Reeta J. Dhawan, Mumbai vs Department Of Income Tax

The Revenue is aggrieved by the impugned order dated 06/12/2010 of the ld. First Appellate Authority, Mumbai, on 2 Smt. Reeta J. Dhawan.

the ground that the ld. First Appellate Authority erred in deleting the addition estimating the net profit at Rs.3,20,730/- without appreciating that the Assessing Officer collected information of the profit in the similar line of business activity and found that average net profit was 3.16% and thus he estimated the net profit at 3% and further deleting the addition made on account of sundry creditors and advances amounting to Rs.1,47,79,209/- admitting fresh evidence, also deleting the addition of Rs.12,13,000/- on account of unsecured loans.

2. At the time of hearing, Shri Akhilendra Yadav, ld. DR for the Revenue defended the conclusion arrived at in the assessment order which are identical to the ground raised. Mr. Yadav contended that the Assessing Officer collected information from the market and found that the net profit in the similar line of business was 3.16% , therefore, his estimation was quite reasonable. On the issue of sundry creditors and advances amounting to Rs.1,47,79,209/-, the ld. DR pleaded that the ld. Commissioner of Income tax (Appeals) deleted the addition admitting fresh evidences which is violation of Rule 46A of the IT Rules. So far as, deleting the addition of Rs.12,13,000/- made on account of unsecured loans, Mr yadav contended that the assessee failed to establish the capacity and creditworthiness of loan creditors. The assessment order was defended.

3 Smt. Reeta J. Dhawan.

2.1. On the other hand, the husband of the assessee, Shri Jugal Dhawan, defended the conclusion arrived at by the ld. Commissioner of Income tax (Appeals).

2.2. We have considered the rival submissions and perused the material available on record. Without going into much deliberation, we find that the ld. Commissioner of Income tax (Appeals) granted relief to the assessee without meeting out the objections raised in the assessment order leading to the additions contained in the assessment order. Even no remand report was sought from the Assessing Officer as fresh evidence such as ledger account of sundry creditors alongwith other details of payment through bank account were not furnished during assessment proceedings, thus, it is violation of Rule 46A of the IT Rules 1962. Likewise, assessee did not establish the capacity and the creditworthiness of the loan creditors during assessment proceedings. In view of these facts, the impugned order is set aside to the file of the ld. Commissioner of Income tax (Appeals) for fresh adjudication in accordance with law. The ld. Commissioner of Income tax (Appeals) is directed to call for the remand report from the Assessing Officer. The assessee also be given opportunity of being heard with further liberty to furnish evidence, if any, in support of her claim so that no prejudice is caused to either side, consequently, the appeal of the Revenue is allowed for statistical purposes only.

Finally, the appeal of the Revenue is allowed for statistical purposes only.

4 Smt. Reeta J. Dhawan.

This order was pronounced in the open court in the presence of ld. Representatives from both sides at the conclusion of the hearing on 01/01/2015.

Sd/- Sd/- (RAJENDRA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, DATED - 02/01/2015 f{x~{tÜ? P.S/.िन.स. आदे श कȧ ूितिलǒप अमेǒषत/Copy षत of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. ू×यथȸ / The Respondent. 3. आयकर आयुƠ(अपील) / The CIT(A)- 4. आयकर आयुƠ / CIT

5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड[ फाईल / Guard file.

आदे शानुसार/ ार BY ORDER, स×याǒपत ूित //True Copy// उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुब ं ई / ITAT, Mumbai