TaxTMI 
TaxTMI 
2002 (9) TMI 245
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....us violating Rule 46A of I.T. Rules. 4. That the order of CIT(A) being bad in law may be set aside and the order of the Assessing Officer be restored." 2. The facts, as taken from the record, are that the assessee had filed return showing net loss. The case was taken up for scrutiny and notices under sections 143(2) and 142(1) were issued and served upon the assessee. In response to the notices, one Shri Gulab Bharati of the assessee company attended the hearing, who was given a questionnaire for compliance and the case was adjourned to 1st December, 1993. On 1st December, 1993, nobody attended the case and, as such, the Assessing Officer completed the assessment under section 144 of the Income-tax Act vide order dated 31st January, 1994. In the balance sheet the assessee had shown unsecured loan from the following persons: 1. Ram Avtar Rs. 61,000 2. Shyam Lal Rs. 51,200 3. Sheo Lal Rs. 53,700 4. Charan Shah Rs. 37,000....
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....cepted the reasons for not filing the affidavits before the Assessing Officer. The ld. CIT(A) also considered the capacity of the creditors and the genuineness of the transactions and came to the finding that all these persons were having source to advance the loans to the assessee. The ld. CIT(A), on the basis of these evidences, accepted the explanation of the assessee and deleted the entire addition made under section 68 of the Income-tax Act. The revenue is in appeal before us in respect of the grounds of appeal incorporated above. 3. We have heard the ld. D.R. and ld. counsel for the assessee. The ld. D.R., besides relying on the grounds of appeal, argued that assessee was given many opportunities to prove the cash credit but assessee has not availed such opportunities and has not explained anything at all and, as such, CIT(A) has wrongly admitted inadmissible evidence. The ld. D.R., on the basis of the record and reply filed towards the admission of the additional evidences, argued that CIT(A) has wrongly admitted the additional evidences and assessee has not given identity of the creditors, their capacity to give loan as well as genuineness of the transaction. Ld. D.R.....
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....he Assessing Officer revealed that he has given various dates showing when notices were issued to the assessee under sections 143(2) and 142(1). The notices were issued for 26-6-1992, 26-8-1993 and 5-10-1993 and lastly notice under section 143(2) was issued for 22-11-1993 and on that day the case was adjourned to 1-12-1993. The Assessing Officer replied that he had given five opportunities to the assessee which were not availed. The Assessing Officer further replied that the affidavits of the Director of the assessee Shri S.S. Kharbanda is self serving and would not prove anything. The Assessing Officer further replied that the affidavits of the creditors were filed at belated stage and had no evidentiary value as no details have been filed. On these objections, the Assessing Officer requested the CIT(A) that the additional evidence may not be admitted. We may mention here that the Assessing Officer did not object to the identity of the creditor as well as genuineness of the transaction in his reply. The Assessing Officer did not seek to examine the evidences filed by the assessee or the affidavits or to cross examine the various deponents/ creditors whose affidavits were filed by ....
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....icer for his objection. The Assessing Officer did not seek to examine any of the affidavits as well as evidences filed before the CIT(A). The Assessing Officer also failed to seek cross examination of any of these affidavits and, as such, the contents of the affidavits of the creditors and Directors of the assessee will be deemed to have been admitted by the Assessing Officer. The grounds of appeal Nos. 1 and 2 are, therefore, accordingly liable to be rejected having no force. The ld. CIT(A) was satisfied about the identity, genuineness of the transaction and creditworthiness of various creditors. The satisfaction of the CIT(A) was on the basis of the contents of the affidavits and the details of the advance of loans. The ground Nos. 1 and 2 of the departmental appeal would not survive as whatever opportunity was granted by the Assessing Officer was considered by the CIT(A) while admitting the additional evidences. Rule 46A(1)(b) has given the exceptions when additional evidences could be admitted and one of the conditions was that where appellant was prevented by sufficient cause from producing the evidence before the Assessing Officer. The CIT(A) has already considered the reason....