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TMI Blog2011 (1) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer that the assessee had made any sales outside the books of account or that the assessee has realised any sale proceeds of sugar outside the books of account Regarding subscription and contribution - The spirit of Rule 46A is founded on the principles of natural justice which in the present case, in our view, stand fulfilled by the fact that the CIT(A) obtained and considered the remand report of the Assessing Officer with respect to the submissions and material led by the assessee before adjudicating the issue before him It is not necessary that when additional evidence is furnished, the matter must be remanded to the Assessing Officer. It depends on nature of issue and nature of evidence - Mere fact that the yield of the assessee was not comparable to other yields, could not be a ground to doubt the results declared by the assessee - Same is the position on the issue of genuineness of sale rate, evidence regarding subscription, contribution and treatment of penalty amount - rates of molasses non-recovery of the shortage amounts, the use of subsidy and expenditure by way of interest on loans raised from the banks, the matter has merely been remanded to the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per which no additional evidence is admissible unless the CIT(A) records in writing the reasons for its admission and when the additional evidence can be admitted only for the specific reasons enumerated in sub-rule (1) of Rule 46A? and (iv) Whether on the facts and in the circumstances of the case, the Ld. ITAT is right in law in upholding the deletion by the CIT(A) of addition of Rs.1,43,328/- made on account of penalty payable to growers when the CIT(A) had allowed the relief in violation of provisions of sub-rule (2) of Rule 46A of the Income Tax Rules, 1962 as per which no additional evidence is admissible unless the CIT(A) records in writing the reasons for its admission and when the additional evidence can be admitted only for the specific reasons enumerated in sub-rule (1) of Rule 46A? (v) Whether, on the facts and in the circumstances of the case, the Ld. ITAT is right in law in allowing another opportunity to the assessee to lead evidence and to furnish explanation in support of its claim of low sale rates of molasses, for which addition of Rs.46,96,460/- had been made by the Assessing Officer or before the Commissioner of Income tax (Appeals) inspite of the amp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative Societies. The accounts of the assessee are not only subject to audit by its own appointed auditors but also by auditors appointed by the Registrar, Cooperative Societies. Another undisputed feature in the case of the assessee is that it is maintaining complete account books which are vouched and audited. There is also no dispute that the assessee produced before the Assessing Officer the requisite details and material required to finalized the assessment. We are only pointing out this background to say ostensibly there is no charge of misfeance or undeclared business against the assessee. Moreover, the Assessing Officer has not pointed out any such discrepancy in the records maintained by the assessee. The only point made out by the Assessing Officer is that the yield declared by the assessee is low in comparison to the yield declared by another concern, M/s Yamuna Nagar Sugar Mills. At the outset, we may say that the comparison made is unjustified for the reasons that the Assessing Officer does not bring out any features as to how the assessee and the other concern are similar. Except that the other concern is also a sugar mill there is no material referred to by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial which was hitherto not before the Assessing Officer. It requires the CIT(A) to confront the material is question to the Assessing Officer before admitting and considering the same. In this case, evidently the material and other pleas taken by the assessee before the CIT(A) were confronted to the Assessing Officer. The Assessing Officer has given his comments on each of the Grounds urged before the CIT(A) by way of written communication dated 08.09.2004, a copy of which has been placed in the Paper-book. So however the argument of the Revenue is that the CIT(A) has not specifically referred to Rule 46A while calling for the comments of the Assessing Officer. In our considered opinion, the said argument is quite technical and does not substantively distract from the fact that the Assessing Officer was very much in the know of the material being relied upon by the assessee before the CIT(A). The spirit of Rule 46A is founded on the principles of natural justice which in the present case, in our view, stand fulfilled by the fact that the CIT(A) obtained and considered the remand report of the Assessing Officer with respect to the submissions and material led by the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to produce material to explain the low rate of sales. Neither before the Assessing Officer and nor before the CIT(A), the said material has been led by the assessee. No doubt, sales effected at rates lower than the market rate by itself do not result into an addition but certainly the same have to be satisfactorily explained. We, therefore, allow an opportunity to the assessee to lead evidence in this regard. The learned counsel for the assessee has referred to the written submissions in this regard which have been placed in the paper book at pages 16-17, 55 to 92 and 388 to 392. So however, the assessee is required to substantiate the explanations on the basis of evidence and material which is not on record. Hence our decision to set aside the order of the CIT(Appeals) and remand this issue to the file of the Assessing Officer to be adjudicated afresh in the light of the material with the assessee in support of its case. Therefore, on this Ground the assessee succeeds for statistical purposes. xx xx xx xx xx (g) Whether interest claimed was on loan advanced for non business purposes: 31. We have considered the rival submissions carefully. At the outset it is obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee in this regard. Therefore, for this purpose, we deem it fit and proper to set aside the order of the CIT(Appeals) and direct the Assessing Officer to adjudicate the issue afresh after allowing the assessee a reasonable opportunity to substantiate the plea that the impugned sums are subjudiced before the Court of law. Thus, on this ground the assessee succeeds for statistical purpose. xx xx xx xx xx (i) Issue of subsidy received: 36. On this aspect, after considering the rival stands we find that, in principle, the plea of the assessee is sustainable, so however, whether or not the subsidy has been claimed in terms of the scheme formulated, is required to be verified. For this purpose the issue is remanded to the file of the Assessing Officer to be examined afresh. Thus, on this Ground the assessee succeeds for statistical purpose. 4. We have heard learned counsel for the appellant. 5. Contention raised on behalf of the appellant is that since the assessee led additional evidence for the first time before the CIT(A), the matter should have been remanded to the Assessing Officer instead of considering the said evidence by the appellate authority. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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