DEVIKINANDAN GUPTA HUF, MUMBAI V. ADDL CIT RG 17(1), MUMBAI

ITA 294/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75503 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 12-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K
• Keywords: Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 410/M/2012 ASSESSMENT YEAR: 2008 - 09 DEVKINANDAN GUPTA HUF 131, KASARA STREET, 3 RD FLOOR, DARUKH ANA, MUMBAI - 400 010 PAN: AAAHG0277M VS. THE JT. COMMISSIONER OF INCOME TAX, RANGE 17(1), PIRAMAL CHAMBERS, LOWER PAREL , MUMBAI 400 0 1 2 ( ASSESSEE ) (RESPONDENT) ITA NO. 294/M/2011 ASSESSMENT YEAR: 2007 - 08 DEVKINANDAN GUPTA HUF 131, KASARA STREET, 3 RD FLOOR, DARUKHANA, MUMBAI - 400 010 PAN: AAAHG0277M VS. THE ADDL. COMMISSIONER OF INCOME TAX, RANGE 17(1), PIRAMAL CHAMBERS, LOWER PAREL , MUMBAI 400 0 1 2 ( ASSESSEE ) (RESPONDENT) ASSESSEE BY : SHRI SHEKHAR GUPTA, A.R. REVENUE BY : SHRI B.P.K. PANDA, D.R. DATE OF HEARING : 17 . 12. 201 3 DATE OF PRONOUNCEMENT : 05.02.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: A BOVE NOTED APPEALS PREFERRE D BY THE ASSESSEE RELEVANT TO DIFFERENT A SSESSMENT Y EARS ARE BEING DISPOSE D OFF W ITH THIS COMMON ORDER AS THE FACTS AND ISSUES INVOLVED THER EIN ARE IDENTICAL IN NATURE. FO R THE SAKE OF CONVENIENCE, FACTS HAVE BE EN TAKEN FROM ITA NO. 410/M/12. ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 2 ITA NO. 410 /M/12 FOR A.Y. 2008 - 09: 2. THE SOLE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS RELATING TO SUSTAINING OF THE INTEREST DISALLOWANCE OF RS.4 , 58 , 039/ - BY THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS CIT(A)] , AGAINST THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER ( HEREINAFTER REFERRED TO AS AO ) AT RS. 5 , 78 , 670/ - . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE A O NOTED THAT THE ASSESSEE HA D PAID INTEREST AT THE RATE OF 18% ON THE BORROWED FUNDS WHEREAS ON THE FUNDS ADVANCED , THE ASSESSE E CHARGED INTEREST @ 9 - 12%. ON BEING ASKED THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD ADEQUATE OWN FUNDS WHICH WERE MORE THAN THE AM OUNTS ADVANCED AND THUS THERE WAS NO CASE FO R T HE DISALLOWANCE. THE A O ON THE OTHER HAND OBSERVED THAT AMOUNTS ADVANCED HAD ARISEN OUT OF INTEREST BEARING FUND @ 18% AND THUS HE DISALLOWED THE INTEREST OF RS. 5,78,670/ - ON PROPORTIONATE BASIS. 4 . IN APPEAL BEFORE THE CIT(A), THE ASSESSEE PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS. RELIANCE UTILITIES 313 ITR 340 (BOM) AND IT WAS ALSO SUBMITTED THAT A SIMILAR ADDITION WAS DELETED BY ITAT IN A.Y. 2005 - 06. IT WAS ALSO CONTENDED THAT THERE WAS MISTAKE IN CALCULATING THE INTEREST DISALLOWANCE AS THE SAME WAS BASED ON NET INTEREST BASIS INSTEAD OF THE GROSS INTEREST A ND THUS THE INTEREST EXPENDITURE OF RS. 1,20,631/ - HAD BEEN WRONGLY DISALLOWED. 