ITO, New Delhi V. M/s Jain Realtors (P) Ltd., New Delhi

ITA 2732/DEL/2011

• Counselvise Citation: 273220114 RSA 2011
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 27-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K CHAND SENIOR
• Assessee Lawyers: S K KOHLI
• Keywords: Recovery proceedings; Source of fund; Additional evidence
• Section: 143(3); 56; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2732/DEL./2011 (ASSESSMENT YEAR : 2007-08) ITO, WARD 4 (1), VS. M/S. JAIN REALTORS (P) LTD. , NEW DELHI. SHOP NO.1, POCKET 3, SECTOR 7, DWARKA, NEW DELHI-110 075. (PAN : AABCJ3459L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. KOHLI, CA REVENUE BY : SHRI N.K. CHAND, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT (APPEALS)-VII, NEW DELHI DATED 24.03.2011. THE GR OUNDS OF APPEAL READ AS UNDER :- 1. THE ORDER OR THE LD. CIT (A) IS ERRONEOUS & CON TRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDI TION OF RS.75,55.000/- MADE U/S 68 OF THE I.T. ACT BEING TH E UNCONFIRMED SHARE APPLICATION MONEY. 2.1 THE LD. CIT (A) IGNORED THE FINDING RECORDED BY THE A.O. AND THE FACT THAT THE ASSESSEE DID NOT DISCHARGED T HE ONUS OF ITA NO.2732/DEL./2011 2 PROVING THE EXISTENCE/CREDITWORTHINESS OF THE CREDI TORS AND GENUINENESS OF THE TRANSACTIONS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN DELETIN G THE ADDITION OF RS.31,80,000/- MADE ON ACCOUNT OF ADVAN CE BOOKING OF FLATS. 3.1 THE LD. CIT (A) IGNORED THE FINDING RECORDED BY THE AO AND THE FACTS THAT THE ASSESSEE DID NOT FILE THE NE CESSARY DOCUMENTS TO SUBSTANTIATE ITS CLAIM DURING THE COUR SE OF ASSESSMENT PROCEEDING. 4. THE LD. CIT (A) ERRED IN LAW BY ACCEPTING THE AD DITIONAL EVIDENCES WITHOUT FOLLOWING THE PROCEDURE LAID DOWN UNDER RULE 46A OF THE IT RULES 1962. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, OR DEMAND ANY GROUND OF THE APPEAL RAISED ABOVE AT THE TIME OF TH E HEARING. 2. THE ASSESSEE IS A COMPANY INCORPORATED UNDER IND IAN COMPANIES ACT, 1956. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF D EVELOPMENT AND CONSTRUCTION OF RESIDENTIAL AND COMMERCIAL COMPLEXE S AND COMMISSION AGENCY IN SALE/ PURCHASE OF PROPERTIES. THE RETURN OF INCOME WAS FILED ON 16.10.2007. THE INCOME DECLARED AS PER THE RETURN WAS RS.1,46,610/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 29.12.2009 A T AN INCOME OF RS.1,08,97,390/-. THE ASSESSING OFFICER MADE THE F OLLOWING THREE ADDITIONS:- (A) ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY AMOUNTING TO RS.75,55,000/-; (B) ADDITION OF RS.31,80,000/- ON ACCOUNT OF ADVANC E FOR BOOKING FLATS; AND ITA NO.2732/DEL./2011 3 (C) ADDITION OF RS.15,780/- ON ACCOUNT OF ROC FEES FOR INCREASING AUTHORIZED CAPITAL. THE CIT (A) GRANTED THE RELIEF ON ADDITION ON ACCOU NT OF SHARE APPLICATION MONEY AND ADDITION ON ACCOUNT OF ADVANCE FOR BOOKIN G FLATS. 