2021 (5) TMI 781 - AT - Income Tax

Un-explained investment in shares u/sec. 69 - Assessee seeked admission of additional evidence - HELD THAT - Though additional evidence is very much related to the issue involved in the appeal and essential for proper and just decision of the case, however as the Assessee s reply and cause shown for non-filing of documents before the authorities below for a long period, is neither plausible nor satisfactory and sufficient, hence we deem it appropriate to accept the prayer of the Assessee for admission of additional evidence, subject to deposit in Andhra Pradesh Chief Minister s Welfare Fund for Covid-19, within 15 days from the date of this order, as offered and agreed by the Assessee. The case is remanded back to the file of AO for decision afresh while considering the additional evidence filed before us by the Assessee and without being influenced by any of the observations made in this order. Appeal filed by the Assessee allowed for statistical purpose.

Summary

Issues involved:
1. Addition of income as unexplained investment in shares u/sec. 69 of the Income Tax Act, 1961.
2. Challenge to assessment order on various grounds including lack of notice and show cause notice.
3. Request for admission of additional evidence during the appeal process.

Detailed analysis:
1. The assessment order under consideration was passed u/sec. 143(3) r.w.s. 144 of the Income Tax Act, where an amount of ?29,75,000 was added as income of the Assessee by treating it as unexplained investment in shares u/sec. 69 of the Act. The Assessee failed to avail opportunities to provide supporting documents or comply with notices sent by the Assessing Officer (AO), leading to the addition. The ld. Commissioner upheld this addition partially, dismissing the Assessee's contention that no notice was given before the addition was made.

2. The Assessee challenged the assessment order on multiple grounds before the ld. Commissioner, including the lack of notice and show cause notice regarding the proposed addition. The ld. Commissioner, after careful consideration, found that the AO had indeed issued notices u/s. 142(1) to the Assessee on multiple occasions, and thus, the contention that no show cause notice was served was dismissed. The ld. Commissioner also addressed other grounds raised by the Assessee, ultimately upholding the addition of ?29,75,000.

3. During the appeal process, the Assessee filed a petition under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, seeking admission of additional evidence crucial to substantiate its case. The Assessee explained that the necessary documents were not available during the assessment proceedings but were later obtained. The Tribunal accepted the Assessee's request for admission of additional evidence, subject to a deposit of ?33,000 in the Andhra Pradesh Chief Minister's Welfare Fund for Covid-19. The case was remanded back to the AO for a fresh decision considering the additional evidence submitted during the appeal.

In conclusion, the appeal filed by the Assessee was allowed for statistical purposes, emphasizing the importance of providing necessary documentation and complying with procedural requirements during tax assessments.