TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 125
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....ing of flats. 3.1 The Ld. CIT (A) ignored the finding recorded by the AO and the facts that the assessee did not file the necessary documents to substantiate its claim during the course of assessment proceeding. 4. The Ld. CIT (A) erred in law by accepting the additional evidences without following the procedure laid down under Rule 46A of the IT Rules 1962. 5. The appellant craves leave to add, to alter, or demand any ground of the appeal raised above at the time of the hearing." 2. The assessee is a company incorporated under Indian Companies Act, 1956. The assessee is engaged in the business of development and construction of residential and commercial complexes and commission agency in sale/ purchase of properties. The return of income was filed on 16.10.2007. The income declared as per the return was Rs.1,46,610/-. The assessment was completed u/s 143(3) on 29.12.2009 at an income of Rs.1,08,97,390/-. The Assessing Officer made the following three additions:- (a) Addition on account of share application money amounting to Rs.75,55,000/-; (b) Addition of Rs.31,80,000/- on account of advance for booking flats; and (c) Addition of Rs.15,780/- on account of ROC fees ....
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....CIT (A) admitted these evidences and granted the relief to the assessee without giving an opportunity to the Assessing Officer regarding the merits of the additional evidences. Therefore, the issue may be set aside to the file of the Assessing Officer for proper adjudication in respect of the additional evidences field before the CIT (A). This issue is also covered by decision of Hon'ble Delhi High Court in the case of CIT vs. Manish Buildwell Pvt. Ltd. -High Court-Del-IT. 4. Learned AR was also not having any contrary view in this regard. 5. After hearing both the sides, we are of the view that this issue is covered by decision of Hon'ble jurisdictional High Court, cited supra. In this case, Hon'ble High Court held as under :- "21. In our opinion, substantial questions of law do arise out of the order of the Tribunal in respect of its decision regarding the addition of Rs.1,61,67,600/- made under Section 68. We, accordingly, re-frame the following substantial questions of law:- "1. Whether on the facts and in the circumstances of the case and on a proper interpretation of Rule 46A of the Income Tax Rules, 1962, the Tribunal was right in law in taking a decision on the m....
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....ents of Rule 46A need not be complied with. If such a plea of the assessee is accepted, it would reduce Rule 46A to a dead letter because it would then be open to every assessee to furnish additional evidence before the CIT (A) and thereafter contend that the evidence should be accepted and taken on record by the CIT (A) by virtue of his powers of enquiry under sub-Section (4) of Section 250. This would mean in turn that the requirement of recording reasons for admitting the additional evidence, the requirement of examining whether the conditions for admitting the additional evidence are satisfied, the requirement that the assessing officer should be allowed a reasonable opportunity of examining the evidence etc. can be thrown to the winds, a position which is wholly unacceptable and may result in unacceptable and unjust consequences. The fundamental rule which is valid in all branches of law, including Income Tax Law, is that the assessee should adduce the entire evidence in his possession at the earliest point of time. This ensures full, fair and detailed enquiry and verification. A 7-Judge Bench of the Supreme Court in Keshav Mills Co. Ltd. v. Commissioner of Income-Tax, Bombay ....
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....the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the [Assessing Officer] has been allowed a reasonable opportunity (a) to examine the evidence or document or to cross examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the [Assessing Officer]) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.] We are highlighting these aspects only to press home the point that the conditions prescribed in Rule 46A must be shown to exist before additional evidence is admitted and every procedural requirement mentioned in the Rule has to be strictly complied with so that the Rule ....