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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI WASEEM AHMED & SHRI SIDDHARTHA NAUTIYAL
आदेश/O R D E R
PER BENCH:
The captioned appeal has been filed at the instance of the assessee against the order of the Ld. Commissioner of Income Tax-(Appeals)-1, (in short the Ld. CIT(A)), Rajkot dated 01/08/2018arising in the matter of assessment order passed under Section 143(3) r.w.s. 147of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2009-10.
The assessee has raised the following revised grounds of appeal: “1.0 The grounds of appeal mentioned hereunder are without prejudice to one another. 2.0 The Commissioner of Income-tax (Appeals)-1, Rajkot [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in relating addition of Rs. 8,55,000/- being alleged unexplained cash/cheque deposits in bank account No. 1271 held with Rajkot People’s Co-operative Bank, Rajkot. The addition retained is totally unjustified and uncalled for and deserves to be deleted and may kindly be deleted. 4.0 The Ld. CIT(A) erred on facts as also in law relating addition of Rs. 4,54,980/- made U/s. 68 of the Act on account of alleged unexplained cash credit
received from friends and associates. The addition retained is totally unjustified and uncalled for and deserves to be deleted and may kindly be deleted. 5.0 The learned CIT(A) erred on facts as also in law in rejecting evidences / additional evidences (in spite of making specific request for admission of the same) furnished during the appellant stage which goes to the root of the matter. The ld. CIT(A) ought to have admitted the same and give justice to the appellant. 5.0 Your Honor’s appellant craves leave to add, amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.”
3. The interconnected issue raised by the assessee is that the Ld. CIT(A) erred in confirming the addition of Rs. 8,55,000/- and 4,54,980/- representing the deposit in bank and loan taken from the friends and associates.
4. The assessee in the present case did not disclose the bank account in his return of income where the deposit of Rs. 8,55,000/- was made. Likewise the AO also observed that the assessee failed to justify the unsecured loan aggregating to Rs. 4,54,980/- by furnishing the necessary details with respect to the identity, creditworthiness of the parties and genuineness of the transactions. Thus, the AO treated the same as unexplained cash credit under Section 68 of the Act amounting to Rs. 13,09,980/- and added to the total income of the assessee.
5. Aggrieved assessee preferred an appeal before the Ld. CIT(A) who confirmed the order of the AO by observing as under:
“7.1 Ground of appeal no. 3
Having considered facts and circumstances of the case, I find that during the assessment proceedings the assessee had categorically shown his ignorance about the A/c No.1271withRajkot Peoples Cooperative Bank Pvt. Ltd. and the transactions contained therein. The AO accordingly treated the credits of Rs.8,55,000/- in this account to be unexplained.
During appellate proceedings, the assessee has contended that the transactions in this said bank account pertain to his wife. This contention of assessee is in the nature of additional evidence which is not admissible without specifying the conditions laid down in rule 46A. The assessee has not filed any petition under rule 46A and has not shown why additional evidences should be admitted. Therefore, no cognizance of the contentions of the assessee at appellate stage can be taken when enough opportunity had been provided at the assessment stage. The contention therefore are rejected, and I find no reason to interfere with finding of AO. Addition is sustained. Ground of appeal no. 3 is rejected.
7.2 Ground of appeal no.
4. In this ground, the assessee has challenged addition of Rs. 454980/- in respect of unsecured loans. The assessing officer has categorically mentioned that the assessee during assessment proceedings was asked to furnish the details/evidences with regard to identity, credit worthiness of the depositors and the genuineness of the transactions, but the assessee failed to furnish the same.
During appellate proceedings, it is contended that these amounts were taken as loan from relatives and friends. The assessee has furnished copies of so- called contra accounts and confirmations. Since, these are in the nature of additional evidences without specifying the conditions laid down in rule 46A, these evidences are not admissible. It is not-worthy that no action can be taken in hands of the so-called creditors as by now the action in their hands has become time barred. If, the assessee had furnished these additional evidences during assessment proceedings and if there was an opportunity with AO to examine them, any adverse findings in case of the creditors would have attracted action under IT Act in those cases. Therefore, in a way by not furnishing these evidences at assessment stage, the assessee has managed to not only avoid their security but also avoid any action in the hands of the creditors in case of anything adverse was found on scrutiny of these additional evidences. For this reason and the fact that sufficient opportunity has been provided during assessment proceedings the additional evidences do not deserve to be admitted. There is no case to interfere with findings of the AO. The addition is sustained. Ground of appeal is rejected.”
Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.
The Ld. AR before us filed a Paper Book running from pages 1 to 57 and submitted that the assessee had filed additional documents before the Ld. CIT (A) which were rejected as these additional documents were not supportedon the basis of the application under Rule 46A of Income Tax Rule. But the Ld. CIT (A) without giving the opportunity to the assessee to rectify the defect for filing the additional documents has confirmed the order of the AO.
In view of the above, the Ld. AR for the assessee requested the bench to restore the issue to the file of the AO for fresh adjudication in the light of the additional documents as discussed above and as per the provisions of law.
On the contrary, the Ld. DR before us agreed to restore the issue but to the file of Ld. CIT (A). As such the Ld. DR opposed to restoring the issue to the file of the AO for fresh adjudication.
We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly the assessee has filed additional documents before the Ld. CIT (A) which were rejected by him on the ground that there was no separate application filed by the assessee for the admission of the additional documents under Rule 46A of Income Tax Rule.
There is no dispute that these additional documents were important to decide the issue on hand and there was no separate application filed by the assessee for the admission of such additional documents as mandated under Rule 46A of Income Tax Rule. However, we opined that the Ld. CIT-A in the interest of justice & fair play should have provided the opportunity to the assessee to rectify the defect in filing the additional documents. Therefore, we are of the view that the matter needs to be examined afresh in the light of the additional evidences.
Now the question arises whether the issue should be set-aside to the file of Ld. CIT(A) or the AO for fresh adjudication as per the provisions of law. Admittedly assessment order was passed ex-parte and even if we set-aside the issue to the file of the Ld. CIT-A, a remand report has to be obtained from the AO.
12.1 In view of the above, we are inclined to restore the impugned issue to the file of the AO for fresh adjudication. Hence, the ground of appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 14/09/2022 at Ahmedabad.