2010 (6) TMI 895 - AT - Income Tax

Summary

Issues involved: Appeal against disallowances made by Assessing Officer u/s 68 of the Income-tax Act, 1961 for loans treated as unexplained cash credits and difference in TDS certificates and labour charges.

Issue 1 - Disallowance u/s 68 of the Act:
The appellant contested the addition u/s 68 made by the AO, claiming lack of opportunity to prove that credits pertained to earlier years and some were not subject to u/s 68. Additional evidence was submitted to the CIT(A) including loan confirmations and explanations for certain credits. However, the CIT(A) did not admit the evidence and only directed the AO to review the previous year's balance sheet. The Tribunal noted that the CIT(A) failed to consider the additional evidence, emphasizing the need for a fair opportunity for the appellant. The matter was remanded to the CIT(A) for proper consideration of the evidence and reasons for non-admission.

Issue 2 - Cooperation with AO:
The Departmental Representative argued that the appellant did not cooperate with the AO, implying no need for fresh evidence admission. However, the Tribunal found that the appellant's case focused on the CIT(A)'s failure to admit additional evidence rather than lack of opportunity from the AO. The Tribunal stressed the importance of proper consideration of evidence for substantial justice and directed the CIT(A) to provide a reasonable opportunity for the appellant to be heard.

Conclusion:
The Tribunal partially allowed the appeal, setting aside the issue of disallowance u/s 68 of the Act, except for a specific amount, to be reconsidered by the CIT(A) with proper evaluation of the additional evidence. The decision was pronounced on June 4, 2010.