DAS PATEL LAND DEVELOPERS P.LTD, MUMBAI V. ITO 8(1)(3), MUMBAI

ITA 3197/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9810 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 08-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 27-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: K K LALKAKA
• Keywords: Sale consideration of property below Jantri Value; Business income; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 44AD; 143(3); 50C

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 3197/ MUM/2015 ( / ASSESSMENT YEAR : 2011-12) DAS PATEL LAND DEVELOPERS PVT. LTD., F/9, SARDAR PATEL SOCIETY, NEHRU ROAD, VILE PARLE EAST, MUMBAI 400057. / V. INCOME TAX OFFICER 8(1)(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AAACD5093M ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI K.K. LALKAKA REVENUE BY : SHRI V. VIDHYADHAR (DR) / DATE OF HEARING : 06.07.2017 / DATE OF PRONOUNCEMENT : 23.08.2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 3197/MUM/2015, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 03.02.20 15 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 16, MUMBAI (H EREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR 2011-12, APPELLATE PR OCEEDINGS BEFORE LEARNED CIT(A) HAS ARISEN FROM THE ASSESSMENT ORDER DATED 2 7.01.2014 PASSED BY THE LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO ) U/S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) . ITA 3197/MUM/2015 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN SUSTAIN ING THE ORDER OF THE ASSESSING OFFICER BY RELYING OUT OF CONTEXT AND WITHOUT APPLICATION OF MIND ON THE ORDER PASSED BY CIT (APP EALS) FOR A.Y. 2006-07 IN APPEAL NO. CIT(A)-16/ITO 8(1)(3)/IT-151/ 2011-12. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN SUSTAIN ING THE ORDER OF THE ASSESSING OFFICER IN TREATING INCOME ARISING FROM SALE OF TWO FLATS IN J. P. NAGAR, E BUILDING AS ARISING FRO M BUSINESS OF DEVELOPMENT OF PROPERTY AND ERRONEOUSLY HOLDING THA T THE SALE PROCEEDS OF FLAT NO. 7, FLAT NO. 16 AND FLAT NO. 30 6 AGGREGATING TO RS. 8,50,0001- AS INCOME ARISING UNDER THE HEAD 'IN COME FROM OTHER SOURCES' 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN SUSTAIN ING THE ORDER OF THE ASSESSING OFFICER BY IGNORING THE FACT THAT THE APPELLANT IS A DEVELOPER OF PROPERTY AS CAN BE EVIDENCED FROM PA ST RECORDS AND HENCE THE PROVISIONS OF SECTION 50C ARE NOT APP LICABLE AND CONSEQUENTLY ADOPTING THE VALUE ADOPTED BY THE STAM P AUTHORITIES NAMELY OF RS. 14,11,000/- INSTEAD OF TH E RATE MENTIONED IN THE AGREEMENT OF RS. 6,96,000/- IS UNJ USTIFIABLE AND ERRONEOUS IN LAW. -- 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WITHOUT PREJUDICE TO OUR ABOVE SUBMISSION, THE CIT (APPEALS) HAS ERRED IN SUSTAINING THE ORDER OF THE ASSESSING OFFICER IN ESTIMATING NET PROFIT @ 12% ON THE VALUE ADOPTED BY THE STAMP AUTHORITIES OF RS. 14,11,000/- WITHOUT REJECTING TH E BOOKS OF ACCOUNTS WHICH ACTION IS WHOLLY ERRONEOUS AND UNJUS TIFIABLE. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN SUSTAIN ING THE ORDER OF THE ASSESSING OFFICER BY IGNORING RESPECTIVE VAL UES OF COPIES OF THREE AGREEMENTS NAMELY FLAT NO. 7 FOR RS. 3,25,000 /-, FLAT NO. 16 FOR RS. 3,25,000/- AND FLAT NO. 306 FOR RS. 2,00,00 0/- MERELY BECAUSE THE VALUATION BY THE STAMP AUTHORITIES WAS NOT AVAILABLE ITA 3197/MUM/2015 3 IGNORING THE MATERIAL FACT THAT THE APPELLANT IS A DEVELOPER AND THE PROVISIONS OF SECTION 50C ARE NOT APPLICABLE IN THE APPELLANT'S CASE. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN SUSTAIN ING THE ORDER OF THE ASSESSING OFFICER IN TAXING THE ENTIRE INCOM E OF RS. 1,95,000/- AS 'INCOME FROM OTHER SOURCES' ALTHOUGH THE ONLY INCOME EARNED BY THE ASSESSEE DURING THE YEAR IS BU SINESS INCOME ARISING FROM DEVELOPMENT OF PROPERTY AND NOT GIVING ANY DEDUCTION IN RESPECT OF EXPENSES INCURRED FOR EARNI NG THE SAID BUSINESS INCOME. YOUR APPELLANT THEREFORE PRAYS THAT THE ADDITION MA DE OF RS. 9,45,000/- IS UNJUSTIFIABLE ON FACTS AND UNTENABLE IN LAW AND, THEREFORE, NEEDS TO BE DELETED. 3. THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDI TIONAL GROUND:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED IN NOT DEDUCTIN G DIFFERENCE BETWEEN OPENING AND CLOSING STOCK OF RS. 13,61,415/ - FROM THE TOTALSALES WHICH IS AGAINST ALL PRINCIPLES OF STAND ARD ACCOUNTING. 4. AT THE OUTSET , IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE BENCH WHEREIN ATTENTION IS DRAWN TO LETT ER DATED 10 TH APRIL, 2017 FILED ON BEHALF OF THE ASSESSEE REQUESTING FOR ADMI SSION OF THE ABOVE ADDITIONAL GROUND OF APPEAL RAISED BEFORE THE TRIBU NAL FOR THE FIRST TIME WHICH WAS NOT RAISED BEFORE THE LD. CIT(A) . IT IS SUBMIT TED THAT SINCE THIS IS PURELY A LEGAL GROUND, IT MAY BE ADMITTED KEEPING IN VIEW R ATIO OF DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CORPORATION LIMITED V. CIT, 229 ITR 383 (SC) AND THE SAME MAY B E ADJUDICATED ON MERITS. THE LD. D.R. OPPOSED THE ADMISSION OF THE ADDITIONA L GROUND OF APPEAL . WE HAVE HEARD RIVAL CONTENTIONS.. WE HAVE OBSERVED TH AT ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY OF LEGAL NATURE AN D KEEPING IN VIEW THE RATIO OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LIMITED (SUPRA), THE SAID ADDITIONAL GR OUND OF APPEAL BEING LEGAL ITA 3197/MUM/2015 4 GROUND IS HEREBY ORDERED TO BE ADMITTED IN THE INTE REST OF JUSTICE . WE ORDER ACCORDINGLY. