2018 (5) TMI 1975 - AT - Income Tax

Addition u/s 68 - Non consideration of evidences submitted by assessee - HELD THAT - FAA has passed the exparte order without properly considered the submissions of the assessee. Assessee has filed all the necessary documentary evidences for substantiating its claim in dispute before the lower authorities, but the Ld. CIT(A) has not considered the same. Assessee has also certified that the above evidences/ documents were on record of the Ld. CIT(A) AO, but the Ld. CIT(A) has not considered the same in a proper manner, which in my considered opinion, are very essential to be considered and needs to be examined by the Ld. CIT(A). Issues in dispute are remitted back to the file of Ld. CIT(A) to decide the issues in dispute afresh, after considering all the evidences as discussed above and give adequate opportunity of being heard to the assessee for substantiating its claim. The Assessee is also directed to submit all the documents / evidences before the Ld. CIT(A) in order to substantiate its claim and did not take any unnecessary adjournment and fully cooperate with the Ld. CIT(A) in the proceedings for the speedy disposal of the matter. - Assessee s Appeal is allowed for statistical purposes.

Issues:
1. Validity of the order passed by CIT(A) without sufficient opportunity to the appellant.
2. Jurisdiction of CIT(A) in enhancing income.
3. Treatment of negative reserves and surplus in income enhancement.
4. Addition under section 68 of the Act for short term borrowings.
5. Adequacy of explanation for additions made by CIT(A).
6. Ownership of land and sale of plot/land.
7. Source of investment in working progress.
8. Applicability of section 69 of the Act.
9. Discovery of new sources of income by CIT(A).

Analysis:
1. The Assessee challenged the order of CIT(A) on grounds of lack of opportunity for compliance. The Tribunal found merit in the contention that the CIT(A) passed an ex parte order without considering the submissions and evidences provided by the Assessee. The Tribunal directed the issues to be remitted back to the CIT(A) for fresh consideration with proper opportunity for the Assessee to substantiate their claims.

2. The Assessee contested the jurisdiction of CIT(A) in enhancing the income by a significant amount. The Tribunal noted that the Assessee had submitted extensive documentary evidence to support their claims, which the CIT(A) failed to consider. The Tribunal directed the CIT(A) to reevaluate the income enhancement issue based on the evidences provided by the Assessee.

3. Regarding the treatment of negative reserves and surplus in income enhancement, the Tribunal observed that the CIT(A) did not adequately consider the evidences submitted by the Assessee. The Tribunal directed the CIT(A) to review this aspect along with other issues upon reconsideration.

4. The addition under section 68 of the Act for short term borrowings was challenged by the Assessee. The Tribunal noted that the Assessee had provided detailed documentation to support the legitimacy of the borrowings, which the CIT(A) overlooked. The Tribunal directed the CIT(A) to reexamine this addition in light of the documents submitted.

5. The Tribunal addressed the adequacy of explanations provided by the Assessee for the additions made by the CIT(A). It was noted that the Assessee had submitted a comprehensive set of evidences, which were not properly considered. The Tribunal instructed the CIT(A) to give due consideration to the explanations and evidences provided by the Assessee.

6. The issue of ownership of land and sale of plot/land was raised by the Assessee. The Tribunal observed discrepancies in the CIT(A)'s findings and directed a reevaluation based on the evidences submitted by the Assessee.

7. The source of investment in working progress was contested by the Assessee. The Tribunal found that the CIT(A) did not adequately consider the documentary evidence provided by the Assessee. The Tribunal directed a reexamination of this issue by the CIT(A) with proper consideration of the evidences.

8. The applicability of section 69 of the Act to a specific sum was disputed. The Tribunal directed the CIT(A) to review this issue in light of the evidences and submissions made by the Assessee.

9. The discovery of new sources of income by the CIT(A) was challenged. The Tribunal found that the CIT(A) had not properly considered the evidences on record. The Tribunal directed the CIT(A) to reevaluate this aspect in the reassessment.

In conclusion, the Tribunal allowed the Assessee's appeal for statistical purposes and remitted the issues back to the CIT(A) for fresh consideration with proper opportunity for the Assessee to present their case effectively.

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