2013 (12) TMI 1408 - AT - Income Tax

Additions on account of undisclosed stock - Non-granting adequate opportunity to produce the evidences Held that - The assessee had not been granted adequate opportunity to explain the stock of jewellery in respect of the customers who had given the gold jewellery for making the ornaments - The assessee had not been granted adequate opportunity to explain the issues in the course of assessment - The additions had been made only on surmises and conjectures without giving the assessee adequate opportunity to explain the individual items - The assessee has produced certain fresh evidences before the Tribunal in the form of affidavits The issue was restored to AO for fresh adjudication.

Summary

Issues:
Appeal against order of CIT(A) for Assessment year 2007-08; Adequate opportunity to explain additions; Non-granting of opportunity to produce evidence; Additions made on surmises and conjectures; Restoration of issues to AO for re-adjudication.

Analysis:
The appeal was filed against the order of the ld. CIT(A) for the Assessment year 2007-08. The appellant raised various grounds challenging the additions made by the assessing officer without adequate opportunity to explain or produce evidence. The appellant contended that the CIT(A) erred in law by confirming all the additions without granting a fair chance to present their case. Specifically, the appellant objected to the addition of undisclosed stock value, investment in money lending business, loans given to other entities, estimated interest on investment, and undisclosed investment in pawn business. The appellant argued that these additions were made without proper explanation and were based on conjecture and surmise.

During the proceedings, the appellant's representative highlighted that the appellant was not given sufficient opportunity to explain the stock of jewellery and other issues during the assessment. The representative pointed out that the appellant had additional evidence, in the form of affidavits, to support their claims regarding the gold jewellery deposited by customers. It was emphasized that the appellant should have been allowed to present these documents before the assessing officer and the CIT(A). The representative requested that the issues be sent back to the AO for reevaluation, with the appellant being given a fair chance to substantiate their claims with the newly presented evidence.

In response, the Departmental Representative did not object to the issues being remanded to the AO for further adjudication. After considering the arguments from both sides and reviewing the fresh evidence in the form of affidavits provided by the appellant, the Tribunal decided to remand the issues back to the AO for re-adjudication. The Tribunal acknowledged the importance of granting the appellant a fair opportunity to substantiate their claims and present the newly available evidence. Consequently, the appeal of the assessee was partly allowed for statistical purposes, with the issues being restored to the AO for reevaluation. As a result, the other grounds raised in the appeal were considered moot in light of the decision to send the issues back for re-adjudication.

In conclusion, the Tribunal allowed the appeal for statistical purposes and directed the issues to be remanded to the AO for a fresh assessment, ensuring that the appellant is provided with adequate opportunity to explain and support their case with the newly presented evidence.