TaxTMI 
TaxTMI 
2016 (5) TMI 1591
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...."(1) The learned Commissioner of Income-tax (Appeals) (CIT(A)) erred in rejecting the additional evidences produced by the appellant along with the application for admission of the same. (2) The Commissioner of Income-tax (Appeals) further erred in this connection in holding that the appellant's case does not fall within any of the conditions prescribed under rule 46A of the Income-tax Rules, 1962. (3) The Commissioner of Income-tax (Appeals) further erred in this connection in making several irrelevant/incorrect/immaterial observations in paragraph 5 and 5a of pages 4 and 5 of the impugned order more particularly, questioning mens rea of the appellant. (4) The Commissioner of Income-tax (Appeals) further erred in this connection in impliedly holding that the principles of natural justice were not violated. (5) The Commissioner of Income-tax (Appeals) further erred in this connection in spurning additional evidences on the merits after holding that they were inadmissible. (6) The Commissioner of Income-tax (Appeals) further erred in this connection in holding that the additional evidences do not explain both additions of Rs. 1,44,000....
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.... 1,44,000 was treated as unexplained cash credit under section 68 of the Act by the Assessing Officer, vide assessment orders dated December 7, 2011, passed under section 143(3) of the Act. It was also noticed by the Assessing Officer from the balance-sheet, that there were unsecured loans of Rs. 3,40,285 and, accordingly, the assessee was asked to furnish the details along with the loan confirmations. In response, the assessee filed loan confirmations from Mrs. Hansaben Khoshiya wherein the assessee has shown the opening balance as on April 1, 2008, at Rs. 3 lakhs. The assessee submitted that this is an old loan. The Assessing Officer on a careful perusal of the balance-sheet filed by the assessee for the assessment years 2008-09 and 2009-10 observed that there was only one loan in the balance-sheet as at March 31, 2008, for an amount of Rs. 40,285 from Mr. Akshil B. Bhinsara, while in the balance- sheet for the assessment year 2009-10, there were two loans, one from Mr. Akshil B. Bhinsara of Rs. 40,285 and the other is from Mrs. Hansaben Khoshiya of Rs. 3 lakhs. The Assessing Officer observed from the above that it was clear that the said loan of Rs. 3 lakhs from Mrs. Hansaben....
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....Appeals). The assessee submitted that proper opportunity was not granted to the assessee by the Assessing Officer to produce the abovementioned documents and asked the Commissioner of Income-tax (Appeals) to admit the same. The learned Commissioner of Income-tax (Appeals) examined the claim of the assessee and called for the assessment records and looked into the order-sheet entry dated November 16, 2011, whereby the assessee's representative was called upon to explain the source of the cash deposit of Rs. 1,44,000 and also the other details and the matter was adjourned to November 27, 2011. The assessee did not provide the relevant information at that stage on the basis of which the Assessing Officer could have accepted the explanations of the assessee. The Commissioner of Income- tax (Appeals) held that the case of the assessee does not fall in any of the conditions laid down in rule 46A of the Income-tax Rules, 1962. The claim of the assessee to produce additional evidences was rejected by the learned Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeals) also turned down the evidences with respect to the knitting and embroidery being ad....
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....s dated November 22, 2013, of the learned Commissioner of Income-tax (Appeals), the assessee is in second appeal before the Tribunal. 7. The learned counsel for the assessee submitted that the assessee has provided detailed evidences to the learned Commissioner of Income-tax (Appeals) by way of loan confirmations from the lenders with respect to the loan of Rs. 3 lakhs received from Mrs. Hansaben Khoshiya. The loan was received through banking channel from the lender, Mrs. Hansaben Khoshiya, of Rs. 3 lakhs. The bank statement of Mrs. Hansaben Khoshiya was submitted before the learned Commissioner of Income-tax (Appeals) along with the copy of Income-tax return of Mrs. Hansaben Khoshiya, which is also placed in the paper book filed with the Tribunal. These documents were produced before the learned Commissioner of Income-tax (Appeals) but the learned Commissioner of Income-tax (Appeals) rejected the same by not admitting the additional evidences which were also not forwarded to the Assessing Officer for his examination and verification and no remand report was called by the Commissioner of Income-tax (Appeals) from the Assessing Officer, as required under rule 46A(3) of the Incom....
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....parties. We have observed that the additions have been made to the income of the assessee by the Assessing Officer on account of cash deposit of Rs. 1,44,000 in the Bank of India, Borivali Branch, Mumbai, and also with respect to the loan raised by the assessee to tune of Rs. 3 lakhs from Mrs. Hansaben Khoshiya. As per the facts emerging from the orders of the authorities below and the records, information were called by the Assessing Officer from the assessee at the fag-end of the assessment proceedings under section 143(3) read with section 143(2) of the Act on November 16, 2011, whereby the assessee was called upon to submit the details on November 27, 2011. The assessee could not furnish the complete information and details so called by the Assessing Officer by November 27, 2011. The assessment order under section 143(3) of the Act was framed by the Assessing Officer on December 7, 2011. Before the Assessing Officer during the assessment proceedings under section 143(3) read with section 143(2) of the Act, the assessee submitted the details that the cash deposit is out of knitting and embroidery business. The complete details were not furnished by the assessee before the Assess....
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....ences on the merits in a proper perspective as the same were not admitted by the learned Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeals) simply brushed aside the additional evidences filed by the assessee before the learned Commissioner of Income-tax (Appeals) as an afterthought. In our considered view and in the interest of substantial justice, the learned Commissioner of Income-tax (Appeals) should have admitted these additional evidences filed before the learned Commissioner of Income-tax (Appeals) in the interest of justice and should have forwarded these additional evidences to the Assessing Officer for his examination and verification on the merits and should have sought the remand report from the Assessing Officer as provided under rule 46A(1), (3) of the Income-tax Rules, 1962. It is a settled principle of law that when the technicalities are pitted against the substantial justice, the course which advances substantial justice has to be favoured. With the admission of these additional evidences filed before the Commissioner of Income-tax (Appeals), the appeal at best would have been decided on the merits by the Commissioner of Income-t....