The ACIT, Central Circle-1, Rajkot, Rajkot V. M/s. Classic Construction Co., Rajkot

ITA 43/RJT/2021

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6955 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-05-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 30-03-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Loose papers; Principle of natural justice; Additional evidence; Corroborative evidences; Accommodation entries; TDS; Set aside
• Section: 68; 69C; 142(1); 133A; 143(2); 64; 113; 48; 72

Judgement Text

आयकरअपील यअ धकरण,राजकोट यायपीठ,राजकोट। IN THE INCOMETAXAPPELLATE TRIBULAL, RAJKOT BENCH: RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No.43/RJ T/202 1 ( नधा रणवष / Assessment Yea r: (2017-18) (Hybrid Hearing) The ACIT, Cent ral C ir cle -1, Rajko t Vs. M/s Classic Construction Co., 75, Nand Koshor, University Road, Gangotri Park, Opp. BTS, Rajkot – 360001 थायीलेखासं./जीआइआरसं./PAN/GIR No. : AAIFC5100F (Appellant) (Respondent) Appellant by : Shri Shramdeep Sinha, CIT-DR Respondent by :Shri D. M. Rindani, AR Date of Hearing : 02/05/2024 Date of Pronouncement : 29/05/2024 आदेश / O R D E R PER DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the Revenue, pertaining to Assessment Year 2017-18, is directed against the order passed by the Learned Commissioner of Income [(in brief “Ld. CIT(A)”] vide orderdated25.01.2021, which in turn arises out of an assessment order passed by Assessing Officer u/s. 143(3)of the Income Tax Act, 1961 (in short, ‘the Act’), dated 19.12.2019. 2. The grounds of appeal raised by the Revenue are as follows: “1. On the facts and in the circumstances of the case and in law, learned Commissioner (Appeals) erred in considering the facts of the case and has ignored the facts that additions were made on the basis of material facts/digital data impounded during the course of Survey. Page | 2 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. 2. On the facts and in the circumstances of the case and in law, learned Commissioner (Appeals) erred in confirming lump sum disallowance to the extent of Rs.7,00,000/- only out of total disallowance of Rs.7,66,00,000/- made u/s 69C of the Act, ignoring the facts that most of the sub-contractors have filed ITR under presumptive tax and contact details in their ITR belongs to the assessee's related concern, which leads to inference that the payment towards the sub-contractor were inflated/bogus payments. 3. On the facts and in the circumstances of the case and in law, learned Commissioner (Appeals) erred in deleting the disallowance of Rs.84,00,000/- made u/s 69C of the Act. 4. On the facts and in the circumstances of the case and in law, learned Commissioner (Appeals) erred in ignoring the impounded non judicial stamp paper where in Shri Bharat Bharwad has confirmed that he has received the impugned payments on behalf of the assessee-firm. 5. On the facts and circumstances of the case and in law, Ld.CIT(A) has ignored the facts that payments made to Shri Bharat Bharwad were evidently on behalf of the assessee-firm and the sources of these payments were not explained during the course of assessment proceedings. 6. On the facts and circumstances of the case and in law, the payments made to Shri Bharat Bharwad by V. N. Pankhania on behalf of the assessee- firm was erroneously interpreted by the Ld. CIT(A) as payment made by Shri Bharat Bharwad to Shri Pankhania. 7. On the facts and circumstances of the case and in law, Ld.CIT(A) has ignored the facts that since the assessee has failed to explain the source of payments made to Shri Bharat Bharwad, the tax was rightly computed as per the provisions of Sec. 115BBE of the IT. Act. 8. The appellant prays that the order of the learned Commissioner (Appeals) on the above ground be set aside and the addition made in the Assessment order may kindly be restored.” 3. In ground Nos. 1 and 2, the main grievance of the revenue is that the learned Commissioner(Appeals) has ignored the facts that additions were made on the basis of material facts/digital data impounded during the course of Survey and ld.CIT(A) erred in confirming lump sum disallowance to the extent of Rs.7,00,000/- only out of total disallowance of Rs.7,66,00,000/- made u/s 69C of the Act, ignoring the facts that most of the sub-contractors have filed Income Tax Return (ITR) under presumptive tax and contact details in their ITR belongs to the assessee's related concern, which leads to Page | 3 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. inference that the payment towards the sub-contractor were inflated/bogus payments. 4. Brief facts, qua ground Nos.1 and 2, as discernible from the orders of lower authorities are thatassessee before us is a partnership firm and engaged in the business of road, construction, and other construction activities. Theassessee filed its return of income, showing total income of Rs. 20,76,130/- on 02.11.2017. The assessee`s case was selected for scrutiny through CASS, for complete scrutiny and notice under section 143(2) dated 24 th August, 2018, was issued and served upon the assessee. Subsequently, the notices under section 142(1) of the Income tax Act, dated 07.10. 2019 and dated 15.10.2019 respectively were issued and served upon the assessee. 