ITO 24(3)(2), MUMBAI vs. PRASANNA P AHER, MUMBAI

“On the facts & in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the additions made by the A.O. on Capital introduced of Rs.5,08,000I- and Unsecured Loans of Rs.75,000I- without appreciating that no evidences has been filed by the assessee during assessment proceedings and contention of assessee admitted without remanding the matter back to the file of AO for verification, in contravention to the provisions of Rule 46A of l.T. Rules

On the facts & in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the additions made by the A.O. on penalty paid shown as 'Detention Charges' of Rs.1,00,00/- ignoring that no proof was given at the time of assessment proceedings that it was not a fine/penalty covered u/s. 37 of the I.T. Act 1961. 3. On the facts & in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the additions made out of various expenses @ 10% of such expenses claimed, when the assessee has not 3 Prasanna P. Aher discharged the burden of onus of proof cast on him as per Section 102 of the Evidence Act.

On the facts & in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting an addition of unexplained cash credits u/s. 68 on Sundry Creditors of Rs.14,00,000/- ignoring that the even primary details viz, name & address of the Creditor were not furnished before the A.O. and that assessee had failed to discharge his primary onus of proving the existence and genuineness of creditors".

During the course of hearing, Shri Somnath Ukkal Departmental Representative (Ld DR) on behalf of the Revenue and Shri Arun Sahu, Authorised Representative (Ld Counsel) on behalf of the respondent assessee, argued the case.

It has been argued by the Ld. DR that in this case there has been violation of rule 46A of the Income Tax Rules1962, on the part of the Ld. CIT(A) by considering additional evidences filed by the assessee with regard to the issues involved in the grounds raised by the revenue. It has been submitted by him that Ld. CIT(A) has taken the evidences on record and considered the same for adjudication of the appeal without confronting the same to the AO. No petition was filed by the assessee u/r 46A. No findings have been given by Ld. CIT(A) as to how and why these evidences should be admitted. In fact there is a violation of Rule 46A, which has 4 Prasanna P. Aher led the violation of principles of natural justice, and therefore, the impugned order passed by Ld. CIT(A) is not sustainable in the eyes of law.

On the other hand, Ld. AR of the assessee has submitted that proper opportunity was not given by the AO to the assessee during course of assessment proceedings, in as much as, no doubts were expressed by the AO with respect to replies filed by the assessee in response to the queries of the AO. Whatever was asked by the AO, the same was submitted by the assessee, and therefore, nothing more was asked and the assessment order was framed. Therefore, the assessment order was also in violation of principles of natural justice, and therefore, assessee has righty submitted the required evidences before the Ld. CIT(A), and have been rightly considered by him while adjudication of the first appeal of the assessee.

We have heard both the sides and gone through the orders of the lower authorities. The admitted facts are that additional evidences were filed by the assessee before Ld. CIT(A) which have been considered by him while adjudicating the appeal of the assessee. It is noted that no justification or findings or reasoning has been given by the Ld. CIT(A) in its order for admission the additional evidences filed by the assessee. It is further noted that these evidences have not been even confronted to the AO for obtaining comments of the AO on the evidences filed by the assessee. Thus, it is a clear case of violation of rule 46A of the Income Tax Rule, 1962. 5 Prasanna P. Aher

Taking into account all the facts and circumstances of the case, and to meet the ends of justice, we find it appropriate to send the issues raised by the Revenue, back to the file of the AO for his examination and deciding these issues afresh. The AO shall give adequate opportunity of hearing to the assessee to submit required details and documents, and shall also express all the doubts left, if any, before the taking any fresh decision. The assessee shall also extend necessary cooperation to the AO by submitting all the details and documents as may be required by the AO, as per law. Thus, grounds raised by the Revenue are allowed for statistical purposes.

In the result, the appeal of the Revenue is allowed for statistical purposes.

""यथ" / The Respondent. 3. आयकर आयु"त(अपील) / The CIT, Mumbai. 4. आयकर आयु"त / CIT(A)- , Mumbai

"वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड" फाईल / Guard file.