TaxTMI 
TaxTMI 
2015 (5) TMI 477
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....rties out of 53 parties. 4. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 35,680/- made on house tax paid for the directions premises without appreciating that house tax paid is indirect benefit to the director. 5. The appellant craves to be allowed to add any fresh grounds of appeal and / or delete or amend any of the grounds of appeal." 3. Facts, in brief, as per the AO and ld CIT (A) are that assessee filed e-return declaring income of Rs. 1,57,77,810 on 7.3.2011. The case was picked up for scrutiny under CASS. The assessee is engaged in Trading and Export of Carpets, Handicrafts etc. During the year Sales has been declared at Rs. 13,63,89,728/- (previous year : 17,39,06,908/-) after debiting various expenses in the profit and loss account, net profit of Rs. 1,63,73,524/- (previous year : Rs. 1,89,14,442/-) has been declared. The GP rate for the year under consideration is 42.11% as compared to 40.35% in the immediately preceding year. During the course of assessment proceedings, the Assessing Officer asked the assessee to produce details with addresses of sundry creditors declared in the balance sheet alon....
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.... in the name of third party - assessee must prove identity of creditors, capacity of creditors to advance money and genuineness of transaction as held in Shankar Industries Vs. CIT (Calcutta) 144 ITR 689. In the case of S. Punjabi vs. ACIT (ITAT, Madras), 62 TTJ 749, Hon'ble Tribunal has upheld the addition u/s. 68 even where confirmation letters were filed in respect of few creditors but none were produced for examination - neither was the AO requested to issue notice u/s. 131. According to AO no evidence was placed on record to show that any effort was made by these parties ( sundry creditors) for recovery of their dues from the assessee. And neither was any evidence furnished by the assessee of any business transaction with any of the parties during the year under consideration. And only a few self drawn vouchers were produced which appeared to have been made in a single sitting. And in the previous assessment year i.e. AY 2008-09, the assessee had itself surrendered a sum of Rs. 45.76 lacs in view of the non - filing of confirmation from some creditors. So the AO was of the opinion that since in the present year too, the assessee has not been able to prove the genuineness of t....
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....additional evidence before passing the appellate order. Hence, he requested that the issue in dispute may also be sent back to the file of the CIT(A) with the same directions as given in the assessment year 2008-09 by the Co-ordinate Bench in assessee's own case, as aforesaid. 7. On the contrary, Ld. Counsel of the assessee opposed the request of the Ld. DR and relied upon the order of the Ld. CIT(A). 8. We have heard both the parties and perused the records. We find that according to AO no evidence was placed before him to show that any effort was made by the sundry creditors for recovery of their dues from the assessee. And neither was any evidence furnished by the assessee of any business transaction with any of these parties during the year under consideration. Only a few self vouchers were produced before him that too appeared to have been made in a single sitting. And in the previous assessment year i.e. AY 2008-09, the assessee had itself surrendered a sum of Rs. 45.76 lacs in view of non filing of confirmation from some of these creditors only. So according to the AO, the assessee has not been able to prove the genuineness of the transaction as also the identity and credi....
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.... the AO when it itself offered the amount to tax. The AO in his remand report dated 14.07.2011 succinctly pointed out that since the assessee itself expressed its inability to furnish further confirmations and produce the persons for cross-examination and offered the amount of Rs. 45,76,244/- to tax. 9 I.T.A .no.-3886/Del./2012 There is nothing on record to suggest that the AO did not allow sufficient opportunity to the assessee to submit confirmations. When the assessee expressed its inability to furnish further confirmations or to produce the persons, it offered the amount to tax; and the AO accepted the said offer and completed the assessment. In these circumstances, how conditions stipulated in clause (b) of rule 46A(1) of the IT Rules,1962 could be said to have been fulfilled, is not evident from the impugned order. Even otherwise there is nothing to suggest as to whether or not the ld. CIT(A) examined the genuineness of additional evidence submitted by the assessee nor the AO seems to have been asked to verify its genuineness. In these circumstances, we are of the opinion that the ld. CIT(A) admitted additional evidence submitted by the assessee in its application under rule ....
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.... sub-rule (1) unless the Deputy Commissioner (Appeals) or as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. (3)The Deputy Commissioner(Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub-rule (1) unless the Income-tax 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.." 6.1 It is evident from the aforesaid provisions that the ld.....
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....e requirements of the Rule strictly so that the Rule is meaningfully exercised and not exercised in a routine or cursory manner. The Hon'ble High Court held that sub-rule (3) of Rule 46A interdicts the CIT (A) from taking into account any evidence produced for the first time before him unless the AO has had a reasonable opportunity of examining the evidence and rebut the same. In the instant case, there is nothing in the impugned order of the ld. CIT (A) to show that after the objections were raised by the AO in his remand report dated 14.7.2011 against admission of additional evidence, the ld. CIT(A) asked the AO to examine the genuineness of the additional evidence. Thus, the end result has been that additional evidence was admitted and accepted as genuine without the AO furnishing his comments and without verification. Since in the case under consideration, the ld. CIT(A) did not follow the procedure laid down in Rule 46A of the IT Rules,1962 , we find merit in the contentions of the ld. DR and therefore, in the interest of justice and fair play, vacate the findings of the Ld. CIT(A) and restore the issues raised in various grounds of appeal before us to his file, with the direc....