Appeal details
Counselvise Citation
107021114 RSA 2009
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 1 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-12-2011
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
21-12-2011
Assessment Year
2005-2006
Appeal Filed On
16-11-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NOS.1070/BANG/09 & 32/BANG/2010 ASSESSMENT YEARS : 2005-06 & 2006-07 SCHNEIDER ELECTRIC CONZERV INDIA PRIVATE LIMITED, (FORMERLY CONZERV SYSTEMS PVT. LTD.), 44P, ELECTRONIC CITY, EAST PHASE, HOSUR ROAD, BANGALORE 560 100. PAN : AAACE 6272F VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SARANGAN, ADVOCATE RESPONDENT BY : SHRI G.V. GOPALA RAO, CIT-I(DR) DATE OF HEARING : 21.12.2011 DATE OF PRONOUNCEMENT : 21.12.2011 O R D E R PER N.K. SAINI, ACCOUNTANT MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 14.9.09 AND 16.11.09 OF THE CIT(APPEAL S)-I, BANGALORE FOR THE ASSESSMENT YEARS 2005-06 & 2006-07. THESE APPEALS PERTAINING TO THE ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 2 OF 12 SAME ISSUES WERE HEARD TOGETHER, SO THEY ARE DISPOS ED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THESE APPEALS, THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(APPEALS) WHILE CONFIRMING THE ACTION OF THE AO HAD NOT GIVEN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO JUSTI FY ITS CLAIM. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING DIGITAL ELECTRONIC METERS , CONDUCTS ENERGY AUDITS AND PROVIDES ENERGY MANAGEMENT SOLUTIONS. THE ASSE SSEE FILED RETURNS OF INCOME ON 30.10.05 AND 26.11.06 FOR THE ASSESSMENT YEARS 2005-06 & 2006-07 RESPECTIVELY. THE SAID RETURN FOR THE A.Y. 2005-06 WAS PROCESSED U/S .143(1) OF THE INCOME-TAX ACT, 1961 [HEREINAFTE R REFERRED TO AS THE ACT IN SHORT]. FOR THE ASSESSMENT YEAR 2006-07, THE AS SESSEE FILED REVISED RETURN TO CORRECT CERTAIN MISTAKES THAT CROPPED UP IN E-FILING PROCESS. THE SAID RETURN WAS PROCESSED U/S 143(1) OF THE ACT. L ATER ON THE CASE WAS SELECTED FOR SCRUTINY. THE AO FRAMED THE ASSESSMEN TS BY MAKING CERTAIN ADDITIONS AND DISALLOWANCES AND INCOME WAS ASSESSED AT RS.5,91,08,246 AND RS.6,36,70,527 FOR THE A.YS. 2005-06 & 2006-07 RESPECTIVELY. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A), WHO ALLOWED PART RELIEF TO THE ASSESSEE. NOW THE ASSESSEE IS IN APPEAL FOR BOTH T HE YEARS. 4. THE ASSESSEE FILED AN APPLICATION UNDER RULE 18( 4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 ALONG WITH THE AFFIDAVIT, THE CONTENTS OF THE APPLICATION UNDER RULE 18(4) OF THE INCOME T AX (APPELLATE TRIBUNAL) RULES, 1963 OF THE AND THE AFFIDAVIT FURNISHED BY T HE ASSESSEE ARE AS UNDER: ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 3 OF 12 ADDITIONAL EVIDENCES UNDER RULE 18(4) OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 