Mr. C.R.Raghu , Bangalore V. Income TAx Officer Ward-6(2)(2), Bangalore

ITA 2145/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7699 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 09-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SHEET AL SMT PADMAM EENAKSH
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH 'B' BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO.2145/BANG/2017 (ASST. YEAR 2012-13) MR. C.R RAGHU, NO.42/2, 8 TH MAIN, 5 TH CROSS, 5 TH MAIN, RAJMAHAL VILAS EXTENSION, BENGALURU. . APPELLANT ABOPB2185C. VS. THE INCOME-TAX OFFICER, WARD-6(2)(2), BENGALURU. . RESPONDENT ITA NO.213/BANG/2018 (ASST. YEAR 2012-13) (BY REVENUE) ASSESSEE BY : SMT. SHEET AL, ADVOCATE REVENUE BY : SMT. PADMAM EENAKSHI, JCIT DATE OF HEARING : 3-07-2018 DATE OF PRONOUNCEMENT : 18-07-2018 O R D E R PER SHRI JASON P BOAZ, ACCOUNTANT MEMBER: ITA NO.2145/ B/17 & ITA NO.213 /B/2018 2 THESE ARE CROSS APPEALS BY THE ASSESSEE AND REVENU E, DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX (APPEALS) -6, BANGALORE DATED 31/08/2017 FOR ASST. YEAR 2012-13. 2. BRIEFLY STATED, THE FACTS OF THE CASE RELEVANT F OR THIS APPEAL ARE AS UNDER:- 2.1 THE ASSESSEE, ENGAGED IN RETAIL LIQUOR BUSINE SS, FILED HIS RETURN FOR ASST. YEAR 2012-13 ON 29/9/2012 DECLARING INCOM E OF RS.10,47,450/-. THE RETURN WAS PROCESSED U/S 143(1 ) OF THE INCOME- TAX ACT, 1961 (IN SHORT, THE ACT)) AND THE CASE W AS TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 9/2/2015, WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.4,94,11,470/- IN VIEW OF VARIOUS ADDITIONS/DI SALLOWANCES. ON APPEAL, THE CIT(A)-6 BANGALORE VIDE THE IMPUGNED OR DER DATED 31/8/2017 ALLOWED THE ASSESSEE PARTIAL RELIEF . AGG RIEVED BY THE ORDER OF THE CIT(A)-6, BANGALORE BOTH THE ASSESSEE AND RE VENUE HAVE FILED CROSS APPEALS WHICH WILL BE DISPOSED HEREUNDER: 3. ASSESSEES APPEAL IN ITA NO.2145/BANG/2017 (ASST. Y EAR 2012-13) THE ASSESSEE HAS FILED THIS APPEAL WHEREIN HE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT (A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.49,834/- CLAIMED UNDER VEHICLE MAINTENANCE CHARGES OF M/S.THIRUMALA WINES AND LEGEND BAR & RESTAURANT. ITA NO.2145/ B/17 & ITA NO.213 /B/2018 3 2. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT T HE RUNNING EXPENDITURE CLAIMED WAS IN THE COURSE OF BUSINESS IN RESPECT OF SERVICING AND REPAIR CHARGES WHICH WAS REQUIRED TO BE INCURRED IN THE COURSE OF BUSINESS WHICH HAD TOTAL TURNOVER OF RS.3,50,81,171/-. 3. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HAT THE EXPENDITURE WAS REASONABLE AND COMPARED WELL WITH SIMILAR EXPENDITURE IN THE PAST AND ACCORDINGL Y HE OUGHT TO HAVE ALLOWED THE SAME. 4. THE LEARNED CIT (A) ERRED IN DISALLOWING THE INTEREST CLAIMED TO THE TUNE OF RS. 12,24,714 /- WHICH WAS ON THE LOANS BORROWED FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. 5. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HAT THE LOAN WAS GIVEN TO THE APPELLANT THROUGH HIS MOTHER AND THE INTEREST PAYMENT WAS TO THE LENDING BANK/ AND BY VIRTUE OF SECTION 194A(3)(III) OF THE ACT, THERE WAS NO OBLIGATION TO DEDUCT / TAX AT SOURCE. 6. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HAT THE JUDGMENT OF THE SUPREME 'TO COURT REFERRED TO WAS DISTINGUISHABLE AND ON THE OTHER HAND IT SUPPORTED THE CLAIM OF THE APPELLANT SINCE THE LOAN BORROWED WAS FOR THE PURPOSE OF BUSINESS OF THE APPELLANT THROUGH HIS MOTHER AND THE SAME HAD BEEN DULY REFLECTED IN HIS ACCOUNTS. 7. ON THE FACTS, THE LEARNED CIT (A) OUGHT TO HAVE ACCEPTED THE EXPLANATION AND REFRAINED FROM ITA NO.2145/ B/17 & ITA NO.213 /B/2018 4 INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT TO UPHOLD THE DISALLOWANCE. 8. THE LEARNED CIT (A) ERRED IN UPHOLDING THE DISALLOWANCE OF REPAIRS AND'\ MAINTENANCE TO THE TUNE OF RS. 1 LAKH OUT OF TOTAL MAINTENANCE EXPENDITURE OF RS. 1,30,494/- WHEN THE GROSS REVENUE DECLARED FROM THE ACTIVITY WAS TO THE TUNE OF J1-RS.3,50,81,171/- ON MERE ALLEGATION THAT THER E WAS NO EVIDENCE TO SUPPORT THE EXPENDITURE WAS PROVIDED. 9. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HAT THE EXPENDITURE WAS ESSENTIAL F AND THEY WERE OF PETTY IN NATURE AND MERE NON-PRODUCTION OF VOUCHERS WAS NOT A SUFFICIENT REASON TO DISALLOW TH E EXPENDITURE. 10. THE LEARNED CIT (A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.3,23,1061- BEING THE INTEREST PAID TO AXIS BANK ONLY ON THE GROUND THAT THE LOAN WAS GIVEN IN THE EL'- NAME OF THE APPELLANT'S MOTHER. 11. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THAT THE LOAN WAS FOR THE BUSINESS OF THE APPELLANT AND IT HAD BEEN DULY REFLECTED IN THE ACCOUNTS OF THE APPELLANT AND PAYMENT OF INTEREST WAS BY THE APPELLANT DIRECTLY TO THE BANK AND BY VIRTUE OF SECTION 194A(3)(III) OF THE ACT THERE WAS NO OBLIGATION TO DEDUCT TAX AT SOURCE. 12. THE LEARNED CIT (A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.72,925/- OUT OF VEHICLE ITA NO.2145/ B/17 & ITA NO.213 /B/2018 5 MAINTENANCE EXPENDITURE ON ESTIMATE BASIS WHEN THE APPELLANT HAD FURNISHED EVIDENCE AND ALSO THE EXPENDITURE INCURRED WAS INCIDENTAL AND FOR THE BUSINESS OF THE APPELLANT WHICH YIELDED RECEIPT OF RS.3,50,81,171/-. 13. THE LEARNED CIT (A) ERRED IN SUSTAINING THE AD DITION OF RS.2,47,73,480/- BEING THE OUTSTANDING UNSECURED LOAN WHICH RELATED TO THE ARRACK BUSINESS WHICH STOOD BANNED BY THE STATE GOVERNMENT. 14. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THAT THOUGH THE ARRACK BUSINESS STOOD BANNED, THE APPELLANT WAS CONTINUED TO BE IN BUSINESS AND THE LOANS OUTSTANDING WERE LIABLE TO BE DISCHARGED BY HIM AND THERE BEING NO WAIVER OF LOAN, THE IMPUGNED ADDITION AS MADE WAS UNCALLED FOR. 15. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THAT THE OUTSTANDING UNSECURED LOANS WERE NOT OF THE RELEVANT YEAR AND CARRIED OVER FIGURES AND WERE OUTSTANDING FROM THE FINANCIAL YEAR 2006-07 ONWARDS AND CONSEQUENTLY THE IMPUGNED ADDITION ALLEGING THEM TO BE BOGUS WAS UNCALLED FOR AND THUS THE IMPUGNED ADDITION IS LIABLE TO BE DELETED. 16. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THE PRINCIPLES OF NATURAL JUSTICE WERE NOT FOLLOWED IN THAT THE INFORMATION COLLECTED BEHIND THE BACK OF T HE APPELLANT WAS NOT PRODUCED TO THE APPELLANT FOR REBUTTAL AND ACCORDINGLY THE IMPUGNED ADDITION IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND OPPOSED TO LAW, AND ACCORDINGLY LIABLE TO BE DELETED. ITA NO.2145/ B/17 & ITA NO.213 /B/2018 6 17. THE LEARNED CIT (A) OUGHT TO HAVE REFRAINED FR OM UPHOLDING THE DISALLOWANCE OF RENT PAYABLE TO EXCISE DEPARTMENT WHICH WAS OUTSTANDING AS UNEXPLAINED CASH CREDIT. 18. THE LEARNED CIT (A) OUGHT TO HAVE ACCEPTED THE EXPLANATION OFFERED BY THE APPELLANT THAT THE LOAN OUTSTANDING FOR THE RELATED PERIOD WAS ASSESSMENT YEAR 2007-08 ONWARDS AND THE LIABILITY CONTINUED TO BE IN EXISTENCE AND CONSEQUENTLY THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WERE ALSO NOT ATTRACTE D. 19. THERE BEING NO CASH BORROWAL TREATING THE OUTSTANDING AMOUNT AS CASH CREDIT WAS OPPOSED TO LAW AND ALSO THE OUTSTANDING BALANCE AS ON THE OPENING DATE WAS ALSO NOT INCLUDIBLE IN THE TOTAL INCOME OF THE APPELLANT FOR THE RELEVANT YEAR AND ACCORDINGLY THE LEARNED CIT (A) OUGHT TO HAVE DELETED THE IMPUGNED ADDITION. 20. THE LEARNED CIT (A) ERRED IN UPHOLDING THE ADD ITION OF CASH CREDIT OF RS.50,00,000/- ALLEGING THAT THER E WAS NO CONFIRMATION FROM THE CREDITOR. 21. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THE BORROWAL WAS IN THE YEAR RELATED TO THE ASSESSMENT YEAR 2008-09 WHICH CONTINUED TO BE OUTSTANDING IN THE RELEVANT YEAR AND THAT BEING SO, THE IMPUGNED ADDITION AS MADE IN THE RELEVANT YEAR WAS UNCALLED FOR AND ACCORDINGLY LIABLE TO BE DELETED. 22. ON THE FACTS, THE LEARNED CIT (A) OUGHT TO HAV E ACCEPTED THE EXPLANATION OFFERED BY THE APPELLANT I N RESPECT OF EACH OF THE ISSUES AND REFRAINED FROM ITA NO.2145/ B/17 & ITA NO.213 /B/2018 7 UPHOLDING THE DISALLOWANCE OR ADDITION AS THE CASE MAY BE. 23. WITHOUT PREJUDICE, THE DISALLOWANCE/ADDITION AS CONFIRMED BY THE LEARNED CIT (A) IS ARBITRARY, EXCESSIVE AND OUGHT TO BE DELETED IN FULL. 24. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 4. GROUND 1 TO 3 DISALLOWANCE OF VEHICLE MAINTENA NCE CHARGES RS.49,834/- 4.1 IN THE ORDER OF ASSESSMENT, THE ASSESSING OFFI CER (AO), AFTER PUTTING THE ASSESSEE ON NOTICE VIDE LETTER DATED 7/ 8/2014, DISALLOWED ON ACCOUNT OF RS.49,834/-, OUT OF VEHICLE MAINTENAN CE CHARGES OF RS.4,09,750/- CLAIMED BY THE ASSESSEE, IN THE ABSEN CE OF SUPPORTING DOCUMENTS/DETAILS BEING FILED. ON APPEAL, THE LD C IT(A) HAS UPHELD THE ABOVE DISALLOWANCE MADE BY THE AO ON THE GROUND THAT NO DOCUMENTARY EVIDENCE TO SUPPORT THE ASSESSEES CLAI M WAS FILED BEFORE HER. BEFORE US ALSO, SINCE NO SUPPORTING BILLS/DOC UMENTARY EVIDENCE WAS FILED TO ESTABLISH THE ASSESSEES CLAIM IN RESP ECT OF EXPENSES AMOUNTING TO RS.49,834/-, WE FIND NO MERIT IN THE G ROUNDS 1 TO 3 (SUPRA) RAISED BY THE ASSESSEE AND CONSEQUENTLY, UP HOLD THE DISALLOWANCE THEREOF, MADE AND CONFIRMED BY THE AUT HORITIES BELOW. 5. GROUNDS 4 TO 7 DISALLOWANCE OF INTEREST ON LOAN RS.12,24,714/- ITA NO.2145/ B/17 & ITA NO.213 /B/2018 8 5.1 IN THESE GROUNDS (SUPRA), THE ASSESSEE CONTENDS THAT THE AUTHORITIES BELOW ERRED IN DISALLOWING INTEREST CLA IMED ON LOANS WHICH WERE BORROWED FOR THE PURPOSE OF HIS BUSINESS THRO UGH HIS MOTHER FROM THE BANK U/S 40(A)(IA) OF THE ACT. IT WAS ALS O CONTENDED THAT THE JUDICIAL PRONOUNCEMENT OF THE HONBLE APEX COURT R EFERRED TO WAS DISTINGUISHABLE. THE LD AR FOR THE ASSESSEE WAS HE ARD IN SUPPORT OF THE GROUNDS RAISED . 5.2 PER CONTRA, THE LD DR FOR REVENUE SUPPORTED THE ORDER OF THE AO IN DISALLOWING THE INTEREST. ACCORDING TO THE L D DR, IT IS NOT THE ASSESSEE BUT THE ASSESSEES MOTHER, SMT. VIJAYLAKSH MI, HERSELF AS INCOME-TAX ASSESSEE, WHO HAD AVAILED THE SAID LOAN FROM CORPORATION BANK AND THE FACTS ON RECORD ESTABLISH THAT IT IS THE ASSESSEE WHO HAS MADE PAYMENT OF THE INTEREST ON THE SAID LOAN OF HI S MOTHER DIRECTLY TO THE BANK ON BEHALF OF HIS MOTHER. THE LD DR DREW T HE ATTENTION OF THE BENCH TO PAGE 250 OF THE ASSESSEES PAPER BOOK WHIC H IS THE ASSESSEES BALANCE SHEET AS ON 31/2/2012 WHEREIN TH E LOAN OF MOTHER DOES NOT APPEAR AS A LOAN CREDITOR. IT IS CONTENDE D THAT, SINCE THE SAID EXPENDITURE IS NOT INCURRED IN THE COURSE OF ASSESS EES BUSINESS, THEREFORE, THERE IS NO CASE FOR THE AFORESAID INTER EST TO BE ALLOWED AS A DEDUCTIONS AS HAS BEEN RIGHTLY HELD BY THE LD CIT(A ). 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE OR DERS OF THE AUTHORITIES BELOW AND DETAILS FILED THE UNDISPUTED FACTS AS EMERGE FROM THE RECORD ARE THAT THE LOAN IN RESPECT OF WHI CH THE INTEREST PAID ITA NO.2145/ B/17 & ITA NO.213 /B/2018 9 AMOUNTING TO RS.12,24,714/- HAS BEEN CLAIMED AS A D EDUCTION IS NOT IN RESPECT OF A LOAN TAKEN BY THE ASSESSEE. THE FACT THAT THE LOAN IN QUESTION IS TAKEN BY THE ASSESSEES MOTHER SMT. VIJ AYALAKSHMI FROM CORPORATION BANK IS NOT DISPUTED. IT IS ALSO NOT D ISPUTED THAT THE ASSESSEES MOTHER IS AN INCOME-TAX ASSESSEE. FURTH ER, ON PERUSAL OF THE ASSESSEES BALANCE SHEET AS ON 31/3/2012(COPY P LACED AT PAGE 250 OF PAPER BOOK) AS POINTED OUT BY THE LD DR, WE FIND THAT THE ASSESSEES MOTHER SMT. VIJAYALAKSHMI IS NOT REFLECTED AS A LOA N CREDITOR IN THE CASE ON HAND. IN THESE FACTUAL CIRCUMSTANCES, IN O UR CONSIDERED VIEW, THERE IS NO CASE FOR DEDUCTION OF INTEREST CLAIMED AS PAID ON SUCH LOAN WHICH HAS NOT BEEN AVAILED BY THE ASSESSEE OR EXPEN DED WHOLLY AND EXCLUSIVELY FOR HIS BUSINESS AND ACCORDINGLY UPHOLD THE FINDING OF THE LD CIT(A) IN THE MATTER. WE, THEREFORE FIND NO MER IT IN THE GROUNDS 4 TO 7 RAISED BY THE ASSESSEE AND DISMISS THE SAME. 6. GROUND NOS. 8 & 9 DISALLOWANCE OF REPAIRS & MAINTENANCE EXPENDITURE RS.1,00,000/- 6.1 IN THESE GROUNDS, THE ASSESSEE CHALLENGES THE D ISALLOWANCES OF RS.1,00,000/- OUT OF REPAIRS AND MAINTENANCE EXPENS ES CLAIMED. AFTER BEING HEARD BOTH PARTIES, WE HAVE PERUSED AND CAREF ULLY CONSIDERED THE MATERIAL ON RECORD. IN THE ORDER OF ASSESSMENT , THE AO, AFTER PUTTING THE ASSESSEE ON NOTICE VIDE LETTER DATED 7/ 8/2014, DISALLOWED AN AMOUNT OF RS.1,00,000/- OUT OF REPAIRS AND MAINT ENANCE EXPENSES CLAIMED