5. In the assessee`s case under consideration, a searchand seizure action was carried out in the case of “Operation Star Alliance”, which was conducted on 26.09.2018. In relation to that a survey action u/s 133A of the I.T. Act has been conducted on the business premises of M/s.Classic Network Pvt. Ltd., wherein certain incriminating documents were found and impounded pertaining to M/s Classic Construction Company (theassessee).During the course of assessment proceedings, on perusal of various submission filed, and various incriminating material found and impounded during the survey, it was noticed by assessing officer that all the transactions mentioned as per annexure which contains printout of digital data taken out from the premises of M/s Classic Network Pvt. Ltd., were not reflected in its books of account andassessee has not submitted any documentary evidences to substantiate the transactions. Therefore, a show cause notice dated 12.12.2019 proposing the additions was issued by assessing officer. Theoperative part of show cause notice is reproduced as under: Page | 4 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. “On perusal of various submissions done by you, it has been noted that you have given incomplete details despite being called by way of various letter and notices. Further, you have been given last opportunity vide letter dated 04.12.2019 to submit the various called for details by previous notice. The last date of that notice to submit detail was 06.12.2019. But it is to be stated that nothing has been received by this office in this regard. With this in background this office has left with no other option but to serve you final show cause notice, as below: 3. During the course of survey proceedings u/s 133A of the I.T. Act on dtd. 26.09.2018 at the business premises of M/s Classic Network Pvt. Ltd., various loose papers/pages of M/s Creative Construction Co. as per Annexure-A (A1 to A4) were impounded, the following unaccounted cash receipt/unaccounted cash is tabulated as under:- 4. In view of the discussion above and also the various notices issued previously please show cause, why the above unaccounted cash receipt of Rs.8,50,00,000/- should not be disallowed and the same should not be treated as unexplained investment and why it should not be added to your total income. 5. On verification of your submission dtd. 06.12.2019 for A.Y. 2017-18, it is seen that you have shown unsecured loans accepted during the years. The said unsecured loans are obtained from various entities, in support of it the assessee has to furnish credit worthiness identity of depositors and genuineness of transactions of the depositors along with confirmation, ID Proof, Bank Statement reflecting the same transaction and Copy of IT Return filed. In response to the notices, you have furnished incomplete details which were not enough to prove the creditworthiness and genuineness of transaction in respect of the entities from whom you have taken unsecured loan. Therefore, you are hereby requested to show cause as why should the amount of Rs.10,00,00,000/- credited as unsecured loan not be treated as unexplained cash credited u/s 68 of the Income Tax Act, 1961. 6. Please submit the reply on or before 16.12.2019, failure to do so the assessment will be finalized based on the materials available on record. It is pertinent to mention here that you have been already given end number of opportunities and enough time to complete all the details (Please refer to various Page | 5 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. notices and adjournments given earlier) so no further adjournment will be entertained on whatsoever granted may be. 7. The reply should reach this office only through e-portal (e-assessment platform) on 16.12.2019. Please note that in case nothing is heard from you by 16.12.2019.” 6. In response to the above show-cause notice, the assessee has submitted its reply before the Assessing Officer which is reproduced by the assessing officer in the assessment order,vide page Nos. 6 to 7 of assessment order. The assessee submitted before the assessing officer that the amount of Rs.7,66,00,000/- relates to sub-contractors(vide page Nos.39 and 40 of digital data) to whom payments were made during the year under consideration and these payments are duly recorded in books of accounts and moreover, payments were made through cheque. The assessee submitted copy of all ledger accounts, highlighting the payment entries, before the assessing officer. 7. However, Assessing Officer noted that assessee had again reiterated his reply as was given before the ITO (Investigation) during the post-search enquiries. The assessee-company has merely furnished the computerized self-serving copy of ledger account of these parties before the assessing officer. During the current assessment proceedings, the assessee failed to produce copy of invoices, PAN, bank statement, signed copy of MOU signed, if any, with those parties. Further, the assessee also did not produce any of the parties during the assessment proceedings to substantiate the transactions. Further the incriminating documents on which the assessing officer was relying on (page Nos.39 & 40) were clearly indicating that assessee is inflating his expenses so as to suppress its profit.The assessing officer noted that details found on these pages (page Nos.39 & 40) were of Classic Construction Company for the Month of April 2016. This page shows Debit and Credit entries of various person for the Month of April Page | 6 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. 2016 pertaining to FY. 2016-17. The heading of this page is written Classic Construction Company 2016-17 and the column on these pages are Date, Name and Amount-Debit and Total. The details found on these pages are of Classic Construction Co and various transactions having same amount of Rs.9,00,000/- and Rs.8,00,000/- paid to various persons in the month of April,2016 only and it appears no TDS has been deducted. It can be very well seen that all the payment is made in the month of April only after obtaining bill before the financial year ending to suppress the profit. The style of payment is in the round figure only and not as per bill. Further, assessee neither produce any documentary evidence before the investigation wing during post search investigation nor during the current assessment proceedings, to substantiate his stand. Further, the assessee has been categorically asked during the post search enquiries three times to produce the documentary proof of the sub-contract services provided by these parties. Shri Smit Kaneria, key person of M/s Classic Construction Co. was confronted about these pages during the statement taken on oath u/s 131(1A) of the Income Tax Act on 25.01.2019 and he has stated as under: “A-24 Sir, I have gone through this page and wish to explain that on the page No. 39 & 40 contain details of payments to sub-contractors of Classic Construction Co. For which we are submitting the ledger accounts of those sub-contractors herewith.” 8. The assessing officer further noted that the details given on these pages did not tally with the ledger furnished by the assessee. Therefore, assessing officer was of the view that entire debit of Rs.7,66,00,000/- needs to be added in the hands of Classic Construction Company for F.Y. 2016- 17, as the assessee has merely furnished the computerized self- serving copy of ledger account of these parties and also failed to produce copy of invoices, PAN, bank statement, signed copy of MOU, if any, with those parties.The assessing officer has provided another opportunity to Shri Smit Kaneria, director of the M/s Classic Network Pvt Ltd, to explain the content Page | 7 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. in the page numbers 39 and 40 on 03.05.2019. He has been categorically asked to explain the content of page number 39 and 40 i.e. the details of Classic Construction Company for the Month of April 2016. In this regard the statement of Shri Smit Kaneria, on 03.05.2019 are asunder: “Q7 Once again, I am showing you the print out of Digital Data, page no. 39 & 40, impounded from your business premises of Classic Network Pvt Ltd. The Xerox copy of the same has been given to you on dated 25.01.2019 for clarification. You have attended this office on 26.02.2019 and stated that all these transactions are related to sub-contractor of Classic Construction Company and you have submitted the only ledger accounts of sub-contractors for F.Y. 2016-17. Kindly give the following details with documentary proof of the subcontractor of Classic Construction Company. 1.Nature and activity carried out by the party. 2 Documents maintained by your office (1) Running bill (ii) MOU or Agreement (iii) sub-contractor (Deployment of Labour) (iv) Full name and address of Contractors with PAN. (v) Documentary proof of TDS on Sub Contract amount Answer:7 Sir, I will submit all the details as asked by you within 5 stays.” 9. However, the details related to sub-contractor of Classic Construction Company had not been furnished by the assesseeat that time and also as on date during assessment proceedings. The assesseehas not submitted any documents or evidence thereby clearly pinpointing to the fact thatall the transactions are non- genuine and were executed for the purpose of inflation of expenses and suppression of income and in that process. The assessing officer also noted that cross verification of the return of income of one of the sub-contractor, as given in page no. 39 and 40 from ITD revealed that the mobile number and the e-mail address of the sub-contractor is actually the mobile number of Shri Kaushik Gadhvi, who is the accountant of M/s Classic Network Pvt Ltd. Besides, the e- mail address is that of Classic Network Pvt. Ltd. Thus, it is clear that the sub- contractor is actually a bogus entity created only to inflate the expenses and suppress the profits. The same modus operandi is followed by the assessee in the case of payments made to all the subcontractors Page | 8 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. mentioned on page No. 39 and 40 supra.From the above discussion and facts on record it is clear that the assessee firm has paid the subcontract amount to third party instead of sub- contractor. The relevant document is pasted on page No.12 of assessment order.On verification of ledger account, it was noticed by assessing officer that rather than making account payee cheque to sub-contractors against the services shown to be rendered by them, the assessee has made the payments in the month of April and in the round figure and not as per bill. It indicates that these sub-contractors are employees of the assessee- company. It is strengthened by this fact that in the ITR filed of those sub-contractors shown on record, mobile number, land line number and E-mail address of M/s Classic Network Pvt. Ltd. or its accountant is given. These entities are conduit to inflate the sub -contract charges and suppressing the income. The same is to be disallowed and added back in the hands of the firm. Therefore, assessing officer noted that in light of various incriminating materials available on records, as noted above, and non-submission of assessee of any corroborative evidence to prove these transaction, it is crystal clear that payment done of Rs. 7,66,00,000/- was unexplained and therefore assessing officer made addition under section 69C of the Income Tax Act. 10. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before Ld. CIT(A), who has deleted the addition made by the Assessing Officer, observing as follows: “Decision: 5.3 I have considered the facts of the case and the submissions of the appellant carefully. The AO has made the disallowance of Rs.7,66,00,000/- out of the sub- contract expenses on the basis of page No.39 & 40 of digital data impounded during the course of survey proceedings carried out in the other group concern namely M/s Classic Network Pvt. Ltd. On top of the page 4 in table in the assessment order under the remarks column the AO has mentioned the nature of aforesaid amounts as unaccounted cash payments. While making such disallowance in the assessment order it has concluded as unexplained sub- contract payment u/s 69C of IT Act however, on the other side it has concluded in Page | 9 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. the later part of the assessment as inflated/bogus expenses debited in the books of accounts. Thus, there is contradiction in approach of the AO while arriving at the conclusion. The AO observed that those pages contain the computerized entries showing payments to various sub-contractors for the year under consideration in which details like name, amount paid and total amount paid etc. are written. As per AO all the payments were made in the month of April 2016 only after obtaining bills before the financial year ending to suppress the profit. It was also observed that the style of payment is being round payment only and not as per the bills. 5.4 In the assessment proceedings as per AO the appellant submitted the ledger account copies of these parties and further observed that assessee has not submitted the supporting documents like invoices, PAN, bank statement, signed copy of MOU, etc. of the parties So the AO concluded that the assessee had inflated the expenses so as to suppress its profits. The AO inferred that for want of details, the transactions were non genuine and executed for the purpose of inflation of expenses and suppression of income. The AO also observed that the mobile number and e-mail address of the sub-contractors were actually the mobile No of Shri Kaushik Gadhvi who was the accountant of the appellant company. So, the AO concluded that sub-contractors were the bogus entities created only to inflate the expenses and suppress the profits. The AO also suspected that the appellant firm has paid the sub-contract amount to third parties instead of sub-contractors. 5.5 On the other side, the appellant has objected to the findings of the AO given in the assessment order and submitted that it has given sufficient corroborative evidences in support of the sub-contract expenses and those have been duly recorded in the books of accounts. The AO has made the disallowance on suspicion which is without any basis. 5.6 The appellant submitted that the AO has not verified the facts of the case and not taken the material on record. The details called for have been submitted to the AO as per the short span of time granted by him during the assessment proceedings. If the AO had any doubt he could have asked for the further details or clarifications, but the AO has not done so, before finalization of assessment. So, it has not given proper opportunities and failed to follow the principle of natural justice. 5.7 On going through the facts and details available on record it has been noticed that on the digital data impounded the name of the sub-contractors, date of payment and amount paid are found noted. For ready reference the entries noted are as under: Date Amount (Rs.) Amount (Rs.) 06.04.2016 AMITH.VIRPARIYA 900000 11-04-2016 AMITH. VIRPARIYA 900000 12-04-2016 AMITH.VIRPARIYA 900000 Page | 10 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. Page | 11 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. All the above payments were pertaining to the Month of April, 2016. In support the appellant has submitted the copies of running bills, ROI acknowledgement copy, copy of bank statement in support of payment made to the sub-contractors etc., besides ledger account copies of each of the sub-contractors during the course of assessment proceedings and subsequently in the appellate proceedings also. It has been claimed and noticed that the aforesaid sub-contractors are the old parties working for the appellant for last so many years. In support of such claim, the appellant has provided the details of sub-contract expenses paid to the said subcontractors in the last three years as under: Page | 12 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. Page | 13 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. 5.8 From the above details, it is apparent that the aforesaid sub-contractors have been working regularly for the appellant and in support the details of the sub contract expenses for last two years have been provided and nothing has been commented adversely against their working in the past by the AO. The AO has brought nothing on record through enquiry or otherwise that the sub contract expenses in relation to the above parties were inflated/bogus in the year under consideration but not in the preceding years. 5.9 It has also been further observed that the aforesaid sub-contractors wereregularly working for the appellant during preceding years and their bills and payments have been regularly recorded in the books of account and no doubt about the genuineness has been raised in the preceding years. The details of the opening balance, debit and credit amounts besides closing balance at the year end of each of the aforesaid sub contractors for the last three years in the books of accounts are as under: Page | 14 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. Page | 15 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. Page | 16 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. 