1. THE APPELLANT HEREIN CRAVES LEAVE OF THIS HON'BLE T RIBUNAL TO FURNISH THE FOLLOWING ADDITIONAL DOCUMENTS THAT WERE NOT PRODUCED BEFORE THE LEARNED CIT(A) AND THE ASSE SSING AUTHORITY. HOWEVER THE ORDER OF THE COMMISSIONER OF CENTRAL EXCISE VIDE ANNEXURE -1 IS FURNISHED IN SUP PORT OF THE CLAIM MADE BY THE APPELLANT THAT THE TRANSFER P RICE ADOPTED BY THE APPELLANT FOR COMPUTING THE PROFITS OF THE DAMAN UNIT WAS JUSTIFIED AND SUPPORTED BY AN ORDER OF A COMPETENT AUTHORITY. THE CONTENTS OF THE SAID ORDER HAS BEEN NOTED BY THE LEARNED CIT(A) AT PAGE 12 OF HIS ORDER FOR AY 2005-06. THE COMMENTS OF THE ASSESSING OFFIC ER GIVEN BY WAY OF REMAND REPORT ARE ALSO EXTRACTED BY THE LEARNED CIT(A) AT PAGE 17 OF HIS ORDER FOR AY 2005- 06. THEREFORE IT IS SUBMITTED THAT THE ORDER OF COMMISS IONER OF CENTRAL EXCISE IF ADMITTED AS AN EVIDENCE BY THI S HON'BLE TRIBUNAL, IT WOULD NOT CAUSE ANY HARDSHIP T O THE RESPONDENT SINCE REASONABLE OPPORTUNITY WAS GIVEN T O BOTH THE PARTIES ON THIS ISSUE AND ELABORATE DISCUSSIONS WERE HELD BEFORE THE CIT(A). 2. SECONDLY THE PROFIT AND LOSS ACCOUNTS VIDE ANNEXURE S 2 AND 3 TO THIS APPLICATION HAVE BEEN PREPARED BY THE APPELLANT IN ORDER TO ASSIST THE HON'BLE TRIBUNAL T O SUPPORT THE CLAIM OF THE APPELLANT THAT THE PROFITS OF DAMA N UNIT ADOPTED FOR CLAIMING SECTION 80-IA BENEFIT WAS JUST IFIED. THE APPELLANT HAS TAKEN UP THIS CONTENTION BOTH BEF ORE THE ASSESSING AUTHORITY AND BEFORE THE LEARNED CIT(A). THEREFORE THE ADDITIONAL DOCUMENTS IN THE FORM OF P ROFIT AND LOSS ACCOUNTS FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 PREPARED AND FURNISHED NOW BEFORE THIS HON' BLE TRIBUNAL WILL NOT ALTER THE CLAIM OF THE APPELLANT. THERE IS NO HARDSHIP CAUSED TO THE RESPONDENT IF THE ADDITIO NAL EVIDENCE NOW PRODUCED IS ACCEPTED AND PLACED ON REC ORD. 3. THESE ADDITIONAL EVIDENCES WOULD CLEARLY REVEAL THA T THE CLAIM OF THE APPELLANT UNDER SECTION 80-IA IS JUSTI FIED. FURTHER, THESE ADDITIONAL EVIDENCE WILL NOT CHANGE THE CLAIMS MADE BY THE APPELLANT BEFORE THIS HON'BLE TR IBUNAL. THERE ARE NO FRESH CLAIMS OR GROUNDS TAKEN BY THE APPELLANT BY FURNISHING THESE DOCUMENTS. 4. THEREFORE IT IS PRAYED THAT THIS HON'BLE TRIBUNAL M AY BE PLEASED TO ALLOW THIS APPLICATION FOR PRODUCING THE ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 4 OF 12 AFORESAID ADDITIONAL EVIDENCE AND CONSIDER THE SAME , IN ACCORDANCE WITH LAW. AFFIDAVIT I , MUKUND M BAPAT , S / O.MADHAV BAPAT AGED ABOUT 44 YEARS RESIDING AT NO 34, ROYAL ENCLAVE, JAKKUR POST , SRIRAMPURA BANGALORE 560 064 DO HEREBY STATE ON OATH AS UNDER; 1 . THAT I AM THE DIRECTOR OF THE APPELLANT IN THE AFOR ESAID CASE AND AM CONVERSANT WITH THE FACTS OF THE CASE. HENCE I SWEAR TO THIS AFFIDAVIT . 