2014 (1) TMI 1135 - AT - Income Tax

Order of CIT(A) passed in violation of principles of natural justice - Held that - The assessee has produced voluminous evidences - The assessee has also given the reasons for non- furnishing of these documents which was mainly due to the fact that the assessee company was running into heavy losses and was not in the commercial operation - These evidences ought to have been considered by the learned Commissioner (Appeals) in the interest of substantial justice - A very high pitch assessment has been made - These evidences goes to the very root of the various issues involved - The power of the learned Commissioner (Appeals) is co-terminus with that of the Assessing Officer and during the appellate proceedings, the learned Commissioner (Appeals) can not only entertain various evidences but also can also carry out necessary enquiry through the Assessing Officer after calling for the remand report - The issue was restored for fresh adjudication.

Summary

Issues:
1. Admission of additional evidences at the appellate stage.
2. Assessment of depreciation.
3. Assessment of interest expenditure.
4. Assessment of repairs expenses, survey charges, and site expenses.
5. Assessment of unexplained cash credit.
6. Assessment of interest income instead of Business Income.

Admission of Additional Evidences:
The appellant challenged the refusal to admit additional evidences by the Commissioner (Appeals), citing reasons for non-production before the Assessing Officer due to heavy losses and operational difficulties. The appellant sought a remand for a fresh assessment. The Departmental Representative supported the Commissioner's decision, emphasizing the lack of reasonable cause for admitting additional evidence. The Tribunal found merit in the appellant's arguments, noting the substantial evidences' relevance and the need for a thorough examination by the Assessing Officer. Consequently, the Tribunal set aside the Commissioner's order and remanded the case to the Assessing Officer for a fresh assessment, directing a comprehensive review of all evidences provided by the appellant.

Assessment of Depreciation, Interest Expenditure, Repairs Expenses, etc.:
The appellant contested various additions made by the Assessing Officer, including depreciation, interest expenditure, repairs expenses, and unexplained cash credit, among others. The Commissioner (Appeals) upheld these additions, leading to the appeal before the Tribunal. The appellant argued that the voluminous evidences provided were not considered adequately, impacting the correctness of the additions. The Tribunal acknowledged the appellant's challenges, noting the operational difficulties faced by the company and the reasons for non-compliance. Considering the significant impact of these evidences on the assessment, the Tribunal opined that justice required a fresh examination by the Assessing Officer. Therefore, the Tribunal set aside the Commissioner's decision and remanded the case for a comprehensive reassessment, emphasizing the need for a fair opportunity for the appellant to present their case effectively.

Conclusion:
The Tribunal allowed the appellant's appeal for statistical purposes, remanding the case to the Assessing Officer for a fresh assessment considering all relevant evidences provided by the appellant. The decision highlighted the importance of substantial justice and effective opportunity for the appellant to address the assessment issues adequately. The Tribunal's ruling aimed at ensuring a fair and thorough review of the case, emphasizing the need for a comprehensive examination of the evidences to determine the correct income of the assessee.