5.10 Further the details of the GP rate and NP rate for the year under consideration and preceding two years are as under:- A.Y. G.P. Rate NP Rate Turnover (Rs.) 2017-18 6.59 % 1.38% 13,36,55,318/- 2016-17 2.87% 1.20% 28,32,00,511 2015-16 4.44% .1.34% 19,47,20,038/- From the above table it is apparent that there is substantial increase in the GP rate and NP rate for the year under consideration as compared to the preceding two years. It is worth to mention that all the sub-contract expenses have been debited under the head of direct expenses in the P & L Account before working the GP rate and NP rate. 5.11 On going through the ledger account copies of the aforesaid sub-contractors for the year under consideration, it is found that all the payments noted on the digital data pages have been duly recorded in the respective accounts of the sub- contractors maintained in the books of accounts and no discrepancy in respect of a single amount has been noted by the AO. Neither the AO has pointed out any discrepancy in this regard saying that the entries found noted on the digital data do not match with the ledger account copies of the respective parties.Therefore, AO's observation that the appellant has not submitted the supporting evidences like invoices, MOU does not have much relevance. Neither the AO has made any enquiries directly with the aforesaid subcontractors to ascertain the genuineness of the sub-contract expenses. Therefore the Page | 17 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. disallowance made by the AO was based only on account of non-submission of the supporting evidences and not on such documentary evidences or findings of anyenquiry doubting the genuineness of the payments to the aforesaid sub- contractors. It has also been noticed that no cash payments to any of the sub- contractors have been made in the year under consideration as could be noticed from their ledger accounts. All the payments have been made through banking channels duly recorded in the books of accounts. It has also been submitted that all the sub contractors were regular income tax payers and in support the sample copy of acknowledgment of return of income, computation of total income etc. filed by them have been produced. 5.12 In view of the above discussion, it is apparent that the details found noted on the digital data pages are part of the regular books of accounts. The payments found noted on those pages were duly recorded in the respective ledger accounts as against the opening balance in their accounts as on 01.04.2016. On verification it is found that the TDS on the sub-contract payments made to them have also been made by the appellant. Therefore, there is no case that any bogus sub-contract expenses have been debited by the appellant. The AO has not quoted a single instance showing that the sub-contract payments were in the nature of the accommodation entries and sub- contractors have not carried out any work for the appellant. So, the disallowance made on assumption/suspicion without any substance is unwarranted. However, to plough the revenue the lump sum disallowance to the extent of Rs.7,00,000/- is confirmed which would be fair and reasonable considering the nature of business of the appellant. Relief is granted for the balance disallowance. Thus, the disallowance made by the AO is partly allowed.” 11. Aggrieved by the order of Ld. CIT(A), the Revenue is in appeal before us. 12. Shri Shramdeep Sinha,Learned Commissioner of Income Tax – Departmental Representative (Ld.CIT-DR) for the Revenue, at the outset pointed out that assessee has submitted additional evidences and documents before ld.CIT(A), during the appellate proceedings, and ld.CIT(A) did not send these additional documents and evidences to the assessing officer for his examination and to submit remand report. Therefore, it is violation of Rule 46A of the Income Tax Rules. These additional documents and evidences aresubmitted by the assessee before this Tribunal, first time, which are placed in the paper book of the assessee. The ld DR further stated that these additional documents and evidences have bearing on the determination of income/loss of the assessee, therefore, an opportunity Page | 18 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. should be given to the assessing officer to examine the same, hence matter may be remitted back to the file of the Assessing Officer for fresh adjudication. 13. The ld.CIT- DR further pointed out that Assessing Officer made addition to the tune of Rs.7,66,00,000/-. On appeal by the asseseee, the Ld.CIT(A) had restricted the addition made by the Assessing Officer to Rs.7,00,000/- only. The Ld. CIT(A) did not mention the reason in his order that how and why he is restricting the addition of Rs.7,66,00,000/- to Rs.7,00,000/- only. Why not the ld CIT(A) restricted such addition at higher amount such as Rs. 50,00,000/- or Rs.80,00,000/- ? Thus, ld DR stated that there is arbitrariness in restricting the huge addition of Rs.7,66,00,000/- to Rs.7,00,000/- only, which is without any base. The ld CIT(A) did not use the base of previous years` net profit or gross profit of the assessee or the net profit or gross profit of other business in the identical and similar situations. Besides, the payment made to sub-contractors are bogus to show more expenses in books of accounts, to evade the payment of taxes. Therefore, ld.DR contended that original addition made by the assessing officer may be sustained. 