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2023 (9) TMI 1118 - AT - Income TaxCIT(A) justification in accepting addition evidences u/r 46A - HELD THAT - CIT(A) afforded opportunity to the Ld. AO and asked for remand report from him. The Ld. AO in his remand report only objected to admittance of additional evidence by the CIT(A). If he wanted, he could have examined the contents of the additional evidence furnished by the assessee during the course of remand proceedings but the Ld. AO did not do anything of the sort. On these facts, we are of the view that in the interest of justice and backed by the decision of Hon ble Delhi High Court in Virgin Securities Credits (P) Ltd. 2011 (2) TMI 207 - DELHI HIGH COURT Ld. CIT(A) was perfectly justified in admitting the additional evidence. Disallowance of 40% of total direct/indirect expenses and disallowance of claim u/s 80C - HELD THAT - On the basis of evidence produced by the assessee and admittance thereof under Rule 46A of the Rules, the Ld. CIT(A) has deleted the above disallowances. Nothing has been brought on record by the Revenue to enable us to take a view different from that of the Ld. CIT(A). Accordingly, we reject the grounds related to deletion of these disallowances by the Ld. CIT(A) in both the AY(s). Addition on account of difference in opening stock of the current year and closing stock of the preceding year - CIT(A) has accepted the explanation offered by the assessee before him and deleted the addition. The explanation furnished by the assessee before the Ld. CIT(A) could not be faulted before us by the Revenue. We, therefore, reject this ground of the Revenue raised in AY 2012-13. Revenue appeal dismissed.
Issues involved:
The judgment involves appeals filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals) for Assessment Years 2011-12 and 2012-13. AY 2011-12: 1. The Ld. CIT(A) deleted the addition of Rs. 1,73,33,666/- for disallowance of 40% of total direct/indirect expenses. 2. The Ld. CIT(A) admitted fresh/additional evidence under Rule 46A despite objections from the AO. 3. The Ld. CIT(A) deleted the addition of Rs. 51,653/- for disallowance of the assessee's claim under section 80C of the IT Act. AY 2012-13: 1. The Ld. CIT(A) deleted the addition of Rs. 1,75,71,490/- for disallowance of 40% of total direct/indirect expenses. 2. The Ld. CIT(A) deleted the addition of Rs. 76,09,453/- for the difference in opening stock figure of the current year with the closing stock figure of the previous year. 3. The Ld. CIT(A) admitted fresh/additional evidence under Rule 46A despite objections from the AO. 4. The Ld. CIT(A) deleted the addition of Rs. 51,653/- for disallowance of the assessee's claim under section 80C of the IT Act. The assessee, engaged in garment manufacturing and export, filed returns for AY 2011-12 and 2012-13, which were selected for scrutiny. The AO made ex-parte assessments with disallowances and additions. The assessee appealed these decisions before the Ld. CIT(A). During the appellate proceedings, the assessee submitted additional evidence under Rule 46A. The Ld. CIT(A) admitted the evidence based on the assessee's explanations and the decision of the Hon'ble Delhi High Court. The Ld. CIT(A) deleted the disallowances of expenses and claims under section 80C based on the documents provided by the assessee. Regarding the difference in opening/closing stock, the Ld. CIT(A) accepted the explanation of a clerical mistake and deleted the addition. The Revenue appealed the Ld. CIT(A)'s decisions before the Tribunal for both AYs. The Tribunal observed that the Ld. CIT(A) was justified in admitting additional evidence and upheld the deletions of disallowances and additions based on the evidence produced by the assessee. The Tribunal rejected the Revenue's grounds related to the disallowances and additions, affirming the Ld. CIT(A)'s decisions. The appeals of the Revenue for both AYs were dismissed.
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