TaxTMI 
TaxTMI 
2014 (11) TMI 66
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....ave failed to appreciate fully and properly the submissions made and cause advanced by the appellant for failure to produce the said evidence before AO. 3.1. The Ld.CIT(A) has grievously erred in law and on facts in confirming that the deposits aggregating to Rs. 5,37,21,000 from three parties were unexplained. 3.2. That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld the deposits aggregating to Rs. 5,37,21,000 from three parties were unexplained. 4.1. The Ld.CIT(A) has erred in upholding that the appellant had not commenced the business activity during the year so that the expenditure of Rs. 68,05,325 was not admissible. 4.2. That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld that the appellant had not commenced the business activity during the year so that the expenditure of Rs. 68,05,325 was not admissible. 5.1. Both the lower authorities have grievously erred in relying upon the statements of the Directors and acceptance letter for the purposes of upholding the impugned addition and disallowance made by AO. The appellant does not admit the conclusions drawn....
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....itted along with the written submissions in support of additional evidence under Rule 46A. He drew our attention towards page Nos.32 to 44 of the paper-book. He submitted that the ld.CIT(A) sent these additional evidences to the AO for his comment. The AO in its report dated 16/08/2011, copy of which was provided to the assessee and the assessee has made submission dated 07/09/2011 on the remand report submitted by the AO. He submitted that the ld.CIT(A) has observed that the assessee was given sufficient opportunities as there was a time of more than one month between the date of survey and the passing of order by the A.O. The appellant did not furnish the confirmation nor did he seek any time from the AO on this account and, accordingly, additional evidences submitted by the appellant were not considered. He submitted that out of 39 creditors, 36 confirmations were obtained. He submitted that since no sufficient opportunities was granted during the course of assessment proceeding to enable the appellant to produce these confirmations on the file of the AO, the appellant's case falls under Clause (b) and (c) of Sub-Rule (1) of Rule 46A. In support of this contention, he relied upo....
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....ade the Submission dated 7/9/2011 on the remand Report submitted by the A.O. [The said Submission is reproduced on page Nos.12 to 17 of the Order of the CIT(A)]. 6. CIT(A) has observed on page No.18 of the Order that - "The A.O. gave sufficient opportunities. There was a time of more than one month between the date of survey and the passing of order by the A.O. The appellant did not furnish the confirmation nor did he seek any time from the AO on this account". And accordingly, additional evidence submitted by the appellant were not considered. 7. It is respectfully submitted that during the period of one month (approx.) be3tween the date of survey and Assessment Order, 36 confirmations could be obtained out of the 39, and since there was large number of confirmations to be obtained, those two confirmations could be obtained by the appellant after the Assessment, and since no sufficient opportunity was granted during the course of assessment proceeding to enable the appellant to produce these confirmations on the file of the A.O., the appellant's case falls under Clause (b) and (c) of Sub-Rule (1) of Rule 46A. 8. LEGAL POSITION: (i) Bombay High Court, in the case ....
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.... before him. Therefore, the additional evidence submitted by the appellant is not admitted." 5.2. From the aforesaid decision, it is evident that in the opinion of ld.CIT(A), the assessee was given sufficient opportunity to produce evidences in support of its claim that the transactions were genuine. The ld.CIT(A) also relied upon the statement of the directors recorded under section 131 of the Act, wherein the directors have admitted that the transactions in question are not genuine. The case of the assessee is that the statements recorded u/s.131 of the Act cannot be treated as material evidences and no addition can be made in view of the various judicial pronouncements as relied upon by the ld.counsel for the assessee. 5.3. There is no dispute so far as statements of the directors are concerned, which were recorded u/s.131 of the Act. We find that at page Nos.21 to 29 are the statements recorded on oath under section 131 of the Act, wherein the directors have stated in reply to question No.14 about the loan taken by the assessee during the F.Y. 2007-08. Further, in reply to question No.15, it is stated by the directors that the confirmation of loan from M/s.Jupiter Business L....
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....46A and for said purpose Commissioner (Appeals) need not call for a remand report from Assessing Officer. In the case in hand, undisputedly, the ld.CIT(A) had sought comments from the AO in respect of the admissibility of evidence. In the decision of Hon'ble ITAT Mumbai Bench 'I' rendered in the case of Shahrukh Khan vs. Dy.CIT reported at (2007) 13 SOT 61 (Mum.), wherein the Coordinate Bench of this Tribunal has held that Whether after calling of remand report on merit as contemplated in surule( 3) of rule 46A, Commissioner (Appeals) was precluded with his discretion for refusing to admit additional eviddnce. The ld.counsel for the assessee has relied on the judgement of Hon'ble Gujarat High Court rendered in the case of CIT vs. Saakeen Alloys (P.) Ltd. reported at (2014) 46 taxmann.com 42 (Guj.). Since the decision has been rendered in relation to the Excise Law, the same does not help to the assessee. The ld.counsel for the assessee has also relied on the decision of the Hon'ble ITAT Mumbai Bench 'F' rendered in the case of Unitex Products Ltd. vs. ITO reported at (2008) 22 SOT 429 (Mum.), wherein the Tribunal has held that whether section 133A(3)(iii) authorizes authority to re....
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.... expenditure. He submitted that in support of the contention that the business of assessee had already commenced, the reliance was placed on the following judgements:- (i) CIT vs. Saurashtra Cement & Chemical Industries Ltd. [91 ITR 170 (Guj.]. (ii) Prem Conductors Pvt.Ltd. vs. CIT [108 ITR 654 (Guj.)] (iii) Sarabhai Management Corporation Ltd. vs. CIT [102 ITR 25 (Guj.)]. (iv) CIT vs. Sarabhi Management Corporation Ltd. [192 ITR 151 (SC)]. 7.1. The ld.counsel for the assessee submitted that non-consideration of the case-laws is not justified and has resulted into gross miscarriage of justice. On the contrary, ld.CIT-DR supported the orders of the authorities below. 8. We have heard rival submissions, perused the material available on record and gone through the orders of the authorities below as well the judgements relied upon by the ld.counsel for the assessee. We find that AO has decided this issue by observing as under:- "5. From a perusal of the P&L A/c. of the assessee it was noticed that the assessee had debited an amount of Rs. 6805325/- as expenditure. The assessee had not commenced any commercial or business activity during the year. Therefore the ent....