2 . THAT THE CONTENTS IN PARAGRAPHS 1 TO 4 OF THE ACCOMPANYING APPLICATION ARE TRUE AND CORRECT AND A RE WITHIN MY KNOWLEDGE AND INFORMATION . 3 . THAT THE ANNEXURES 1 TO 3 ENCLOSED ALONG WITH THE APPLICATION ARE TRUE COPIES OF THE ORIG I NALS . WHATEVER STATED ABOVE ARE TRUE AND CORRECT . BANGALORE, SD/ - DATE: 22/8/11. DEPONENT . 5. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ORDER OF THE COMMISSIONERATE OF CENTRAL EXCISE, BANGALORE, IS HAVING A DIRECT BEARING ON THE ISSUE AGITATED BY THE ASSESSEE IN THE PRESENT APPEAL. IT IS SUBMITTED THAT THE SA ID ORDER DATED 20.02.2007 SUPPORTS THE CLAIM OF THE ASSESSEE THAT THE PROFITS OF THE DAMAN UNIT ADOPTED FOR CLAIMING DEDUCTION U/S. 80IA WAS JUSTIF IED. HE THEREFORE REQUESTED TO ADMIT THE ADDITIONAL EVIDENCE. 6. THE LD. DR ALTHOUGH OPPOSED FOR ADMISSION OF ADD ITIONAL EVIDENCE, HOWEVER, HE COULD NOT CONTROVERT THE AFORESAID CONT ENTION OF THE LD. COUNSEL ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 5 OF 12 FOR THE ASSESSEE AND ALSO STATED THAT IF THE ADDITI ONAL EVIDENCE IS TO BE ADMITTED, THE MATTER SHALL GO TO THE ASSESSING OFFI CER FOR HIS CONSIDERATION. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL ON RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSING OFFICER DID NOT ACCEPT T HE CLAIM OF THE ASSESSEE FULLY FOR THE BENEFIT OF DEDUCTION U/S. 80IA RELATI NG TO DAMAN UNIT. IT ALSO APPEARS THAT THE ASSESSEE COULD NOT FURNISH THE ORD ER OF THE COMMISSIONER OF CENTRAL EXCISE, BANGALORE DATED 20.02.2007 IN SU PPORT OF ITS CLAIM. THEREFORE, WE ARE OF THE OPINION THAT THE DOCUMENTS WHICH ARE NOW FURNISHED ALONG WITH THE APPLICATION UNDER RULE 18( 4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 IS ALTHOUGH FURNIS HED FOR THE FIRST TIME BEFORE THE TRIBUNAL, BUT IT IS RELEVANT AND GO TO T HE ROOT OF THE PRESENT CONTROVERSY. IN THE PRESENT CASE, THE ADDITIONAL EVIDENCE WILL NOT CHANGE THE CLAIM MADE BY THE ASSESSEE AS THE ISSUE WAS ALR EADY BEFORE THE AO AND THE LD. CIT(A). 8. AS PER THE PROVISIONS CONTAINED IN RULE 29 OF TH E INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE PARTIES TO TH E APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL. THE PROVISIONS CONTAINED IN THE SAID RULE ARE PARI MATERIA WITH THE ORDER 41 RULE 27 OF THE CODE OF CIVIL PROCEDURE , 1908, WHICH ALSO DOES NOT ALLOW THE PARTY TO THE APPEAL TO ADDUCE ANY ADD ITIONAL EVIDENCE UNLESS AND UNTIL SUCH EXCEPTIONAL CIRCUMSTANCES ARE SET OU T. 9. IN THE PRESENT CASE, THE ASSESSEE HAD MOVED AN A PPLICATION UNDER RULE 18(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) R ULES, 1963 FOR ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 6 OF 12 ADMISSION OF ADDITIONAL EVIDENCE. IN THE INSTANT C ASE, THE ASSESSEE COULD NOT FURNISH COPY OF THE ORDER DATED 20.02.2007 OF T HE COMMISSIONER OF CENTRAL EXCISE, BANGALORE BEFORE THE LD. CIT(APPEAL S) AND THE AO IN SUPPORT OF ITS CLAIM THAT THE TRANSFER PRICE ADOPTE D BY THE ASSESSEE FOR COMPUTING THE PROFITS OF DAMAN UNIT WAS JUSTIFIED A ND SUPPORTED BY THE ORDER OF A COMPETENT AUTHORITY. IN OUR OPINION, TH E MISTAKE OF THE ASSESSEE WAS NOT DELIBERATE OR WITH MALAFIDE INTENTION, THER EFORE THE NEW EVIDENCE NOW FURNISHED AS ADDITIONAL EVIDENCE SHALL BE ADMIT TED BY KEEPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE, BUT AT THE SAME TIME, OPPORTUNITY IS TO BE GIVEN FOR REBUTTAL TO ANOTHER PARTY. 10. AS REGARDS TO THE ADMISSION OF THE ADDITIONAL E VIDENCE, THE HONBLE MADRAS HIGH COURT IN THE CASE OF ANAIKAR TRADE AND ESTATES (P) LTD (NO.2) VS. CIT, 186 ITR 313 HAS HELD AS UNDER: THE TRIBUNAL HAS DISCRETION TO ALLOW THE PRODUCTIO N OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES, 1963 IF T HE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR AFFIDAVIT T O BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTI AL CAUSE, IT MAY ALLOW THE DOCUMENT TO BE PRODUCED OR THE AFFIDAVITS TO BE FILED. EVEN IF THERE WAS A FAILURE TO PRODUCE THE DOCUMENT S BEFORE THE ITO AND THE A.A.C, THE TRIBUNAL HAS THE JURISDICTIO N IN THE INTERESTS OF JUSTICE TO ALLOW THE PRODUCTION OF SUC H VITAL DOCUMENTS. 11. IN THE PRESENT CASE ALSO, THE DOCUMENTS FURNISH ED BY THE ASSESSEE ARE VITAL WHICH GO TO THE ROOT OF THE PRESENT CONTR OVERSY, SO THESE ARE TO BE ADMITTED IN THE INTEREST OF NATURAL JUSTICE BUT THE SE DOCUMENTS ARE REQUIRED TO BE EXAMINED AND CONSIDERED AT THE LEVEL OF THE A O. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDERS AND REMAND THE PRESENT IS SUE BACK TO THE FILE OF ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 7 OF 12 THE LEARNED AO TO BE DECIDED AFRESH IN ACCORDANCE W ITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 12. FOR THE AFORESAID VIEW, WE ARE ALSO FORTIFIED BY THE DECISION OF THE ITAT DELHI BENCH F IN THE CASE OF UOP LIC V ADDIT IONAL DIRECTOR OF INCOME-TAX, INTERNATIONAL TAXATION, CIRCLE 2(2) NEW DELHI (2007) 108 LTD 186 WHEREIN RELEVANT FINDINGS GIVEN IN PARAS NO, 30 , 31 33, 48, 52 READ AS UNDER: 30. IT IS A SETTLED POSITION THAT PRODUCTION OF ADDITIONAL EVIDENCE AT THE APPELLATE STAGE IS NOT A MATTER OF RIGHT TO LITIGATING PUBLIC AND ALLOWING OF PRODUCTION OF ADDITIONAL EVI DENCE IS IN THE DISCRETION OF THE TRIBUNAL. THE SAID DISCRETION, H OWEVER, IS TO BE EXERCISED JUDICIALLY AND NOT ARBITRARILY. AS HELD B Y HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V. KUM . SATYA SETIA (1983) 143 ITR 486, IT IS WITHIN THE DISCRETI ON OF THE APPELLATE AUTHORITY TO ALLOW PRODUCTION OF ADDITION AL EVIDENCE IF THE SAID AUTHORITY REQUIRES ANY DOCUMENT TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE. THE TRIB UNAL IS THE FINAL FACT FINDING BODY UNDER THE SCHEME OF THE INCOME TA X ACT , 1961 AND POWERS, THEREFORE, HAVE NECESSARILY TO BE EXERC ISED BY IT FOR DECIDING THE QUESTIONS OF FACT. WHILE EXERCISING IT S POWERS, IF THE TRIBUNAL IS OF THE OPINION THAT ADDITIONAL EVIDENCE IS MATERIAL IN THE INTEREST OF JUSTICE FOR DECIDING A PARTICULAR I SSUE, ITS DISCRETION CANNOT BE INTERFERED WITH UNLESS IT HAS BEEN EXERCI SED ON NON EXISTING OR IMAGINARY GROUNDS. IN THE CASE OR MAHAV IR SINGH (SUPRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE IT WAS HELD THAT SECTION 107 OF CPC ENABLES AN APPELLATE COURT TO TA KE ADDITIONAL EVIDENCE OR TO REQUIRE SUCH OTHER EVIDENCE TO BE TA KEN SUBJECT TO SUCH CONDITIONS AND LIMITATIONS AS ARE PRESCRIBED U NDER ORDER 41 OF RULE 27 OF CPC. IT WAS ALSO HELD THAT THE PARTIE S ARE NOT ENTITLED, AS OF RIGHT, TO THE ADMISSION OF SUCH EVI DENCE AND THE MATTER IS ENTIRELY IN THE DISCRETION OF THE COURT W HICH IS OF COURSE TO BE EXERCISED JUDICIALLY AND SPARINGLY. IT WAS OBSER VED THAT ORDER 41 RULE 27 OF CPC ENVISAGES CERTAIN CIRCUMSTA NCES WHEN ADDITIONAL EVIDENCE CAN BE ADDUCED AND ONE OF SUCH CIRCUMSTANCES IS WHERE THE APPELLATE COURT REQUIRES ANY DOCUMENT TO BE PRODUCED OR ANY WITNESS TO BE EXAMINED TO ENA BLE IT TO PRONOUNCE JUDGMENT OR FOR ANY OTHER SUBSTANTIAL CAU SE. IT WAS ALSO CLARIFIED THAT THE EXPRESSION TO ENABLE IT TO PRONOUNCE JUDGMENT CONTEMPLATES A SITUATION WHEN THE APPELLA TE COURT ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 8 OF 12 FINDS ITSELF UNABLE TO PRONOUNCE JUDGMENT OWING TO A LACUNA OR DEFECT IN THE EVIDENCE AS IT STANDS. IN THE CONT EXT, IT WAS FURTHER CLARIFIED THAT THE ABILITY TO PRONOUNCE A JUDGMENT IS TO BE UNDERSTOOD AS THE ABILITY TO PRON OUNCE A JUDGMENT SATISFACTORY TO THE IT MIND OF COURT DEL IVERING IT. THIS POSITION WAS REITERATED AGAIN BY THE HONBLE SUPREME COURT IN THE CASE OF SYED ABDUL KHADER VS. RAMI REDDY AIR, 1979 S.C. 553 CITED BY THE LD. COUNSEL FOR THE ASSESSEE. IN THE CASE OF MUNICIPAL CORP. OF GREATER BOMBAY VS. LALA PANCHAN AIR 1965 S.C. 1008 CITED BY THE LD. COUNSEL FOR THE ASSESSEE , IT WAS OBSERVED BY THE HONBLE SUPREME COURT THAT THE POWER TO ADMIT ADDITIONAL EVIDENCE DOES NOT ENTITLE THE APPELLATE COURT TO LET IN FRESH EVIDENCE ONLY FOR T HE PURPOSE OF PRONOUNCING JUDGMENT IN A PARTICULAR WAY AND IT IS ONLY FOR REMOVING A LACUNA IN THE EVIDENC E THAT THE APPELLATE COURT IS EMPOWERED TO ADMIT ADDITIONA L EVIDENCE. IN THE CASE OF ARJAN SINGH V. KARTAR SING H AIR 1951 S.C. 193, IT WAS HELD THAT THE DISCRETION GIVEN TO THE APPELLATE COURT BY ORDER 41, RULE 27 OF CPC TO RECEIVE AND ADMIT ADDITIONAL EVIDENCE IS NOT AN ARB ITRARY ONE BUT IS A JUDICIAL ONE CIRCUMSCRIBED BY THE LIMI TATIONS SPECIFIED IN THAT RULE. IT WAS ALSO HELD THAT THE L EGITIMATE OCCASION FOR THE APPLICATION OF THE SAID RULE IS WH EN ON EXAMINING THE EVIDENCE AS IT STANDS SOME INHERENT LACUNA OR DEFECT BECOMES APPARENT. TO THE SIMILAR EFFECT IS ANOTHER DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATHA SINGH VS. FINANCIAL COMMISSIONER TAXATION ALR 1976 S.C. 1053. 