2012 (7) TMI 308 - AT - Income Tax

Admission of additional evidence by CIT(A) - Revenue contention that additional evidence on a finding about lack of sufficient opportunity, which is not borne out from the record - Held that - Admission of additional evidence has to be in terms of Hon ble Delhi High Court judgment in the case of Manish Build Well Pvt. Ltd. (2011 (11) TMI 35 (HC)), which mandates that when the Assessing Officer has objected to the admission of additional evidence, then the issue should be decided first and thereafter the Assessing Officer may be asked to furnish the remand report - assessee should have filed an application for admission of additional ground in this behalf and mere narration of facts in statement of facts will not suffice inasmuch as the law provides that the CIT(A) shall decide the appeal on the grounds raised by the assessee. Advances received from ATS held to be business transaction- CIT(A) has not recorded any specific finding about the aspect of MOU being genuine or otherwise. In the absence of a clear finding about the genuineness of the MOU, reference to business customs and usages are not decisive. Unexplained gifts - Ignoring the importance of relationship, occasion of gift and human probabilities in case of gift from unrelated persons, the issue is decided solely on the basis of confirmations and gift deeds - set aside the appeals back to the file of CIT(A).

Summary

Issues involved:
- Appeals by assessee and revenue for multiple assessment years challenging CIT(A)'s orders.
- Common ground by revenue regarding admission of additional evidence.
- Various specific grounds raised by both parties for different assessment years.

Analysis:
1. The judgment involves a group of nine appeals where both the assessee and the revenue have filed cross-appeals for different assessment years, contesting CIT(A)'s orders on various grounds. The revenue has also challenged the admission of additional evidence by CIT(A) for certain assessment years, along with specific issues raised for each year.

2. The effective grounds raised by the assessee include challenges to additions under different sections of the Income Tax Act for various assessment years. For instance, the sustenance of additions under section 68 for A.Y. 2004-05, treating income from other sources for A.Y. 2005-06, and addition of deemed dividend under section 2(22)(e) for A.Y. 2008-09.

3. The revenue's appeals primarily focus on challenging the admission of additional evidence under rule 46A of the I.T. Rules for several assessment years, along with contesting deletions of various additions made by the Assessing Officer, such as deemed dividends, unexplained loans, and gifts.

4. The Assessing Officer contended that the assessee's explanations for certain transactions were unconvincing and lacked merit. The revenue argued that the admission of additional evidence by CIT(A) was not in compliance with Rule 46A, emphasizing the mandatory nature of following procedural rules.

5. The counsel for the assessee argued that despite not specifically raising lack of opportunity as a ground in the appeal memo, the issue was communicated to the Assessing Officer, justifying the admission of additional evidence by CIT(A) based on insufficient time provided during assessment proceedings.

6. After considering the arguments from both sides, the Tribunal set aside all the appeals back to the file of CIT(A) for further review. The Tribunal highlighted the need for compliance with procedural rules, clear findings on the genuineness of transactions, and consideration of legal precedents in deciding the appeals.

7. In conclusion, all the appeals were allowed for statistical purposes, emphasizing the importance of following proper procedures and legal principles in tax assessments. The judgment was pronounced in open court on 28-06-2012.