3. AT THE OUTSET OF THE HARING, THE LEARNED DR SUBM ITTED THAT THE CIT (A) HAS VIOLATED THE PROCEDURE LAID DOWN UNDER RULE 46A OF THE IT RULES, 1962. REVENUE HAD TAKEN THIS GROUND IN ITS APPEAL AT SERI AL NO.4. THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCES BEFORE THE CIT (A) A ND THE CIT (A) DECIDED THE ISSUE BY HOLDING AS UNDER :- 4.3 IT IS APPROPRIATE NOW TO REFER TO RULE 46A O F INCOME-TAX RULES, 1962 WHICH PROVIDES THAT THE ASSESSEE SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE FIRST APPELLATE AUTH ORITY ANY EVIDENCE OTHER THAN THAT PRODUCED DURING THE COURSE OF PROCEEDINGS BEFORE THE A.O., EXCEPT IN THE CIRCUMST ANCES MENTIONED IN CLAUSE (A) TO (D). THESE CLAUSES DEAL WITH THE SITUATIONS - (A) WHERE THE A.O. HAD REFUSED TO ADMIT EVIDENCES W HICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE A.O. ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE A.O. ANY EVIDENCE WHICH I S RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE A.O HAS MADE THE ORDER APPEALED AGAI NST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELL ANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. ITA NO.2732/DEL./2011 4 IN THE INSTANT CASE, THE CIRCUMSTANCES MENTIONED IN CLAUSES (C) AND (D) DO EXIST. THE A.O. WAS ALSO GIVEN OPPOR TUNITY IN TERMS OF RULE-46A (3) TO EXAMINE THE AFOREMENTIONED EVIDENCES BUT HE HAS NOT MADE ANY ADVERSE COMMENTS WITH REGAR D TO THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. NO COMM ENT WAS OFFERED ON THE MERITS OF THE CASE. ALL THIS SHOWS T HAT THE OBJECTION AGAINST THE ADMISSION OF THE ADDITIONAL E VIDENCES CARRIES NO FORCE WHATSOEVER. CONSIDERING THE TOTALI TY OF FACTS AND CIRCUMSTANCES OF THE CASE, IT WAS FOUND THAT THE AD DITIONAL EVIDENCES WERE VERY RELEVANT AND THEREFORE THEY WER E CONSIDERED BY THE UNDERSIGNED NECESSARY FOR DISPOSAL OF THE IS SUE INVOLVED IN THE PRESENT APPEAL. HENCE, THE AFOREMENTIONED AD DITIONAL EVIDENCES ARE ADMITTED. LD. DR PLEADED THAT THE CIT (A) FORWARDED THE ADDIT IONAL EVIDENCES TO THE ASSESSING OFFICER FOR CALLING THE REMAND REPORT. I N THE REMAND REPORT, THE ASSESSING OFFICER OBJECTED FOR ADMISSION OF ADDITIO NAL EVIDENCES AND CIT (A) ADMITTED THESE EVIDENCES AND GRANTED THE RELIEF TO THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER REGARDING T HE MERITS OF THE ADDITIONAL EVIDENCES. THEREFORE, THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATION IN RESPECT OF THE A DDITIONAL EVIDENCES FIELD BEFORE THE CIT (A). THIS ISSUE IS ALSO COVERED BY DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANISH BUILDWELL PVT. LTD. 2011-TIOL- 756-HIGH COURT-DEL-IT. 4. LEARNED AR WAS ALSO NOT HAVING ANY CONTRARY VIEW IN THIS REGARD. 5. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW THAT THIS ISSUE IS COVERED BY DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, CITED SUPRA. IN THIS CASE, HON'BLE HIGH COURT HELD AS UNDER :- ITA NO.2732/DEL./2011 5 21. IN OUR OPINION, SUBSTANTIAL QUESTIONS OF LAW DO ARISE OUT OF THE ORDER OF THE TRIBUNAL IN RESPECT OF ITS DECISIO N REGARDING THE ADDITION OF RS.1,61,67,600/- MADE UNDER SECTION 68. WE, ACCORDINGLY, RE-FRAME THE FOLLOWING SUBSTANTIAL QUE STIONS OF LAW:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND ON A PROPER INTERPRETATION OF RULE 46A OF THE INCOME TAX RULES, 1962, THE TRIBUNAL WAS RIGHT IN L AW IN TAKING A DECISION ON THE MERITS OF THE ADDITION MAD E UNDER SECTION 68 WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSING OFFICER OF BEING HEARD AS ENVISAGED IN SU B-RULE (3) OF RULE 46A? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT SINCE THE CIT (A) POSSESSES CO-TERMINUS POWERS OVER THE ASSESSMENT APART FROM APPELLATE POWERS, THERE WAS N O VIOLATION OF RULE 46A COMMITTED BY HIM ? 22. AS WE HAVE WITH THE CONSENT OF THE LEARNED COUN SEL, HEARD THEM ON MERITS, WE PROCEED TO DECIDE THE AFORESAID SUBSTANTIAL QUESTIONS OF LAW. SINCE THE CIT (A) HIMSELF REFERS TO RULE 46A AND HAS ALSO ADMITTED THAT THE CONFIRMATION LETTERS ADDUCED BY THE ASSESSEE BEFORE HIM WERE TECHNICALLY FRESH EVID ENCE, IT IS NOT POSSIBLE TO ACCEPT THE PLEA OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE CIT (A), IN EXAMINING THE CONFIRMATION LET TERS, WAS EXERCISING HIS INDEPENDENT POWERS OF ENQUIRY UNDER SUB-SECTION (4) OF SECTION 250 OF THE INCOME TAX ACT. IT IS TRU E THAT THE CIT (A) AS FIRST APPELLATE AUTHORITY HAS CONTERMINOUS P OWERS OVER THE SOURCES OF INCOME CONSTITUTING THE SUBJECT MATTER O F THE ASSESSMENT, EXCEPT THE POWER TO TACKLE NEW SOURCES OF INCOME NOT CONSIDERED BY THE ASSESSING OFFICER, AND CAN DO WHAT THE ASSESSING OFFICER CAN DO AND CAN DIRECT THE ASSESSI NG OFFICER TO DO WHAT HE HAS FAILED TO DO, AS HELD BY THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX, U.P. V. KANPUR COAL SYNDICATE, (1964) 53 ITR 225, BUT IN THIS CASE, THE CIT (A) DID NOT EXERCISE THIS RIGHT. THIS POWER, WHICH IS RECOG NIZED IN SUB- SECTION (4) OF SECTION 250, HAS TO BE EXERCISED BY THE CIT (A) AND THERE SHOULD BE MATERIAL ON RECORD TO SHOW THAT HE, WHILE DISPOSING OF THE APPEAL, HAD DIRECTED FURTHER ENQUI RY AND CALLED ITA NO.2732/DEL./2011 6 FOR THE CONFIRMATION LETTERS FROM THE ASSESSEE EVEN IN RESPECT OF RECEIPT OF MONIES FROM CUSTOMERS BY WAY OF CHEQUES. RULE 46A IS A PROVISION IN THE INCOME TAX RULES, 1962 WHICH IS INVOKED, ON THE OTHER HAND, BY THE ASSESSEE WHO IS IN AN APP EAL BEFORE THE CIT (A). ONCE THE ASSESSEE INVOKES RULE 46A AND PRA YS FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE THE CIT (A) , THEN THE PROCEDURE PRESCRIBED IN THE SAID RULE HAS TO BE SCR UPULOUSLY FOLLOWED. THE FACT THAT SUB-SECTION (4) OF SECTION 250 CONFERS POWERS ON THE CIT (A) TO CONDUCT AN ENQUIRY AS HE T HINKS FIT, WHILE DISPOSING OF THE APPEAL, CANNOT BE RELIED UPO N TO CONTEND THAT THE PROCEDURAL REQUIREMENTS OF RULE 46A NEED N OT BE COMPLIED WITH. IF SUCH A PLEA OF THE ASSESSEE IS AC CEPTED, IT WOULD REDUCE RULE 46A TO A DEAD LETTER BECAUSE IT W OULD THEN BE OPEN TO EVERY ASSESSEE TO FURNISH ADDITIONAL EVIDEN CE BEFORE THE CIT (A) AND THEREAFTER CONTEND THAT THE EVIDENCE SH OULD BE ACCEPTED AND TAKEN ON RECORD BY THE CIT (A) BY VIRT UE OF HIS POWERS OF ENQUIRY UNDER SUB-SECTION (4) OF SECTION 250. THIS WOULD MEAN IN TURN THAT THE REQUIREMENT OF RECORDIN G REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE, THE REQUIREMENT OF EXAMINING WHETHER THE CONDITIONS FOR ADMITTING THE ADDITIONAL EVIDENCE ARE SATISFIED, THE REQUIREMENT THAT THE ASSESSING OFFIC ER SHOULD BE ALLOWED A REASONABLE OPPORTUNITY OF EXAMINING THE E VIDENCE ETC. CAN BE THROWN TO THE WINDS, A POSITION WHICH IS WHO LLY UNACCEPTABLE AND MAY RESULT IN UNACCEPTABLE AND UNJ UST CONSEQUENCES. THE FUNDAMENTAL RULE WHICH IS VALID I N ALL BRANCHES OF LAW, INCLUDING INCOME TAX LAW, IS THAT THE ASSESSEE SHOULD ADDUCE THE ENTIRE EVIDENCE IN HIS POSSESSION AT THE EARLIEST POINT OF TIME. THIS ENSURES FULL, FAIR AND DETAILED ENQUIRY AND VERIFICATION. A 7-JUDGE BENCH OF THE SUPREME CO URT IN KESHAV MILLS CO. LTD. V. COMMISSIONER OF INCOME-TAX , BOMBAY NORTH, AHMEDABAD (1965) 56 ITR SC 365 HAD OBSERVED AS UNDER:- PROCEEDINGS TAKEN FOR THE RECOVERY OF TAX UNDER TH E PROVISIONS OF THE ACT ARE NATURALLY INTENDED TO BE OVER WITHOUT UNNECESSARY DELAY, AND SO, IT IS THE DUTY O F THE PARTIES, BOTH THE DEPARTMENT AND THE ASSESSEE, TO L EAD ALL THEIR EVIDENCE AT THE STAGE WHEN THE MATTER IS IN C HARGE OF THE INCOME-TAX OFFICER. 23. IT IS FOR THE AFORESAID REASON THAT RULE 46A ST ARTS IN A NEGATIVE MANNER BY SAYING THAT AN APPELLANT BEFORE THE CIT (A) ITA NO.2732/DEL./2011 7 SHALL NOT BE ENTITLED TO PRODUCE BEFORE HIM ANY EVI DENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENC E ADDUCED BY HIM BEFORE THE ASSESSING OFFICER. AFTER MAKING S UCH A GENERAL STATEMENT, WHICH IS IN CONSONANCE WITH THE PRINCIPL E STATED IN THE ABOVE JUDGMENT, EXCEPTIONS HAVE BEEN CARVED OUT THA T IN CERTAIN CIRCUMSTANCES IT WOULD BE OPEN TO THE CIT (A) TO AD MIT ADDITIONAL EVIDENCE. THEREFORE, ADDITIONAL EVIDENCE CAN BE PRODUCED AT THE FIRST APPELLATE STAGE WHEN CONDITIO NS STIPULATE IN THE RULE 46A ARE SATISFIED AND A FINDING IS RECORDE D. RULE 46 A READS:- PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE [ DEPUTY COMMISSIONER (APPEALS) ] [ AND COMMISSIONER (APPEALS) ] . 