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2012 (8) TMI 388 - AT - Income TaxAdmission of additional evidence - requirements of Rule 46A Held that - new evidence filed by the assessee from the government agency and the same are essential for disposal of the appeal - CIThas considered the new evidence and the facts and circumstances of the case in entirety and validly, after recording reasons, admitted the new evidences Addition on account of unexplained addition to capital account Held that - copy of the capital account is available wherein amount on account of remittance from LIC of India and amount on account of constituency allowance received by the assessee is mentioned - addition has been deleted on the basis of corroborative evidence against revenue Unexplained cash credit Held that - Assessee establish the identity & creditworthiness of the investor and genuineness of the transaction - Shri Gurdip Singh is assessed to income tax and he has confirmed the loan granted to the assessee and further quoted his PAN number addition deleted
Issues Involved:
1. Admission of additional evidence by CIT(A) under Rule 46A. 2. Deletion of addition on account of demurrage paid to railways. 3. Deletion of addition on account of unexplained addition to capital account. 4. Deletion of addition under Section 68 of the Income Tax Act, 1961. 5. Allowance of interest paid on non-business interest-free advances. Issue-Wise Detailed Analysis: 1. Admission of Additional Evidence by CIT(A) under Rule 46A: The Revenue contended that the CIT(A) erred in admitting additional evidence without complying with Rule 46A. The assessee argued that the evidence was validly admitted. The Tribunal found that the CIT(A) had recorded reasons for admitting additional evidence, which included a certificate from the Railway authorities and other detailed submissions. The CIT(A) had given the AO due opportunity to comment on the additional evidence through remand reports. The Tribunal upheld the CIT(A)'s decision, stating that the interest of justice warranted the admission of new evidence, and dismissed the Revenue's grounds on this issue. 2. Deletion of Addition on Account of Demurrage Paid to Railways: The Revenue argued that CIT(A) erred in deleting the addition of Rs. 2,10,170/- for demurrage paid to railways without evidence. The Tribunal noted that the assessee had produced a certificate from the Railway authorities and other documentary evidence, which indicated that demurrage is compensatory, not penal. The CIT(A) had relied on the jurisdictional High Court's decision in CIT v. Indo Asian Switchgears (P.) Ltd. The Tribunal found no infirmity in the CIT(A)'s findings and upheld the deletion of the addition. 3. Deletion of Addition on Account of Unexplained Addition to Capital Account: The Revenue contended that CIT(A) erred in deleting the addition of Rs. 4,36,632/-. The Tribunal observed that the CIT(A) had deleted the addition based on documentary evidence, including remittances from LIC and constituency allowance received by the assessee. The Tribunal upheld the CIT(A)'s findings, noting that the addition was deleted based on corroborative evidence, and dismissed the Revenue's ground. 4. Deletion of Addition under Section 68 of the Income Tax Act, 1961: The Revenue argued that CIT(A) erred in deleting the addition of Rs. 8,00,000/- under Section 68. The CIT(A) had upheld the addition of Rs. 10 lacs for two creditors but deleted Rs. 8 lacs for Shri Gurdip Singh, who had provided a confirmation and was assessed to tax. The Tribunal found that the CIT(A) had granted partial relief based on the evidence provided by Shri Gurdip Singh and upheld the CIT(A)'s findings, dismissing the Revenue's ground. 5. Allowance of Interest Paid on Non-Business Interest-Free Advances: The Revenue contended that CIT(A) erred in allowing relief of Rs. 7,24,478/- out of Rs. 7,30,033/- disallowed by the AO on account of interest paid on non-business interest-free advances. The Tribunal noted that CIT(A) had directed the AO to disallow interest proportionately based on the dates of advances and the rate charged by the bank. The Tribunal found no infirmity in the CIT(A)'s findings and dismissed the Revenue's ground. Conclusion: The Tribunal dismissed the appeal of the Revenue and the Cross-objection of the assessee, upholding the CIT(A)'s decisions on all grounds.
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