14. On the other hand, Shri D. M. Rindani, Ld. Counsel for the assessee, fairly agreed that assessee has submitted additional evidences and documents before ld CIT(A), during the appellate proceedings, however, these additional evidences and documents do not have any bearing on the determination of tax liability of the assessee. The ld.CIT(A) could have adjudicated the issue without using these additional evidences and documents.These additional evidences and documents are not significant and important. The assessee had a good case therefore ld.CIT(A) did not send these additional evidences and documents to the file of the assessing officer Page | 19 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. for his examination and remand report. Therefore, ld Counsel argued that these additional evidences and documents are not important to adjudicate the issue under consideration.The vendor's bills, Income Tax Return, and other documents etc, not filed during assessment proceedings but filed before CIT(A), support the ledger entries and strictly speaking they are not additional evidences, yet the impugned loose paper entries are duly accounted and explained even without the supporting/additional evidences.That is, if these additional documents/evidences are not considered, even then, theassessee’s appeal was allowable, hence, ld CIT(A) has rightly deleted the addition, as these additional documents do not have any bearing on the determination of tax liability of the assessee and therefore these may be ignored. 15. The ld Counsel further pointed out that ld CIT(A) made a token disallowance of Rs.7,00,000/-, which should not have been made by the ld CIT(A), as the assessee has furnished enough documents and evidences, before ld CIT(A). 16.We have heard the rival parties and have gone through the material placed on record. For the sake of clarity and also being pertinent, first, we should examine the additional documents and evidences submitted by the assessee before ld CIT(A), during appellate proceedings. We note that assessee has submitted before us paper book index with revised certification, which is reproduced below: Page | 20 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. As per the revised paper book index, noted above, the assessee submitted documents at page Nos. 16-17, 22, 26,31,33,44,46,51,56,65,71,79-80,88- 89,97-98, 106-117, 126-127, which were placed before the assessing officer. Page | 21 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. However, the balance documents and evidences, which are mentioned below were not submitted before the assessing officer: (1). The documents at page nos. 18 to 21 of paper book,which relate to Amit H. Virpariyawhich, were not filed before the assessing officer. These documents are relating to work contract RA2 , work contract RA 3, work contract RA 1, work contract RA 1, which involves amount Rs.10,08,160/- ,Rs.11,59,526/-, Rs.11,15,092/-, and Rs.9,96,005/- respectively. (2). The documents at page nos. 23 to 25 of the paper book, relate to Mr. Chetan R. Dalsaniya. These documents are relating to work contract RA1 of Rs. 9,96,278/- , the assessee submitted income tax return and computation of income, also. (3). The documents at page nos. 27 to 30 of the paper book arepertaining to Harsukhbhai P Aghera, which are relating to supply and service invoices,income tax return and computation of income. (4). The document at page no. 32 of the paper book relates to supply and service invoice of DagdishMaradia of Rs. 22,40,817/-. (5). The document at page no. 34 of the paper book, is a supply and service invoice of BhagvanjiAghera of Rs. 11,99,122/-.The document at page no. 35 of the paper book, contains income tax return of BhagvanjiPremjibhaiAghera. The documents at page nos. 36 and 37 of the paper book, there is computation of total income of BhagvanjibhaiAghera. (6). The documents at page no. 39 of the paper book, there is ledger account of JaidevsinhS.Jadevji and page no. 40 of the paper book there is work contract RA-5 of JaidevsinhS.Jageda of Rs. 68,57,551/- and there is income tax return of JaidevsinhS.Jageda on page no. 41.The documents at page no. 42 of the paper book, there is computation of total income of JaidevsinhSajjansinhJageda. Page | 22 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. (7). The document at page no. 45 of the paper book, there is work contract RA 1 of Jitendra R. Kundaria of Rs. 20,14,591/-. (8). The document at page no. 47 of the paper book, there is a supply and service invoice dated 12 th April, 2016 of Kantilal V Agheraof Rs.12,04,341/- and on page no. 48 there is income tax return for assessment year 2017-18 of Kanti V Ahgera and page nos. 49 to 51 of the paper book the computation of total income of Kanti Vithalbhai Aghera is placed. (9). The documents at page no. 52 of the paper book isrelating to Ketan J Vachhani, which is supply and service invoice of Rs. 10,48,819/-.The document at page no. 53-54 of the paper book are relating to KetanbhaiJamnadasVachhan, which consists of income tax return and computation of total income for assessment year 2017-18. (10). The document at page no. 57 of the paper book, there is work contract RA-1 of amount of Rs. 13,34727/- of Kirit Kumar H Dalsaniya. The document page no. 59 of the paper book contains work contract RA3 Kiritkumar H. Dalsaniya of Rs. 6,78,724/-. The documents at page nos. 