M/s. J S Overseas Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1712/DEL/2013

• Counselvise Citation: 171220114 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Assessee Lawyers: ADITYA KUMAR
• Keywords: Opportunity of being heard; Principle of natural justice; Rule of consistency; Bonafide belief; Earning of tax free income; Additional evidence; Competent authority; Reassessment proceedings
• Section: 143(3); 234B; 14A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. H. S. SIDHU , JM ITA NO. 1712 /DEL/2013 : ASSTT. YEAR : 2008 - 09 ITA NO. 1713/DEL/2013 : ASSTT. YEAR : 2009 - 10 M/S J S OVERSEAS PVT. LTD., D - 194, 1 ST FLOOR, OKHLA IND. AREA, PHASE - I NEW DELHI VS ASSTT. COMMISSIONER OF INCOME - TAX CIRCLE - 4(1) NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AA CJ5251D A SSESSEE BY : SH. ASHWANI KUMAR & ADITYA KUMAR, CA REVENUE BY : SH. GAURAV DUDEJA , SR. DR DATE OF HEARIN G : 12 .11 . 2014 DATE O F PRONOUNCEMENT : 14. 11 .2014 ORDER P ER N. K. SAINI , AM: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARAT E ORDER S EACH DATED 3.1 .2013 OF LD. CIT(A) - VIII , NEW DELHI . SINCE THE ISSUE S INVOLVED ARE COMMON HAVING IDENTICAL FACTS AND THE APPEALS WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 . FIRST WE WILL DEAL WITH I.T.A. NO. 1712/D/2013. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE LEARNED ASSESSING OFFICER ERRED IN INITIATING REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT IN SPITE OF THE FACT THAT THE ORIGINAL ASSESSMENT WAS COMPLET ED U/S 143(3) OF THE ACT AND ALL THE FACTS RELATING TO THE ALLEGED ESCAPEMENT OF INCOME WERE ON THE RECORDS. ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 2 2. WITHOUT PREJUDICE TO GROUND NO. 1, THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING THE DEDUCTION U/S 80IA OF THE ACT IN SPITE OF THE FACT THE SAME WAS ALLOWED IN THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT AND IN THE PAST AND THE REASONS RECORDED FOR INITIATION OF REASSESSMENT PROCEEDINGS DID NOT MENTION ABOUT THE ESCAPEMENT OF INCOME FOR ALLOWING THE DEDUCTION IN ASSESSMENT U/S 143(3). 3. T HAT THE LEARNED C.I.T(A) ERRED IN UPHOLDING THE DISALLOWANCE OF DEDUCTION OF RS. 47,77,883/ - U/S 80IA IN RESPECT OF INCOME EARNED FROM THE INFRASTRUCTURAL FACILITY PROVIDED AT NAGAPATTINAM SEA PORT TAMIL NADU UNDER LICENSE AGREEMENT WITH TAMIL NADU MARITIM E BOARD, COPY OF WHICH WAS FILED BEFORE BOTH THE AUTHORITIES. 4. THAT THE ACTION OF ASSESSING AUTHORITY AND APPELLATE AUTHORITY FOR NOT GRANTING DEDUCTION U/S 80IA OF THE ACT IS AGAINST THE PRINCIPLE OF CONSISTENCY AS THE SAME WAS ALLOWED TO THE APPELLANT IN THE INITIAL YEAR AND SUBSEQUENT YEARS IN ASSESSMENTS MADE U/S 143(3) OF THE ACT. 5. THAT THE LEARNED C.I.T(A) ERRED IN UPHOLDING THE DISALLOWANCE U/S 14A OF THE ACT AMOUNTING TO RS. 3,78,902/ - WITHOUT APPRECIATING THE FACTS ON THE RECORD AND SUBMISSIO NS MADE IN THE APPELLATE PROCEEDINGS. THAT THE LEARNED C.I.T(A) DID NOT APPRECIATE THAT THE ENTIRE INVESTMENT IN SHARES WERE MADE IN THE PAST PREVIOUS YEARS OUT OF ACCUMULATED RESERVE & SURPLUSES AND THERE IS NO NEXUS OF INTEREST PAID DURING THE YEAR WITH THE INVESTMENT MADE. 6. THAT INTEREST U/S 234B OF THE ACT HAS BEEN CHARGED WRONGLY AS THE APPELLANT ESTIMATED ITS CURRENT INCOME ON THE BASIS OF ASSESSMENTS COMPLETED U/S 143(3), IN WHICH DEDUCTION U/S 80IA WAS ALLOWED. 