2013 (4) TMI 37 - AT - Income Tax

Long term capital gain on transfer of property - addition made as case of the assessee was selected for scrutiny - assessee contested against addition in absence of any sale consideration received by the appellant but simply on the basis of inclusion of his name in the sale document - Levy of interest u/s 234A/B/C - Initiation of penalty u/s. 271(1)(c) - CIT (A) erred in law and on facts in rejecting application made under rule 46A of the Act to place additional evidence on record by the appellant - Held that - Though the deed has been created after passing of assessment order, but to meet the ends of justice one more opportunity be granted to assessee to represent the case before the CIT (A). Thus remit back the issue involved in this appeal to the file of CIT (A) for deciding the issue afresh after considering the relinquishment deed and other material as deemed fit and after giving sufficient and reasonable opportunity of hearing to the assessee - in favour of assessee by way of remand.

Summary

Issues:
1. Admissibility of additional evidence sought under rule 46A of the Income Tax Rules, 1962.

Analysis:
The appeal was filed against the order of Ld. CIT (A) for the assessment year 2009-10, where the assessee challenged the addition of long-term capital gains by the Assessing Officer. The appellant argued that there was no legal right or interest in the property sold due to relinquishment by way of a disclaimer. The appellant also contended that no sale consideration was received, and the inclusion of their name in the sale document should not lead to the addition of capital gains. Furthermore, the appellant raised concerns about double taxation as the Assessing Officer assessed the share of the appellant and their son. Additionally, the appellant sought to place additional evidence on record under rule 46A, which was rejected by the CIT (A).

The main contention before the Appellate Tribunal was the admissibility of the additional evidence, specifically the deed of relinquishment, under rule 46A. The Ld. A.R. argued that the deed was crucial for adjudicating the issue, while the Ld. D.R. opposed its admission. The Tribunal noted that the CIT (A) did not consider the relinquishment deed and cited reasons for rejecting additional evidence, stating that it was created after the assessment order and lacked the appellant's signature. However, the Tribunal, in the interest of justice, decided to remit the issue back to the CIT (A) for fresh consideration, emphasizing the importance of giving the assessee a reasonable opportunity to present their case.

As a result of remitting the issue back to the CIT (A) for reevaluation after considering the relinquishment deed and other relevant material, the appeal of the assessee was allowed for statistical purposes. The Tribunal refrained from adjudicating other grounds raised in the appeal, as the primary focus was on the admissibility of additional evidence under rule 46A.

This judgment highlights the significance of procedural fairness and the right of parties to present crucial evidence for a fair adjudication. The decision underscores the importance of giving due consideration to all relevant material and providing adequate opportunities for parties to present their case effectively.