31. AS PER RULE 29 OF THE APPELLATE TRIBUNAL RULES , 1963, THE TRIBUNAL HAS THE POWER TO ALLOW ADDITIONA L EVIDENCE NOT ONLY IF IT REQUIRES SUCH EVIDENCE TO ENABLE IT TO PRONOUNCE JUDGMENT BUT ALSO FOR ANY OTHER SUBSTANTIAL CAUSE. THERE MAY BE CASES WHERE EVEN THOUGH THE TRIBUNAL FINDS THAT IT IS ABLE TO PRONOU NCE JUDGMENT ON THE STAGE OF RECORD AS IT I S AND SO IT CANNOT STRICTLY SAY THAT IT REQUIRES ADDITIONAL EVIDENCE T O ENABLE IT TO PRONOUNCE JUDGMENT IT STILL CONSIDERS THAT IN THE INTEREST OF JUSTICE, SOMETHING WHICH REMAINS OBSCURE, SHOULD BE FILED UP SO THAT IT CAN PRONOUNCE THE JUDGMENT IN A MORE SATISF ACTORY MANNER. SUCH REQUIREMENT OF THE TRIBUNAL IS LIKELY TO ARISE ORDINARILY WHEN SOME INHERENT LACUNA OR DEFECT BECOMES APPARE NT UPON ITS APPRECIATION OF THE EVIDENCE. THE POWER OF THE TRIB UNAL TO ADMIT ADDITION EVIDENCE IN SUPPORT OF THE CLAIM IN ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 9 OF 12 APPEAL IS DISCRETIONARY AND NO FETTERS CAN BE IMPOS ED ON THE EXERCISE OF SUCH POWER. HOWEVER, AS HELD BY HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RAM PRA SAD SHARMA VS. CIT (1979) 119 ITR 867 AND BY THE HONBLE ANDHR A PRADESH HIGH COURT IN THE CASE OF A. K. BABU KHAN VS. CWT ( 1976) 102 ITR 756 IT IS NOT AN ARBITRARY POWER BUT IT IS A JU DICIAL ONE CIRCUMSCRIBED BY THE LIMITATIONS GIVEN IN RULE 29 O F THE APPELLATE TRIBUNAL RULES, 1963. THE CONDITIONS PREC EDENT FOR THE EXERCISE OF POWER UNDER RULE 29 MUST, THEREFORE, BE FOUND TO HAVE BEEN ESTABLISHED. HOWEVER, WHERE THERE IS NO L ACK OF EVIDENCE BUT YET THE PLEA IN SUPPORT OF ADMITTIN G THE EVIDENCE IS SO DECISIVE AND OF CLINCHING VALUE WITH REFERENCE TO THE POINTS AT ISSUE, IT IS OPEN TO THE TRIBUNAL TO INVOKE ITS POWER OF ALLOWING ADDITIONAL EVIDENCE TO RENDER SUBSTANTI AL JUSTICE AND NOT TO DEPRIVE THE PARTY OF SUCH JUSTICE ON TECHNIC AL GROUNDS. FURTHER AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF VELJL DOORAJ & CO. VS. CIT (1968) 68 ITR 708, WHEN THE EVIDENCE WAS AVAILABLE TO THE PARTY AT THE INITIAL STAGE AND HAD NOT BEEN PRODUCED BY HIM, THE MERE FACT THAT EVIDENCE SOUGHT TO BE PRODUCED IS VITAL AND IMPORTANT DOES N OT PROVIDE A SUBSTANTIAL CAUSE TO ALLOW ITS ADMISSION AT THE APPELLATE STAGE. THE ADMISSIBILITY OF ADDITIONAL EV IDENCE DEPENDS ON WHETHER OR NOT THE SUBSTANTIAL CAUSE AND NOT TO ENABLE THE ASSESSEE OR THE DEPARTMENT TO TENDER FRESH EVIDENCE TO SUPPORT A NEW POINT OR TO MAKE OU T A NEW CASE. IN THE CASE