DY. COMM. OF INCOME TAX, CIRCLE -2, KALYAN vs. KUMAR U. AILANI, ULHASNAGAR

1. “Whether on the facts and circumstances of the case and in law, the Ld.CIT (A)-II, Thane, has erred in admitting new evidence filed before the AO after the DCIT Vs. Shri. Kumar U. Ailani

The only ground raised by the revenue is against admitting the new evidences by the CIT(A) which are not in accordance with the Rule 46A of the I.T. Rules 1962.

Shri Dinesh Wadhwani (HUF) Rs.2,00,000/- 2. Shri Dinesh Wadhwani (Indl) Rs.4,90,000/- 3. Smt. Neelu Wadhwani Rs.6,50,000/- 4. Smt. Rinku Chanchlani Rs.5,00,000/- 5. Shri Deepak Wadhwani Rs.1,38,000/- Total Rs.19,78,000/- ========== The above unsecured loans was added to the income of the asessee on the ground that assessee could not proved the creditworthiness and genuineness of the DCIT Vs. Shri. Kumar U. Ailani transactions to the satisfaction of the AO and the requirements of section 68 of the IT Act were also not satisfied despite the several opportunities. The ld. CIT(A) allowed the appeal of the assessee by holding that all these advances were received by A/c payee Cheques and the genuineness of all the transactions was proved by the assessee and therefore, the provision of section 68 of the Act were not applicable.

The ld. DR at the outset brought to our notice that Shri.Dinesh Wadhwani, Dinesh Wadhwani HUF & Smt. Neelu Wadhwani had filed letters in the office of Add CIT, Range-2, Kalyan on 29.12.2008 stating that amount were paid to the assessee in respect of the purchase of shares from M/s. Kumar Plaza Resorts Ltd and the payments were duly shown as investments in their respective case however the assessee had incorrectly shown such payments as loans. Whereas the assessment order was passed on 24.12.2008 exactly 5 days before the date of confirmation letters filed by Wadhwanis. The above details/ reply/ explanation could not be considered by the AO as these were filed after passing the assessment order. The ld. DR further submitted that the admission by the CIT(A) of these evidences without calling for report of the AO accounted to admission of additional evidences. It was not in accordance with Rule 46A of the IT Act, 1962. The ld. DR finally prayed that in the interest of justice, the issue to be restored to the file of the CIT(A) to allow a reasonable opportunity to the AO to comment on these

We have heard the rival submissions and perused the material on record. We find from the records that Shri. Dinesh Wadhwani (Indl.), Shri.Dinesh Wadhwani (HUF) & Smt. Neelu Wadhwani had filed copies letters confirming their transactions with the assessee on 29.12.2008 in the office of Add. CIT, Range-2, Kalyan along with the necessary details in respect of the amount given to the assessee whereas the assessment order was passed on 24.12.2008 meaning thereby the assessment order was passed 5 days before the date of filing confirmations. The ld. CIT(A) deleted the additions by relying on the evidences filed by the loan creditors on 29.12.08 without calling for any remand report from the AO and without giving the AO an opportunity to present his views on the matter. In our opinion the interest of the justice would be met if the AO is allowed an opportunity of being heard to comment on the evidences filed by the various creditors after the date of the assessment order. We therefore without commenting on the merit restore the issue back to the file of the CIT(A) with the direction to allow the reasonable