DCIT, CIRCLE-1, PATNA V. MACMILLAN INNOW INDIA (JV), PATNA

ITA 121/PAT/2020

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals)-1, Patna, which had deleted an addition of Rs. 2,24,48,000 made under section 68 of the Income Tax Act, 1961. The addition pertained to unexplained capital introduced in the books of the assessee, Macmillan Innow India (JV). The Revenue contended that the CIT(A) erred in law by admitting new evidence during the appellate proceedings without providing the Assessing Officer an opportunity to examine this evidence, thus violating Rule 46A(3) of the Income Tax Rules, 1962. The CIT(A) had adjudicated the fresh evidence without calling for a remand report from the Assessing Officer, which was a procedural oversight.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 132805 (ITAT-PATNA)
• Duration Of Justice: 1 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2022
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 02-11-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 21-12-2020
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 68; 143(3); 250

Judgement Text

आयकर अपीलीय अधिकरण पटना 'डीबी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL PATNA ‘DB’ BENCH AT KOLKATA [वर् च ु अल कोट ु ] [Virtual Court] डॉ. मनीष बोरड, ल े खा सदस्य एवं श्री अधनक े श बनर्जी, न्याधयक सदस्य क े समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.: 121/Pat/2020 Assessment Year: 2017-18 DCIT, Circle-1, Patna...............................................Appellant Vs. Macmillan Innow India (JV)...................................Respondent [PAN: AAAKM 2210 Q] Appearances by: Sh. Rupesh Agrawal, Sr. D/R, appeared on behalf of the Revenue. Sh. R.N. Bedi, C.A., appeared on behalf of the Assessee. Date of concluding the hearing : November 3 rd , 2022 Date of pronouncing the order : November 23 rd , 2022 आद े श ORDER Per Manish Borad, Accountant Member: This appeal filed by the Revenue pertaining to the Assessment Year (in short “AY”) 2017-18 is directed against the I.T.A. No.: 121/Pat/2020 Assessment Year: 2017-18 Macmillan Innow India (JV). Page 2 of 4 order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-1, Patna [in short ld. “CIT(A)”] dated 15.09.2020 arising out of the assessment order framed u/s 143(3) of the Act dated 16.12.2019. 2. The Revenue is in appeal before this Tribunal raising the following grounds: “1. On the facts and circumstances of the case, the Ld. CIT(A) erred in law in deleting the addition of Rs. 2,24,48,000/- by admitting make- believe evidence during the course of appellate proceedings, and without allowing the Assessing Officer a reasonable opportunity to examine the genuineness of evidence produced during the appellate proceedings and also the creditworthiness and identity of the lender/creditor for rebuttal entailing apparent violation of Rule 46A(3) of the IT Rules, 1962. 2. Any other grounds that may be urged at the time of hearing.” 3. At the outset, ld. D/R submitted that the assessee filed various documents and details to prove the identity, genuineness and creditworthiness of the cash creditors of Rs. 2,24,48,000/- before ld. CIT(A) but ld. CIT(A) failed to call for the remand report from ld. AO which is the clear violation of the provisions of Rule 46A(3) of the Income Tax Rules, 1962 (in short the “Rules”). 4. Per contra, ld. Counsel for the assessee submitted that the assessee filed a copy of bank statement before ld. AO showing all the credit entries. However, all the other evidences were placed for the first time before ld. CIT(A). 5. We have heard rival contentions and perused the records placed before us. The sole grievance of the Revenue is that ld. CIT(A) violated the provisions of Rule 46A(3) of the Rules and did not provide any opportunity to ld. AO to examine the additional I.T.A. No.: 121/Pat/2020 Assessment Year: 2017-18 Macmillan Innow India (JV). Page 3 of 4 evidences filed before ld. CIT(A) for the first time. We notice that ld. AO made the addition u/s 68 of the Act for the capital introduced during the year in the books of the assessee at Rs. 2,24,48,000/-. The assessee failed to furnish name, address, PAN, income tax return and bank account statement and since the genuineness of the transaction, identity and creditworthiness of the persons introducing capital remained unexplained, ld. AO made the addition u/s 68 of the Act at Rs. 2,24,48,000/-. Further, we notice that when the matter travelled before ld. CIT(A), the assessee filed detailed submissions and also placed various evidences in connection to the capital introduced by Macmillan Innow Pvt. Ltd., the joint venture partner to the project Macmillan Innow India (JV). From perusal of the impugned order, we find that all the fresh evidences filed by the assessee were adjudicated by ld. CIT(A) without calling for the remand report from ld. AO. This is a clear violation of provisions of Rule 46A(3) of the Rules which provides that: “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— (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.” 6. On perusal of the above provision, we find that ld. CIT(A) ought to have given an opportunity to ld. AO to furnish remand report for examining the evidences filed by the assessee. Since this exercise has not been carried out, we are of the considered view I.T.A. No.: 121/Pat/2020 Assessment Year: 2017-18 Macmillan Innow India (JV). Page 4 of 4 that the matter needs to be restored to ld. CIT(A) who shall give a reasonable opportunity to ld. AO for furnishing a remand report dealing with all the additional evidences filed by the assessee and after considering the said remand report, ld. CIT(A) to decide in accordance with law. 7. In the result, the appeal filed by the Revenue is allowed for statistical purposes. Kolkata, the 23 rd November, 2022. Sd/- Sd/- [Anikesh Banerjee] [Manish Borad] Judicial Member Accountant Member Dated: 23.11.2022 Bidhan (P.S.) Copy of the order forwarded to: 1. DCIT, Circle-1, Patna. 2. Macmillan Innow India (JV), L/100, Mani Kunj Apartment, Road No. 21, S.K. Nagar, Patna-800 001. 3. CIT(A)-1, Patna. 4. CIT- 5. CIT(DR), Patna Bench, Patna. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata