The ITO, Ward-5(3), Baroda V. Smt. Malini Amarsinh Rathwa, Baroda

ITA 1401/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1952 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-12-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 30-05-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M MATHIVANANDR
• Keywords: Principle of natural justice; Additional evidence; TDS
• Section: 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND A. N. PAHUJA, AM INCOME-TAX OFFICER, WARD-5(3), 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE, BARODA. V/S . SMT. MALINI AMARSINH RATHWA, PROP. RADHIKA GAS SERVICE, C/4, CHAITANYA APARTMENTS, OPP. NAVAPURA POLICE STATION, BARODA. PAN NO.ABQPR 3101 E (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI M. MATHIVANAN,DR REVENUE BY:- NONE O R D E R A.N. PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 2 0.03.2006 OF THE LD. CIT(A)-V,BARODA, RAISES THE FOLLOWING G ROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF CA RTING EXPENSES OF RS.5,21,119/- WITHOUT APPRECIATING THAT THE INDIAN OIL CORPORATION (IOC) HAD FULLY REIMBURSED THE CARTING EXPENSES AS WELL AS OCTROI EXPENSES. 1(B) THE CIT(A) ERRED IN IGNORING THE LETTER OF THE IOC DATED21.03.2005 CATEGORICALLY STATING THAT IT HAD REIMBURSED CARTIN G EXPENSES OF RS.5,32,901/- AND OCTROI EXPENSES OF RS.6,66,789/-, TOTAL AMOUNTING TO RS.11,99,690/-, AS AGAINST WHICH THE A SSESSEE HAD ACCOUNTED FOR THE REIMBURSEMENT OF RS.8,58,339/- ON LY. 2(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN REDUCING THE DISALLOWANCE O F CARTING EXPENSES MADE BY THE A.O. AT RS.2,92,245/- TO RS.86 ,143/-. 2(B) THE CIT(A) ERRED IN ADMITTING ADDITION AL EVIDENCE IN THE FORM OF CONFIRMATION LETTERS FROM THE TEMPO DRIVERS WITHOUT THERE BEING ANY EXTENUATING CIRCUMSTANCE IN TERMS OF RULE 46A(1), W ITHOUT RECORDING REASONS IN TERMS OF RULE 46A(2) AND WITHOUT ALLOWIN G THE ASSESSING OFFICER AN OPPORTUNITY TO REBUT THIS EVIDENCE IN TE RMS OF RULE 46A(3). ITA NO. 1401/AHD/2006 ASST. YEAR:2002-03 ITA NO. 1401/AHD/2006 2 3. THE APPELLANT CRAVES LEAVE TO ADD TO AM END OR ALTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. 2. AT THE OUTSET, WE FIND THAT DESPITE SERVICE OF NOTICE OF HEARING[AD ON RECORD], NONE APPEARED BEFORE US ON BEHALF OF THE A SSESSEE. THEREFORE, THE BENCH PROCEEDED WITH THE DISPOSAL OF APPEAL AFTER HEARING THE LD. DR. 3. ADVERTING FIRST TO GROUND NOS. 1 & 1(B) RELATI NG TO DISALLOWANCE OF RS.5,21,119/- IN RESPECT OF CARTING EXPENSES, FACTS , IN BRIEF AS PER RELEVANT ORDERS ARE THAT THE RETURN DECLARING INCOME OF RS. 1,42,610/- FILED ON 28.10.2002 BY THE ASSESSEE, A DEALER OF INDIAN OIL CORPORATION LTD. (IOCL) FOR LPG, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME -TAX ACT, 1961[HEREINAFTER REFERRED TO AS THE ACT] WAS SELECTED FOR SCRUTINY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 