5 . THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD FAILED TO E S TABL ISH DIRECT NEXUS BETWEEN INTEREST FREE FUNDS AND BUSINESS PURPOSE IN RELATION TO THE INTEREST FREE ADVANCES , OF WHICH THE BURDEN TO PROVE WAS ON THE ASSESSEE. ALL THE FUNDS OF THE ASSESSEE HAD BEEN IN A COMMON POOL AND THE ASSESSEE HAD NOT ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 3 SHOWN THAT THE INTEREST FREE ADVANCES HAD EMANATED FROM INTE REST FREE FUNDS AVAILABLE. IT WAS THE PRIMARY ONUS OF THE ASSES SEE TO EXPLAIN AND DELINEATE THE BUSINESS PURPOSE OF THE ADVANCES . EVEN T HE ONUS U/S. 36(1)(III) LIES ON THE ASSESSEE TO PROVE THAT ALL THE FUNDS BORROWED WERE UTILISED FOR THE PURPOSES OF THE BUSINESS . HE FURTHER OBSERVED THAT I N A BUSINESS , ALL CASH RECE IPTS AND PAYMENTS NORMALLY MERGE INTO A COMMON HOTCHPO TCH AND IT WAS FOR THE ASSESSEE TO SHOW THAT ON THE DATE OF ADVANCEMENT OF LOAN NO INTER EST BEARING FUNDS WERE UTILIZED. HE FURTHER OBSERVED THAT EVEN IF IN T HE BALANCE SHEET AT THE END OF THE FINANCIAL YEAR SUFFICIENT CAPITAL WAS SHOWN IN THE ASSESSEE 'S ACCOUNT, T HAT ITSELF HAD NO RELEVANCE TO THE ACTUAL TRANSACTION OF MAKING AN ADVANCE. TH E ASSE SSEE SHOULD HAVE PRODUCED THE DAY TO DAY CASH FLOW STATEMENT OF NOT ONLY THE PREVIOUS YEAR BUT ALSO OF PAST Y EARS WHEN THE INVESTMENTS WERE MADE. IT IS VERY MUCH POSSIBLE THAT AN ASSESSEE MAY HAVE SAY RS.10 CRS OF SHARE CAPITAL AND RESERVES BUT NO CASH BALANCE TO INVEST AND THAT HE UTILIZES THE O . D. A/C OR BORROWED FUNDS FOR THE PURPOSES OF MAKING INTEREST FREE A DVANCES. THUS, THE COMPARISON OF SHARE CAPITAL PLUS RESERVES VI S - A - VI S INVESTMENT CANNOT LEAD TO CONCLUSION THAT INVESTMENTS WERE MADE OUT OF INTEREST FREE FUNDS . HE F URTHER OBSE R VED THAT IN THE CASE OF CIT VS. RELIANCE UTILITIES (SUPRA), A CLEAR FINDIN G HAD BEEN RECORDED THAT THE ASSESSEE HAD INTEREST - FREE FUNDS OF ITS OWN WHICH HAD BEEN GENERATED IN COURSE OF YEAR. BUT I N THE INSTANT CASE THE ASSESSEE HAD NOT SHOWN THAT SUFFICIENT INTEREST FREE FUNDS WERE GENERATED IN THE COURSE OF YEAR AND THAT INTERE ST FREE ADVANCES HAD SPRUNG FROM THESE OWN FUNDS. HE THEREFORE HELD THAT THE INT EREST DISALLOWANCE WAS JUSTIFIED . HOWEVER , HE ACCEPTED THE ALTERNATE PLEA OF THE ASSESSEE THAT THE A.O. SHOULD HAVE COMPARED THE GROSS INTEREST RECEIVED WITH INTEREST CALCULATE D UNDER PRODUCT METHOD. HE THUS SUSTAINED THE ADDITION TO THE EXTENT OF RS . 4 , 58 , 039/ - (578670 - 120631). BEING AGGRIEVED, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL. ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 4 6 . BEFORE US , THE LD. A.R. OF THE ASSESSEE HAS AGAIN RELIED UPON THE AUTHORITY OF TH E HON'BLE BOMBAY HIGH COURT STYLED AS 'CIT VS. RELIANCE UTILITIES AND POWER LTD.' (SUPRA) WHEREIN THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT IF THERE ARE FUNDS AVAILABLE, BOTH INTEREST FREE AND OVERDRAFT/LOANS TAKEN, THEN PRESUMPTION WOULD ARISE THAT INVES TMENTS WOULD BE OUT OF THE INTEREST FREE FUND GENERATED OR AVAILABLE WITH THE COMPANY IF THE INTEREST FREE FUNDS WERE SUFFICIENT TO MEET THE INVESTMENTS. HOWEVER, ON THE OTHER HAND THE CONTENTION OF THE LD. D.R. HAS BEEN THAT SUCH A PRESUMPTION WOULD ARIS E ONLY IF ON THE DATE OF INVESTMENT, ASSESSEE HAD ITS OWN/INTEREST FREE FUNDS AVAILABLE WITH IT. HE HAS FURTHER CONTENDED THAT SINCE THE ASSESSEE HAS NOT PROVIDED ANY FUND FLOW STATEMENT TO PROVE THAT SUFFICIENT INTEREST FREE FUNDS WERE AVAILABLE WITH IT O N THE DATE OF INVESTMENT, HENCE THE PRESUMPTION OF INVESTMENT MADE BY THE ASSESSEE OUT OF ITS OWN FUNDS WOULD NOT BE APPLICABLE IN THE CASE IN HAND. ON THE OTHER HAND THE LD. A.R. HAS FURTHER SUBMITTED THAT SHORT TERM LOANS WERE ADVANCED BY THE ASSESSEE HUF TO THE FAMILY MEMBERS OUT OF OWN FUNDS. MOREOVER , IT WAS UP TO ASSESSEE TO DECIDE AS HOW TO CONDUCT ITS BUSINESS AND THE REVENUE CANNOT DICTATE TERMS TO THE ASSESSEE FOR THE CONDUCT OF THE BUSINESS. 7. WE HAVE HEARD THE LD. REPRES ENTATIVES OF THE PAR TIES AND HA VE ALSO GONE THROUGH THE RECORD. WE MAY OBSERVE THAT THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF 'CIT VS. RELIANCE UTILITIES AND POWER LTD.' (SUPRA) HAS OBSERVED THAT IF THERE ARE FUNDS AVAILABLE, BOTH INTEREST FREE AND OVERDRAFT/LOANS TAKEN, THEN PRESUMPTION WOULD ARISE THAT INVESTMENTS WOULD BE OUT OF THE INTEREST FREE FUND GENERATED OR AVAILABLE WITH THE ASSESSEE. HOWEVER , THER E SEEMS TO BE FORCE IN THE CONTENTION OF THE LD. D.R. THAT SUCH A PRESUMPTION WOULD ARISE ONLY IF ON THE ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 5 DATE OF I NVESTMENT, ASSESSEE HAD ITS OWN/INTEREST FREE FUNDS AVAILABLE WITH IT. A LL THE FUNDS OF THE ASSESSEE HAD BEEN IN COMMON POOL AND THE ASSESSEE HAS NOT PRODUCED THE DAY TO DAY FUND FLOW STATEMENT. EVEN AN OBSERVATION HAD BEEN MADE BY THE AO THAT THERE WAS A CLEAR NEXUS BETWEEN THE DIVERSION OF HIGHER INTEREST BEARING FUNDS TO LOWER INTEREST EARNING INVESTMENTS WHICH WAS DEVOID OF ANY BUSINESS EXPEDIENCY AS THE MONEY USED FOR INVESTMENT PURPOSE HAD BEEN WITHDRAWN FROM THE O VER D RAFT ACCOUNT OF THE BANK. 8 . IN OUR VIEW, WHEN THE FACT OF DIVERSION OF HIGHER RATE OF INTEREST BEARING FUNDS INTO LOWER INTEREST YIELDING INVESTMENT WAS APPARENT AND ESTABLISHED ON THE FILE, THERE WAS NO QUESTION OF DRAWING ANY PRESUMPTION OF USE OF OWN FUNDS AS THE PRESUMPTION CAN GENERALLY BE DRAWN ONLY TO THE FACTS WHICH OTHERWISE CANNOT BE ESTABLISHED OR PROVED BY WAY OF DIRECT EVIDENCE AND SUCH TYPE OF PRESUMPTIONS, IF NOT HELD TO BE CONCLUSIVE PROOF OF THE FACTS TO BE ESTABLISHED BY THE EXPRESS PROVISIONS OF A STATUTE, ARE AL WAYS REBUTTABLE. THE PECULIAR FACTS OF THE PRESENT CASE MAKE IT QUITE DISTINGUISHABLE FROM THAT OF THE CASE OF CIT VS. RELIANCE UTILITIES (SUPRA). 