7. THAT THE ORDER OF ASSESSING OFF ICER AND APPELLATE AUTHORITY ARE NOT BASED ON THE CORRECT FACTS AND LAW AND THEREFORE THE SAME ARE REQUIRED TO BE QUASHED. 3 . GROUND NO. 7 IS GENERAL IN NATURE WHILE GROUND NO. 1 WAS NOT PRESSED SO THESE GROUNDS DID NOT REQUIRE ANY ADJUDICATION ON OUR PA RT. VIDE GROUND S ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 3 NO. 2 TO 4 THE GRIEVANCE OF THE ASSESSEE RELATES TO THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IA OF THE I.T ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE ACT ON 2.6.2010 AT RS. 19,85,966/ - AS AGAINST THE RETURNED INCOME OF RS. 19 ,85,966/ - , THEREAFTER THE CASE WAS REOPENED AFTER RECORDING THE REASONS U/S 148 OF THE ACT. THE ASSESSEE WAS DERIVING INCOME FROM BROKERAGE, TRADING OF OIL , STORA GE TERMINAL AND TRANSPORTATION. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE CLAIMED THE DEDUCTION OF RS. 47,77,883/ - U/S 80IA OF THE ACT. HOWEVER, THE AO DISALLOWED THE SAID DEDUCTION CLAIMED BY THE ASSESSEE ON ACCOUNT OF O PERATION AND MAINTENANCE OF INFRASTRUCTURAL FACILITIES AT THE NAGA PATTINAM SEA PORT, TAMIL NADU ON THE PLEA THAT THE ASSESSEE DID NOT FURNISH THE CERTIFICATE THAT THE WAREHOUSE FORM ED PART OF THE PORT. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED THAT IT HAD ENTERED INTO LICENSE AGREEMENT WITH THE TAMIL NADU MARITIME BOARD, CHENNAI (CONTROLLING AUTHORITY FOR S EA P ORTS IN TAMIL NADU) VIDE LICENSE DEED FOR 15 YEARS W.E.F 6.12.2000 AND AS PER THE TERMS OF THE LICENSE, TH E ASSESSEE WAS ALLOWED TO USE LAND WITHIN THE SEA PORT PREMISES OF NAGAPATTINAM SEA PORT, TAMIL NADU FOR SETTING UP AND OPERATING OIL STORAGE AND HANDLING FACILITIES . IT WAS FURTHER SUBMITTED THAT THE ASSESSEE FUL FILLED ALL THE REQUIREMENTS OF S EC. 80IA OF THE ACT AND WAS CLAIMING DEDUCTION UNDER THE SAID S ECTION FOR THE LAST MANY YEARS AND THE SAME WAS ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 4 BEING ALLOWED TO IT EVERY YEAR . IT WAS STATED THAT T HE AO HAD NOT GIVEN ANY COGENT REASON FOR DEVIATING FROM THE ACCEPTED PRACTICE. 6. THE LD. CIT(A) AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT CIRCULAR NO. 10/2005 WAS ISSUED BY THE CBDT ON 16.12.2005 WHEREIN A REFERENCE OF THE EARLIER CIRCULAR DATED 23.6.2000 WAS MADE AND IT WAS CLARIFIED THAT THE DEFINITION OF EXPRESSION PORT FOR THE P URPOSE OF SEC. 80IA OF THE ACT INCLUDE STRUCTURES AT PORTS FOR STORAGE, LOADING AND UNLOADING ETC., SUBJECT TO THE FULFILLMENT OF THE CONDITIONS REQUIRING THAT THE STRUCTURE SHOULD HAVE BEEN COMPLETED UNDER A BOT OR BOLT SCHEME AND THE CONDITION THAT THER E SHOULD BE AN AGREEMENT FOR TRANSFER OF THE FACILITY TO THE COMPETENT AUTHORITY ON THE EXPIRY OF THE STIPULATED PERIOD WAS DELETED. HE FURTHER OBSERVED THAT W.E.F ASSESSMENT YEAR 2002 - 03 ALL THAT WAS NECESSARY WAS A CERTIFICATE ISSUED BY THE PORT AUTHORI TY THAT THE STRUCTURE IN QUESTION FORMS A PART OF THE PORT . THE LD. CIT(A) ALSO OBSERVED THAT THE