2023 (4) TMI 179 - AT - Income Tax

Validity of CIT(A) action for not calling for remand report from the AO and not furnishing copies new evidences provided by the assessee during the appellate proceedings for rebuttal - HELD THAT - Factual recording by the ld.CIT(A) has not been controverted by the Revenue before us nor furnished any evidence to compel us to find any merit in the allegations of the Revenue. In the absence of the same, particularly when the ld.CIT(A) has given opportunity to the AO to contradict the submissions of the assessee, we are unable to accept the allegation of the Revenue that the AO has not been provided with proper opportunity to submit remand report or opportunity to rebut the new evidences furnished by the assessee during the appellate proceedings. Thus, we find the grounds raised by the Revenue in both the appeals being devoid of any merits, the same are rejected in both the appeals. Undisclosed income - differential amount of sale proceeds - addition on account of difference of value of the property as per stamp duty valuation authority and sale consideration received by the assessee on sale of shops - HELD THAT - We find that all the documents furnished by the assessee during the assessment as well as appellate proceedings were sufficient to justify claim of the assessee. On the contrary, the findings of the lower authorities were not based any documentary evidences, but based on some presumption that the assessee has concealed sale of plot, and thereby earned undisclosed income which action of the AO was not justified by any documentary evidence and therefore not in accordance with law. On such presumption, burden to establish concealment of income indeed was with the AO with some incriminating material. In the absence of the same, we are unable to find any merit in the impugned order of the ld.CIT(A), which we set aside, and allow the grounds of appeal of the assessee.

Issues Involved:
1. Whether the ld.CIT(A) erred in law by allowing the appeal of the assessee without receiving the remand report from the AO.
2. Whether the ld.CIT(A) erred in law by allowing the appeal of the assessee based on new evidence not furnished before the AO.
3. Whether the ld.CIT(A) was justified in setting aside the matter to the AO.
4. Whether the AO correctly maintained the addition of Rs.1,71,02,449/- and Rs.3,10,69,500/- on account of alleged differences in sales as reported in accounts and as observed by the AO based on AIR details.

Detailed Analysis:

Issue 1: Remand Report from AO
The Revenue contended that the ld.CIT(A) allowed the appeal of the assessee without obtaining a remand report from the AO. However, the Tribunal found that the ld.CIT(A) had forwarded the submissions of the appellant to the AO, but no report was received from the AO. The Tribunal noted that the factual recording by the ld.CIT(A) was not controverted by the Revenue, and thus, the allegation of the Revenue was found to be without merit. Consequently, the grounds raised by the Revenue were rejected.

Issue 2: New Evidence
The Revenue argued that the ld.CIT(A) allowed the appeal of the assessee based on new evidence not furnished before the AO. The Tribunal observed that the ld.CIT(A) had forwarded the submissions and new evidence to the AO for comments, but no response was received. The Tribunal concluded that the ld.CIT(A) had given the AO an opportunity to rebut the new evidence, and therefore, the grounds raised by the Revenue were devoid of merit and were rejected.

Issue 3: Setting Aside the Matter to AO
The Tribunal found that the ld.CIT(A) had directed the AO to re-verify and allow the claim of the assessee, considering the explanations and confirmations provided by the assessee. The Tribunal upheld the decision of the ld.CIT(A) to set aside the matter to the AO for re-verification.

Issue 4: Additions on Account of Differences in Sales
For A.Y. 2010-11, the AO made an addition of Rs.1,71,02,449/- based on AIR information, which indicated a higher sale value for a property than what was reported by the assessee. The assessee explained that the higher value was for stamp duty purposes, and the actual transaction value was Rs.1,07,00,000/-. The ld.CIT(A) found this explanation to be confirmed by M/s Chugh Housing & Developers and directed the AO to re-verify and allow the claim. However, the AO maintained the addition, which was upheld by the present CIT(A). The Tribunal found that the ld.CIT(A) had already considered all the evidence and directed the AO to re-verify, but the AO re-examined the issue instead. The Tribunal found the AO's action unjustified and set aside the impugned order, allowing the appeal of the assessee.

For A.Y. 2011-12, a similar issue arose with an addition of Rs.3,10,69,500/-. The Tribunal noted that the facts and circumstances were similar to A.Y. 2010-11 and adopted the same view, allowing the appeal of the assessee and setting aside the impugned order.

Conclusion:
The appeals of the Revenue were dismissed, and the appeals of the assessee were allowed. The Tribunal found that the ld.CIT(A) had acted correctly in forwarding the submissions to the AO and directing re-verification. The AO's maintenance of the additions without proper re-verification was unjustified. The Tribunal set aside the impugned orders and allowed the claims of the assessee.

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