9. HOWEVER , THE CONTENTION OF THE LD. AR THAT IN DAY TO DAY BUSINESS, IT IS FOR THE ASSESSEE TO SEE HOW TO MANAGE ITS BUSINESS HAS SOME FORCE . ASSESSEE CAN SHOW FROM THE FUND FLOW STATEMENT THAT INTEREST FREE FUNDS WERE AVAILABLE WITH IT ON THE DATE OF INVESTMENT. EVEN THOUGH THE ASSESSEE MAY NOT SHOW IN THE ABSENCE OF SEP A RATE FUND FLOW STATEMENT OR SEP A RATE ACCO UNTS RELATING TO BUSINESS LOANS/ T RANSACTIONS VIZ - A - VIZ . INVESTMENTS MADE FROM OWN FUNDS, BUT IF THE ASSESSEE IS ABLE TO SHOW THE POSSIBILITY AND ANTICIPATION OF AVAILABILITY OF OWN FUNDS , MAY BE EXACTLY NOT ON THE DATE OF INVESTMENT OR ADVANCEM ENT OF LOAN BUT , IN A VERY NEAR FUTURE DATE OR WITHIN A REASONABLE SHORT PERIOD OF TIME FROM THE DATE OF SUCH INVESTMENT AND THE ASSESSEE ESTABLISHES THAT SUCH FUNDS WERE ACTUALLY AVAILABLE WITH HIM WITHIN THAT REASONABLE SHORT PERIOD , THEN THE PRESUMPTIO N WILL BE THAT ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 6 THE ADVANCEMENT OF LOAN/ INVESTMENT WAS MADE BY TH E ASSESSEE FROM HIS OWN FUNDS, THOUGH IN ANTICIPATION OF THE AVAILABILITY OF ITS OWN FUNDS WITHIN A SHORT PERIOD OF TIME. THE PRINCIPLE UNDERLYING THIS PROPOSITION IS THAT A BUSINESSMAN HAS TO CIRCULATE HIS MONEY ACCORDING TO THE DAY TO DAY REQUIREMENTS AND THE LIKELY INFLOW AND OUTFLOW OF MONEY IN THE NEAR FUTURE IS TAKEN INTO CONSIDERATION WHILE MAKING INVESTMENT . U NDER SUCH CIRCUMSTANCES , DISALLOWANCE CAN NOT BE MADE ON THE ENTIRE INTEREST EXPENDITURE BUT A VERY REASONABLE PROPORTIONATE DISALLOWANCE CAN BE MADE AND EVEN IN CERTAIN CASES CAN BE IGNORED DUE TO THE SHORTNESS OF THE PERIOD BETWEEN THE DATE OF ADVANCEMENT/EXPENDITURE AND DATE OF AVAILABILITY OF OWN FUNDS. IT CAN BE EXPLAINED BY THE ASSESSEE TO THE ASSESSING OFFICER FROM THE BALANCE SHEET OF THE FINANCIAL YEAR UNDER CONSIDERATION AS WELL FROM THAT OF THE PREVIOUS YEARS AS TO WHETHER SUFFICIENT OWN FUNDS WERE AVAILABLE TO THE ASSESSEE DURING THE FINANCIAL YEAR OR TH AT T HE INTEREST FREE FUNDS WERE GENERATED DURING THE COURSE OF THE YEAR EVEN IF THE ASSESSE COULD NOT PROVE THE AVAILABILITY OF OWN FUNDS O N THE PARTICULAR DATE OF INVESTMENT/ADVANCEMENT/EXPENDITURE. 10. THOUGH IN THE INSTANT CASE THE ASSESSE HAS FAILED TO PROVE THAT ON THE PARTICULAR DATES OF INVESTMENTS/ ADVANCEMENT OF LOANS TO THE FAMILY MEMBERS , SUFFICIENT OWN FUNDS WERE AVAILABLE WITH IT, HOWEVER THE ASSESSE FROM THE BALANCE SHEET HAD SUBMITTED BEFORE THE AO THAT THE ASSESSEES CAPITAL AS ON 31.3.2008 WAS RS.7.72 CRO RES AND THE PROFIT DURING THE YEAR WAS AT RS.1.95 CRORES. ASSESSEES HAD SUFFICIENT OWN CAPITAL. THE ASSESSEES OWN CAPITAL AND LOANS WERE IN CIRCULATION DURING THE YEAR AS THE ASSESSEE HAD ALSO BEEN ENGAGED IN THE BUSINESS OF MONEY LENDING. IN VIEW OF TH ESE SUBMISSIONS OF THE LD. A.R. , WE REMAND BACK THE CASE TO THE FILE OF THE AO TO DECIDE THIS ISSUE AFRESH IN THE LIGHT OF ABOVE OBSERVATIONS AND TO MAKE THE DISALLOWANCE, IF ANY, AFTER CONSIDERING THE RELEVANT DATES AND RATE OF INTEREST. ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 7 ITA NO. 294/M /11 FOR A.Y. 2007 - 08 11. THE ASSESSEE IN THIS APPEAL HAS TAKEN THE FOLLOWING TWO GROUNDS : 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN SUSTAINING THE ORDER OF THE AO DISALLOWING INTEREST OF RS.12,73,633/ - . 2. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN SUSTAINING THE ORDER OF THE AO DISALLOWING RS.16,18,692/ - U/S. 40(A)(IA) OF THE ACT. GROUND NO.1: 12. THE ISSUE INVOLVED IN THIS GROUND RE LATING TO THE INTEREST DISALLOWA NC E IS IDENTICAL TO T HE ISSUE RAISED ABOVE IN ITA NO. 410/M/12 FOR A.Y.2008 - 09. IN VIEW OF OUR OBSERVATIONS AND FINDINGS GIVEN ABOVE, THIS ISSUE IS RESTORED TO THE FILE OF THE AO TO DECIDE IT AFRESH ACCORDINGLY. GROUND NO.2 : 13. IN THIS GROUND THE ASSESSEE H AS CONTESTED THE CO NFIRMATION OF DISALLOWANCE MADE UNDER SECTION 40(A)(IA). THE AO OBSERVED THAT THE ASSESSEE HAD DEBITED RS.16,18,692/ - AGAINST BHAVNAGAR UNIT AS CLEARING, FORWARDING AND DEMURRAGE CHARGES. AFTER VERIFICATION IT WAS FOUND THAT THE ASSESSEE HAD NOT DEDUCTED TDS ON THESE PAYMENTS AND HE THUS DISALLOWED THE SAID EXPENDITURE U/S.40(A)(IA). 14. BEFORE THE LD. CIT(A) , THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE FURNIS HED THE DETAILS OF EXPENDITURE DISALLOWED AND FURTHER SUBMITTED THAT I N RESPECT OF PAYMENTS M ADE TO GUJARAT PIPAVAV PORT LTD., SAI MARINE AND MAERSK INDIA PVT. LTD. , DISALLOWANCE COULD NOT BE MADE AS THEY HAVING OBTAINED THE EXEMPTION CERTIFICATE U/S.197(1). IN RESPECT OF PAYMENTS MADE TO SAF MARINE AND MAERSK INDIA PVT. LTD. IT WAS SUB MITTED T HAT THEIR PRINCIPALS WERE A. P. MOLLER AND MAERSK/AS - DENMARK; PAYMENTS MADE TO THEM WERE ALSO GOVERNED BY DOUBLE TAXATION AGREEMENT BETWEEN INDIA AND DENMARK. FURTHER ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 8 FROM THE DEFINITION OF PROFITS FROM OPERATIONS OF SHIPS AS PER ARTICLE 9 OF THE TREATY B ETWEEN INDIA AND DENMARK, IT REVEALED THAT IT INCLUDES PROFITS DERIVED FROM USE, MAINTENANCE OR RENTAL OF CONTAINERS. IN VIEW OF THE SAME, THE STORAGE/DEMURRAGE CHARGES PAID TO MAERSK INDIA LTD. AND SAF MARINE WOULD BE OUTSIDE THE PURVIEW OF TAXATION. IN R ESPECT OF PAYMENTS MADE TO K.K. ASSOCIATES AND CLASSIC FREIGHT, THE ASSESSEE HAD DEDUCTED TAX AT SOURCE, WHICH THROUGH OVERSIGHT WAS NOT BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. 