IN THE ABSENCE OF SUPPORTING DOCUMENTS/DETA ILS BEING FILED. ON APPEAL, THE LD CIT(A) HAS UPHELD THE ABOVE DISAL LOWANCE MADE BY THE AO SINCE NO DOCUMENTARY EVIDENCE WAS FILED BEFO RE HER TO SUPPORT ITA NO.2145/ B/17 & ITA NO.213 /B/2018 10 THE ASSESSEES CLAIM. BEFORE US ALSO, SINCE NO SUP PORTING DOCUMENTARY EVIDENCE IS FILED TO ESTABLISH THE ASSESSEES CLAIM , WE UPHOLD THE DISALLOWANCE OF RS.1 LAKH, OUT OF REPAIRS AND MAINT ENANCE EXPENSES CLAIMED, MADE AND UPHELD BY THE AUTHORITIES BELOW. CONSEQUENTLY, FINDING NO MERIT IN THE GROUNDS NO.8 & 9 RAISED BY THE ASSESSEE, WE DISMISS THE SAME. 7. GROUND NO.12 DISALLOWANCE OF VEHICLE MAINTENAN CE EXPENSE RS.72,925/- 7.1 IN THIS GROUND, THE ASSESSEE CHALLENGES THE DIS ALLOWANCE OF RS.72,925/- OUT OF VEHICLE MAINTENANCE EXPENSES CLA IMED. AFTER BEING HEARD BOTH PARTIES, WE HAVE PERUSED AND CAREF ULLY CONSIDERED THE MATERIAL ON RECORD. IT IS SEEN FROM THE ORDER OF ASSESSMENT THAT THE AO, AFTER PUTTING THE ASSESSEE ON NOTICE VIDE L ETTER DATED 7/8/2014, DISALLOWED AN AMOUNT OF RS.72,925/- OUT O F VEHICLE MAINTENANCE EXPENSES CLAIMED; IN THE ABSENCE OF SUP PORTING DOCUMENTARY EVIDENCE IS BEING FILED. ON APPEAL, TH E LD CIT(A) HAS UPHELD THE ABOVE DISALLOWANCE MADE BY THE AO FOR TH E REASON THAT NO DOCUMENTARY EVIDENCE WAS FILED BEFORE HER TO SUPPO RT THE ASSESSEES CLAIM. BEFORE US ALSO, SINCE NO SUPPORTING DOCUMEN TARY EVIDENCE IS FILED TO ESTABLISH THE ASSESSEES CLAIM, WE UPHOLD THE DISALLOWANCE OF RS.72,925/- OUT OF VEHICLE MAINTENANCE EXPENSES, MA DE AND SUSTAINED THE ORDERS OF THE AUTHORITIES BELOW. CONSEQUENTLY, GROUND NO.12 RAISED BY THE ASSESSEE IS DISMISSED. GROUND NOS. 10 & 11 DISALLOWANCE OF INTEREST PAID RS.3,23,106/- ITA NO.2145/ B/17 & ITA NO.213 /B/2018 11 8. IN THESE GROUNDS (SUPRA), THE ASSESSEE ASSAILS T HE ACTION OF THE LD CIT(A) IN UPHOLDING THE DISALLOWANCE OF RS.3,23, 106/- ON ACCOUNT OF INTEREST PAID TO AXIS BANK ON THE GROUND THAT TH E SAID LOAN WAS TAKEN, NOT BY THE ASSESSEE BUT BY THE ASSESSES MOT HER. THE LD AR WAS HEARD IN SUPPORT OF THE GROUNDS RAISED. 8.1 PER CONTRA, THE LD DR PRAYED FOR UPHOLDING OF T HE ORDERS OF THE AUTHORIZES BELOW IN DISALLOWING THE INTEREST OF RS. 3,23,106/- PAID IN RESPECT OF LOAN TAKEN BY THE ASSESSEES MOTHER, SMT .VIJAYALAKSHMI FROM AXIS BANK. ACCORDING TO THE LD DR, THE FACTS ON RECORD ESTABLISH THAT IT WAS THE ASSESSEE WHO HAS MADE PAYMENTS OF T HE INTEREST ON THE AFORESAID LOAN FROM AXIS BANK ON BEHALF OF HIS MOTH ER WHO HAS AVAILED THE LOAN. THEREFORE, SINCE THE SAID INTERE ST EXPENDITURE CLAIMED HAS NOT BEEN ESTABLISHED TO HAVE BEEN INCUR RED WHOLLY AND EXCLUSIVELY IN THE COURSE OF THE ASSESSEES BUSINES S, THE SAID CHAIN OF INTEREST PAYMENT ON LOAN TO AXIS BANK HAS BEEN CORR ECTLY REJECTED BY THE LD CIT(A). 8.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD: IT IS NOT DISPU TED THAT THE LOAN IN RESPECT OF WHICH INTEREST OF RS.3,23,106/- HAS BEEN PAID AND THE EXPENDITURE CLAIMED AS A DEDUCTION IS NOT IN RESPEC T OF A LOAN TAKEN BY THE ASSESSEE FROM AXIS BANK; BUT WAS TAKEN BY HIS M OTHER SMT. VIJAYALAKSHMI. THE FACT THAT THE ASSESSEES MOTHER IS AN ASSESSEE IS ALSO NOT DISPUTED. FROM THE DETAILS ON RECORD, IT APPEARS TO US THAT THE ASSESSEE MADE PAYMENT OF INTEREST ON LOAN TAKEN BY HIS MOTHER FROM ITA NO.2145/ B/17 & ITA NO.213 /B/2018 12 AXIS BANK AND HAS NOT ESTABLISHED BEFORE US THAT TH E SAME WAS INCURRED IN THE COURSE OF THE ASSESSES BUSINESS AN D WE, THEREFORE, UPHOLD FINDING OF THE LD CIT(A) IN THE MATTER. CON SEQUENTLY, GROUNDS 10 AND 11 RAISED BY THE ASSESSEE ARE DISMISSED. 9. GROUNDS NOS. 13 TO 22 ADDITIONS U/S 68 OF THE ACT RS.2,47,73,480/- 9.1 IN THESE GROUNDS (SUPRA), THE ASSESSEE HAS ASS AILED THE ACTION OF THE LD CIT(A) IN SUSTAINING THE ADDITION U/S 68 OF THE ACT TO THE EXTENT OF RS.2,47,73,480/- AND RS.50 LAKHS, INTER ALIA MA INLY ON THE GROUNDS THAT THE SAID OUTSTANDING UNSECURED LOANS PERTAINE D TO BALANCES FROM EARLIER PERIODS, I.E FIN YEAR 2006-07 ONWARDS AND C ONSEQUENTLY THE IMPUGNED ADDITIONS COULD NOT HAVE BEEN SUSTAINED. 9.2.