M/s Sai Krishna Constructions, Vijayawada V. THE ITO, WARD - 1(2), Vijayawada

CO 142/VIZ/2013

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3161 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 9 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SHANKAR NARAYANAN
• Assessee Lawyers: B V S CHALAPATHI RAO
• Keywords: Reopening of assessment; Additional evidence; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 420 /VIZAG/ 201 3 ( / ASSESSMENT YEAR: 20 0 8 - 09 ) INCOME - TAX OFFICER WARD - 1(2) 2 ND FLOOR, C.R.BUILDINGS NEAR RYTHU BAZAR BANDAR ROAD VIJAYAWADA 520 002 SAI KRISHNA CONSTRUCTIONS NO.76 - 10 - 35 GANDHI STATUE ROAD BHAVANIPURAM VIJAYAWADA [PAN :ABIFS3111R] ( / APPELLANT) ( / RESPONDENT) CROSS OBJECTION NO. 14 2/VIZAG/201 3 ARISING OUT OF ITA NO.4 20 /VIZAG/201 3 ( / ASSESSMENT YEAR: 20 08 - 09 ) SAI KRISHNA CONSTRUCTIONS NO.76 - 10 - 35 GANDHI STATUE ROAD BHAVANIPURAM VIJAYAWADA [PAN :ABIFS3111R ] INCOME - TAX OFFICER WARD - 1(2) 2 ND FLOOR, C.R.BUILDINGS NEAR RYTHU BAZAR BANDAR ROAD VIJAYAWADA 520 002 ( / APPELLANT) ( / RESPONDENT) /A SSESSEE BY : SHRI B.V.S.CHALAPATHI RAO, AR /R EVENUE BY : SHRI RAVI SHANKAR NARAYANAN, DR /DATE OF H EARING : 29 .0 8 .2017 / DATE OF PRONOUNCEMENT : 06 . 09. 2017 2 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : TH IS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE C OMMISSIONER OF INCOME TAX (APPEALS) [ CIT (A ) ] , VIJAYAWADA VIDE ITA NO. 149 /CIT (A)/VJA/2012 - 13 DATED 27 .0 3 .201 3 FOR THE ASSESSMENT YEAR 2008 - 09 . 2. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.22,45,900/ - FOR THE ASSESSMENT YEAR 2008 - 09 ON 30.09.2008. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON TOTAL INCOME OF RS .25,51,371/ - BY AN ORDER DATED 29.12.2010. SUBSEQUENTLY THE ASSESSMENT WAS REOPENED U/S 147 BY ISSUE OF NOTICE U/S 148 OF I.T.ACT AND COMPLETED THE REASSESSMENT BY ORDER U/S 143(3) DATED 25.05.2012 ON TOTAL INCOME OF RS.2,23,78,217/ - . DURING THE REASSESSMENT PROCEEDINGS NONE APPEARED BEFORE THE ASSESSING OFFICER AND NO BOOKS OF ACCOUNTS AND DETAILS WERE FURNISHED BY THE ASSESSEE. HENCE, THE RE ASSESSMENT WAS MADE EXPARTE U/S 144 OF I.T.ACT . THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS TO THE ASSESSEES INCOME OF RS.25,51,371/ - . 3 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA 1. AFCONS INFRASTRUCTURE LTD AND VIJAYA LAKSHMI TRANSPORTERS RS.19,22,614 2. DISALLOWANCE U/S 40(A)(IA) RS.62,15,624 3. DISALLOWANCE OF REMUNERATION & INTEREST RS.6,85,960 4. DIESEL EXPENSES RECOVERY RS.1,01,44,170 5. DISALLOWANCE OF EXPENDITURE RS. 8,58,478 3. A GGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND CHALLENGED THE VALIDITY OF ISSUE OF NOTICE U/S 148. THE LD.CIT(A) HELD THAT THE REOPENING OF THE ASSESSMENT WAS MADE ON CHANGE OF OPINION AND ACCORDINGLY HELD THAT THE ISSUE OF NOTICE U/S 148 AND THE CONSEQUENT ASSE SSMENT MADE U/S 144 R.W.S 147 IS BAD IN LAW. LD.CIT(A) ALSO DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON MERITS. AGGRIEVED BY THE ORDER OF THE LD.CIT( A), THE REVENUE FILED THE APPEAL BEFOR E THIS TRIBUNAL AND THE ASSESSEE FILED CROSS OBJECTIONS SUPPORTING THE ORDER S OF THE LD.CIT (A) . 