2020 (10) TMI 280 - AT - Income Tax

Addition u/s. 68 - Submission of additional evidences filed by the assessee before the Ld. CIT (A) - HELD THAT - CIT(A) had decided the matter based on the additional evidence filed by assessee without obtaining remand report from Ld.AO which is not in accordance with rule 47A of the Rules. Therefore, in the interest of justice, we hereby remit the matter back to the file of the AO with directions to admit and examine any evidence filed by the assessee in support of her claim even if it is for the first time and thereafter decide the matter in accordance with law and merits after affording proper opportunity to the assessee of being heard. Also hereby direct the Ld. AO to examine the actual transactions made by the assessee with an open mind ignoring the silly mistakes committed in the books of accounts of the assessee, as it appears from the facts of the case that the additions made by the Ld. AO for ₹ 1,09,19,900/- u/s. 68 of the Act may not be warranted because the cash brought into the books of the assessee appears to be the amount paid to Mr. Sabzan who is the construction mistry for constructing the Hospital of the assessee, sourced from the bank loan obtained by the assessee. As far as the addition u/s. 68 for ₹ 61,42,389/- is concerned, the issue requires proper verification. - Decided in favour of revenue for statistical purposes.

Issues Involved:
1. Condonation of delay in filing cross-objection.
2. Addition of ?1,09,19,900/- under Section 68 of the Act.
3. Addition of ?61,42,389/- under Section 68 of the Act.

Condonation of Delay in Filing Cross-objection:
The appeal involved a delay in filing a cross-objection by the assessee, which was attributed to the misplacement of files by the Counsel. The Tribunal, after perusing the condonation petition, found that the delay was not due to the fault of the assessee. Consequently, the Tribunal condoned the delay and proceeded to hear the appeal on merits, considering that both the appeals were on identical issues.

Addition of ?1,09,19,900/- under Section 68 of the Act:
The Assessing Officer (AO) had made an addition of ?1,09,19,900/- under Section 68 of the Act, as the assessee had obtained a loan from a bank, but the transaction was not recorded in her books of accounts correctly. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted this addition after verifying that the loan was directly paid to a construction mistry for building the Hospital, and the entries in the books of accounts were erroneous. The Tribunal upheld the CIT(A)'s decision, emphasizing that the AO had treated the amount as undisclosed income erroneously.

Addition of ?61,42,389/- under Section 68 of the Act:
The AO made another addition of ?61,42,389/- under Section 68 of the Act, relating to cash received from various parties. The CIT(A) deleted this addition after the assessee explained that the cash received was due to loans extended to parties, which were partially returned during the relevant assessment year. The Tribunal found in favor of the assessee, noting that the CIT(A) had correctly considered the submissions and evidence provided by the assessee.

In conclusion, the Tribunal remitted the matter back to the AO for fresh examination, emphasizing the need for proper verification of the additional evidence submitted by the assessee. The Tribunal directed the AO to consider all evidence, explain transactions clearly, and avoid errors made in the books of accounts. The appeal of the Revenue was allowed for statistical purposes, and the Cross-objection of the assessee was dismissed, as the matter was remitted back to the AO for reevaluation.

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