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IN THE IMPUGNED ORDER, THE LD CIT(A) AFTER CONSIDERING THE AOS VIEW IN THE ORDER OF ASSESSMENT, THE ASSESSEES CLAIM AND THE MATERIAL ON RECORD HAS UPHELD THE ADDITION U/S 68 OF THE ACT TO THE EXTENT OF RS.2,47 ,73,480/- (OUT OF THE ADDITION OF RS.3,49,112/-) AND RS.50 LAKHS MADE BY THE AO; HOLDING AS UNDER AT PARAS 19 TO 28 OF HER ORDER. 19. ADDITION OF RS. 3,4977,112/- ON ACCOUNT OF UNSECURED LOANS. - THE AO DISALLOWED A SUM OF RS. 3,49,77112/- SHOWN AS UNSECURED LOAN BY THE APPELLANT. PERUSAL OF ASSESSMENT ORDER REVEAL THAT APPELLANT HAD NOT PROVIDED PAN, DATE OF LOAN TRANSACTION, ADDRESS OF CREDITORS, IDENTITY ETC. HO WEVER ITA NO.2145/ B/17 & ITA NO.213 /B/2018 13 APPELLANT STATED BEFORE AO THAT THESE WERE OLD LOAN S APPEARING IN EARLIER YEARS. IT IS NOTED THAT APPELL ANT WAS PROVIDED SEVERAL OPPORTUNITIES BY AO TO FURNISH CONFIRMATIONS IN RESPECT OF THESE UNSECURED LOANS. HOWEVER, APPELLANT FURNISH PAN IN RESPECT OF 13 CREDITORS OUT OF A TOTAL OF 43 CREDITORS. THEREFORE AO HELD THAT 30 CREDITORS IDENTITY OF CREDITORS, GENUI NENESS OF TRANSACTION AND CREDIT WORTHINESS OF THESE CREDI TORS WERE NOT PROVEN . IN RESPECT OF 13 CREDITORS WHEREI N PAN WAS FURNISHED, AO ISSUED LETTERS REQUIRING CONFIRMATIONS. HOWEVER, IT IS NOTED THAT IN 7 CASES , THE CREDITORS DENIED SUCH CREDITS/ LOANS AND TRANSACTIO NS. IN RESPECT OF 6 CREDITORS, LETTERS ISSUED WERE RETU RNED BACK TO AO BY POSTAL AUTHORITIES WITH THE REMARK 'L EFT WITHOUT ADDRESS. THEREFORE SUBMISSIONS FILED BY APPELLANT THAT THESE CREDITORS ARE OLD AND THAT IT HAS BEEN APPEARING FROM EARLIER FINANCIAL YEARS AND THA T IT CANNOT BE INCLUDED IN THE CURRENT YEAR'S INCOME IS FOUND TO BE UNTENABLE. SINCE NO DOCUMENTARY EVIDENC E HAS BEEN FURNISHED TO PROVE EXISTENCE OF THESE CREDITORS, THEIR IDENTITY , CREDIT WORTHINESS AND GENUINENESS OF TRANSACTIONS HAVE NOT BEEN PROVEN. THEREFORE, EXPLANATIONS FURNISHED BY APPELLANT IS REJECTED. ITA NO.2145/ B/17 & ITA NO.213 /B/2018 14 20. DURING APPELLATE PROCEEDINGS, AR OF APPELLANT STATED THAT A SUM OF RS55,94,0911- WAS A TRANSACTIO N ON ACCOUNT OF LITIGATION BETWEEN APPELLANT & TWO PARTIES I.E M/S BRIGADE GATEWAYS AND HDFC BANK. COPY OF THE LITIGATION FILED IN COMPLAINT BEFORE TH E STATE COMMISSION, CONSUMER DISPUTES REDRESSAL FORUM, BANGALORE ON 29/12/2011. IT WAS SUBMITTED THAT M/S BRIGADE GATEWAYS HAD PAID THE APPELLANT RS . 55,94,091/-. IT WAS STATED THAT THE SUM WAS PAID DIRECTLY BY M/S BRIGADE GATEWAYS TO HDFC BANK SINCE APPELLANT HAD AVAILED LOAN FROM HDFC BANK. COPY OF HDFC BANK SHOWING LOAN A/C FOR THE PERIOD 30111/2006 TO 03/04/2011 WAS FILED. COPY OF LETTER DATED 19/08/2011 ISSUED BY M/S BRIGADE GATEWAYS IN RESPECT OF THE SAID PAYMENT WAS ALSO FILED. 21. IT WAS ALSO SUBMITTED THAT AN AMOUNT OF RS. 4B,09,541/- WAS OUTSTANDING AMOUNT DUE TO SRNT. VIJAIAKHSMI , APPELLANT'S MOTHER. IT WAS STATED THA T A SUM OF RS. 2.10 CRORE LOAN WAS AVAILED BY APPELLANT FROM AXIS BANK, IT WAS STATED THAT A SUM OF RS. 1,19,93,015 WAS GIVEN TO APPELLANT'S MOTHER AS REPAYMENT FOR A LOAN TAKEN BY APPELLANT EARLIER. TH US IT WAS STATED THAT THE AMOUNT OF RS.46,09,541/- REPRESENTED CLOSING BALANCE OF APPELLANTS MOTHER I N APPELLANTS BOOKS. ITA NO.2145/ B/17 & ITA NO.213 /B/2018 15 22. THE AO IN HIS REMAND REPORT DATED 1910512015 STATED THAT THE ASSESSING OFFICER WAS RIGHT IN BRIN GING THE AMOUNT TO TAXATION WITH RESPECT TO RS.2,47,73,4 80/- WITH RESPECT TO BRIGADE GATEWAY AND SUIT. VIJAYALAKSHMI, SINCE THE INFORMATION IN THE LET/ER WAS NOT FURNISHED THE SAME WAS BROUGHT TO TAXATION. 23. IT MAY BE NOTED THAT SUBMISSIONS FILED BY APPELLANT DURING APPELLATE PROCEEDINGS WERE FORWARDED TO AD FOR HIS COMMENTS WHITE SEEKING REMAND REPORT HOWEVER, NO DETAILED ENQUIRY WAS MADE IN RESPECT OF THESE ENTRIES BY SEEKING CLARIFICATION FROM APPELLANT. THE REMAND REPORT MER ELY STATED SINCE THE INFORMATION IN THE LETTER WAS NOT FURNISHED THE SAME WAS BROUGHT TO TAXATION'. 24. IN VIEW OF THE FACT THAT AMOUNT OF RS. 55,94,09 11- WAS SUM PAID TO HDFC BANK BY M/S BRIGADE GATEWAYS AND IN VIEW OF THE FACT THAT AMOUNT OF RS. 46,09,541/- REPRESENTED CLOSING BALANCE OF APPELLAN T'S MOTHER IN APPELLANT'S BOOKS, ADDITION OF THE SAID AMOUNTS UNDER THE HEAD UNSECURED LOAN TOTALLING RS. 3,49,77,1121- IS FOUND TO BE UNSUSTAINABLE. HENCE T HE SAME STANDS DELETED. APPELLANT GETS RELIEF OF RS.1,02,03,632/-I.E. (3,49,77,112-55,94,091- ITA NO.2145/ B/17 & ITA NO.213 /B/2018 16 46,09,541). CONSEQUENTLY ADDITION OF RS.2,47,73,480 1- IS SUSTAINED AND CONFIRMED. 25. ADDITION OF RS- 6457,200/- UNDER THE HEAD EXCIS E DUTY PAYABLE. - AD HELD THAT APPELLANT HAD SHOWN RS . 64,57,200/- AS RENT PAYABLE TO EXCISE DEPARTMENT AS UNEXPLAINED SINCE APPELLANT FAILED TO FILE DOCUMENT ARY EVIDENCE IN SUPPORT OF HIS CONTENTIONS. 26. DURING APPELLATE PROCEEDINGS, AR OF APPELLANT STATED THAT SINCE ARRACK BUSINESS WAS CLOSED DOWN, THE APPELLANT WAS NOT IN A POSITION RAISE FUNDS AND CLE AR HIS LIABILITY AND HENCE BALANCE PAYABLE WAS RS. 64,57,200/-. HOWEVER, NO EVIDENCE HAS BEEN FURNISHE D IN THIS REGARD. THEREFORE, IN VIEW OF THE FACT THAT NO DOCUMENTARY EVIDENCE HAS BEEN FURNISHED IN SUPPORT OF HIS CONTENTION, THE SO CALLED BALANCE PAYABLE AMOUNTING TO RS. 64,57,200/- , ADDITION MADE BY AD IS FOUND TO BE IN ORDER. THE SAME IS THEREFORE CONFIRM ED. GROUND FAILS. 27. ADDITION OF RS. 50,00,0001- BEING LIABILITY DUE TO SRI. PRAKASH - PERUSAL OF ASSESSMENT ORDER SHOW THA T AO MADE ADDITION ON ACCOUNT OF THE FACT THAT APPELL ANT FAILED TO FURNISH CONFIRMATION FROM SRI. PRAKASH IN RESPECT OF THE SAID LOAN. IT WAS STATED BEFORE AD T HAT ITA NO.2145/ B/17 & ITA NO.213 /B/2018 17 LIABILITY IS THE NAME OF SRI. PRAKASH DOES NOT REPR ESENT ANY CASH CREDIT AND THAT IT WAS AN OPENING BALANCE RELATING TO EARLIER YEAR'S TRANSACTION. 28. EVEN DURING APPELLATE PROCEEDINGS, IT WAS AGAIN STATED THAT SINCE LIABILITY WAS AN OPENING BALANCE WHICH DOES NOT RELATE THE YEAR IN QUESTION AND HENC E CANNOT BE BROUGHT TO TAX U/S 68. IT WAS STAED THAT A SUM OF RS. 50 LAKH WAS RECEIVED BY DD NO 219277 DATED 20/12/2007. HOWEVER NO CONFIRMATION FROM THE SAID SRI. PRAKESH HAS BEEN TILED. THEREFORE IDENTIT Y OF CREDITOR, HIS CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION HAS NOT BEEN PROVEN. HENCE, ADDITION MADE BY AC IS FOUND TO BE IN ORDER. GROUND FAILS. 9.2.2 WE FIND THAT EXCEPT FOR RAISING THE GROUNDS (SUPRA) AND REITERATING THE AVERMENTS MADE IN THE SUBMISSIONS P UT FORTH BEFORE THE AUTHORITIES BELOW, WHICH HAVE BEEN CONSIDERED BY TH E LD CIT(A), THE ASSESSEE HAS FAILED TO BRING ON RECORD ANY MATERIAL EVIDENCE TO CONTROVERT THE FACTUAL FINDINGS RENDERED BY THE LD CIT(A) IN THE IMPUGNED ORDER (SUPRA). IN THIS FACTUAL MATRIX OF THE CASE, WE FIND NO REASON TO INTERFERE WITH OR DEVIATE FROM THE FACTUA L FINDINGS RENDERED BY THE LD CIT(A) ON THIS ISSUE IN THE IMPUGNED ORDE R AND THEREFORE UPHOLD THE ADDITIONS OF RS.2,47,73,480/- AND OF RS. 50 LAKHS IN THE CASE OF SHRI PRAKASH MADE U/S 68 OF THE ACT. CONSE QUENTLY, GROUNDS 13 TO 22 OF THE ASSESSEES APPEAL ARE DISMISSED. ITA NO.2145/ B/17 & ITA NO.213 /B/2018 18 10. GROUNDS 22 AND 23 BEING GENERAL IN NATURE, NO ADJUDICATION IS CALLED FOR THEREON. 11. IN THE RESULT, ASSESSEES APPEAL FOR AY 2012 -13 IS DISMISSED. REVENUES APPEAL IN ITA NO: 213/BANG/2018 (AY 2012 -13) 12. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOW ING GROUNDS:- 1. 1 THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN DECIDING THE MATTER BASED ON THE FRESH EVIDENCES SUBMITTED BY THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE SUCH EVIDENCES WHICH IS CONTRAVENED TO THE PROVISION OF RULE 46A(3). 3. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATE S TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. ITA NO.2145/ B/17 & ITA NO.213 /B/2018 19 13. GROUND NOS: 1 AND 4 (SUPRA) BEING GENERAL IN NATURE, NO ADJUDICATION IS CALLED FOR THEREON AND CONSEQUENTLY THESE GROUNDS ARE DISMISSED AS INFRUCTUOUS. 14. GROUND NO: 2 & 3 VIOLATION OF PROVISIONS OF RULE 46A(3) 14.1.1 IN THIS GROUND (SUPRA), REVENUE CONTENDS T HAT THE LD CIT(A) ERRED IN DECIDING THE MATTER AND GRANTING RE LIEF TO THE ASSESSED BASED ON FRESH EVIDENCES SUBMITTED BY THE ASSESSEE AND WITHOUT AFFORDING ANY OPPORTUNITY OF BEING HEARD AN D TO EXAMINE SUCH EVIDENCE, WHICH TENTAMOUNTS CONTRAVENTION/VIOL ATION OF THE PROVISIONS OF RULE 46A(3) OF THE RULES. IN VIEW OF THIS IT IS PRAYED THAT THE LD CIT(A) ORDER ON THIS ISSUE BE REVERSED AND THAT OF THE AO RESTORED. 14.1.2 THE LD DR FOR REVENUE SUBMITTED THAT IN TH E COURSE OF ASSESSMENT PROCEEDINGS, THE AO, INTER ALIA, BRO UGHT TO TAX IN THE ASSESSEES HANDS UN-EXPLAINED CREDITS AMOUNTING TO RS.3,49,77,112/-; WHICH INCLUDED UNEXPLAINED CASH C REDITS AMOUNTING TO RS.55,94,091/- IN THE NAME OF BRIGADE GATEWAY AND RS. 46,09,541/- IN THE NAME OF SMT VIJAYALAKSHMI FO R WANT OF DETAILS TO ESTABLISH GENUINENESS OF THE LOANS/CASH CREDITS. ACCORDING TO THE LD DR IT IS EVIDENT, FROM A PERUSA L OF PARAS 20 TO 25 OF THE IMPUGNED ORDER, THAT THE LD CIT(A) TOOK F RESH EVIDENCE/ DETAILS ON RECORD AND ACTED THEREON TO RENDER RELIE F TO THE ASSESSEE BY DELETING THE ADDITIONS ON THE UNEXPLAINED CREDIT S OF BRIGADE ITA NO.2145/ B/17 & ITA NO.213 /B/2018 20 GATEWAY RS. 55,99,091/- AND SMT VIJAYALAKSHMI RS.46,09,541/-. THE LD DR CONTENDS THAT IN THE MATT ER OF BRIGADE GATEWAY, THE CIT(A) TOOK ON RECORD AND ACTED ON FRE SH EVIDENCE I.E., THE COPY OF LITIGATION FILED IN COMPLAINT BEF ORE THE STATE COMMISSION, CONSUMER DISPUTES REDRESSAL FORUM, BANG ALORE ON 29/12/2011; COPY OF HDFC LOAN ACCOUNT AND COPY OF L ETTER DATED 19/8/2011 ISSUED BY M/S BRIGADE GATEWAY IN RESPECT OF THE SAID PAYMENTS. SIMILARLY, IN THE CASE OF SMT VIJAYALAKSH MI, THE ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT WAS DELETED ON TH E STRENGTH OF THE ASSESSEES SUBMISSIONS/DETAILS. IT WAS SUBMITTED TH AT THE AFORESAID FRESH/ADDITIONAL EVIDENCE/DETAILS WERE TAKEN ON REC ORD AND ACTED UPON BY THE LD CIT(A) WITHOUT PUTTING THE DEPARTMEN T/AO ON NOTICE AS REQUIRED U/S 46A(3) OF THE IT RULES, 196 2; THEREBY NOT AFFORDING THE AO ADEQUATE OPPORTUNITY TO EXAMINE T HE SAME AND REBUT THE ASSSSEES CONTENTIONS. IN THESE FACTUAL C IRCUMSTANCES, IT WAS PRAYED, THAT THE ORDERS OF THE LD CIT(A) DELETI NG THE UNEXPLAINED CASH CREDITS IN THE CASES OF BRIGADE GA TEWAY AND SMT. VIJAYALAKSHMI BE SET ASIDE AND THE MATTER BE R ESTORED TO THE FILE OF THE LD CIT(A) FOR FRESH EXAMINATION AND ADJ UDICATION , AFTER AFFORDING THE AO AND THE ASSESSEE ADEQUATE OPPORTUN ITY OF BEING HEARD AND TO FILE DETAILS, SUBMISSIONS REQUIRED. IT WAS POINTED OUT THAT AT VARIOUS PLACES IN THE IMPUGNED ORDER THE LD CIT(A) HAD ERRONEOUSLY REFERRED TO THE AOS REMAND REPORT D ATED 19/5/2015. IT IS CONTENDED THAT AS PER RECORD, THERE IS NO EVI DENCE OF ANY REMAND REPORT HAVING BEEN CALLED FOR BY THE LD CIT( A) FROM THE AO U/S 250(4) OF THE ACT AT ANY STAGE OF PROCEEDING S AND WHAT THE ITA NO.2145/ B/17 & ITA NO.213 /B/2018 21 LD CIT(A) REFERS TO AS REMAND REPORT DATED 19/5/ 2015 IS ACTUALLY PARA WISE COMMENTS OF THE AO WITH RESPECT TO THE PO INTS RAISED IN ASSESSEES APPEAL PETITION FOR ASST. YEAR 2012-13 F ILED ON 19/3/2015 ON STATEMENT OF FACTS, ETC. 14.2 THE LD AR FOR THE ASSESSEE SUPPORTED THE IMPUG NED ORDER OF THE LD CIT(A). ON BEING QUERIED BY THE BENCH THE LD AR COULD NOT PLACE ON RECORD ANY ORDER OF THE REMAND U/S 250(4) OF THE ACT CALLED FOR BY THE LD CIT(A) FROM THE AO; AND MORE P ARTICULARLY IN RESPECT OF THE FRESH DETAILS/EVIDENCE FILED IN RES PECT OF THE CASH CREDITS OF BRIGADE GATEWAYS AND SMT VIJAYALAKXMI; WHICH IS THE SUBJECT MATTER OF REVENUES APPEAL. 14.3.1 WE HAVE HEARD THE RIVAL CONTENTION AND PERU SED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD BEFORE US. IN OUR VIEW, AN APPRAISAL OF THE FACTS OF THE MATTER CLEARLY IN DICATE THAT THE LD CIT(A) IN THE COURSE OF APPELLATE PROCEEDINGS HAD A DMITTED FRESH EVIDENCE/DETAILS ON RECORD WHICH WAS NOT BEFORE AO AND BASED THEREON, GRANTED RELIEF TO THE ASSESSEE ; WITHOUT AFFORDING THE AO ADEQUATE OPPORTUNITY OF BEING HEARD IN THE MATTER; TO EXAMINE AND SUBMIT THE FRESH EVIDENCE FILED WHICH IS IN CONTRAV ENTION OF RULE 46A(3) OF THE IT RULES, 1962 ( IN SHORT THE RULES ). RULE 46A OF THE RULES HAS A DIRECT BEARING ON THE CONTROVERSY BEFORE US AND IT READS AS UNDER:- ITA NO.2145/ B/17 & ITA NO.213 /B/2018 22 PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE [DY. COMMISSIONER (APPEALS)] [AND COMMISSIONER (APPEALS)]. 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE [DY. COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)], ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE [AO] EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY :- (A) WHERE THE [AO] 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 PRODUCE BY THE [AO]; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE [AO] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE [DY. COMMISSIONER (APPEALS)] [OR, AS THE ITA NO.2145/ B/17 & ITA NO.213 /B/2018 23 CASE MAY BE, THE COMMISSIONER (APPEALS) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE [DY. 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. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE [DY. COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOS E 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 [ASSESSING OFFICER]) UNDER CLAUSE (A ) OF SUB-SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.] 14.3.2 A PERUSAL OF RULE 46A (SUPRA) WOULD SUGGEST THAT SUB RULE -1 PLACES AN EMBARGO ON THE ASSESSEE TO SUCH PERMIS SION FOR ITA NO.2145/ B/17 & ITA NO.213 /B/2018 24 PRODUCING EVIDENCE, EITHER ORAL OR DOCUMENTARY. SU CH EVIDENCE CAN ONLY BE PERMITTED TO BE PRODUCED, IF THE CONDIT IONS ENUMERATED IN SUB CLAUSE (A) TO (D) ARE MET. AS PER SUB RULE-2 , THE LD CIT HAS TO RECORD IN WRITING WHY HE OR SHE HAD ADMITTED TH E ADDITIONAL EVIDENCE. SUB RULE-3 CONTEMPLATES THAT IF ADDITIONA L EVIDENCE IS TAKEN ON RECORD, THEN IT CANNOT BE CONSIDERED ON ME RIT, UNLESS OPPORTUNITY IS AFFORDED TO THE AO TO COMMENT ON THE EVIDENCE OR DOCUMENTS OR TO CROSS-EXAMINE THE WITNESS PRODUCED BY THE ASSESSEE. APART FROM THAT, THE AO IS TO BE AFFORDED OPPORTUNITY TO PRODUCE ANY EVIDENCE IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE. SUB RULE-4 IS AN EXCEPTIO N TO ALL OTHER SUB RULES AND IT AUTHORIZES THE CIT(A) TO DIRECT AN Y PARTY FOR PRODUCTION OF ANY DOCUMENTS OR EXAMINATION OF ANY W ITNESS TO ENABLE HER TO DISPOSE OFF THE APPEAL OR FOR ARRIVIN G AT A JUST CONCLUSION. IN THE LIGHT OF THE ABOVE, WE FIND THAT , IN THE FACTUAL AND LEGAL MATRIX OF THE CASE AS DISCUSSED ABOVE FRO M PARA 14.1 TO 14.3.2 OF THIS ORDER, THE LD CIT(A) HAS FAILED TO A FFORD ADEQUATE OPPORTUNITY TO THE AO AND THEREFORE, IN OUR CONSID ERED VIEW, THE CONTENTIONS ENUMERATED IN SUB RULE-3 OF RULE 46A OF THE RULES REMAINED UN-COMPLIED WITH AND IS IN CONTRAVENTION THEREOF. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE FINDINGS AND O RDER OF THE LD CIT(A) IN RESPECT OF THE DELETION OF THE UNEXPLAINE D CASH CREDITS IN RESPECT OF BRIGADE GATEWAYS OF RS.55,94,091/- AND O F MRS. VIJAYALAKSHMI OF RS.46,09,541/- AND RESTORE TH E SAME MATTER TO THE FILE OF LD CIT(A) WITH DIRECTIONS FOR FRESH ADJUDICATION THEREON, IN ACCORDANCE WITH LAW AND AFTER AFFORDI NG THE AO ITA NO.2145/ B/17 & ITA NO.213 /B/2018 25 ADEQUATE OPPORTUNITY TO EXAMINE THE FRESH ADDITIONA L EVIDENCE FURNISHED BY THE ASSESSEE ONLY BEFORE THE LD CIT(A) AND TO FILE COMMENTS/REBUTTALS REQUIRED WHICH SHALL BE DULY C ONSIDERED. WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY GROUND NO : 2 & 3 OF REVENUES APPEAL ARE ALLOWED FOR STATISTICAL PURPOS ES. 15. IN THE RESULT, THE ASSESSEES APPEAL FOR ASST. YEAR 2012-13 IS DISMISSED AND REVENUES CROSS APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JULY, 2018 . SD/- SD/- (LALIET KUMAR) (JAS ON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMB ER BANGALORE DATED : 18/7/2018 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETAR Y, ITAT, BANGALORE ITA NO.2145/ B/17 & ITA NO.213 /B/2018 26 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR. P.S... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WE BSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..