60- 62 of the paper book contains work contract RA4 of Rs. 8,68,681, work contract RA5of Rs. 13,12,268/- and work contract RA-6 of Rs. 3,05,540/- of Kiritkumar H. Dalsaniya whereas page no. 63 of the paper book contains the income tax return of Kiritkumar H Dalsaniya for assessment year 2017- 18. The documents at page no. 64 of the paper book contains computation of total income of Kiritkumar H Dalsaniya. (11).The document at page no. 66 of the paper book contains ledger account of ManojbhaiKalariya, and page no. 65 contains supply and service invoice of ManojbhaiKalariya having amount ofRs. 10,55,167/-.The document at page nos. 68 to 70 of the paper book contains the income tax return and computation of total income, filed by ManojbhaiKalariya for assessment year 2017-18. Page | 23 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. (12). The documents at page nos. 72 to 75 of the paper book contains work contract RA-1 of Rs. 12,97,556/- , work contract RA2 of 12,35,470/-, work contract RA3 of 12,28,508/-, work contract RA4 of Rs. 9,45,927/- of Manojkumar V Delvadia. The documents at page nos. 76 to page 78 of the paper book, relate toManojkumar V. Delvadia, having income tax return and computation of total income. (13). The documents at page nos. 81 to 85of the paper book contain work contract RA4, RA3, RA2 and RA1 of Shri Nirav J. Gami, their respective amounts are 10,72,164/-, Rs. 10,52,762/-, 11,63,598/- and Rs. 10,84,164/- and page no. 85 contains the income tax return of Nirav J. Gami (14). The documents at page nos. 90 to 96 of the paper book, contain the contract work by PrabhatsinhZala, as work contract RA4, work contract RA3,work contract RA2,work contract RA1, andtheir respective amounts are Rs. 9,86,639/-, Rs. 11,45,412/-, Rs. 11,54,201, and Rs. 15,99,029/-. (15).The documents at page nos. 94 to 96 of the paper book, contain the income tax return for assessment year 2017-18 and computation of income of PrabhatsinhZala. (16).The documents at page no. 99to 105 of the paper book, contain the documents relating to Satish R. Kaneria, which contains work contract RA4, work contract RA3,work contract RA 1 and work contract RA1whose respective amounts are Rs. 11,74,224/-, Rs. 10,93,247/-, Rs. 10,23,373/- and Rs. 11,23,898/-. (17). The documents at page nos. 103 to 105 of the paper book, contains the income tax return and computation of total income of Satishbhai R. Kaneria. (18). The documents at page nos. 108 to 115 of the paper book, contain the documents relating to SaileshM. Dadhania wherein work contract RA4,work Page | 24 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. contract RA3,work contract RA2, work contract RA1and work contract RA1, and their respective amounts are Rs. 11,38,998/-, Rs. 10,55,433/-, 10,55,433/-, 10,00,855/-, Rs. 11,85,467/- and Rs. 11,70,080/- . (19). The documents at page nos. 113 to 115 of the paper book contain the income tax return and computation of total income of Sailesh M.Dadhania. (20). The documents at page nos. 118 to 125 of the paper book contain the paper relating to ShayamPradipbhaiGovani, wherein the work contract RA 4 of Rs. 10,51,588/- ,work contract RA3 of Rs. 10,94,856/- work contract RA2 of Rs. 11,00,692/- and work contract RA1 of Rs. 10,40,885/- and supply and service notice of Rs. 3,94,663/- are placed. (21).The documents at page nos. 123 to 125 of the paper book, consist income tax return for assessment year 2017-18 and computation of total income of Shri Shyambhai P Govani. (22). The documents at page nos. 128 to 134 of the paper book are relating to SureshbhaiKheradia wherein work contract RA1,work contract RA2,work contract RA3, andtheir amount respectively are Rs. 11,47,663/-, Rs. 10,29,671/-, and Rs. 10,93,623/-. (23). The documents at page nos. 131 of the paper book contains the supply and service invoice of SureshbhaiKheradia having total amount of Rs. 14,23,635/-.The documents at page nos. 132-134 of the paper book, containthe income tax return and computation of total income for assessment year 2017-18 of Shri Suresh M. Kheradia. (24). The documents at page nos. 135 to 198 of the paper book, contain the tax audit report, Form No. 26Q, account statement, tax audit reportwhich were not there before the assessing officer. Page | 25 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. 17.We note that above documents and evidences were submitted by the Assessee, during the appellate proceedings, before the ld.CIT(A), however, ld.CIT(A) has not remitted/sent these documents to the assessing officer for his examination and remand report. The Ld. Counsel argued that no doubt, these are additional evidences and documents, submitted first time before the ld. CIT(A), however, these documents and evidences do not have bearing on the determination of income/loss of the assessee, therefore, these additional documents and evidences so submitted before the ld CIT(A) are not important to adjudicate the issue, hence, CIT(A) has ignored and did not find appropriate to send these additional evidences to the assessing officer for his examination and to submit remand report. The Ld Counsel further stated that without considering these documents and evidences, the assessee has a good case in his favor, thus, ld Counsel stated that these additional evidences and documents may be ignored. On the other hand, the ld DR for the Revenue, argued before us that these additional evidences and documents have a bearing on the determination tax liability of the assessee, therefore, these additional evidences should have been examined by the assessing officer and ld CIT(A) was supposed to send these additional evidences to the file of the assessing officer for his examination and to furnish the remand report thereon. However, the ld CIT(A) has failed to do so. Hence it is a violation of Rule 46A of the Income Tax Rules. 