ASSESSEE HAD FILED A COPY OF AGREEMENT ENTERED INTO WITH THE TAMIL NADU MARITIME BOARD REGARDING USE OF LAND AT NAGAPATTINAM PORT BUT THE SAID AGREEMENT COULD NOT BE SAID A CERTIFICATE AS REQUIRED UNDER THE TERMS OF CBDT CIRCULAR NO. 10/2005 . THE LD. CIT(A) HELD THAT SINCE THE ASSESSEE HAD NOT BEEN ABLE TO FURNISH A CERTIFICATE FROM THE CONCERNED PORT AUTHORITY THAT THE STRUCTURES FORM PART OF THE PORT , DESPITE VARIOUS OPPORTUNITIES PROVIDED IN THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS , THEREFORE, THE DISALLOWANCE MADE BY THE AO WAS AS PER LAW. NOW THE ASSESSEE S IN APPEAL . ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 5 7. T HE LD. COUNSEL FOR THE ASSESSEE FURNISHED AN APPLICATION UNDER RULE 29 OF THE INCOME TAX ( APPELLATE TRIBUNAL ) RULES, 1963 FOR ADMISSION OF ADDITIONAL EVIDENCE BY STATING THEREIN AS UNDER: IT IS RESPECTFULLY PRAYED THAT WHILE ADJUDICATING THE ABOVE APPEAL, THE FOLLOWING DOCUMENTS MAY KINDLY BE ADMITTED AS ADDITIONAL EVIDENCE AND CO NSIDERED AS THE SAID DOCUMENTS ARE DIRECTLY LINKED TO THE ISSUES RAISED IN THE GROUNDS OF APPEAL: (1) COPY OF LETTER DATED 09.11.2012 ADDRESSED BY APPELLANT COMPANY TO STATE PORT OFFICER, TAMIL NADU MARITIME BOARD (TNMB), CHENNAI. (2) COPY OF LETTER DATED 15.03 .2013 ADDRESSED BY THE APP ELLANT COMPANY TO THE CEO, TNMB. (3) COPY OF LETTER NO. 8309/S3/12 DATED 19.04.2013 ADDRESSED BY THE TNMB TO THE APPELLANT COMPANY MENTIONING THEREIN ALLOTMENT OF LAND ON LEASE BASIS TO THE APPELLANT COMPANY FOR A PERIOD OF 15 DAYS. (4) COPY OF LETTER DATED 05.06.2013 WRITTEN BY THE APPELLANT COMPANY TO TNMB REQUESTING FOR ISSUE OF AMENDED CERTIFICATE. (5) COPY OF LETTER NO. 3884/S3/2013 DATED 06.09.2013 ADDRESSED TO THE APPELLANT COMPANY CERTIFYING THE LAND BELONGS TO TNMB. (6) COPY OF MANUAL OF TNMB CLEARLY MENTIONING ISSUE OF LICENSE IN FORM - 26 FOR USING THE PORT LAND TO M/S J S OVERSEAS PVT. LTD. THE ABOVE MENTIONED DOCUMENTS/CORRESPONDENCE COULD NOT BE FILED BEFORE THE LOWER AUTHORITIES AS THE RELEVANT CERTIFICATE FROM THE TNMB WAS OBTAIN ED ONLY ON 19.04.2013 AND FURTHER AMENDED ON 06.09.2013. THE APPELLANT COMPANY WAS NOT AWARE, UNDER A ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 6 BONAFIDE BELIEF, OF THE SPECIFIC REQUIREMENTS IN THIS REGARD SINCE THE DEDUCTION U/S 80IA HAD BEEN CONSISTENTLY ALLOWED TO IT IN THE EARLIER YEARS. INADVE RTENT OMISSION ON PART OF THE APPELLANT COMPANY IN NOT HAVING OBTAINED THE RELEVANT CERTIFICATE IS HIGHLY REGRETTED. IT IS PRAYED THAT THE DOCUMENTS BEING FROM A GOVERNMENT AUTHORITY BE KINDLY ENTERTAINED AS AN ADDITIONAL EVIDENCE AS THEY GO TO THE ROOT O F THE MATTER AND ARE ESSENTIAL FOR JUDICIOUS ADJUDICATION OF THE ISSUE UNDER APPEAL. THANKING YOU, YOURS FAITHFULLY , SD/ - (ASHWANI KUMAR) C.A COUNSEL FOR THE APPELLANT COMPANY 8 . THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMPETENT AUTHORITY ISSUED A CERTIFICATE VIDE LETTER NO. 8309/S3/12 DATED 19. 