15. HOWEVER , T HE LEARNED CIT(A) DID NOT CONSIDER THE DOCUMENTS AND D ETAILS SUPPLIED BY THE ASSESSEE AT APPELLATE STAGE CITING RULE 46A OF THE I.T. RULES AND FURTHER OBSERVED THAT THE EVIDENCE UNDER RULE 46A CAN ONLY BE ACCEPTED IF, THE AO HAD REFUSED TO ACCEPT THE SAID EVIDENCE OR THE ASSESSEE WAS PREVENTED BY SUFFICIENT C AUSE FROM PROD UCING THE EVIDENCE BEFORE THE A O. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS PUT FORTH BY THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN OUR VIEW, WHILE REFUSING TO TAKE INTO CONS IDERATION THE RELEVANT DOCUMENTS WHICH WERE VERY MUCH NECESSARY FOR THE JUST DECISION OF THE CASE, LEARNED CIT(A) FAILED TO EXERCISE HIS APPELLATE JURISDICTION U/S 250 OF THE ACT. THE DUTY WAS ALSO CAST UPON THE LEARNED CIT(A) TO ADMIT AND CONSIDER THE EVI DENCE PRODUCED BEFORE HIM BY THE ASSESSEE. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI S.SHAH V. CIT [(1998) 231 ITR 1 (BOM.)] HAS HELD THAT THE POWERS CONFERRED ON THE FIRST APPELLATE AUTHORITY UNDER SUB - SECTION (4) OF SECTION 250 OF TH E ACT, BEING A QUASI - JUDICIAL POWER, IT IS INCUMBENT ON HIM TO EXERCISE THE SAME, IF THE FACTS AND CIRCUMSTANCES JUSTIFY. EVEN OTHERWISE UNDER RULE 46A(4) OF THE INCOME TAX RULES , THE CIT(A) HAS BEEN GIVEN POWER TO CALL FOR PRODUCTION OF ANY DOCUMENT OR T HE EXAMINATION OF ANY WITNESSES TO ENABLE HIM TO DISPOSE OF THE APPEAL. THERE IS NO DOUBT ABOUT ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 9 THE LEGAL POSITION THAT IF ANY DOCUMENT FURNISHED BY THE ASSESSEE BEFORE THE COMMISSIONER (APPEALS) IS IN THE NATURE OF CLINCHING EVIDENCE WHICH GOES TO THE ROO T OF THE CASE THEN IN THE INTEREST OF JUSTICE SUCH TYPES OF EVIDENCE SHOULD NOT BE REJECTED. THE DOCUMENTS RELIED UPON BY THE ASSESSEE ARE VERY MUCH RELEVANT AND NECESSARY FOR THE JUST AND PROPER DECISION OF THE CASE AS THE ASSESSEE FROM THE ABOVE DOCUMEN TS HAS CLAIMED THAT HE HAD DEDUCTED THE TAX WHILE MAKING PAYMENTS TO CERTAIN PARTIES AND FURTHER THAT THE REMAINING PARTIES HAD BEEN GRANTED EXEMPTION FROM DEDUCTION OF TAX UNDER SECTION 197(1) OF THE ACT, HENCE WE SET ASIDE THE FINDINGS OF THE CIT(A) ON T HIS ISSUE AND REMAND B ACK THE MATTER TO THE FILE OF A O WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AS PER LAW AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND SUBMIT THE NECESSARY DOCUMENTS ETC. T HIS GROUND OF APPEAL IS ACCORDINGL Y ALLOWED FOR STATISTICAL PURPOSES. 17. IN THE RESULT , APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05.02. 201 4 . SD/ - SD/ - ( D. KARUNAKARA RAO ) (SANJAY GARG) ACCOUNT ANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 05.02. 201 4 . * KISHORE COPY TO: THE ASSESSEE THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI ITA NO .410/M/2012 & 294/M/2011 DEVKINANDAN GUPTA HUF 10 THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.