23.10.2003 .DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER [AO IN SHORT] N OTICED THAT THE ASSESSEE CLAIMED CARTING EXPENSES OF RS.2,12,113/- IN THE TR ADING ACCOUNT AS REVEALED FROM THE FOLLOWING DETAILS :- CARTING ACCOUNT PARTICULARS AMOUNT (RS.) PARTICULARS AMOUNT (RS) LOCAL CARTING (RELATING TO SALES) 602398 REIMBURSEMENT OF EXPENSES BY IOCL (09.10.01 TO 31.03.02) 858339 TRANSPORT EXPENSES (RELATING TO PURCHASES) 469054 BALANCE TRANSFERRED TO TRADING ACCOUNT 212113 TOTAL 1070452 TOTAL 1070452 3.1 THE AO FURTHER FOUND THAT THE TRANSPORT EXPE NSES FOR TRANSPORTING CYLINDERS FROM IOCL, GANDHAR TO ASSESSEES GODOWN W ERE REIMBURSED BY IOCL. THE IOCL, GANDHAR VIDE THEIR LETTER DATED 21. 03.2005 CONFIRMED THE REIMBURSEMENT OF OCTROI EXPENSES AND PAYMENT OF TRA NSPORT EXPENSES. THE TRANSPORT EXPENSES OF RS.532901/-, PAID BY IOCL, ON WHICH TAX HAD ALSO BEEN DEDUCTED AT SOURCE, WERE NOT REFLECTED BY THE ASSES SEE IN HER BOOKS OF ACCOUNT. THE AO , THEREFORE, RECAST THE CARTING AC COUNT AFTER CONSIDERING THE TRANSPORT CHARGES RECEIVED FROM IOCL, AS UNDER :- ITA NO. 1401/AHD/2006 3 CARTING ACCOUNT PARTICULARS AMOUNT (RS.) PARTICULARS AMOUNT (RS) LOCAL CARTING (RELATING TO SALES) 601398 REIMBURSEMENT OF EXPENSES BY IOCL (09.10.01 TO 31.03.02) 858339 TRANSPORT EXPENSES (RELATING TO PURCHASES) 469054 REIMBURSEMENT OF TRANSPORT EXPENSES 532901 BALANCE PROFIT 320788 TOTAL 1391240 TOTAL 1391240 3.2 ACCORDINGLY, THE AO ADDED THE AFORESAID AMO UNT OF RS.532901/- WHILE DISALLOWING CARTING EXPENSES OF RS.212113. 4. ON APPEAL, THE ASSESSEE SUBMITTED THAT AS PER THEIR AGREEMENT WITH THE IOCL, THE ASSESSEE IS ENTITLED TO REIMBURSEMENT OF TRANSPORT EXPENSES INCURRED FOR PROCURING THE CYLINDERS TO ITS PREMISE S AS ALSO THE OCTROI EXPENSES. FROM THE ASSESSEES PREMISES, THE DISTRIB UTION OF CYLINDERS IS THEIR RESPONSIBILITY . DURING THE YEAR THE ASSESSEE INCU RRED TRANSPORT EXPENSES OF RS.482234 RELATING TO PURCHASE OF CYLINDERS AS WEL L AS OCTROI THEREON. FOR THIS, IOCL MADE A REIMBURSEMENT OF RS.858339, WHICH INCLUDED AN AMOUNT OF RS.532901/- TOWARDS REIMBURSEMENT OF TRANSPORTATION EXPENSES. THE BALANCE AMOUNT IS TOWARDS OCTROI EXPENSES. AS AGAINST THIS THE ASSESSEE HAS INCURRED TOTAL EXPENSES OF RS.1070452 AS UNDER:- 1. OCTROI AND TRANSPORT EXPENSES FOR THE PURCHASED CYLINDERS RS.482334 2. LOCAL TRANSPORT EXPENSES PAID TO TEMPO DRIVERS, RS.588218 HANDCART PULLERS, CYCLE RICKSHAWS FOR DISTRIBUTION OF CYLINDERS THEREFORE, THE TOTAL EXPENDITURE IS RS.1070452 WHE REAS THE REIMBURSEMENT IS OF RS.858339/-. THE EXCESS AMOUNT OF RS.2,12,113 HA S BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT.. ALTHOUGH AN AMOUNT OF RS .532901/-. WAS INCLUDED IN THE AFORESAID AMOUNT OF RS.858339/-, THE AO PRESUME D THAT THE SAME HAS NOT BEEN ACCOUNTED FOR AND MADE THE ADDITION OF RS.5329 01/-. THE ASSESSEE HAD SUBMITTED THE DETAILS OF TRANSPORTATION CHARGES AND OCTROI CHARGES RECEIVED ITA NO. 1401/AHD/2006 4 FROM IOCL OF RS.858339/-. THE LD. CIT(A) AFTER HAVI NG A REPORT OF THE AO ON THE SUBMISSIONS OF THE ASSESSEE AND REJOINDER OF TH E ASSESSEE REDUCED THE ADDITION FROM 532901/- TO RS.11782/- IN THE FOLLOWI NG TERMS :- 4.4 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE CONTENTIONS OF THE APPELLANT. THE APPELLANT HAS CLA IMED CARTING EXPENSES OF RS.212113/-. THE APPELLANT HAS RECEIVED REIMBURSEME NT OF OCTROI EXPENSES FROM IOCL BY CHEQUES FROM 09.10.2001 TO 31.03.2002 OF RS.858339/-. AGAINST THIS REIMBURSEMENT OF OCTROI THE APPELLANT HAS CLAIMED LOCAL CARTING EXPENSES FOR DISTRIBUTION OF CYLINDERS OF RS.601395 /- AND TRANSPORT EXPENSES FOR TRANSPORTATION OF CYLINDERS FROM IOCL, GANDHAR TO APPELLANTS GODOWN OF RS.469054/-. IOCL IS REIMBURSING THE TRANSPORT EXPE NSES FOR TRANSPORTING CYLINDERS FROM IOCL, GANDHAR TO THE APPELLANTS GOD OWN AS ALSO REIMBURSING THE OCTROI EXPENSES. IT HAS BEEN INTIMATED BY IOCL THAT IT HAS PAID TRANSPORT EXPENSES OF RS.532901/- ON WHICH TAX OF RS.11782/- HAS ALSO BEEN DEDUCTED. IT HAS BEEN HELD BY THE ASSESSING OFFICER THAT THE RECEIPT OF TRANSPORT CHARGES FROM IOCL TO RS.532901 HAS NOT BEEN REFLECTED IN TH E BOOKS OF ACCOUNT AS INCOME. THE ASSESSING OFFICER HAS THEREFORE MADE TH E ADDITION OF RS.532901/-. IT HAS BEEN CLAIMED BY THE APPELLANT T HAT THE REIMBURSEMENT OF RS.532901/- HAS BEEN DULY ACCOUNTED FOR AS INCOME A ND IS INCLUDED IN THE REIMBURSEMENT OF RS.858339/-. THE ABOVE CONTENTION OF THE APPELLANT IS ACCEPTED. HOWEVER IT IS SEEN THAT APPELLANT HAS ONL Y ACCOUNTED FOR THE REIMBURSEMENT OF AN AMOUNT OF RS.498468/- AFTER DED UCTION OF TDS AND THE AMOUNT RECEIVED IN THE MONTH OF APRIL, 2002. THE AP PELLANT SHOULD HAVE INCLUDED THE AMOUNT OF TDS DEDUCTED OF RS.11782/- W HILE ACCOUNTING FOR THE REIMBURSEMENT OF TRANSPORTATION EXPENSES. THEREFORE THE APPELLANT HAS FAILED TO ACCOUNT FOR THE REIMBURSEMENT OF TRANSPORTATION EXPENSES OF RS.11782/-. ACCORDINGLY THE ADDITION MADE ON ACCOUNT OF UNDISCL OSED TRANSPORTATION RECEIPTS IS REDUCED FROM RS.532901/- TO RS.11782/-. 5. THE REVENUE IS NOW IN APPEAL AGAINST THE AFORE SAID FINDINGS OF THE LD. CIT(A). THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORT ED THE ORDER OF ASSESSING OFFICER AND CONTENDED THAT THE CIT(A) HAS NOT PROPERLY APPRECIATED THE FACTS OF THE CASE. THE LD. DR WHILE REFERRING T O THE REPORT OF THE AO REPRODUCED IN THE IMPUGNED ORDER ARGUED THAT THE AS SESSEE HAS RECEIVED REIMBURSEMENT OF RS. 11,99,690/- WHILE THE ASSESSEE HAS CREDITED ONLY AN AMOUNT OF RS. 8,58,339/- AND NO RECONCILIATION WAS SUBMITTED BY THE ASSESSEE EITHER DURING THE ASSESSMENT PROCEEDINGS OR EVEN BEFORE THE LD. CIT(A). 