4.2013 MENTIONING THEREIN ALLOTMENT OF LAND ON LEASE BASIS TO THE ASSESSEE FOR A PERIOD OF 15 YEARS. THIS CERTIFICATE WAS FURTHER AMENDED VIDE LETTER NO. 3884/S3/2013 DATED 6.9.2013 CERTIFYING THAT THE LAND BELONGS TO TAM IL NADU MARITIME BOARD, CHENNAI AND THE SAID LETTER COULD NOT BE FILED BEFORE THE LOWER AUTHORITIES AS IT WAS OBTAINED ON THE DATE SUBSEQUENT TO THE ORDER PASSED BY THE LD. CIT(A) ON 3.1.2013. IT WAS CONTENDED THAT THE ASSESSEE WAS NOT AWARE, UNDER A BONAFIDE BELIEF, OF THE SPECIFIC REQUIRE MENTS IN THIS REGARD , SINCE THE DEDUCTION U/S 80IA OF THE ACT HAD BEEN CONSISTENTLY ALLOWED TO IT IN THE EARLIER YEARS. IT WAS STATED THAT THE DOCUMENTS BEING FROM A GOVERNMENT AUTHORITY BE KINDLY ENTERTAINED AS AN ADDITIONAL EVIDENCE BECAUSE THEY GO TO TH E ROOT OF THE MATTER AND ARE ESSENTIAL FOR JUDICIOUS ADJUDICATION. ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 7 9 . IN HIS RIVAL SUBMISSIONS THE LD. DR ALTHOUGH OPPOSED FOR THE ADMISSION OF ADDITIONAL EVIDENCE BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THESE EVIDENCE GO TO THE ROOT OF THE MATTER, HOWEVER, HE STATED THAT IF THE ADDITIONAL EVIDENCES ARE TO BE ADMITTED THE MATTER SHALL GO TO THE ASSESSING OFFICER FOR HIS CONSIDERATION. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFUL LY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE IT IS NOTICED THAT THE AO DID NOT ALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IA OF THE ACT FOR THE REASONS THAT THE ASSESSEE FAILED TO FURNISH THE CERTIFICATE FROM A COMPETENT A UTHORITY THAT THE LAND BELONGING TO TAMIL NADU MARITIME BOARD, CHENNAI WAS ALLOTTED TO THE ASSESSEE. THE SAID ACTION OF THE AO WAS CONFIRMED BY THE LD. CIT(A ) BY OBSERVING THAT THE ASSESSEE FAILED TO PRODUCE THE AFORESAID CERTIFICATE EITHER BEFORE THE AO O R BEFORE HIM. 10.1 NOW THE ASSESSEE HAS FURNISHED THE COPY OF SAID CERTIFICATE ALONGWITH AN APPLICATION FOR ADMITTING THE SAME AS AN ADDITIONAL EVIDENCE UNDER RULE 29 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963. IN THE PRESENT CASE ALTHOUGH THE ADDIT IONAL EVIDENCES HAD BEEN FURNISHED FIRST TIME BEFORE THE TRIBUNAL BUT IT IS VERY MUCH RELEVANT AND GO TO THE ROOT OF THE PRESENT CONTROVERSY. MOREOVER, THE ADDITIONAL EVIDENCES WILL NOT CHANGE THE CLAIM MADE BY THE ASSESSEE AS THE ISSUE WAS ALREADY BEFORE THE AO AND THE LD. CIT(A). 11 . AS PER THE PROVISIONS CONTAINED IN RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE PARTIES TO THE APPEAL SHALL NOT BE ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 8 ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL. T HE 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 ADDITIONAL EVIDENCE UNLESS AND UNTIL SUCH EXCEPTIONAL CIRCUMSTANCES AR E SET OUT. 12 . IN THE PRESENT CASE THE ASSESSEE HAD MOVED AN APPLICATION UNDER RULE 29 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963. IN OUR OPINION THE MISTAKE OF THE ASSESSEE, IF ANY, IN NOT FILING THE CERTIFICATE FROM THE COMPETENT AUTHORITY WAS N OT DELIBERATE OR WITH A MALAFIDE INTENTION BECAUSE THE ASSESSEE WAS GETTING THE DEDUCTION U/S 80IA C ONSISTENTLY FOR THE EARLIER YEARS, THEREFORE, THE NEW EVIDENCE NOW FURNISHED AS AN ADDITIONAL EVIDENCE SHALL BE ADMITTED BY KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE BU T AT THE SAME TIME OPPORTUNITY IS TO BE PROVIDED FOR REBUTTAL TO THE ANOTHER PARTY I.E. THE REVENUE DEPARTMENT. 