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE DEVELOPMENT OF LAND, CONSTRUCTION OF BUILDINGS AND SALE OF FLATS. THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143 (3) R.W.S. 143(2) OF THE 1961 ACT OBSERVED THAT THE ASSESSEE HAD SHOWN SALES OF RS. 17,41,000/- AND OTHER INCOME OF RS. 4000/-. THE AO OBSERVED THAT T HE ASSESSEE HAD AS PER THE BALANCE SHEET, SHOWN THE VALUE OF INVENTORY OF FLATS AS ON 31.3.2011 OF RS. 15,71,011/-. THE ASSESSEE WAS ASKED TO EXPLAIN COMPLETE DETAILS OF THE PROJECT, FLATS SOLD ALONG WITH COPY OF AGREEMENTS A ND INVENTORY OF FLATS AT THE YEAR ENDING ON 31 ST MARCH, 2011. IN RESPONSE, THE ASSESSEE HAD SUBMIT TED COPIES OF THREE AGREEMENTS, PARTY-WISE DETAILS OF S ALE AND STATEMENT OF CLOSING STOCK. THE ASSESSEE SUBMITTED THAT OUT OF FIVE FLA TS SOLD DURING THE YEAR, THE ASSESSEE WAS UNABLE TO COLLECT AGREEMENTS IN RESPEC T OF TWO FLATS AND THEREFORE THE ASSESSEE EXPRESSED ITS INABILITY TO R ECONCILE THE INCOME SHOWN IN THE PROFIT AND LOSS ACCOUNT SO FAR AS TWO FLATS ARE CONCERNED. THE A.O. AFTER GOING THROUGH THE DOCUMENTS SUBMITTED BY THE ASSESS EE OBSERVED THAT THE ASSESSEE HAD DEVELOPED A PROJECT NAMELY J.P. PARK/J .P. NAGAR E. THE ASSESSEE ALSO FURNISHED THE STATEMENT OF REVENUE OF RS. 17,41,000/- RECEIVED DURING THE YEAR, THE DETAILS OF WHICH ARE AS UNDER: - SR NO. FLAT NO. NAME OF THE BUYER SALE VALUE 1 7 ANUGYA P. GARODIA 3,25,000 2 15 GANESH S. PATEL 3,60,000 3 16 SMITA H. SHAH 3,25,000 4 306 DHARMENDRA KHUMBHAR 2,00,000 5 310 P.L. MIRANI 3,36,000 6 OTHER INCOME (BALANCING AMT) 1,95,000 TOTAL 17,41,000 ITA 3197/MUM/2015 5 THE A.O. OBSERVED THAT ONLY TWO SALE AGREEMENTS IN RESPECT OF FLAT NO. 15 AND FLAT NO. 310 WAS RELATED TO THE PERIOD UNDER ASSESS MENT AND ONE AGREEMENT RELATING TO FLAT NO. 306 WAS REGISTERED ON 26 TH APRIL, 2006 FOR RS. 2 LACS AS AGAINST MARKET VALUE OF RS. 2,63,211/- AND HENCE TH E FLAT NO 306 CANNOT BE SAID TO HAVE BEEN SOLD DURING THE YEAR UNDER CONSID ERATION. THE SALE OF FLATS AND THE COPIES OF AGREEMENTS FURNISHED BY THE ASSES SEE ARE SUMMARIZED AS UNDER: SR NO. FLAT NO. DATE OF SALE REGISTRATION VALUE MARKET VALUE 1 7 N.A 3,25,000 N.A. 2 15 26.04.2010 3,60,000 6,75,000 3 16 N.A. 3,25,000 N.A. 4 306 N.A. 2,00,000 N.A. 5 310 26.04.2010 3,36,000 7,36,000 THE STATEMENT OF CLOSING STOCK AS FURNISHED BY THE ASSESSEE IS AS UNDER:- FLOOR FLAT NO. FLOOR AREA GROUND 1 415 FIRST 4 600 SECOND 5 385 THIRD 2 800 TOTAL 2200 THE ASSESSEE WAS ASKED TO FURNISH THE COPIES OF AGR EEMENT OF REMAINING FLATS SOLD DURING THE YEAR AS ALSO THE AO OBSERVED THAT M ARKET VALUE OF THE FLATS IS MORE THAN AGREEMENT VALUE AND THE AO ASKED ASSESSEE TO EXPLAIN AS TO WHY AVERAGE MARKET RATE SHOULD NOT BE ADOPTED AND APPLI ED TO TOTAL SQUARE FEET SOLD DURING THE YEAR AND AS TO WHY PROFIT OF 12% OF SALES SHOULD NOT BE ADOPTED AND APPLIED TO THE TOTAL SQUARE FEET AREA S OLD DURING THE YEAR, WHICH RATE OF PROFIT WAS ALSO ADOPTED FOR EARLIER YEAR . THE ASSESSEE SUBMITTED THAT IT ITA 3197/MUM/2015 6 FILED RETURN OF INCOME SHOWING PROFIT OF MORE THAN 8% ON TOTAL SALES . THE ASSESSEE