2016 (9) TMI 1626 - AT - Income Tax

Addition u/s 68 - Admission of additional evidences - HELD THAT - In the interest of justice and the contention raised by the Assessee s counsel that additional evidence filed by the Assessee by way of Paper Book No. 2 i.e. Confirmation and Acknowledgement from seller of shares with their ITR etc. which are very essential and goes to the root of the matter, hence, the same are admitted. We are also of the view that the additional evidences filed by the assessee requires thorough examination at the level of the AO, therefore in the interest of justice, we are setting aside the issues in dispute to the file of the AO to examine the additional evidences filed by the assessee and decide the same afresh, as per law, after giving adequate opportunity of being heard to the assessee. In the result, the appeal filed by the assessee stands allowed for statistical purposes.

Summary

Issues:
1. Validity of the assessment order under section 143(3) instead of section 144.
2. Treatment of cash and cheque deposits as unexplained under section 68.
3. Admission of additional evidence before the CIT(A).
4. Jurisdiction of the CIT(A) to proceed further after not accepting additional evidence.

Analysis:

Issue 1:
The first issue raised in the appeal questions the validity of the assessment order under section 143(3) instead of section 144 due to non-appearance of the assessee on the last date and alleged non-consideration of the submission dated 23.12.08. The appellant contested the justification of upholding the order by the Ld.CIT(A) and sought clarification on the procedural aspects. The Tribunal examined the grounds and decided to allow the appeal for statistical purposes, indicating a favorable ruling for the assessee on this issue.

Issue 2:
The second issue pertains to the treatment of credit by way of cash and cheques deposited as unexplained under deeming section 68 without disputing the nature of the credits. The appellant argued that the credits were sales proceeds of shares with confirmed purchases. The Tribunal noted the submissions and admitted additional evidence crucial to the matter. The Tribunal set aside the issue to the AO for re-examination, emphasizing the need for a thorough review of the facts and adequate opportunity for the assessee to present their case.

Issue 3:
Regarding the admission of additional evidence before the CIT(A), the appellant filed a request under Rule 29 of the ITAT Rules, 1963, seeking permission to introduce legal documents as additional evidence. The Tribunal acknowledged the importance of the evidence submitted by the appellant, which included confirmations, acknowledgments, and balance sheets from relevant parties. The Tribunal admitted the additional evidence and remitted the issue back to the AO for a fresh decision after thorough examination.

Issue 4:
The final issue raised questions the CIT(A)'s actions after not accepting the additional evidence and proceeding further by exercising the jurisdiction of the AO. The Tribunal, after hearing the arguments and perusing the records, deemed it necessary to set aside the issues in dispute to the file of the AO for a reevaluation based on the additional evidence submitted by the assessee. The Tribunal emphasized the importance of justice and providing the assessee with a fair opportunity to present their case.

In conclusion, the Tribunal allowed the appeal for statistical purposes, highlighting the significance of procedural correctness, thorough examination of evidence, and ensuring fair opportunities for the parties involved in tax assessment disputes.