13 . AS REGARDS TO THE ADMISSION OF THE ADDITIONAL EVIDENCE, THE HON BLE MADRAS HIGH COURT IN THE CASE OF ANAIKAR TRADE AND E STATES (P) LTD (NO.2) VS. CIT, 186 ITR 313 HAS HELD AS UNDER: THE TRIBUNAL HAS DISCRETION TO ALLOW THE PRODUCTION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES, 1963 IF THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR AFFIDAVIT TO BE FILED T O ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE, IT MAY ALLOW THE DOCUMENT TO BE PRODUCED OR THE AFFIDAVITS TO BE FILED. EVEN IF THERE WAS A FAILURE TO PRODUCE THE DOCUMENTS BEFORE THE ITO AND THE A.A.C, THE TRIBUNAL HAS THE JURISDICTION IN T HE INTERESTS OF JUSTICE TO ALLOW THE PRODUCTION OF SUCH VITAL DOCUMENTS. ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 9 14 . IN THE PRESENT CASE ALSO, THE DOCUMENTS FURNISHED BY THE ASSESSEE ARE VITAL WHICH GO TO THE ROOT OF THE PRESENT CONTROVERSY, SO THESE ARE TO BE ADMITTED IN THE INTEREST OF NATU RAL JUSTICE BUT THESE DOCUMENTS ARE REQUIRED TO BE EXAMINED AND CONSIDERED AT THE LEVEL OF THE AO. WE, THEREFOR E, SET ASIDE THE IMPUGNED ORDER AND REMAND THE PRESENT ISSUE BACK TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTER PROVID ING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 15 . FOR THE AFORESAID VIEW, WE ARE ALSO FORTIFIED BY THE DECISION OF THE ITAT DELHI BENCH F IN THE CASE OF UOP LIC V ADDITIONAL 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 AN D ALLOWING OF PRODUCTION OF ADDITIONAL EVIDENCE IS IN THE DISCRETION OF THE TRIBUNAL. THE SAID DISCRETION, HOWEVER, IS TO BE EXERCISED JUDICIALLY AND NOT ARBITRARILY. AS HELD BY HON BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V. KUM. SATYA SETIA (198 3) 143 ITR 486, IT IS WITHIN THE DISCRETION OF THE APPELLATE AUTHORITY TO ALLOW PRODUCTION OF ADDITIONAL EVIDENCE IF THE SAID AUTHORITY REQUIRES ANY DOCUMENT TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE. THE TRIBUNAL IS THE FINAL FACT FIN DING BODY UNDER THE SCHEME OF THE INCOME TAX ACT , 1961 AND POWERS, THEREFORE, HAVE NECESSARILY TO BE EXERCISED BY IT FOR DECIDING THE QUESTIONS OF FACT. WHILE EXERCISING ITS POWERS, IF THE TRIBUNAL IS OF THE OPINION THAT ADDITIONAL EVIDENCE IS MATERIAL IN THE INTEREST OF JUSTICE FOR DECIDING A PARTICULAR ISSUE, ITS DISCRETION CANNOT BE INTERFERED WITH UNLESS IT HAS BEEN EXERCISED ON NON EXISTING OR IMAGINARY GROUNDS. IN THE CASE OR MAHAVIR SINGH (SUPRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE IT WAS HELD THAT ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 10 SECTION 107 OF CPC ENABLES AN APPELLATE COURT TO TAKE ADDITIONAL EVIDENCE OR TO REQUIRE SUCH OTHER EVIDENCE TO BE TAKEN SUBJECT TO SUCH CONDITIONS AND LIMITATIONS AS ARE PRESCRIBED UNDER ORDER 41 OF RULE 27 OF CPC. IT WAS ALSO HELD THAT THE PARTIES AR E NOT ENTITLED, AS OF RIGHT, TO THE ADMISSION OF SUCH EVIDENCE AND THE MATTER IS ENTIRELY IN THE DISCRETION OF THE COURT WHICH IS OF COURSE TO BE EXERCISED JUDICIALLY AND SPARINGLY. IT WAS OBSERVED THAT ORDER 41 RULE 27 OF CPC ENVISAGES CERTAIN CIRCUMSTANC ES 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 ENABLE IT TO PRONOUNCE JUDGMENT OR FOR ANY OTHER SUBSTANTIAL CAUSE. IT WAS ALSO CLAR IFIED THAT THE EXPRESSION TO ENABLE IT TO PRONOUNCE JUDGMENT CONTEMPLATES A SITUATION WHEN THE APPELLATE COURT FINDS ITSELF UNA BLE TO PRONOUNCE JUDGMENT OWING TO A LACUNA OR DEFECT IN THE EVIDENCE AS IT STANDS. IN THE CONTEXT, IT WAS FURTHER CLARIFIED THAT THE ABILITY TO PRONOUNCE A JUDGMENT IS TO BE UNDERSTOOD AS THE ABILITY TO PRONOUNCE A JUDGMENT SATISFACTORY TO THE IT MIND OF COURT DELIVERING IT. THIS POSITION WAS REITERATED AGAIN BY THE HON BLE 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 HON BLE SUPREME COURT THAT THE POWER TO ADMIT ADDITIONAL EVIDENCE DOES NOT ENTITLE THE APPELLATE COURT TO LET IN FRESH EVIDENCE ONLY FOR THE PURPOSE OF PRONOUNCING JUDGMENT IN A PARTICULAR WAY AND IT IS ONLY FOR REMOVING A LACUNA IN THE EVIDENCE THAT THE APPELLATE COURT IS EMP OWERED TO ADMIT ADDITIONAL EVIDENCE. IN THE CASE OF ARJAN SINGH V. KARTAR SINGH 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 ARBITRARY ONE BUT IS A JUDICIAL ONE CIRCUMSCRIBED BY THE LIMITATIONS SPECIFIED IN THAT RULE. IT WAS ALSO HELD THAT THE LEGITIMATE ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 11 OCCASION FOR THE APPLICATION OF THE SAID RULE IS WHEN ON EXAMINING THE EVIDENCE AS IT STANDS SOME INHERENT LACUNA OR DEFECT BECOMES APP ARENT. TO THE SIMILAR EFFECT IS ANOTHER DECISION OF HON BLE SUPREME COURT IN THE CASE OF NATHA SINGH VS. FINANCIAL COMMISSIONER TAXATION ALR 1976 S.C. 1053. 31. AS PER RULE 29 OF THE A PPELLATE TRIBUNAL RULES, 1963, THE TRIBUNAL HAS THE POWER TO ALLOW ADDITIONAL 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 PRONOUNCE JUDGMENT ON THE STAGE OF R ECORD AS IT IS AND SO IT CANNOT STRICTLY SAY THAT IT REQUIRES ADDITIONAL EVIDENCE TO 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 JUDG MENT IN A MORE SATISFACTORY MANNER. SUCH REQUIREMENT OF THE TRIBUNAL IS LIKELY TO ARISE ORDINAR ILY WHEN SOME INHERENT LA CUNA OR DEFECT BECOMES APPARENT UPON ITS APPRECIATION OF THE EVIDENCE. THE POWER OF THE TRIBUNAL TO ADMIT ADDITION EVIDENCE IN SUPPORT OF THE CLAIM IN APPEAL IS DISCRETIONARY AND NO FETTERS CAN BE IMPOSED ON THE EXERCISE OF SUCH POWER. HOWEVER, AS HELD BY HON BLE ALLAHABAD HIGH COURT IN THE CASE OF RAM PRASAD SHARMA VS. CIT (1979) 119 ITR 867 AND BY THE HON BLE ANDHRA PRADESH HIGH COU RT IN THE CASE OF A. K. BABU KHAN VS. CWT (1976) 102 ITR 756 IT IS NOT AN ARBITRARY POWER BUT IT IS A JUDICIAL ONE CIRCUMSCRIBED BY THE LIMITATIONS GIVEN IN RULE 29 OF THE APPELLATE TRIBUNAL RULES, 1963. THE CONDITIONS PRECEDENT FOR THE EXERCISE OF POWER U NDER RU LE 29 MUST, THEREFORE, BE FOUND TO HAVE BEEN ESTABLISHED. HOWEVER, WHERE THERE IS NO LACK OF EVIDENCE BUT YET THE PLEA IN SUPPORT OF ADMITTING 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 SUBSTANTIAL JUSTICE AND NOT TO DEPRIVE THE PARTY OF SUCH JUSTICE ON TECHNICAL GROUNDS. FURTHER ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 12 AS HELD BY HON BLE 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 NOT PROVIDE A SUBSTANTIAL CAUSE TO ALLOW ITS ADMISSION AT THE APPELLATE STAGE. THE ADMISSIBILITY OF ADDITIONAL EVIDENCE 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 OUT A NEW