REFERRED TO PROVISIONS OF SECTION 44AD OF THE 1961 ACT . IT WAS ALSO SUBMITTED THAT PROVISIONS OF SECTION 50C OF THE 196 1 ACT CANNOT BE INVOKED AS THE ASSESSEE IS DEVELOPER OF FLAT . THE ASSESSE E REQUESTED FOR ACCEPTING THE SALE VALUE AS RETURNED BY THE ASSESSEE BUT THE ASSE SSEES SUBMISSION WERE REJECTED BY THE A.O. . IT WAS OBSERVED BY THE AO T HAT THE ASSESSEE HAS FURNISHED ONLY COPIES OF THREE AGREEMENTS IN SUPPOR T OF SALE SHOWN IN THE PROFIT AND LOSS ACCOUNT AND OUT OF THREE AGREEMENTS , ONE AGREEMENT W.R.T. FLAT NO 306 WAS REGISTERED ON 26-04-2006 FOR RS.2,0 0,000/- AGAINST MARKET VALUE OF RS. 2,63,211/- AND HENCE FLAT NO 306 CANNO T BE SAID TO HAVE BEEN SOLD DURING PREVIOUS YEAR RELEVANT TO ASSESSMENT YE AR. SINCE THE ASSESSEE PRODUCED ONLY TWO AGREEMENTS , THE AO HELD THAT THE ASSESSEE HAS SOLD ONLY TWO FLATS DURING THE YEAR. THE AO OBSERVED THAT REG ISTRATION VALUE OF THESE TWO FLATS OF WHICH AGREEMENTS ARE PRODUCED ARE FLAT NO. 15 AND 310 AND ITS REGISTRATION VALUE IS RS. 6,96,000/- AS AGAINST MAR KET VALUE OF RS. 14,11,000/- AND HENCE MARKET VALUE WAS TREATED AS S ALE VALUE AND ACCORDINGLY INCOME @12% ON THE SALE VALUE AND ALSO UN-SUBSTANTIATED INCOME W.R.T. SALE VALUE OF THE REST OF THREE FLATS WAS BROUGHT TO TAX BY THE AO, VIDE ASSESSMENT ORDER DATED 27-01-2014 PASSED BY TH E AO U/S 143(3) OF THE 1961 ACT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 27-01-2014 PASSED BY THE A.O. U/S 143(3) OF THE 1961 ACT, THE ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) WHO ALSO CONFIRMED THE ASSESSMENT ORDER OF THE A.O., VIDE APPELLATE ORDER DATED 03-02-2015 PASSED BY LEARNED CIT(A). 6. AGGRIEVED BY THE APPELLATE ORDER DATED 03-02-201 5 PASSED BY LEARNED CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 7. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE ASSESSEE HAS MOVED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL ) RULES, 1963 AS THE ITA 3197/MUM/2015 7 AGREEMENT FOR FLAT NO. 7 & 16 HAS NOW BEEN LOCATED. THE ASSESSEE VIDE ITS LETTER DATED 11 TH MAY, 2017 SUBMITTED THE ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL FOR ADMISSION . THE CONTENTS OF THE SAID LETTER DATED 11.05.2017 ARE REPRODUCED BELOW:- DAS PATEL LAND DEVELOPERS PRIVATE LIMITED --------------------------------------------------- -------------------------------------- REGD. OFFICE: F/9, SARDAR PATEL SOCIETY; VILE PARLE (EAST), MUMBAI - 400 057. REF. NO . DAS PATEL LAND DEVELOPERS PVT. LTD. F-9, SARDAR PATE I SOCIETY, NEHRU ROAD, VILE PARLE (E), MUMBAI 400057 DATE 11 TH MAY,2017 HON'BLE MEMBERS, INCOME-TAX APPELLATE TRIBUNAL 'G' BENCH MUMBAI MAY IT PLEASE YOUR HONOURS RE: PAN: AAACD5093N APPEAL NO. 3197/MUM/15 SUB: APPLICATION FOR PRODUCTION OF ADDITIONAL EVIDENCE A.Y. 201112 WE ARE SUBMITTING HEREWITH AN APPLICATION FOR ADDIT IONAL EVIDENCE UNDER RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 19 63 IN FURTHERANCE OF SUBSTANTIAL CAUSE AS YOUR APPELLANT WERE UNABLE TO PRODUCE THE SAID EVIDENCE BEFORE THE LOWER AUTHORITIES DUE TO CIRCUMSTANCES B EYOND THEIR CONTROL. ITA 3197/MUM/2015 8 TWO DOCUMENTS OF ADDITIONAL EVIDENCE ARE AS UNDER: 1. AGREEMENT FOR SALE DULY REGISTERED OF FLAT NO. 7 IN 'E' BUILDING DATED 3 RD AUGUST, 2010 2. AGREEMENT FOR SALE DULY REGISTERED OF FLAT NO. 1 6 IN J. P. NAGAR, 'E' BUILDING THE ABOVE AGREEMENTS WERE MISSING AND COULD NOT BE TRACED DESPITE ALL POSSIBLE SEARCH IN VIEW OF THE FACT THAT MR. PARMAN AND PATEL, MANAGING DIRECTOR HAD PASSED AWAY AND THEREAFTER HIS DAUGHTER, VEENA PATEL WAS APPOINTED AS A DIRECTOR WHO UNFORTUNATELY WAS NOT CONVERSANT WITH THE AFFAIRS OF THE BUSINESS. ALL THE OLD DOCUMENTS WERE NOT PROPERLY PRESERVED A ND IT WAS WITH GREAT DIFFICULTY THAT COPIES OF THE AGREEMENT WERE OBTAIN ED FROM THE MEMBERS OWNING THE SAID FLATS WHO INITIALLY WERE RELUCTANT TO OBLI GE. THE ABOVE TWO AGREEMENTS GO TO THE ROOT OF THE MATT ER SINCE IN ABSENCE OF THE SAID AGREEMENTS, THE ASSESSING OFFICER HAS TREATED THE SALE PROCEEDS OF FLATS AS INCOME FROM OTHER SOURCES. RELIANCE IS PLACED ON THE DECISION OF MADHYA PRADES H HIGH COURT IN THE CASE OF DALJEET KAUR V. ITO 212 TAXATION 46 WHEREIN IT HAS BEEN HELD THAT THE ADDITIONAL EVIDENCE WHICH IS CRITICAL AND GOES TO T HE VERY ROOT OF THE MATTER CANNOT BE REJECTED OUTRIGHT AND A REASONABLE APPROA CH IS REQUIRED REGARDING ITS ACCEPTANCE. YOUR APPELLANT WILL, THEREFORE, BE GRATEFUL IF THE SAID ADDITIONAL EVIDENCE IS ADMITTED TO MEET THE ENDS OF JUSTICE. YOURS FAITHFULLY, FOR DAS PATEL LAND DEVELOPERS PVT. LTD. SD/- VEENA PATEL DIRECTOR THUS, THE LD. COUNSEL PRAYED THAT THE ADDITIONAL EV IDENCE MAY PLEASE BE ADMITTED AS IT COULD NOT BE SUBMITTED EARLIER AS T HE SAME WERE NOT TRACEABLE ITA 3197/MUM/2015 9 DUE TO DEATH OF MANAGING DIRECTOR. THE LD. COUNSEL SUBMITTED THAT THESE ADDITIONAL EVIDENCE GOES TO THE ROOT OF THE MATTER AS THEY ARE THE TWO AGREEMENTS OF THE SALE OF FLATS WHICH ARE REFERRED TO BY THE AO WHILE MAKING ADDITION AS INCOME FROM UNSUBSTANTIATED INCOME, THE MATTER MAY BE SET ASIDE TO THE FILE OF THE A.O. FOR VERIFICATION AND ADJUDI CATION OF THE ISSUE AFTER CONSIDERING THE TWO AGREEMENTS WHICH COULD NOT BE S UBMITTED EARLIER. 8. THE LD. D.R., HOWEVER, OBJECTED TO THE FILING OF ADDITIONAL EVIDENCE AND SUBMITTED THAT THE SAME MAY NOT BE ADMITTED. 9. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSE SSEE COMPANY IS ENGAGED IN THE DEVELOPMENT OF LAND, CONSTRUCTION OF BUILDIN GS AND SALE OF FLATS. THE ASSESSEE HAD SOLD FIVE FLATS DURING THE YEAR AGAINS T WHICH THREE AGREEMENTS WERE SUBMITTED BY THE ASSESSEE BEFORE THE LOWER AUT HORITIES. THE ASSESSEE COULD NOT SUBMIT THE OTHER TWO AGREEMENTS OF THE FL AT WHICH WAS STATED TO BE SOLD DURING THE YEAR VIZ. FLAT NO. 7 & 16 IN E BUIL DING , J P NAGAR. NOW, IT HAS COME ON RECORD THAT THESE AGREEMENTS HAVE BEEN LOCA TED AND APPLICATION IS MOVED BY THE ASSESSEE TO ADMIT THE SAME AS AN ADDIT IONAL EVIDENCE UNDER THE INCOME-TAX(APPELLATE TRIBUNAL) RULES, 1963. THE SAI D AGREEMENTS WERE STATED BY THE ASSESSEE TO BE NOT TRACEABLE DUE TO DEATH OF THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY. ONE OF THE MAIN REASONS FOR M AKING ADDITIONS TO THE INCOME OF THE ASSESSEE BY THE AUTHORITIES BELOW IS THE NON SUBMISSION OF THESE TWO AGREEMENTS BY THE ASSESSEE BEFORE THE AUT HORITIES BELOW. AS PER THE ASSESSEE VERSION , THE AGREEMENT COULD NOT LOCATED EARLIER AS MR. PARMANAN PATEL, MANAGING DIRECTOR HAD PASSED AWAY AND THEREA FTER HIS DAUGHTER, VEENA PATEL WAS APPOINTED AS A DIRECTOR WHO UNFORTUNATELY WAS NOT CONVERSANT WITH THE AFFAIRS OF THE BUSINESS AND THESE AGREEMENTS WE RE NOT TRACEABLE . WE HAVE OBSERVED THAT THESE ADDITIONAL EVIDENCE BEING TWO A GREEMENTS WHICH THE ASSESSEE COULD NOT SUBMIT BEFORE THE AUTHORITIES BE LOW AND INFACT THESE TWO ITA 3197/MUM/2015 10 AGREEMENTS GOES TO THE ROOT OF THE MATTER AND ARE I MPORTANT FOR ADJUDICATING THE ISSUES COVERED BY THIS APPEAL BECAUSE THE AUTHO RITIES BELOW MADE ADDITIONS TO THE INCOME FROM UNSUBSTANTIATED SOURCE S MAINLY ON THE GROUNDS THAT THESE AGREEMENTS WERE NOT TRACEABLE. THESE AG REEMENTS ARE NOT BEEN EXAMINED BY THE AUTHORITIES BELOW. CONSIDERING THE FACTUAL MATRIX OF THE MATTER, WE ARE OF THE CONSIDERED VIEW THAT THESE AD DITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE NOW BEING TWO AGREEMENTS FOR SALE OF FLAT SHOULD BE ADMITTED IN THE INTEREST OF JUSTICE AS THEY ARE CRI TICAL FOR ADJUDICATING THE ISSUE COVERED BY THIS APPEAL AND GOES TO THE ROOT O F THE MATTER BECAUSE THE AUTHORITIES BELOW HAVE TAKEN ADVERSE VIEW AGAINST T HE ASSESSEE MAINLY BECAUSE THESE AGREEMENTS WERE NOT SUBMITTED BEFORE THEM. THUS, WE ARE INCLINED TO SET ASIDE AND RESTORE THE ISSUES COVERE D BY THIS APPEAL TO THE FILE OF THE AO FOR DE-NOVO DETERMINATION OF THE ISSUE ON ME RITS IN ACCORDANCE WITH LAW. THE A.O. SHALL ADMIT ALL THE NECESSARY EVIDENC ES AND EXPLANATIONS SUBMITTED BY THE ASSESSEE IN DE-NOVO PROCEEDINGS IN THE INTEREST OF JUSTICE AND ADJUDICATE THE MATTER ON MERITS IN ACCORDANCE W ITH LAW AFTER GIVING PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN AC CORDANCE WITH LAW. WE ORDER ACCORDINGLY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 3197/MUM/2015 FOR ASSESSMENT YEAR 2011-12 IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2017. # $% &' 23.08.2017 ( ) SD/.- SD/- (C.N. PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 23.08.2017 ITA 3197/MUM/2015 11 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI G BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI