Pratapbhai Nagindas Sanghvi, ... vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER आयकर अपील सं./ ./ ITA No. 458/Ahd/2013 िनधा रण वष /Assessment Year: 2008-09 Pratapbhai Nagindas Sanghvi V/s. ACIT (OSD)-I, M.P. House, Nr. Krupa Petrol Range-4 Pump, Ellisbridge, Ahmedabad Ahmedabad PAN : AIOPS 3839 F

आयकर अपील सं./ ./ ITA No. 671/Ahd/2013 िनधा रण वष /Assessment Year: 2008-09 ACIT (OSD)-I, V/s. Pratapbhai Nagindas Sanghvi Range-4 Ahmedabad Ahmedabad PAN : AIOPS 3839 F

अपीलाथ / (Appellant) ू"यथ यथ / (Respondent)

Assessee(s) by : Shri U.S. Bhati, AR Revenue by : Shri Dinesh Singh, Sr. DR.

सुनवाई क% तार'ख/ / Dateof Hearing : 10/06/2015 घोषणा क% तार'ख / Date of Pronouncement: 12/06/2015

आदे श/O R D E R

PER G.D. AGRAWAL, VICE PRESIDENT:

These are the cross appeals filed by the assessee and the Revenue against the order of the Commissioner of Income-tax (Appeals)-XXI, Ahmedabad dated 26.12.2012 for Assessment Year 2008-09.

2. In the Revenue's appeal following grounds are raised while in the assessee's appeal the grounds raised are as under:-

Assessee's Appeal (ITA No. 458/Ahd/2013)

1. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in restricting exemption u/s 54 of the Income Tax Act,1961 to ITA Nos. 458 & 671/Ahd/2013 Pratapbhai Nagindas Sanghvi-Cross For AY 2008-09 2

Rs.30,000/- as against Rs.18,71,000/- incurred in connection with purchase of a new flat on the basis that payments were not made within one year before the date of transfer of flat.

2. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in disallowing exemption u/s 54 of the Income Tax Act, 1961 in respect of sum of Rs.14,54,290/- incurred in connection with cost of improvement of flat.

3. The appellant may be allowed to add, amend, alter or raise additional grounds of appeal.

Revenue's Appeal (ITA No. 671/Ahd/2013)

1. The Ld. CIT(A) has erred in law and on facts in deleting the addition made by the A.O. u/s 54 of Rs.31,61,050/- on the basis of additional evidences without appreciating the fact that the additional evidences admitted by him did not satisfy the conditions laid down under rule 46A of the I.T. Rules, 1962.

2. The Ld. CIT(A) has erred in law and on facts in deleting the addition made by the A.O. u/s 68 of Rs.56,23,312/- on the basis of additional evidences without appreciating the fact that the additional evidences admitted by him did not satisfy the conditions laid down under rule 46A of the I.T. Rules, 1962.

3. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer.

4. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent.

3. At the time of hearing before us, it is submitted by the ld. Departmental Representative that the ld. CIT(A) wrongly admitted the additional evidences, because the conditions prescribed under Rule 46A were not satisfied. He submitted that the Assessing Officer completed the assessment after allowing adequate opportunity of being heard to the ITA Nos. 458 & 671/Ahd/2013 Pratapbhai Nagindas Sanghvi-Cross For AY 2008-09 3

assessee. The assessee did not turn up despite of number of opportunities. That in the remand proceedings, the Assessing Officer objected to the admission of the additional evidences but the CIT(A), without considering the objection of the Assessing Officer and even without recording any finding that why he is admitting the additional evidences, considered the additional evidences and allowed the relief to the assessee. He, therefore, submitted that the order of the CIT(A) should be reversed and that of Assessing Officer may be restored.

