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TMI Blog2015 (11) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished by the assessee before the ld CIT(A). Accordingly, we direct the ld CIT(A) to forward all the additional evidence to the ld. AO. Decided in favour of revenue for statistical purposes. - ITA No. 4908/Del./2011 - - - Dated:- 14-10-2015 - Smt. Diva Singh, JM And Sh. O. P. Kant, AM For the Appellant : Sh. J. P. Chandrekar, Sr. DR For the Respondent : Sh. Shashwat Bajpai, Adv. ORDER Per O. P. Kant, A. M. This appeal of the Revenue is directed against the order dated 25.08.2011 of learned Commissioner of Income-tax (Appeals) - XIX, New Delhi, raising following grounds of Appeal:- 1. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in setting aside the issue of disallowance of ₹ 11,79,500/- u/s 14A the Act as calculated as per Rule 8D of the of I T Rules to the file of the AO for further examination without appreciating the fact that there are no such powers available to him under the IT Act. 2. On the facts and circumstances of the case, the Ld. CIT (A) has erred in admitting fresh evidence under Rule 46A even though it was objected by the AO in his remand report. 3. On the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M-IT, it was held that Rule 8D is applicable from the A.Y. 2008-09. Since Rule 8D is not applicable being assessment year 2007-08 in appellant's case, the AO is hereby directed to call for the details of expenditure and any of the expenditure found related to earning of dividend income and investments should be disallowed. The assessee is hereby directed to furnish the necessary details. For this limited direction, it is relied on the decision of Hon'ble ITAT in the case of Kodak India Ltd vs. ACIT (supra). 4. As regards to the disallowance of professional fees expenses of ₹ 1,96,85,000/-, the assessee submitted additional evidences before the ld. CIT(A), wherein, he claimed that instead of Jagmandti Finevest Pvt. Ltd and Glider Holdings Ltd. services were taken from M/s. Market Share Securities Ltd. and M/s. Gejendra Marketing Services respectively. The assessee submitted that it was not communicated about the inquiries in respect of the parties, otherwise, the assessee would have explained the mistake in supplying the name of the parties. In his remand report sent to the ld CIT(A), the ld. AO objected to the admitting of additional evidences, however, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... method of apportionment 6. In the instant case, the assessment year involved is prior to AY 2008-09, and the ld. AO has expressed his dissatisfaction with the correctness of the claim of the assessee with regards to the expenditure incurred against exempted income, we are of the opinion that the findings in the case of Maxopp Investment Ltd. vs. CIT (supra) are squarely applicable. Respectfully, following the findings, we remit the matter back to the file of ld. AO and direct to determine the amount of expenditure incurred towards earning exempted income, on the basis of a reasonable and acceptable method of apportionment. Needless to say that the assessee shall be provided sufficient opportunity in this respect. In view of the above directions to the ld. AO, the issue whether the ld. CIT(A) has exceeded his authority in directing the ld. AO to compute disallowance following the decision in the case of Kodak India Ltd vs. ACIT (supra), is in our opinion, rendered merely academic. Accordingly, the ground No.1 of the Revenue is allowed for statistical purpose. 7. In ground No.2, the Revenue has challenged the admitting of additional evidences in respect of professi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. In this connection, with regard to merits of the additional evidence, the assessee vide his letter dated 30-09-2010, addressed to your good self, the assessee has contended that the proforma bills/debit notes of M/s Jagmandri Finvest Pvt. Ltd. and M/s Glider Holdings Ltd. were booked inadvertently instead of booking the expenses in name of M/s Market Shares-Securities Ltd. and M/s Gajendra Marketing Services Ltd. The persons who were handling the affairs committed these errors. Before passing the order u/s 143(3) of the I.T. Act, the then AO provided sufficient opportunities on 19/10/2009 , 11/12/2009 and a show cause letter dated 09/09/2009 specifically asking the assessee to file the relevant details, but the assessee company failed to file any reply in this regard. Despite the fact that the case of the assessee company was pending for more than a year and that the then AO specifically asked the assessee to file documentary proof in support of their contention, the assessee company could not and did not reconcile the discrepancy at the time of assessment proceedings. Now whatever documents have been submitted before your goodself appear to a result of manipulation of docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any ground of appeal; or (d) Where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal, (2) No evidence shall be admitted under sub-rule (1) unless the Commissioner (Appeals) records in writing the reasons for its admission. (3) The Deputy Commissioner (Appeals) or as the case may be, the Commissioner (Appeals) shall not take into count any evidence produced under sub-rule(l) unless the Assessing Officer has been allowed a reasonable opportunity- (a) To examine the evidence or documents or to cross-examine the witness produced by the assessee, or (b) To produce any evidence or documents or any witness in rebuttal of the additional evidence produced by the assessee. (4) nothing contained in this rule shall affect the power of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 TAXMAN 257 (GAU.) the High Court of Gauhati held that the appellant is not entitled to produce oral or documentary evidence afresh before appellate authority, as a matter of right. As per sub-rules (1), (2) and (3) of rule 46A, if additional evidence is permitted to be produced, then firstly there must be reasons to be recorded in writing and secondly, reasonable opportunity has to be given to assessing authority-to refute and reject such production and that Rule 46A(4) does net permit to do away with procedural law prescribed under sub-rules (1), (2) and (3) of rule 46A, once additional evidence is produced. 8. Therefore, it is clear and unambiguous that only in case of availability of any one of those four grounds mentioned in sub-rule (1) of rule 46A, the production of additional evidence is permitted. Reference to the contents of the rule 46A show that production of additional evidence is conditioned by certain situations. The assessee has to show that the Assessing Officer has refused to admit the evidence. The assessee also has to show alternatively that he was prevented by sufficient cause from producing the evidence before the Assessing Officer. Alternatively furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted as genuine without the Assessing Officer furnishing his comments and without verification. Since this is an indispensable requirement, we are of the view that the Tribunal ought to have restored the matter to the CIT (A) with the direction to him to comply with sub-rule (3) of Rule 46A. In our opinion and with respect, the error committed by the Tribunal is that it proceeded to mix up the powers of the CIT (A) under sub-section (4) of Section 250 with the powers vested in him under Rule 46A. The Tribunal seems to have overlooked sub-rule (4) of Rule 46A which itself takes note of the distinction between the powers conferred by the CIT (A) under the statute while disposing of the assessee's appeal and the powers conferred upon him under Rule 46A. The Tribunal erred in its interpretation of the provisions of Rule 46A vis-A-vis Section 250(4). Its view that since in any case the CIT (A), by virtue of his conterminous powers over the assessment order, was empowered to call for any document or make any further enquiry as he thinks fit, there was no violation of Rule 46A is erroneous. The Tribunal appears to have not appreciated the distinction between the two provisions. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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