6. AFTER HEARING THE LD. DR, WE FIND THAT THE LD . CIT(A) EVEN THOUGH FOUND THAT THE AMOUNT OF RS.532901/- HAS BEEN DULY ACCOUNTED FOR AS INCOME AND IS INCLUDED IN THE REIMBURSEMENT OF RS.858339/- EXCEPT THE AMOUNT OF ITA NO. 1401/AHD/2006 5 RS.11782/- ON ACCOUNT OF TDS AND THEREBY, REDUCED T HE ADDITION TO RS. 11,782/-, HE DID NOT RECORD ANY FINDINGS ON THE FAC TS POINTED OUT BY THE AO BEFORE HIM AS TO WHEN THE ASSESSEE HAD RECEIVED REI MBURSEMENT OF RS. 11,99,690/-[RS. 5,32,901 TOWARDS TRANSPORTATION OF CYLINDERS AND RS. 6,66,789 TOWARDS OCTROI EXPENSES) FROM THE IOCL, AS CONVEYED IN THEIR LETTER DATED 21.3.2005 ,WHY THE ASSEESSEE CREDITED ONLY AN AMOUN T OF RS. 8,58,339/- . IN THE ABSENCE OF ANY RECONCILIATION, ESPECIALLY WHEN THE ASSESSEE DID NOT APPEAR BEFORE US, WE CONSIDER IT FAIR AND APPROPRI ATE TO RESTORE THE MATTER TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTIONS TO HAVE RECONCILIATION OF THE AFORESAID REIMBURSED AMOUNT OF RS. 11,99,690/- ,MEN TIONED IN THE REPORT OF THE AO REPRODUCED IN THE IMPUGNED ORDER, VIS-A-VIS THE AMOUNT CREDITED BY THE ASSESSEE IN THEIR BOOKS AND THEREAFTER, PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPOR TUNITY TO BOTH THE PARTIES. WITH THESE DIRECTIONS GROUND NOS. 1 & 1(B) IN THE A PPEAL ARE DISPOSED OF. 7. GROUND NOS.2(A) & 2(B) RELATE TO REDUCTION OF D ISALLOWANCE OF CARTING EXPENSES FROM RS.2,92,245/- TO RS.86,143/-, WITHOUT PROVIDING ANY OPPORTUNITY TO ASSESSING OFFICER , IN CONTRAVENTION OF RULE 46A OF THE IT RULES, 1962. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE CLAIMED CARTING EXPENSES OF RS.601398/- WH ILE SHE DISTRIBUTED 103051 CYLINDERS. DESPITE REQUEST MADE BY THE AO, S INCE THE ASSESSEE FAILED TO SUBMIT RELEVANT VOUCHERS FOR EXPENSES,CONSIDERIN G THE PREVAILING RATE FOR DELIVERY/DISTRIBUTION CHARGES OF RS.3/-PER CYLINDER , THE AO ALLOWED CARTING EXPENSES TO THE EXTENT OF RS.309153 AND DISALLOWED THE BALANCE AMOUNT OF RS.292245/-. 8. ON APPEAL, THE ASSESSEE SUBMITTED THAT SHE IN CURRED EXPENDITURE OF RS.588218/- TOWARDS CARTING EXPENSES FOR DELIVERY O F CYLINDERS TO THE CUSTOMERS THROUGH TEMPO DRIVERS, HANDCART PULLERS, CYCLE RICKSHAWS ETC., WHO WERE PAID IN CASH . THE PAYMENT MADE WAS AROUND RS. 6/- PER CYLINDER DELIVERED, INCLUDING THE CHARGES FOR TAKING OF DELI VERY FROM THE ASSESSEES GODOWN, DELIVERING IT TO CUSTOMERS PREMISES IN REP LACEMENT OF THE EMPTY CYLINDER AND LOCAL TRANSPORT, LOADING AND UNLOADIN G SERVICES. IT WAS PLEADED THAT CONSIDERING THE NATURE OF SERVICES AND ESCALAT ING PETROL/DIESEL PRICES, THE ITA NO. 1401/AHD/2006 6 COST OF RS.6/- PER CYLINDER IS MOST REASONABLE. THE ASSESSEE ALSO SUBMITTED CONFIRMATIONS FROM SOME OF THE TEMPO DRIVERS, STATI NG THE RECEIPT OF DELIVERY CHARGES @ RS.5/- PER CYLINDER AND IT WAS REQUESTED TO CONSIDER AND ALLOW THE CLAIM IN THE LIGHT OF THESE CONFIRMATIONS. THE LD. CIT(A) ,AFTER HAVING REPORT OF THE AO REDUCED THE DISALLOWANCE FROM RS.2,92,245/- TO RS.86143/- IN THE FOLLOWING TERMS :- 6.4 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AND THE CONTENTIONS OF THE APPELLANT. THE APPELLANT HAS CLA IMED CARTING EXPENSES OF RS.601398/-. DURING THE YEAR, THE APPELLANT HAS DIS TRIBUTED 103051 CYLINDERS. THE APPELLANT HAS INCURRED THE CARTING EXPENSES IN CASH. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT FAILED TO PRO DUCE THE CASH VOUCHERS IN SUPPORT OF THE CARTING EXPENSES. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS SUBMITTED THE CONFIRMATION OF TEM PO DRIVERS STATING THE RECEIPT OF DELIVERY CHARGES @ RS.5/- PER CYLINDER. CONSIDERING THE ABOVE FACT, THE DELIVERY/DISTRIBUTION CHARGES ARE ESTIMATED @ R S.5/- PER CYLINDER WHICH WORKS OUT TO RS.515255/-. THEREFORE, THE DISALLOWAN CE OF CARTING EXPENSES WORKS OUT TO RS.86143/- (RS.601398/- - RS.515255/-) . ACCORDINGLY THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF CARTING EXPENSES IS REDUCED FROM RS.292245/- TO RS.86143/-. 9. THE REVENUE IS NOW IN APPEAL BEFORE US. AFTER H EARING THE LD. DEPARTMENTAL REPRESENTATIVE , WE FIND MERIT IN HIS CONTENTIONS THAT THE LD. CIT(A) ADMITTED ADDITIONAL EVIDENCE IN CONTRAVENTIO N OF RULE 46A OF THE IT RULES, 1962 WITHOUT GIVING A REASONABLE OPPORTUNITY TO THE AO. IN THIS CONNECTION RELEVANT RULE 46A(2) & (3) OF THE IT RU LES 1962, READS AS UNDER: (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE ( 1) UNLESS THE DEPUTY COMMISSIONER (APPEALS) OR AS THE CASE MAY BE, THE C OMMISSIONER (APPEALS) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3)THE DEPUTY COMMISSIONER(APPEALS) OR, AS THE CA SE MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE INCOME-TAX OFFICER HA S 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 WITN ESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT.' 9.1 IT IS EVIDENT FROM THE AFORESAID PROVISIONS THAT TH E LD. CIT(A) CAN NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-R . (1) OF RULE 46A OF THE IT RULES, 1962 UNLESS THE AO HAD BEEN ALLOWED A REA SONABLE OPPORTUNITY TO ITA NO. 1401/AHD/2006 7 EXAMINE THE EVIDENCE OR TO CROSS-EXAMINE THE WITNES S WHOSE EVIDENCE WAS TAKEN ON RECORD OR TO PRODUCE ANY EVIDENCE IN REBUT TAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE. MOREOVER, THE LD . CIT(A) HAVE TO RECORD HIS REASONS IN WRITING BEFORE ADMISSION OF THE ADDI TIONAL EVIDENCE IN TERMS OF RULE 46A(2) OF THE IT RULES, 1962. IT IS, THEREFORE , OBVIOUS THAT THE LD. CIT(A) COULD NOT HAVE RELIED ON THE ADDITIONAL EVIDENCE WI THOUT GIVING SUCH OPPORTUNITY TO THE AO. THE MERE FACT THAT NOTICE OF HEARING OF THE APPEAL WAS GIVEN TO THE AO WOULD NOT MEET THE REQUIREMENTS OF THE ABOVE RULE. EVEN IF NO SUCH RULE WAS IN EXISTENCE, ENDS OF JUSTICE AND FAI R PLAY DEMAND THAT WHEN AN ASSESSEE PRODUCES ADDITIONAL EVIDENCE IN HIS APPEAL , AN OPPORTUNITY IS GIVEN TO THE AO TO TEST THE EVIDENCE OR TO COUNTER THE EF FECT