4 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA 4. APPEARING FOR THE REVENUE, LD.DR ARGUED THAT IN THIS CASE, THE ASSESSMENT WAS REOPENED WITHIN 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR . O N VER IFICATION OF THE ASSESSMENT RECORD THE AO FOUND THAT THE ASSESSEE HAD RECEIVED RECEIPTS FROM M/S AFCONS INFRASTRUCTURE LTD AND M/S SRI VIJAYA LAKSHMI TRANSPORTERS WHICH WAS SHOWN AS SUNDRY DEBTORS IN THE BALANCE SHEET BUT NOT OFFERED TO TAX. SIMILARLY, IN THE CASE OF SAVVY PROJECTS PRIVATE LIMITED, VIJAYAWADA AND TRANSSTROY (INDIA) LTD., HYDERABAD, DIESEL COST WOULD BE REIMBURSED FROM THE MONTHLY BILLS AS PER THE AGREEMENT, BUT THE ASSESSEE HAS CLAIMED THE EXPENDITURE TO THE TUNE OF RS.1,01,44,170/ - . FURTHER, THE EXPENDITURE OF RS.8,58,478/ - WAS DEBITED UNDER THE HEAD SPARES ALSO WAS THE REIMBURSEMENT. IT IS CLEAR FROM THE ABOVE INFORMATION THAT THE ASSESSEE HAD UNDERSTATE D THE INCOME AND THE ASSESSING OFFICER HA S REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND ACCORDINGLY ISSUED THE NOTICE U/S 148 AFTER RECORDING THE REASONS. SINCE THE ASSESSMENT I S REOPENED WITHIN 4 YEARS FROM THE END OF TH E RELEVANT ASSESSMENT YEAR, FAILURE ATTRIBUTABLE TO THE ASSESSEE IS NOT APPLICABLE IN THE ASSESSEES CASE. THE LD.DR ARGUED THAT THE AO HAS RIGHTLY 5 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA REOPENED THE ASSESSMENT AFTER RECORDING THE REASONS AND THE LD.CIT(A) COMMITTED AN ERROR IN HOLDING THE REOP ENING AS CHANGE OF OPINION. THE LD DR FURTHER SUBMITTED THAT THE ASSESSE HAS NOT SUBMITTED THE ABOVE DETAILS IN THE ORIGINAL ASSESSMENT AND THERE WAS NO OCCASION TO EXAMINE THE DETAILS AND TAKE CONSCIOUS DECISION ON THE ABOVE ISSUES AND HENCE THE QUESTION OF CHANGE OF OPINION DOES NOT ARISE. ACCORDING TO THE DR THERE IS NO CHANGE OF OPINION AND THE NOTICE ISSUED U/S 148 IS VALID AND REQUIRED TO BE UPHELD. 5. ON THE OTHER HAND, LD.AR ARGUED THAT THE AO HAS CALLED FOR THE DETAILS WHICH WAS SUBMITTED BEFORE THE AO AND AFTER EXAMINING THE ENTIRE INFORMATION, THE ASSESSING OFFICER HAS COMPLETED THE ORIGINAL A SSESSMENT PROCEEDINGS, HENCE, REOPENING OF ASSESSMENT IS ASSESSMENT IS NOTHING BUT A MERE CHANGE OF OPINION AND ARGUED THAT LD.CIT(A)S ORDER IS REQ UIRED TO BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. WE HAVE GONE THROUGH THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 29.12.2010 AND THERE IS NO DISCUSSION WITH 6 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA REGARD TO TO ANY OF THE ISSUES RAISED BY THE AO WHILE REOPENING THE ASSESSMENT. IT APPEAR THAT AO HAS NOT CALLED FOR ANY OF THE DETAILS FOR WHICH INCOME STATED TO HAVE BEEN ESCAPED FROM THE ASSESSMENT I.E. RECEIPTS FROM M /S AFCONS INFRASTRUCTURE LTD , M/S SRI VIJAYA LAKSHMI TRANSPORTERS, REIMBURSEMENT OF DIESEL EXPENDITURE AND THE SPARES ETC. FOR A QUERY FROM THE B ENCH, LD.AR ACCEPTED THAT NO EVIDENCE IS AVAILABLE WITH THE ASSESSEE FOR SUBMISSION OF THE DETAILS TO THE AO WITH REGARD TO ISSUES IN RESPECT OF THE TRANSACTIONS RECORDED IN THE REASONS FOR ESCAPEMENT OF INCOME. FROM THE READING OF THE ASSESSMENT ORDER DATED 29. 12 .2010, IT APPEARED THAT NEITHER THE ASSESSING OFFICER CALLED FOR THE DETAILS NOR EXAMINED THE ISSUE S RELATED TO THE REASONS RECORDED FOR REOPENING OF THE REASSESSMENT. SPECIFICALLY WITH REGARD TO THE RECEIPTS OF M/S AFCONS INFRASTRUCTURE LTD, M/S SRI VIJAYA LAKSHMI TRANSPORTERS , SAVVY PROJECTS PRIVATE LIMITED, VIJAYAWADA AND REIM BURSEMENT OF DIESEL AND SPARES THE AO HAS NOT CALLED FOR THE DETAILS AND THE ASSES S EE ALSO DID NOT FURNISH THE SAME. THE ASSESSMENT WA S REOPENED WITHIN 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND AS PER THE JUDICIAL PRONOUNCEMENTS, THE FAILURE OF THE ASSESSEE IS NOT APPLICABLE IN THE 7 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA CASE OF REOPENING OF ASSESSMENT WITHIN 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IN THIS CASE THE ASSESSING OFFICER WHILE COMPLETING THE ORIGINAL ASSESSMENT HAS NOT TAKEN ANY CONSCIOUS DECISION, HENCE IT CANNOT BE HELD TO BE CHANGE OF OPINION. FROM THE REASONS RECORDED BY THE AO PRIMA FACIE IT APPEAR THAT THERE WAS AN ESCAPEMENT OF INCOME. THEREFORE, WE HOLD THAT THE ASSESSING OFFICER HAS VALIDLY REOPENED THE ASSESSMENT AND ISSUE NOTICE U/S 148 IS UPHELD. THE APPEAL OF THE REVENUE ON THIS ISSUE IS ALLOWED AND T HE CROSS OBJECTION S OF THE ASSESSEE ARE DISMISSED ON THIS GROUND. 7. THE NEXT ISSUE IS REGARDING THE MERITS OF ADDITION MADE IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE THE FOLLOWING ADDITIONS TO THE RETURN OF INCOME. (I) NON ADMISSION OF RECEIPTS FROM SUNDRY DEBTORS I.E. M/S AFCONS INFRASTRUCTURE LTD, M/S SRI VIJAYA LAKSHMI TRANSPORTERS RS.19,22,614/ - (II) DISALLOWANCE U/S 40(A)(IA) RS.62,15,624/ - (III) REMUNERATION TO PARTNERS RS.6,85,960/ - (IV) REIMBURSEMENT OF DIESEL EXPENSES RS.1,01,44,170/ - (V) REIMBURSEMENT OF COST OF SPARES RS.8,58,478/ - 8 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA 7.1. DURING THE RE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS NOT RESPONDED TO THE NOTICE ISSUED BY THE ASSESSING OFFICER. N EITHER THE ASSESS E E PRODUCED THE BOOKS OF ACCOUNTS NOR FURNISHED THE DETAILS. THEREFORE, THE ASSESSING OFFICER MADE THE ABOVE ADDITIONS AS PER THE INFORMATION AVAILABLE ON RECORD. LD.CIT(A) DELETED THE ADDITIONS AS UNDER : ADDITION OF RS 19,22,614 REPRESENTIN G SUNDRY DEBTORS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ABOVE SUM WAS NOT CONSIDERED FOR TAXATION PURPOSE THE APPELLANT FURNISHED BEFORE ME THAT THE ABOVE RELATES TO TWO SUNDRY DEBTORS OF RS 1186255/ - AND RS 736359/ WHICH ARE INCLUDED IN THE TOTAL SUNDRY DEBTORS OF RS 10437312! - APPEARING IN SCHEDULE - 11 OF THE BALANCE SHEET AS AT 31 032008 THE FIRST SUM OF RS .1 186255/ WAS MENTIONED AS AFCON INFRASTRU C TURE LTD., AS PER FORM NO 3 CD REPORT WHERE THE SAME BELONGS TO HYDERABAD, TRANSSTORY. (INDI A) LTD THE APPELLANT CMS THAT THIS IS A TYPOGRAPHICAL MISTAKE THE APPELLANT FURNISHED THE ABSTRACT OF ACCOUNT AS APPEARING IN THE BOOKS OF ACCOUNT AS CAN BE SEEN THERE FROM, THE APPELLANT DEBITED CRUSHER OPERATION AND MAINTENANCE CHARGES AT RS 7168684/ - AN D AS AGAINST THIS THE RECEIPTS WERE PS 5982429! - LEAVING A BA LA NCE OF RS 11862551 - WHICH IS TO BE RECOVERED FROM THE SAID CONCERN AND HENCE APPEARING AS SUNDRY DEBTOR. THIS HAS BEEN EXAMINED AND FOUND TO BE IN ORDER, THEREFORE, THE ADDITION OF RS .1 186255( CANNOT BE SUSTAINED AS THE SAID RECEIPTS WERE CREDITED TO TRADING AND PROFIT & LOSS ACCOUNT THE SECOND SUM OF RS 736359 / - IS DUE FROM M/S VIJAYALAKSHMI TRANSPORTS , VIJAYAWADA. THE APPELLANT FURNISHED BE FOR E THE UNDERSIGNED ABSTRACT OF ACCOUNT THIS DEBTOR I S A TRANSPORTER OF APPELLANT'S GOODS, DURING THE YEAR THE APPELLANT PAID MONIES FROM TIME TO TIME AT RS 5138000 / - TOWARDS TRANSPORTATION OF GOODS. AS AGAINST THIS THE HUE CHARGES CREDITED TO ITS ACCOUNT WERE RS 31531I8/ FOR TRANSPORTATION OF MATERIAL FROM CRUSHER SITE TO WORK SPOT AT JHANSI OF MADHYA PRADESH FURTHER THE APPELLANT RECOVERED ADVANCE OF RS 1281000! - FROM TIME TO TIME, THUS LEAVING A BALANCE OF RS 73635W WHICH WAS INCLUDED IN SUNDRY DEBTORS HAVE EXAMINED IN DETAILS AND I AM OF THE OPINION THAT THE ADDITION CANNOT BE SUSTAINED AND DIRECT THE ASSESSING OFFICER FOR DELETION . ADDITION OF RS . 6215624 MADE U/S 40(A)(IA) THE APPELLANT FURNISHED THE DETAILS OF HIRE CHARGES AND DRILLING AND B L AST I NG CHARGES TOTALING TO RS 18 44373 / - 9 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA WHICH INCLUDES A SUM OF RS 20000/ - WHICH DOES NOT ATTRACT THE T D S PROVISIONS THEREBY LEAVING A BALANCE OF RS 1 8424373/ - CHARGED TO TRADING AND PROFIT & LOSS ACCOUNT. THE APPELLANT FURNISHED BEFORE ME THE DETAILS OF TAX DEDUCTION VIDE ITS WRITTEN SUB MISSION. THE AUTHORIZED REPRESENTATIVE ALSO PRODUCED COPIES OF CHALLANS PAID TOWARDS TDS ON 06.03.2008 OF RS.125750/ - AND RS.58,562/ - ON 29.09.2008 BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME, THESE TWO PAYMENTS COVERS A TOTAL EXPENDITURE OF RS.1,84 ,24,373/ - (EXCLUDING RS.20,000/ - ).HENCE THE PROVISIONS OF SECTION 40(A)(IA) OF IT ACT ARE NOT APPLICABLE. THEREFORE THE ADDITION MADE IN THIS REGARD I TO - BE DELETED. HOWEVER, IT IS NOTICED THAT THERE IS LIABILITY FOR CHARGING OF INTEREST U/S 201(IA) AND THE ASSESSING OFFICER IS DIRECTED TO CALCULATED THE SAME AND ENFORCE COLLECTION DISALLOWANCE OF REMUNERATION AND INTEREST PAID TO PARTNERS OF RS . 685960 THE APPELLANT SUBMITTED THAT THIS ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE CERTIFI ED TRUE COPY OF THE PARTNERSHIP DEED WAS NOT ENCLOSED TO THE RETURN OF INCOME THE APPELLANT SUBMITTED THAT AS PER RULE 12 OF IT RULES 1962 NO DOCUMENTS OR ANY SORT OF PAPERS ARE NOT TO BE ANNEXED TO THE RETURN OF INCOME IF AT ALL THEY ARE ANNEXED TO THE RE TURN, THEY ARE TO BE DETACHED BY THE RECEIVING OFFICIAL AND TO BE RETURNED THE APPELLANT FILED COPY OF THE INSTRUCTION IT WAS FURTHER CLAIMED THAT THE ORIGINAL PARTNERSHIP WAS PRODUCED BEFORE THE ASSESSING OFFICER WHO MADE THE ASSESSMENT ORIGINALLY U/S 143 (3) ON 29122010 AND THEREBY THE DEDUCTION TOWARDS REMUNERATION AND INTEREST WAS ALLOWED BY THE ASSESSING OFFICER. I AM ALSO OF THE OPINION THAT THE DISALLOWANCE NOW MADE IN THE REOPENED ASSESSMENTS U/S 144, DATED 22052012 IS NOT JUSTIFIABLE AND DIRECT FOR DELETION . ADDITION OF RS 10144170/ - MADE TOWARDS DIESEL EXPENDITURE CHARGED TO THE TRADING ACCOUNT THE APPELLANT FIRM FURNISHED DETAILS OF THIS EXPENDITURE FROM THE BOOKS OF ACCOUNT THIS EXPENDITURE WAS RECOVERED BY THE PRINCIPALS FROM THE PAYMENT MADE TO THE APPELLANT AS PER AGREEMENT THE APPELLANT ALSO FURNISHED COPIES OF AGREEMENT BEFORE RILE IT IS SURPRISED THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HIMSELF ADMITTED THIS FACT IN PARA 24 OF ASSESSMENT ORDER. THE RECOVERIES OF THE THESEL BY THE PRINCIPALS AS PER THE AGREEMENTS WERE DEDUCTED FROM THE BILLS PAID T O THE APPELLANT THIS IS EVIDENT FROM THE STATEMENT OF BILLS FROM PRINCIPAL CONTRACTORS PREPARED BY THE APPELLANT WHICH IS AT S NO 19, (PAGE 70) OF THE PAPER BOOK I HAVE GONE THROUGH THE SAME AND I AM SATISFIED THAT THE EXPENDITURE CHARGED IS IN ORDER AND H ENCE THE ADDITION IS NOT WARRANTED, THEREFORE, DIRECT THE ASSESSING OFFICER FOR DELETION . DISALLOWANCE OF EXPENDITURE OF RS 858478 / - UNDER SPARES SUPPLIED BY THE PRINCIPAL CONTRACTOR FOR THE USE IN EXECUTION OF WORKS THE APPELLANT SUBMITTED THAT THE EXPLAN ATION SUBMITTED UNDER DIESEL RECOVERY EQUALLY APPLIES TO THIS EXPENDITURE ALSO I HAVE GONE THROUGH THE SUBMISSIONS, STATEMENT OF BILLS AND I AM OF THE OPINION THAT THIS EXPENDITURE IS RIGHTLY ALLOWABLE AND THEREFORE NO ADDITION IS CALLED FOR. THIS NEEDS T O BE DELETED. 10 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA 7.2. LD.CIT(A) DELETED THE ADDITIONS AFTER COLLECTING THE ACCOUNT EXTRACTS AND VERIFYING THE SAME. FURTHER IN THE CASE OF M/S AFCONS INFRASTRUCTURE LTD, IT WAS SUBMITTED BEFORE THE LD.CIT(A) THAT THE RELEVANT DEBTOR WAS TRANSSTROY INDIA PVT. LTD. AND THERE WAS A TYPOGRAPHICAL ERROR. IN RESPECT OF M/S VIJAYALAKSHMI TRANSPORTS, VIJAYAWADA, THE ASSESSEE SUBMITTED EXT RACT OF ACCOUNT. LD.CIT(A) HAS OBTAINED THE EXTRACT OF THE ACCOUNT AN D DELETED THE ADDITION. IN RESPECT OF THE ADDITION MADE U/S 40(A)(IA), THE ASSESSEE PRODUCED THE COPIES OF CHALLANS FOR PAYMENT OF TDS, HENCE, CIT(A ) DELETED THE ADDITION. IN RESPECT OF INTEREST PAID TO PARTNERS, THE ASSESSEE PRODUCED CERTIFIED TRUE COPY OF PARTNERSHIP D EED BEFORE LD.CIT(A) AND IN THE CASE OF DIESEL EXPENDITURE THE ASSESSEE PRODUCED THE EVIDENCES BEFORE CIT(A), HOWEVER, LD.CIT(A) HAS NOT GIVEN ANY OPPORTUN ITY TO THE AO TO REBUT THE EVIDENCES PRODUCED BY THE ASSESSEE A S PER RULE 46A OF IT RULES. RULE 46A P LACES RESTRICTIONS ON ADDITIONAL EVIDENCE BEFORE THE LD.CIT(A). FOR READY REFERENCE, WE REPRODUCE HEREUNDER RULE 46A WHICH READS AS UNDER : 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE 94 [DEPUTY COMMISSIONER (APPEALS)] 95 [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)], ANY EVIDE NCE, WHETHER ORAL OR DOCUMENTARY, 11 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE 96 [ASSESSING OFFICER], EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY : ( A ) WHERE THE 97 [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 PRODUC E BY THE 97 [ASSESSING OFFICER] ; OR ( C ) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE 97 [ASSESSING OFFICER] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR ( D ) WHERE THE 97 [ASSESSING OFFICER] HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GRO UND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB - RULE (1) UNLESS THE 98 [DEPUTY COMMISSIONER (APPEALS)] 99 [OR, AS THE CASE MAY BE, THE COMMISSIONER (AP PEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. 1 (3) THE 2 [DEPUTY COMMISSIONER (APPEALS)] 3 [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB - RULE (1) UNLESS THE 4 [ASSESSING OFFICER] HAS BEEN ALLOWED A REASONABLE OPPORTUNITY ( A ) TO EXAM INE 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 5 [DEPUTY COMMISSIONER (APPEALS)] 6 [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] TO DIRECT THE PR ODUCTION 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 7 [ASSESSING OFFICER]) UNDER CLAUSE ( A ) OF SUB - SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271 C 7.3. AS PER RULE 46A, THE LD.CIT (A) SHOULD NOT ADMIT ANY ADDITIONAL EVIDENCE UNLESS THE ASSESSEE EXPLAINS THE REASONS FOR NON PRODUCTION 12 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA BEFORE THE ASSESSING OFFICER AND THE CIT(A) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE UNLESS REASONABLE OPPORTUNITY IS GIVEN TO THE ASSESSING OFFICER. IN THE INSTANT CASE, THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS AND THE EVIDENCES IN SUPPORT OF ITS CLAIM FOR EXPENSES BEFORE THE ASSESSING OFFICER , BUT PRODUCED THE SAME BEFORE THE CIT(A) AND THE LD.CIT(A) ADMITTED THE ADDITIONAL EVIDENCE AND ALLOWE D THE APPEAL OF THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER . THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE CASE SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO CONSIDERATION OF THE ABOVE ISSUES AND TO DECIDE AFRESH ON MERITS . A CCORDINGLY WE REMIT THE ENTIRE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO CONSIDERATION. 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND CROSS OBJECT IONS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 13 ITA NO. 420 /VIZ/201 3 A ND CO NO.142/VIZ/2013 SAI KRISHNA CONSTRUCTION, VIJAYAWADA T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH SEP 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 06 . 0 9 .2017 L. RAMA, SPS / COPY OF THE ORDER FORWARDED TO : - 1. / THE APPELLANT INCOME - TAX OFFICER, WARD - 1(2), 2 ND FLOOR, C.R.BUILDINGS, NEAR RYTHU BAZAR, BANDAR ROAD, VIJAYAWADA 520 002 2 . / THE RESPONDENT SAI KRISHNA CONSTRUCTIONS, NO.76 - 10 - 35, GANDHI STATUE ROAD, BHAVANIPURAM, VIJAYAWADA 3 . / THE CIT, VIJAYAWADA 4 . ( ) / THE CIT (A) , VIJAYAWADA 5 . , , / DR,ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM