Additional evidence in investment dispute had to be admitted, with remand for fresh appellate adjudication on merits.

Additional evidence should be admitted where the assessee has furnished explanations and supporting documents on the source and year of disputed investments, particularly when the assessment record has already been sent for remand and part of the investment is accepted as not made in the relevant year. Refusal to consider such material without proper examination of the explanation and rejoinder is unjustified. The matter was therefore restored to the first appellate authority for fresh adjudication on merits after giving the assessee due opportunity of hearing.

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Issues: Whether the assessee's additional evidence ought to have been admitted and, in view of the explanation furnished with supporting material, whether the matter required remand to the first appellate authority for fresh decision on merits.

Analysis: The assessee had produced explanations and supporting documents before the first appellate authority regarding the source and year of the disputed investments, and the assessment record had also been sent for remand report. The record showed that one of the investments was accepted by the Assessing Officer as not having been made in the relevant year, yet the additional evidence was still refused and the addition was sustained without proper consideration of the explanation and rejoinder. In these circumstances, the refusal to admit the additional evidence was held to be unjustified and the appellate authority was required to examine the matter on merits after giving due opportunity of hearing.

Conclusion: The additional evidence was directed to be admitted and the issue was restored to the first appellate authority for fresh adjudication on merits after granting due opportunity to the assessee.

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