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TMI Blog2015 (5) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... wn in Rule 46A of the IT Rules,1962 , we find merit in the contentions of the ld. DR and therefore, in the interest of justice and fair play, vacate the findings of the Ld. CIT(A) and restore the issues raised in various grounds of appeal before us to his file, with the directions to follow the mandate in terms of Rule 46A of the IT Rules, 1962 as also principles of natural justice and thereafter, dispose of the matter in accordance with law. See CIT vs. Manish Buildwell [2011 (11) TMI 35 - DELHI HIGH COURT] - Decided in favour of revenue by way of remand. Addition made on house tax paid for the directors premises - CIT(A) deleted the addition - Held that:- CIT(A) has observed that similar issue arose for adjudication in the immediately preceding year in the case of the assessee. There is no change in the facts of the case this year. Not only that, the assessments of the assessee company for the assessment years 2005-06 and 2007-08 were completed u/s. 143(3) and no such disallowance was made by the Assessing Officer. Since the properties have been taken on rent by the company for its business purposes and the rent agreements provide for payment of the house tax by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. During the year Sales has been declared at ₹ 13,63,89,728/- (previous year : 17,39,06,908/-) after debiting various expenses in the profit and loss account, net profit of ₹ 1,63,73,524/- (previous year : ₹ 1,89,14,442/-) has been declared. The GP rate for the year under consideration is 42.11% as compared to 40.35% in the immediately preceding year. During the course of assessment proceedings, the Assessing Officer asked the assessee to produce details with addresses of sundry creditors declared in the balance sheet alongwith confirmation. The assessee produced name, address and amount due to creditors outstanding as on 31.3.2009; And was further asked by the AO, to furnish confirmation in respect of sundry creditors exceeding balance of ₹ 80000/- outstanding in the books of the assessee. Further, as a test check basis, notices u/s. 133(6) of the Income Tax Act 1961, (herein after the Act ) were issued to 35 parties. In respect of 19 parties, notices u/s. 133(6) of the Act were returned back unserved with the remarks incomplete address or left without address or no such person. Assessee was asked by the AO to discharge its burden and asked to establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. And neither was any evidence furnished by the assessee of any business transaction with any of the parties during the year under consideration. And only a few self drawn vouchers were produced which appeared to have been made in a single sitting. And in the previous assessment year i.e. AY 2008-09, the assessee had itself surrendered a sum of ₹ 45.76 lacs in view of the non - filing of confirmation from some creditors. So the AO was of the opinion that since in the present year too, the assessee has not been able to prove the genuineness of the transaction as also the identity and creditworthiness of the persons coupled with the fact that no evidence of trade / business transaction with the same creditors having been brought on record, it was held that the creditors and balances thereof are not open to verification and accordingly, the AO made the disallowance of ₹ 37,02,418/- on account of sundry creditors. 3.1 With regard to disallowance out of House tax of ₹ 35,680/-. the assessee has paid house tax on rental properties amounting to ₹ 1,68,138/-. Out of ₹ 1,66,138/- the assessee has disallowed a sum of ₹ 1,18,686/- in the computation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of their dues from the assessee. And neither was any evidence furnished by the assessee of any business transaction with any of these parties during the year under consideration. Only a few self vouchers were produced before him that too appeared to have been made in a single sitting. And in the previous assessment year i.e. AY 2008-09, the assessee had itself surrendered a sum of ₹ 45.76 lacs in view of non filing of confirmation from some of these creditors only. So according to the AO, the assessee has not been able to prove the genuineness of the transaction as also the identity and creditworthiness of the persons coupled with the fact that no evidence of trade / business transaction with the same having been brought on record, it was held by the AO that the sundry creditors and balances thereof could not be verified. Therefore, the AO made the addition of ₹ 37,02,418/-. We also find that Ld. CIT(A) has admitted additional evidences and deleted the addition. We find that a co-ordinate Bench, in assessee s own case for the asstt. year 2008-09 passed an order dated 12.10.2012 passed in ITA No. 3886/Del/2012 has dealt a similar and identical issue and remanded back t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to tax; and the AO accepted the said offer and completed the assessment. In these circumstances, how conditions stipulated in clause (b) of rule 46A(1) of the IT Rules,1962 could be said to have been fulfilled, is not evident from the impugned order. Even otherwise there is nothing to suggest as to whether or not the ld. CIT(A) examined the genuineness of additional evidence submitted by the assessee nor the AO seems to have been asked to verify its genuineness. In these circumstances, we are of the opinion that the ld. CIT(A) admitted additional evidence submitted by the assessee in its application under rule 46A of the IT Rules,1962,without following the procedure prescribed therein. As is apparent from the findings in the assessment order, the assessee was given sufficient opportunity by the AO to submit the confirmations. The ld. CIT(A) without taking cognizance of the fact that the assessee itself surrendered the amount to tax, proceeded to admit additional evidence, without allowing any opportunity to the AO.. In this situation, how the assessee could be said to be aggrieved with the findings of the AO, is not evident from the impugned order. The assessee in its application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al evidence produced by the appellant (4) Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub section (1) of section 251 or the imposition of penalty under section 271.. 6.1 It is evident from the aforesaid provisions that the ld. CIT(A) can take into account any evidence produced under sub-r. (1)(b) (c) of Rule 46A of the IT Rules, 1962 if the assessee was prevented by sufficient cause . In Haji Lal Mohd. Biri Works' case [2005] 275 ITR 496 (All), by making an elaborate discussion on rule 46A of the Rules in paragraph 10 at page 500 and 501, it was held that under rule 46A the authority is not permitted to act whimsically while exercising the jurisdiction under it .In the case under consideration, the assessee placed before the ld. CIT(A),certain additional evidence and admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of additional evidence, the ld. CIT(A) asked the AO to examine the genuineness of the additional evidence. Thus, the end result has been that additional evidence was admitted and accepted as genuine without the AO furnishing his comments and without verification. Since in the case under consideration, the ld. CIT(A) did not follow the procedure laid down in Rule 46A of the IT Rules,1962 , we find merit in the contentions of the ld. DR and therefore, in the interest of justice and fair play, vacate the findings of the Ld. CIT(A) and restore the issues raised in various grounds of appeal before us to his file, with the directions to follow the mandate in terms of Rule 46A of the IT Rules, 1962 as also principles of natural justice and thereafter, dispose of the matter in accordance with law after allowing sufficient opportunity to both the parties, bringing out clearly as to how the assessee is aggrieved with the findings of the AO after suomotu surrender of the amount and how the conditions stipulated in rule 46A of the I.T. Rules, 1962 are fulfilled. With these directions, ground no. 2 in the appeal is disposed of, as indicated hereinbefore. As a corollary, ground no.1 raised in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is year. Not only that, the assessments of the assessee company for the assessment years 2005-06 and 2007-08 were completed u/s. 143(3) and no such disallowance was made by the Assessing Officer. Since the properties have been taken on rent by the company for its business purposes and the rent agreements provide for payment of the house tax by the assessee company, it was held that this payment was for business considerations and was therefore an allowable expenditure in the case of the assessee. It has also been submitted that, there has been no revision of the rent of the premises for the last so many years and for that reason too the payment of house tax by the assessee was justified. In these circumstances, the disallowance made by the AO was deleted We find no infirmity in the impugned order and the Ld. CIT(A) has passed a reasoned, order and on the principle of consistency too the impugned order does not need any interference from our part, hence, we uphold the same. Therefore, the ground no. 4 raised by the Revenue is rejected. 11. In the result, the Appeal filed by the Revenue stands is partly allowed for statistical purposes. Order pronounced in the open court on 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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