Additional evidence material to tax liability may be admitted, with remand for fresh adjudication where no prejudice is shown.

Additional evidence concerning the nature and location of land was treated as material because it went to the root of the taxpayer's liability, including whether capital gains consequences arose. The evidence was admitted to enable determination of the correct tax liability, and no prejudice to either side was found. The matter was therefore remanded to the Assessing Officer for fresh adjudication of the assessee's contentions on the basis of the additional evidence and earlier directions.

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Issues: Whether the additional evidence relating to the nature and location of the land was material and should be admitted, and whether the matter should be remanded to the Assessing Officer for fresh adjudication.

Analysis: The evidence sought to be produced was found to go to the root of the tax liability, particularly on the question whether the land attracted capital gains consequences. In the interest of determining the correct tax liability, the evidence was held relevant and admissible. Since no prejudice would be caused to either side, the matter was sent back for consideration of the assessee's contentions on the basis of the additional evidence and in the light of the earlier directions relied upon.

Conclusion: The additional evidence was admitted and the assessment was remanded for fresh decision by the Assessing Officer.

Ratio Decidendi: Where proposed additional evidence is material to the determination of correct tax liability, it may be admitted and the assessment remanded for fresh adjudication.

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