TaxTMI 
TaxTMI 
2015 (11) TMI 541
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....he facts and circumstances of the case and in law, the Ld: CIT (A) has erred in deleting the disallowance of professional fee expense of Rs. 1,96,85,000/-." 2. Facts in brief as culled out from the orders of the lower authorities are that the assessee is a domestic company which was incorporated on 10.09.1987 and was engaged in hotel consultancy and operation, money lending and trading in shares in the relevant year. The return of income declaring income of Rs. 36,86,75,655/- was filed on 29.11.2007. The case was selected for scrutiny. During scrutiny the learned Assessing Officer (in short "AO") observed that the assessee earned dividend income of Rs. 3,08,500/- but no expenses corresponding to exempted dividend income were disallowed by the assessee out of the profit and loss account, therefore, the ld AO in assessment order, invoking rule 8D of the IT Rules, disallowed interest expenses of Rs. 11,79,500/- out of the interest expenses of Rs. 16,52,364/- claimed in profit and loss account. The ld. AO also observed that the assessee claimed professional fee expenses of Rs. 1,96,85,000/- to three parties namely Jagmandi Finevest Pvt Ltd (Rs.44,91,000/-), Glider Holding Ltd. (Rs.4....
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....IT(A) admitted the additional evidences filed without providing any opportunity to the AO to examine those parties and allowed the addition of the professional fee expenses. Aggrieved, the Revenue has filed the appeal before us. 5. At the time of hearing, in respect of ground No.1, the learned Senior Departmental Representative (in short "Sr. DR") submitted that in view of the amended provisions of the section 251 of the Act, the ld. CIT(A) was not having authority in law to set aside the matter to the ld. AO for adjudication and argued that the disallowance made by the ld. AO may be confirmed. Whereas, the learned Authorised Representative (in short "AR") submitted that the ld. CIT(A) has actually not set-aside the issue for fresh adjudication but has given specific direction to disallow all the expenses related to earning dividend income. The ld AR also relied on the judicial pronouncements in the case of Godrej Boyce & Manufacturing Co. Vs DCIT 328 ITR 81, CIT Vs. Catholic Syrian Bank Limited (2012) 344 ITR 0259, Kodak India Limited Vs. ACIT (2010-TIOL-742-ITAT-MUM), Kankhal Investments and Trading Co. P Ltd Vs CIT 301 ITR 359, CIT Vs. Matalman Auto P Ltd 336 ITR 0434. Howeve....
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....pect of professional fee expenses, by the ld CIT(A) without providing enough opportunity as per Rule 46A(3) of the Income-tax Rules. The ld Sr. DR submitted that the ld. AO objected to the admitting of the additional evidence in his remand report dated 02/08/2011, copy of which has been filed at the time of hearing before us, however after admitting the evidences, the ld CIT(A) did not call for the comment in respect of those evidences. Whereas, on the other hand, the ld AR submitted that the ld CIT(A) has already forwarded the additional evidences to the AO and therefore compliance of Rule 46A(3) has been made. In support of his claim, the ld AR placed reliance on the judicial pronouncements in the cases of Prabhavati Shah Vs. CIT (1998) 231 ITR 1 (Bom), CIT Vs. Kamlaben Sureshchandra Bhatti (2014) 367 ITR 692(Guj), Electra Jaipur P Ltd Vs. Inspecting ACIT (1988) 26 ITD 236(Del), CIT Vs. Jagjot Singh(2014)41taxman.com423(All), CIT Vs Unique Plastics P Ltd (2015) 60 Taxman.com ( AP& T), Jer Kersi Contractor V ITO Mum Trib ITA No. 1892/Mum/2009. 8. We have heard the rival submission and perused the copy of the additional evidences, which are placed at page No.66 to 78 of the pape....
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....efore your goodself appear to a result of manipulation of documents by the assessee company. 3. As far as the assessee's contention of non asking of documentary regarding payment to M/s Agarwal Law associates Ltd is concerned, it is to inform you that the then A.O had specifically asked the assessee to file documentary proof regarding payment made to M/s Agarwal Law Associates filed any proof in this regard also. Now, the assessee company has filed a confirmation by the assessee company M/s. Agarwal Law Associates confirming the bill raised by the M/s Tulip Star Hotels Ltd. As per the confirmation filed by the M/s Agarwal Law Associates, the assessee company has received a sum of Rs. 32 lakh on 22.09.2010 and balance is outstanding as on date. If we accept the said confirmation and contention of the assessee company, even then M/s Agarwal Law Associates company is a creditor as on 31/03/2007 and entire amount was outstanding. But as per list of creditors filed by the assessee company at the time of assessment (copy enclosed) no amount was due for payment to the company/ firm M/s. Agarwal Law Associates. Therefore, the submission of the assessee company is self contradi....
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....ssment or penalty (whether on his own motion or on the request of the Assessing Officer under clause (a) of sub-section (l) of section 251 or the imposition of penalty under section 271." 6. The case of the assessee does not fall in any of the circumstances enlisted in sub rules (1) (a) to (1) (d)of Rule 46A of the Income Tax Rules, 1962 as explained below: (a) The AO had not refused to admit evidence which ought to have been admitted; and (b) the appellant has not given any justification or reasons that he was prevented by sufficient cause from producing the evidence which he was called to produce by the Assessing Officer; and (c) The appellant has not given any justification or reasons that he was prevented by sufficient cause from producing the before the Assessing Officer any evidence which is relevant to any ground of appeal; and (d) The Assessing Officer has made the order appealed against after giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. As no reasons have been provided by the appellant for not producing the evidence before the lower authorities, the application for ....
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.... alternatively that he was prevented by sufficient cause from producing the evidence before the Assessing Officer. Alternatively further the assessee also has to show its relevance to the grounds of appeal sought to be urged. Lastly, the assessee also has -to establish that the Assessing Officer did not afford him sufficient opportunity in regard thereto. The material on record is abundantly clear that no attempt was made by the assessee to produce the evidence before the Assessing Officer. As no reasons have been provided by the appellant for not producing the evidence before the lower authorities, the application for admission of additional evidence deserves to be rejected. If admitted, the provisions of Rule 46A have to be followed. As noted above, the facts of this case fail to fulfill the requirements of Rule 46A. In light of the objections raised and observations made in and case laws cited above, you are requested to reject the application of the assessee for production of any additional evidence." 12. On perusal of the above, it is clear that the ld. AO has not been allowed reasonable opportunity to examine the documents submitted by the assessee. The c....