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)], ANY EVIDE NCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENC E PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BE FORE THE [ASSESSING OFFICER], EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY : ( A ) WHERE THE [ASSESSING OFFICER] 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 [ASSESSING OFFICER] ; OR ( C ) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] 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. ITA NO.2732/DEL./2011 8 (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) 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) UN LESS THE [ASSESSING OFFICER] HAS BEEN ALLOWED A REASONAB LE 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 [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CAS E MAY BE, THE COMMISSIONER (APPEALS)] TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF A NY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT O F THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE [ASSESSING OFFICER]) UNDER CLAUS E ( A ) OF SUB-SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.] WE ARE HIGHLIGHTING THESE ASPECTS ONLY TO PRESS HOM E THE POINT THAT THE CONDITIONS PRESCRIBED IN RULE 46A MUST BE SHOWN TO EXIST BEFORE ADDITIONAL EVIDENCE IS ADMITTED AND EV ERY PROCEDURAL REQUIREMENT MENTIONED IN THE RULE HAS TO BE STRICTLY COMPLIED WITH SO THAT THE RULE IS MEANINGFULLY EXER CISED AND NOT EXERCISED IN A ROUTINE OR CURSORY MANNER. A DISTINC TION SHOULD BE RECOGNIZED AND MAINTAINED BETWEEN A CASE WHERE THE ASSESSEE INVOKES RULE 46A TO ADDUCE ADDITIONAL EVIDENCE BEFO RE THE CIT (A) AND A CASE WHERE THE CIT (A), WITHOUT BEING PRO MPTED BY THE ASSESSEE, WHILE DEALING WITH THE APPEAL, CONSID ERS IT FIT TO CAUSE OR MAKE A FURTHER ENQUIRY BY VIRTUE OF THE PO WERS VESTED IN HIM UNDER SUB-SECTION (4) OF SECTION 250. IT IS ONL Y WHEN HE EXERCISES HIS STATUTORY SUO MOTO POWER UNDER THE AB OVE SUB- ITA NO.2732/DEL./2011 9 SECTION THAT THE REQUIREMENTS OF RULE 46A NEED NOT BE FOLLOWED. ON THE OTHER HAND, WHENEVER THE ASSESSEE WHO IS IN APPEAL BEFORE HIM INVOKES RULE 46A, IT IS INCUMBENT UPON T HE CIT (A) TO COMPLY WITH THE REQUIREMENTS OF THE RULE STRICTL Y. 24. IN THE PRESENT CASE, THE CIT (A) HAS OBSERVED T HAT THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED BECAUSE THE ASSESSEE WAS PREVENTED BY ADDUCING THEM BEFORE THE ASSESSING OFF ICER. THIS OBSERVATION TAKES CARE OF CLAUSE (C) OF SUB-RULE (1 ) OF RULE 46A. THE OBSERVATION OF THE CIT (A) ALSO TAKES CARE OF S UB-RULE (2) UNDER WHICH HE IS REQUIRED TO RECORD HIS REASONS FO R ADMITTING THE ADDITIONAL EVIDENCE. THUS, THE REQUIREMENT OF S UB-RULES (1) AND (2) OF RULE 46A HAVE BEEN COMPLIED WITH. HOWEVE R, SUB- RULE (3) WHICH INTERDICTS THE CIT (A) FROM TAKING I NTO ACCOUNT ANY EVIDENCE PRODUCED FOR THE FIRST TIME BEFORE HIM UNLESS THE ASSESSING OFFICER HAS HAD A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE AND REBUT THE SAME, HAS NOT BEEN COMPLIED WITH. THERE IS NOTHING IN THE ORDER OF THE CIT (A) TO SHOW THAT THE ASSESSING OFFICER WAS CONFRONTED WITH THE CONFIRMATION LETTERS RECEIVED BY THE ASSESSEE FROM THE CUSTOMERS WHO PAID THE AMOUNTS BY CHEQUES AND ASKED FOR COMME NTS. THUS, THE END RESULT HAS BEEN THAT ADDITIONAL EVIDE NCE WAS ADMITTED AND ACCEPTED AS GENUINE WITHOUT THE ASSESS ING OFFICER FURNISHING HIS COMMENTS AND WITHOUT VERIFICATION. S INCE THIS IS AN INDISPENSABLE REQUIREMENT, WE ARE OF THE VIEW TH AT THE TRIBUNAL OUGHT TO HAVE RESTORED THE MATTER TO THE C IT (A) WITH THE DIRECTION TO HIM TO COMPLY WITH SUB-RULE (3) OF RULE 46A. IN OUR OPINION AND WITH RESPECT, THE ERROR COMMITTED B Y THE TRIBUNAL IS THAT IT PROCEEDED TO MIX UP THE POWERS OF THE CIT (A) UNDER SUB-SECTION (4) OF SECTION 250 WITH THE POWER S VESTED IN HIM UNDER RULE 46A. THE TRIBUNAL SEEMS TO HAVE OVER LOOKED SUB-RULE(4) OF RULE 46A WHICH ITSELF TAKES NOTE OF THE DISTINCTION BETWEEN THE POWERS CONFERRED BY THE CIT (A) UNDER T HE STATUTE WHILE DISPOSING OF THE ASSESSEES APPEAL AND THE PO WERS CONFERRED UPON HIM UNDER RULE 46A. THE TRIBUNAL ERR ED IN ITS INTERPRETATION OF THE PROVISIONS OF RULE 46A VIS-- VIS SECTION 250(4). ITS VIEW THAT SINCE IN ANY CASE THE CIT (A) , BY VIRTUE OF HIS CONTERMINOUS POWERS OVER THE ASSESSMENT ORDER, WAS EMPOWERED TO CALL FOR ANY DOCUMENT OR MAKE ANY FURT HER ENQUIRY AS HE THINKS FIT, THERE WAS NO VIOLATION OF RULE 46A IS ERRONEOUS. THE TRIBUNAL APPEARS TO HAVE NOT APPRECI ATED THE DISTINCTION BETWEEN THE TWO PROVISIONS. IF THE VIEW OF THE ITA NO.2732/DEL./2011 10 TRIBUNAL IS ACCEPTED, IT WOULD MAKE RULE 46A OTIOSE AND IT WOULD OPEN UP THE POSSIBILITY OF THE ASSESSEES CON TENDING THAT ANY ADDITIONAL EVIDENCE SOUGHT TO BE INTRODUCED BY THEM BEFORE THE CIT (A) CANNOT BE SUBJECTED TO THE CONDITIONS P RESCRIBED IN RULE 46A BECAUSE IN ANY CASE THE CIT (A) IS VESTED WITH CONTERMINOUS POWERS OVER THE ASSESSMENT ORDERS OR P OWERS OF INDEPENDENT ENQUIRY UNDER SUB-SECTION (4) OF SECTIO N 250. THAT IS A CONSEQUENCE WHICH CANNOT AT ALL BE COUNTENANCE D. 25. FOR THE ABOVE REASONS, WE ANSWER THE SUBSTANTIA L QUESTIONS OF LAW FRAMED IN PARAGRAPH 21 ABOVE, IN FAVOUR OF T HE REVENUE AND AGAINST THE ASSESSEE. THE ISSUE RELATING TO THE ADDITION OF RS.1,61,67,600/- MADE UNDER SECTION 68 OF THE ACT I S RESTORED TO THE CIT (A) WHO SHALL COMPLY WITH THE REQUIREMENTS OF RULE 46A AND TAKE A FRESH DECISION ON THE MERITS OF THE ADDITION IN ACCORDANCE WITH LAW. 26. THE APPEAL FILED BY THE REVENUE IS DISPOSED OF ACCORDINGLY. NO COSTS. RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE ALL T HE ISSUES RAISED IN APPEAL TO THE FILE OF ASSESSING OFFICER TO DECIDE AFRESH. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2012. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF JANUARY, 2012/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-VII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.