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TMI Blog2020 (12) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... g for remand report from the AO then the appellate authority should give detailed reasons in support of its conclusions, otherwise it amounts to violation of Rule 46A of I.T.Rules, 1962. In this case, on perusal of the order of CIT(A),we find that although the assessee has filed additional evidences in support of its case, but the learned CIT(A) has decided the issues without confronting those documents to the Assessing Officer for his comments in violation of Rule 46A of I.T.Rules, 1962 - Appeal filed by the Revenue is treated as allowed for statistical purposes. - I.T.A.No.2229/Chny/2019 - - - Dated:- 4-12-2020 - Shri Duvvuru RL Reddy, Judicial Member And Shri G. Manjunatha, Accountant Member For the Appellant : Mr. Suresh Periasamy,JCIT For the Respondent : Mr.G.Baskar, Advocate ORDER PER G.MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the Revenue is directed against the order of the learned Commissioner of Income Tax (Appeals)-3, Chennai dated 31.05.2019 and pertains to the assessment year 2015-16. 2. The Revenue has raised the following grounds of appeal:- 1. The order of the Commissioner of Income Tax (Appeals) is contrary to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference in gross receipts as per books of accounts and as per statement of receipts filed during the course of assessment proceedings, disallowance of sales tax and disallowance of ROC fees. The learned CIT(A), after considering the submissions of the assessee has partly allowed the appeal, where he has allowed relief in respect of additions made by the Assessing Officer towards unsecured loans u/s.68 of the Act, however, allowed partly relief in respect of additions made by the Assessing Officer towards disallowance of interest u/s.40(a)(ia) of the Act for non-deduction of TDS @ 30% by taking note of amendment made to section 40(a)(ia) by the Finance Act, 2014 effective from assessment year 2015-16. As regards disallowance of expenditure, after considering the relevant submissions of the assessee including copy of work order restricted the ad-hoc disallowance made by the Assessing Officer to 7.5% of total expenditure. The relevant findings of the order of learned CIT(A) are as under:- 6. Before me, the authorized representative Shri B.Baladasan, Chartered Accountant has submitted that the promoter group has obtained a loan from Future Capital amounting to ₹ 5,OO,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was initially credited directly into the bank account NO.00000030328771730 standing in the name of M/s.Rajkishore Engineering and Constructions Pvt Ltd. maintained with State Bank of India, Vadapalani Branch on 05.11.2012 for the purpose of business. Subsequently in FY 2014-15, this loan amount which was credited in the bank account of RKECPL was adjusted against dues from RKD towards payment of construction cost. This liability along with existing liabilities to the tune of ₹ 3,98,00,000/- in the books of RKD which is payable to the promoter Mr.Rajasekar was converted into equity by issuing shares to the tune of 39,80,000 with a face value of RS.10/- each aggregating to ₹ 3,98,00,000/- as is evident in Form No.PAS- 3 (return of allotment) filed before me. As a result of which, the share capital has been increased from ₹ 2,00,000/- to ₹ 4,OO,OO,OOO/-. Therefore, the sources for increase in share capital to the tune of ₹ 3,98,00,000/- stands explained. I direct the assessing officer to delete the addition made at ₹ 3,98,00,0001- on account of unexplained credit u/s.68 The ground taken is allowed. 8. The ground No.2 is directed against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer is arbitrary and without any valid reason. 10. I have gone through the discussion made by the assessing officer and relevant documents furnished by the authorized representative before me. The copy of work order for construction of basement plus stilt plus four floors residential apartment in the name of RKC Suprabath at Vadapalani,Chennai-26 issued to RKECPL by RKD, the appellant on 18.02.2014 is furnished before me. As rightly pointed out by the authorized representative, the work order issued is a detailed one containinq description of work, measurement of units, rate per unit, the quantum of work done and the corresponding monetary value of the work completed. Therefore, in so far as construction work undertaken by RKECPL is concerned, the assessing officer has not doubted the same. It is only for want of complete details, the impugned disallowance of ₹ 92,75,428/- is made. However, on due consideration of the information furnished before me, I found that the disallowance made is excessive as the assessing officer did not brought out any material evidence for supporting the disallowances made at 20% of expenditure claimed. The same appears to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard both the parties, perused the material available on record and gone through the orders of authorities below. It is a well settled principle of law that when additional evidences are filed before the appellate authority, it is the duty of the appellate authority to confront those additional evidences to the Assessing Officer for his comments and obtain necessary reports from the Assessing Officer on admissibility of the additional evidences and veracity of such additional evidences filed before deciding the issues. No doubt, the appellate authority had powers to examine issue on its own but when the appellate authority has decided the issue on its own without calling for remand report from the Assessing Officer, then the appellate authority should give detailed reasons in support of its conclusions, otherwise it amounts to violation of Rule 46A of I.T.Rules, 1962. In this case, on perusal of the order of learned CIT(A),we find that although the assessee has filed additional evidences in support of its case, but the learned CIT(A) has decided the issues without confronting those documents to the Assessing Officer for his comments in violation of Rule 46A of I.T.Rules, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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