CASE. IN THE CASE OF N. KAMAL AM (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 WEAK POINTS AND MAKE UP FOR OMISSIONS EARLIER MADE. 33. IT IS ALSO WELL SETTLED THAT ONCE ADDITIONAL EVIDENCE IS TAKEN INTO CO NSIDERATION, IT HAS TO BE READ AS PART 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 HON BLE MADRAS HIGH COURT IN THE CASE OF RSS SHANMUGAM PILLAI & SONS (SUPRA), IF THE TRIBUNAL FINDS THAT THE DOCUMENTS FILED ARE QUITE RELEVANT AND FOR THE PURPOSE OF DECIDING THE ISSUE BEFORE IT, IT WOULD BE WELL WITHIN ITS POWERS TO ADMIT THE EVIDENCE , CONSIDER THE SAME ON MERITS OR REMIT THE MATTER TO THE LOWER AUTHORITIES FOR EXAMINING THE SAME. IN THE CASE OF SMT. URMILA RATILAL (SUPRA), HON BLE GUJARAT HIGH COURT HAS HELD THAT WHEN THE ADDITIONAL EVIDENCE FIELD BY THE REVENUE WAS ADMITTED BY T HE TRIBUNAL OVERRULING THE OBJECTION RAISED BY THE ASSESSEE, INTEREST OF JUSTICE 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 C IT (2003) 87 ITO 189, CITED BY THE LD. COUNSEL FOR THE ASSESSEE, IT WAS HELD BY THE PUNE BENCH OF ITAT ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 13 IN IT THIRD MEMBER DECISION THAT WHEN THE DOCUMENTS WHICH WERE NOT AVAILABLE BEFORE THE ASSESSING OFFICER WERE PRODUCED BEFORE THE TRIBUNAL FOR THE F IRST TIME AND THE SAME WERE ADMITTED AS ADDITIONAL EVIDENCE BEING MATERIAL TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER TO VERIFY CORRECTNESS AND AUTHENTICITY OF SUCH DOCUMENTS AND TO ADJUDICATE THE MATTER AFRESH AFTER PROVIDING ADEQUATE OPPORT UNITY TO THE ASSESSEE OF BEING 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 THE REVENUE IS QUITE RELEVANT FOR THE PURPOSE OF DECIDING THE ISSUE BEFORE US AND THE SAME, THEREFORE, CAN BE ADMITTED AS PER RULE 29 OF APPELLATE TRIBUNAL R ULES, 1963 AS HELD BY HON BLE 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 DECIDING THE ISSUE RELATING TO THE PE. 52. AS ALREAD Y NOTED THE ASSESSEE WAS GIVEN AN OPPORTUNITY DURING THE COURSE OF HEARING TO ADVANCE THE ARGUMENTS ON THE ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS ON MERITS OF THE ISSUE TAKING INTO CONSIDERATION THE SAID ADDITIONAL EVIDENCE AND AVAILING THIS OPPORTUNI TY, LD. COUNSEL FOR THE ASSESSEE HAS NOT ONLY RAISED ELABORATE ARGUMENTS ON BOTH THESE ASPECTS BUT HAS ALSO FILED, A DETAILED WRITTEN SUBMISSION. IN THE SAID WRITTEN SUBMISSION AN ATTEMPT HAS BEEN MADE BY HIM TO EXPLAIN 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 VIEW THE FACT THAT THE ADDITIONAL EVIDENCE SO PRODUCED BY THE REVENUE AS WELL AS ELABORATE EXPLANATION OF FERED BY HIM ASSESSEE TO REBUT THE SAME IS ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 14 VOLUMINOUS RUNNING INTO SEVERAL PAGES, WHICH REQUIRES IN - DEPTH EXAMINATION, WE FIND THAT IT WOULD BE FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE RELATING TO PE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER EXAMINING THE ADDITIONAL EVIDENCE AS WELL AS EXPLANATION OFFERED BY THE ASSESSEE WHILE REBUTTING THE SAME. THE ASSESSEE SHALL ALSO BE AT LIBERTY TO ADDUCE FURTHER EVIDENCE TO SUPPORT ITS CASE BEFORE THE ASSESSING OFFICER WHO SHALL TAKE INTO CONSIDERATION 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 ASSESSING OFFICER FOR FRESH DECI SION ALONG WITH THE MAIN ISSUE. IN SO FAR AS THE ISSUE RELATING TO THE LEVY OF INTEREST U/S 234B IS CONCERNED, 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 S PECIAL BENCH OF ITAT IN THE CASE OF MOTOROLA INC. VS. DY. CIT (2005) 95 ITD 269. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO DECIDE THE 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) ON ALL THE ISSUES INVOLVED IN THE PRESENT APPEAL IS ACCORDINGLY SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AS PER THE DIRECTIONS GIVEN HEREINABOVE. 16 . IN VIEW O F THE ABOVE, THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) IS SET ASIDE AND THE ISSUE IS REMANDED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW, AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSES SEE. 17 . THE ASSESSEE HAS ALSO RAISED GROUND NO. 5 RELATING TO THE DISALLOWANCE U/S 14A OF THE ACT. ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 15 18. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS NOT HAVING ANY EXEMPT INCOME SO THERE WAS NO QUESTION O F MAKING THE DISALLOWANCE U/S 14A OF THE ACT. THE RELIANCE WAS PLACED ON THE FOLLOWING JUDGMENT S OF THE VARIOUS HIGH COURTS: CIT VS HOLCIM INDIA (P) LTD. ITA NOS. 486/2014 AND 299/2014 DATE OF DECISION 05.09.2014 (DEL.) CIT VS M/S LAKHANI MARKETING INCL., ITA NO. 970 OF 2008 (O&M) DATE OF DECISION 02.04.2014(P&H) 19 . I N HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE UNDER RULE 14A CAN BE MADE EVEN IF THERE IS NO EXEMPT INCOME. THE RELIANCE WAS PLACED ON THE FOLLOWIN G CASES: CHEMINVEST LTD. VS ITO (2009) 121 ITD 318 (DEL.) (SB) MAXOPP INVESTMENT LTD. VS CIT (2011) 15 TAXMANN.COM 390 (DEL.) CIT VS HOLCIM INDIA (P) LTD. ITA NOS. 486/2014 AND 299/2014 DATE OF DECISION 05.09.2014 (DEL.) 20 . AFTER CONSIDERING THE SUBMISS IONS OF BOTH THE PARTIES WE ARE OF VIEW THAT THIS ISSUE SHALL ALSO BE DECIDED BY THE AO AFTER CONSIDERING THE JUDGMENT CITED BY BOTH THE PARITIES BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 21 . AS REGARDS TO THE GROUND NO. 6 RELATING TO INTE REST U/S 234B OF THE ACT. IT WAS A COMMON CONTENTION OF BOTH THE PARTIES THAT IT WAS CONSEQUENTIAL IN NATURE , WE ORDER ACCORDINGLY. ITA NO. 1712 & 1713 /DEL/2013 J S OVERSEAS PVT. LTD. 16 22 . THE FACTS INVOLVED IN ITA NO. 1713/D/2013 FOR THE ASSESSMENT YEAR 2009 - 10 ARE IDENTICAL AS WERE INVOLVED IN ITA NO. 171 2/D/2013 IN THE ASSESSMENT YEAR 2008 - 09, THEREFORE, OUR FINDING GIVEN IN FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS FOR THIS APPEAL ALSO I.E. THE APPEAL RELATING TO THE ASSESSMENT YEAR 2009 - 10. 23 . IN THE RESULT, BOTH THE APPEAL S OF THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. ( ORDER PRONOU N CED IN T HE OPEN COURT ON 14 /11 / 2014 ) . SD/ - SD/ - ( H. S. SIDHU ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 /11 / 2014 *SUBODH* COPY FORW ARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 1 2 .11 . 2014 PS 2. DRAFT PLACED BEFORE AUTHOR 1 3 .11 . 2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRA FT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK . 10. DATE OF DISPATCH OF ORDER.