Appeal allowed due to procedural violation in admitting evidence without notification.

The Revenue appealed against the CIT(A)'s decision to allow additional evidence without notifying the Assessing Officer, violating the Income Tax Act. The CIT(A) deleted the addition of unexplained investment based on new evidence, but the Tribunal found a violation of procedural rules. The Tribunal set aside the CIT(A)'s order, remanding the issue for fresh adjudication. The Revenue's appeal was allowed for statistical purposes, and the assessee's cross objection was dismissed.

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Issues involved:
Appeal by Revenue against CIT(A) order - Addition of unexplained investment under section 69C - Additional evidence allowed by CIT(A) - Violation of rule 46A - Jurisdiction of CIT(A) to admit additional evidence.

Analysis:
1. Grounds raised by Revenue: The Revenue challenged the CIT(A)'s decision to allow additional evidence without intimating the Assessing Officer, violating section 45A of the Income Tax Act, 1961, and accepting additional grounds without seeking a remand report. The assessee, an individual, filed a return of income for the assessment year 2014-15, but non-compliance led the Assessing Officer to complete the assessment under section 144 of the Act. Reasons for scrutiny included interest income mismatch, derivative transactions, assets/liabilities details, sales turnover mismatch, and securities transactions.

2. Addition of unexplained investment: The Assessing Officer added an amount to the income due to discrepancies in interest income. The CIT(A) deleted the addition based on additional evidence provided by the assessee during the appellate proceedings. The Departmental Representative argued that the CIT(A) should have sent the evidence for verification by the Assessing Officer, as per rule 46A, instead of solely relying on the assessee's submissions.

3. Admissibility of additional evidence: The Assessing Officer was in possession of CIB/AIR information regarding the investment made by the assessee, but the assessee did not furnish any evidence during the assessment. However, additional evidence was presented before the CIT(A), leading to the deletion of the addition. The Tribunal noted that the CIT(A) violated rule 46A by not following the procedure for admitting additional evidence suo-motu.

4. Jurisdiction of CIT(A) to admit evidence: The Tribunal referred to a previous case but concluded that the present case differed, emphasizing the violation of rule 46A by the CIT(A). Consequently, the Tribunal set aside the CIT(A)'s order and remanded the issue for fresh adjudication after complying with rule 46A. The assessee must be given a reasonable opportunity to be heard before the final decision.

5. Final decision: The Revenue's appeal was allowed for statistical purposes, and the cross objection by the assessee was dismissed as infructuous. In conclusion, the Revenue's appeal was allowed, and the cross objection was dismissed. The order was pronounced in open court on 07.02.2020.

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