4. The ld. Counsel for the assessee, on the other hand, stated that before the CIT(A) the assessee's Chartered Accountant, Shri Sunil Chalishazar furnished an affidavit in which he explained that he appeared in response to almost every notice issued by the Assessing Officer and whenever he attended the proceedings, the Assessing Officer was busy and she told that she would call the assessee's counsel later on. He, therefore, submitted that there were adequate reasons for admission of additional evidences under Rule 46A. That the CIT(A) duly forwarded the additional evidences to the Assessing Officer and called for the remand report. The CIT(A) passed the order, after considering assessee's submissions as well as remand report of the Assessing Officer. While passing the order, the CIT(A) did consider the additional evidences. Therefore, it is implied that he admitted the additional evidences, even though no formal order of admission of additional evidences is passed by the CIT(A). He further submitted that the CIT(A) rightly considered the additional evidences and stated that the addition sustained by the CIT(A) should have been also deleted. He, therefore, requested that the Revenue's appeal should be dismissed and the assessee's appeal should be allowed.

ITA Nos. 458 & 671/Ahd/2013 Pratapbhai Nagindas Sanghvi-Cross For AY 2008-09 4

5. In the alternate, the ld. Counsel for the assessee suggested that the matter may be sent back to the file of the CIT(A) for passing a specific order on the admission of additional evidences. In the rejoinder, it is submitted by the ld. Departmental Representative that if at all the matter is to be set aside, then it would be in the interest of justice to set aside the same to the file of the Assessing Officer so that he may get an opportunity to examine the additional evidences properly.

6. We have carefully considered the arguments of both the sides and perused the material placed before us. Rule 46A reads as under:-

"46A. (1) The appellant shall not be entitled to produce before the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the [Assessing Officer], except in the following circumstances, namely :--

(a) where the [Assessing Officer] has refused to admit evidence which ought to have been admitted ; or

(b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the [Assessing Officer] ; or

(c) where the appellant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to 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 [Deputy Commissioner (Appeals)] [or, as the case may be, 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 account any evidence produced under sub-rule (1) unless the [Assessing Officer] has been allowed a reasonable opportunity--

ITA Nos. 458 & 671/Ahd/2013 Pratapbhai Nagindas Sanghvi-Cross For AY 2008-09 5

(a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or

(b) to produce any evidence or document or any witness in rebuttal of the additional 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.]"

7. From the above, it is evident that the assessee is not entitled to produce any additional evidence before the first appellate authority except under certain circumstances as envisaged in clauses (a) to (d) of Rule 46A(1). Sub-rule (2) specifically provides that no evidence shall be admitted by the CIT(A) unless he records the reason in writing for admission of additional evidence. Admittedly, in this case there is no recording of reasons for admission of additional evidences by the CIT(A). The CIT(A) has passed the order considering the additional evidences without passing any order on the admission of additional evidences. In the above circumstances, the order of the CIT(A) is liable to be set aside. However, instead of setting aside the matter back to the file of the CIT(A), we deem it proper to set aside the same to the file of the Assessing Officer, as suggested by the ld. Departmental Representative, so that the Assessing Officer gets an opportunity to examine the additional evidences at his end. In view of the above, we set aside the orders of the authorities below on all the points raised either in the Revenue's appeal or in the assessee's appeal and restore the same to the file of the Assessing Officer. We direct him to allow adequate opportunity to the assessee for producing all the evidences. We also direct the assessee to produce all the evidences before the Assessing ITA Nos. 458 & 671/Ahd/2013 Pratapbhai Nagindas Sanghvi-Cross For AY 2008-09 6

Officer. Thereafter, the Assessing Officer is directed to adjudicate all the issues raised in the Revenue's appeal as well as in the assessee's appeal afresh in accordance with law.

8. In the result, both the appeals are deemed to be allowed for statistical purposes.

Order pronounced in the Court on 12th June, 2015 at Ahmedabad.

Sd/- Sd/-

(S. S. GODARA) (G.D. AGRAWAL) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 12/06/2015 Biju T., PS

षत Copy आदे श क% ूितिल-प अमे-षत/ of the Order forwarded to : 1. अपीलाथ / The Appellant 2. ू"यथ / The Respondent. 3. संबंिधत आयकर आयु/ / Concerned CIT 4. आयकर आयु/(अपील) / The CIT(A)

5. -वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

/ BY ORDER, आदे शानु सार

TRUE COPY

Dy./Asstt.Registrar) उप/सहायक पंजीकार ( उप/ अिधकरण, अहमदाबाद / आयकर अपीलीय अिधकरण, ITAT, Ahmedabad