OF THE EVIDENCE BY PRODUCING EVIDENCE IN REBUTTAL OR OTHERWISE. HE HAD A RIGHT TO OBJECT TO THE PRODUCTION OF ADDITIONAL EVIDENCE. SINCE SOMETHING ADVERSE TO THE AO WAS SOUGHT TO BE DONE IN THE COURSE OF THE APPEAL BY WA Y OF AUGMENTING THE RECORD, THE AO OUGHT TO HAVE BEEN HEARD AND GIVEN A N OPPORTUNITY TO MEET WITH THE ADDITIONAL MATERIAL BY WAY OF CROSS-EXAMIN ATION, COUNTER EVIDENCE AND URGING SUBMISSIONS IN THE CONTEXT OF THE AUGMEN TED RECORD. WHEN A PRAYER FOR ADDITIONAL EVIDENCE WAS MADE, IT WAS AN INDEPENDENT AND SUBSTANTIVE APPLICATION SEEKING A NEW RIGHT. NOTICE OF SUCH APPLICATION WAS NECESSARY TO THE AO AND HE OUGHT TO HAVE BEEN AFFOR DED BOTH AN OPPORTUNITY TO OPPOSE IT AND TO TEST THE ADDITIONAL EVIDENCE OR COUNTER THE EFFECT THEREOF OR PRODUCE EVIDENCE IN REBUTTAL. NO SUCH ORDER GRANTIN G THE REQUEST COULD HAVE BEEN PASSED BEHIND THE BACK OF THE AO IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. IT MAY BE CLARIFIED THAT A NOTICE OF APPEA L CANNOT BE EQUATED WITH NOTICE OF A FUTURE APPLICATION TO LEAD ADDITIONAL E VIDENCE WHICH NO ONE COULD HAVE ANTICIPATED OR REASONABLY FORESEEN. ORDINARILY , THE APPEAL WOULD BE DECIDED ON THE EVIDENCE RECORDED IN THE COURSE OF A SSESSMENT PROCEEDINGS. THE AO, THEREFORE, MAY NOT, IN A GIVEN CASE, THINK IT NECESSARY TO REMAIN PRESENT AT THE HEARING OF THE APPEAL. HE, HOWEVER, CANNOT BE EXPECTED TO ANTICIPATE THAT ADDITIONAL EVIDENCE MIGHT BE PRODUC ED BY THE ASSESSEE IN HIS APPEAL. IT IS FOR THIS REASON THAT IT IS NECESSARY TO GIVE HIM AN OPPORTUNITY TO MEET THE ADDITIONAL EVIDENCE. SINCE IN THE CASE UND ER CONSIDERATION, THE ADDITIONAL EVIDENCE/DOCUMENTS FILED BEFORE THE LEAR NED CIT(A) HAVE NOT BEEN CONFRONTED TO THE AO NOR THE LD. CIT(A) SEEMS TO HA VE RECORDED ANY REASONS ITA NO. 1401/AHD/2006 8 IN WRITING FOR ADMITTING SUCH EVIDENCE , IN THE IN TEREST OF JUSTICE AND FAIR PLAY, WE VACATE THE FINDINGS OF THE LD. CIT(A) AND RESTOR E THE MATTER TO HIS FILE, WITH THE DIRECTIONS TO FOLLOW THE MANDATE IN TERMS OF RU LE 46A(2) & (3) OF THE IT RULES, 1962 AND THEREAFTER, DISPOSE OF THE APPEAL IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE P ARTIES. WITH THESE DIRECTIONS, GROUND NOS. 2(A) & 2(B) IN THE APPEAL ARE DISPOSED OF AS INDICATED HEREINBEFORE.. 10 NO ADDITIONAL GROUND HAVING BEEN RAISED IN TERM S OF THE RESIDUARY GROUND NO.3 , ACCORDINGLY, THE SAID GROUND IS DISMI SSED.. 11. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTIC AL PURPOSES . SD/- SD/- (BHAVNESH SAINI) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 31 /12/2009 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. INCOME-TAX OFFICER, WARD-5(3), 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE, BARODA 3. THE CIT(APPEALS)- V,BARODA 4. THE CIT CONCERNED. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ORDER PRONOUNCED IN OPEN COURT ON 31 /12 /2009