OF N. KAMALAM (SUPRA) IT WAS HELD THAT THE PROVISIONS OF RULE 27 OF ORDER 41 OF CPC, 1908 ARE NOT DESIGNED TO HELP PARTIES TO PATCH UP W EAK POINTS AND MAKE UP FOR OMISSIONS EARLIER MADE. 33. IT IS ALSO WELL SETTLED THAT ONCE ADDITIONAL EV IDENCE IS TAKEN INTO CONSIDERATION, IT HAS TO BE READ AS P ART OR THE RECORD AND BEFORE DRAWING ANY INFERENCE ON THE BASIS OF CONTENTS OF THAT DOCUMENT ADMITTED AS ADDITIONAL EVIDENCE, AN OPPORTUNITY HAS TO BE GIVEN TO THE OTHER SIDE TO EXPLAIN OR REBUT THE SAME. AS HELD BY HONBLE MADRAS HIGH COURT IN THE CASE OF RSS SHANMUGAM PILLAI & SONS (SUPRA), IF THE TRIBUNAL FI NDS THAT THE DOCUMENTS FILED ARE QUITE RELEVANT AND FOR THE PURPOSE OF DECIDING THE ISSUE BEFORE IT, IT WOULD B E WELL WITHIN ITS POWERS TO ADMIT THE EVIDENCE, CONSIDER T HE SAME ON MERITS OR REMIT THE MATTER TO THE LOWER AUTHORITIES FOR EXAMINING THE SAME. IN THE CASE OF SMT. URMILA RATILAL (SUPRA), HONBLE GUJARAT HIGH COURT HAS HELD THAT WHEN THE ADDITIONAL EVIDENCE FIELD BY THE REVENUE WAS ADMITTED BY THE TRIBUNAL OVERRULING THE ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 10 OF 12 OBJECTION RAISED BY THE ASSESSEE, INTEREST OF JUSTI CE DEMANDED THAT THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO EXPLAIN OR REBUT THE ADDITIONAL EVIDENCE BEFORE RELYING ON THE SAME. IN THE CASE OF CHARBHAI BIRI WORKS VS. ASSTT CIT (2003) 87 ITO 189, CITED BY THE LD. COUNSEL FOR THE ASSESSEE, IT WAS HELD BY THE PUNE BENCH OF ITAT IN IT THIRD MEMBER DECISION THAT WHEN THE DOCUMENTS WHICH WERE NOT AVAILABLE BEFORE THE ASSESSING OFFIC ER WERE PRODUCED BEFORE THE TRIBUNAL FOR THE FIRST TIM E AND THE SAME WERE ADMITTED AS ADDITIONAL EVIDENCE BEING MATERIAL TO BE RESTORED TO THE FILE OF THE ASSESSIN G OFFICER TO VERIFY CORRECTNESS AND AUTHENTICITY OF S UCH DOCUMENTS AND TO ADJUDICATE THE MATTER AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE OF B EING HEARD. 48. AS ALREADY NOTED, THE ADDITIONAL EVIDENCE WOULD BE RELEVANT TO CONSIDER AND DECIDE THE CASE ALREADY MADE OUT BY THE REVENUE AND IT IS, THEREFORE NOT A CASE OF TENDERING OF FRESH EVIDENCE BY THE DEPARTMENT TO SUPPORT A NEW POINT OR TO MAKE OUT A NEW CASE. ACCORDING TO US, THE ADDITIONAL EVIDENCE FILED BY T HE REVENUE IS QUITE RELEVANT FOR THE PURPOSE OF DECIDI NG THE ISSUE BEFORE US AND THE SAME, THEREFORE, CAN BE ADMITTED AS PER RULE 29 OF APPELLATE TRIBUNAL RULES, 1963 AS HELD BY HONBL E MADRAS HIGH COURT IN THE CASE OF RSS SHANMUGAM PI1LAI & SONS (SUPRA). THE SAID ADDITIONAL EVIDENCE ALSO NEEDS TO BE TAKEN INTO CONSIDERATION IN THE INTEREST OF JUSTICE FOR DECIDI NG THE ISSUE RELATING TO THE PE. 52. AS ALREADY NOTED THE ASSESSEE WAS GIVEN AN OPPO RTUNITY DURING THE COURSE OF HEARING TO ADVANCE THE ARGUMEN TS ON THE ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS ON MERI TS OF THE ISSUE TAKING INTO CONSIDERATION THE SAID ADDITIONAL EVIDE NCE AND AVAILING THIS OPPORTUNITY, LD. COUNSEL FOR THE ASSESSEE HAS NOT ONLY RAISED ELABORATE ARGUMENTS ON BOTH THESE ASPEC TS BUT HAS ALSO FILED, A DETAILED WRITTEN SUBMISSION. IN THE S AID WRITTEN SUBMISSION AN ATTEMPT HAS BEEN MADE BY HIM TO EXPLA IN EACH AND EVERY DOCUMENT SOUGHT TO BE FILED BY THE REVENUE AS ADDITIONAL EVIDENCE IN ORDER TO REBUT THE CASE SOUGHT TO BE MADE OUT BY THE REVENUE RELYING ON THE SAME ON MERITS. KEEPING IN V IEW THE FACT THAT THE ADDITIONAL EVIDENCE SO PRODUCED BY THE REV ENUE AS WELL AS ELABORATE EXPLANATION OFFERED BY HIM ASSESSEE TO RE BUT THE SAME IS VOLUMINOUS RUNNING INTO SEVERAL PAGES, WHICH REQUIR ES IN-DEPTH EXAMINATION, WE FIND THAT IT WOULD BE FAIR AND PROP ER AND IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE RELATING T O PE TO THE FILE OF ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 11 OF 12 THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER EXAMINING THE ADDITIONAL EVIDENCE AS WELL AS EXPLAN ATION OFFERED BY THE ASSESSEE WHILE REBUTTING THE SAME. THE ASSES SEE SHALL ALSO BE AT LIBERTY TO ADDUCE FURTHER EVIDENCE TO SUPPORT ITS CASE BEFORE THE ASSESSING OFFICER WHO SHALL TAKE INTO CONSIDERA TION THE SAME IN ACCORDANCE WITH LAW. SINCE THE OTHER ISSUES RAISED IN THIS APPEAL RELATED TO THE MAIN ISSUE OF PE, WE DEEM IT APPROPRIATE TO RESTORE THESE ISSUES ALSO TO THE FILE OF THE ASSESS ING OFFICER FOR FRESH DECISION ALONG WITH THE MAIN ISSUE. IN SO FA R AS THE ISSUE RELATING TO THE LEVY OF INTEREST U/S 234B IS CONCER NED, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED BEFORE US THAT THE SAME IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF DELHI SPECIAL BENCH OF ITAT IN THE CASE OF MOTOROLA INC. VS. DY. CIT (2005) 95 ITD 269. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DECIDE T HE ISSUE RELATING TO LEVY OF INTEREST U/S 234B IN THE LIGHT OF THE DECISION OF SPECIAL BENCH IN THE CASE OF MOTOROLA INC (SUPRA). THE IMPUGNED ORDER OF THE LD. CIT(A) O N ALL THE ISSUES INVOLVED IN THE PRESENT APPEAL IS ACCORD INGLY SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AS PER THE DIRECTIONS GIVEN HEREINABOVE. 13. IN VIEW OF THE ABOVE, THE IMPUGNED ORDERS OF TH E LD. CIT(APPEALS) ARE SET ASIDE AND THE ISSUE IS REMANDED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW, AFTER PROVIDIN G DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 14. IN THE RESULT, THE APPEALS BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF DECEMBER, 2011. SD/- SD/- ( GEORGE GEORGE K. ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 21 ST DECEMBER, 2011. DS/- ITA NOS.1070 /BANG/ 09 & 32/BANG/10 PAGE 12 OF 12 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.
