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2024 (6) TMI 1355 - AT - Income TaxIssues Involved: 1. Addition of Rs. 3,58,00,000 on account of unexplained cash credit under Section 68 of the Income Tax Act, 1961. 2. Alleged violation of principles of natural justice in the assessment order. 3. Legality of the order passed by the CIT(A). 4. Confirmation of interest under Sections 234 A/B/C. 5. Request to produce additional evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. 6. Leave to press new or additional grounds of appeal. Issue-wise Detailed Analysis: 1. Addition of Rs. 3,58,00,000 on account of unexplained cash credit under Section 68 of the Income Tax Act, 1961: The assessee contested the addition made by the Assessing Officer (AO) treating share capital and share premium received as unexplained income under Section 68. The AO's order was termed as non-speaking and mechanical, as it did not consider the detailed evidence provided by the assessee, including identity, creditworthiness of creditors, and genuineness of transactions. The Tribunal noted that the AO failed to examine the documents submitted and did not point out any discrepancies. The AO's reliance on the failure to produce shareholders was deemed insufficient without examining the provided documents. 2. Alleged violation of principles of natural justice in the assessment order: The assessee argued that the assessment order violated principles of natural justice as the AO did not consider the submitted evidence and made the addition without proper examination. The Tribunal observed that the AO did not specify the discrepancies in the documents or the necessity for further inquiries, thus failing to justify the addition. 3. Legality of the order passed by the CIT(A): The CIT(A) upheld the AO's order without discussing the material facts or pointing out defects in the evidence provided by the assessee. The Tribunal found the CIT(A)'s order to be non-speaking and mechanical, lacking a proper examination of the evidence, thus not sustainable as per law. 4. Confirmation of interest under Sections 234 A/B/C: The assessee challenged the confirmation of interest under Sections 234 A/B/C, terming it unjustified. The Tribunal's decision to delete the addition of Rs. 3,58,00,000 implicitly addressed this issue, as the interest was consequential to the primary addition. 5. Request to produce additional evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963: The assessee sought leave to produce additional evidence under Rule 29. The Tribunal's detailed examination of the already submitted evidence and its decision to delete the addition rendered this request moot. 6. Leave to press new or additional grounds of appeal: The assessee reserved the right to press new or additional grounds of appeal. However, the Tribunal's decision on the primary issues made it unnecessary to address this point further. Conclusion: The Tribunal concluded that the lower authorities unjustifiably made the impugned additions, failing to properly examine the evidence provided by the assessee. The appeal was allowed, and the addition of Rs. 3,58,00,000 was ordered to be deleted. The Tribunal emphasized the necessity for the AO to conduct an independent inquiry and properly examine the evidence before making such additions. The CIT(A)'s order was deemed non-sustainable due to its mechanical nature and lack of proper examination.
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