18.We have considered the submissions of both the parties and noted that above additional documents are material evidences, which must have been examined by the assessing officer. As we have noted in para no.8 of this order that assessee has merely furnished the computerized self-serving copy of ledger account of these parties and failed to produce copy of invoices, PAN, bank statement, signed copy of MOU, if any, with those parties. The ld CIT(A) ought to have sent these additional evidences to the assessing Page | 26 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. officer for examination and remand report thereon. We also find that ld CIT(A),( vide para No.5.10 of his order, which is reproduced by us above, ) mentioned the net profit and gross profit chart of various years, in his order, which was not submitted by assessee before assessing officer. In para No.5.11 of order of ld CIT(A), reproduced above, the ld CIT(A) stated that “Invoices and MOU does not have much relevance” is not acceptable, as these are material evidences, and ld CIT(A) must have given opportunity to the assessing officer to examine them. In para No.5.12 of the order of ld CIT(A), there is a reference of TDS payment, these documents relating to TDS were not there before the assessing officer.The impugned loose paper entries stating by the assessing officer in his order should have been explained by the assessee to the assessing officer with help of these additional evidences submitted by the assessee, first time before the ld CIT(A), therefore, ld CIT(A) ought to have given an opportunity to the assessing officer to examine these additional evidences and to submit remand report thereon, however, ld CIT(A) failed to do so.Therefore, we find that it is a violation of Rule 46A of the Income Tax Rules. These documents have bearing for determination of tax liability of the assessee and therefore these should have been examined by the assessing officer. Therefore, we are of the view that the matter should be remitted back to the file of the AO for examination of above additional evidences. Therefore, we set aside the order of ld. CIT(A) and remit this issue back to the file of Assessing Officer for fresh adjudication. Hence, ground nos. 1 and 2 raised by the Revenue are allowed for statistical purposes. 19. Coming to ground No.3 to 7 raised by the Revenue, which relate to disallowance of Rs.84,00,000/- (Rs.24,00,000 +Rs.60,00,000) under section 69C of the Act. Page | 27 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. 20.Succinct facts qua the issue are that during the assessment proceedings, the assessing officer, based on thevarious incriminating documents impounded during the survey at the premises of M/s Classic Network Pvt. Ltd., and inventoried, as Annexure A-3 page no 51,it has been observed that the assessee-firm has made payment of Rs.24,00,000/- and Rs.60,00,000/- (total of Rs.84,00,000/-) to Sh. Bharat Bharwad for purchase of property as per affidavit for confirmation and payment receipt prepared on dated 31 st December, 2016. The relevant documentsare pasted by assessing officer in the assessment order. On minute perusal of both these documents it has been noticed by assessing officer that amount of Rs.24,00,000/- and Rs.60,00,000/- has been paid to Sh. Bharat ChhaganbaiBharvad, in the Months of September 2016 and July 2016 respectively and that too in cash, as was clearly mentioned in page no 51 of the annexure A-3 found and impounded from the premises of Classic network Pvt. Ltd. The said page was even signed byShri Bharat C. Bharwad, thereforeclearly sanctifying its authenticity.Further in the wake of this document page no 51 of annexure A- 3, the assessee was categorically, show- caused to explain the same. The relevant portion of the said show-cause notice dated 12.12.2019 is reproduced below: “On perusal of various submissions done by you, it has been noted that you have given incomplete details despite being called by way of various letter and notices. Further, you have been given last opportunity vide letter dated 04.12.2019 to submit detail on 06.12.2019. But it is to be stated that nothing has been received by this office in this regard. With this in background this office has left with no other option but to serve you final show cause notice, as below: 3. During the course of survey proceedings u/s 133A of the I.T. Act on dtd. 26.09.2018, at the business premises of M/s Classic Network Pvt. Ltd., various loose papers/pages of M/s Creative Construction Co. as per Annexure-A(A1 to A4) were impounded, the following unaccounted cash receipt/unaccounted cash is tabulated as under: SI. No. Impounded Annexure and page No. A.Y. Amount Remarks 1 page No.39 & 40 of 2017-18 76600000 Unaccounted Cash Page | 28 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. digital data payment 2 A1, page No.1 to 116 2017-18 2400000 Unaccounted cash payment 3 A1, page No.1 to 116 2017-18 6000000 Unaccounted cash payment 4. In view of the discussion above and also the various notices issued previously please show cause, why the above Unaccounted cash receipt of Rs.8,50,00,000/- should not be disallowed and the same should not be treated as unexplained investment and why should not be added to your total income.” 21. In response to the above show cause notice, the assessee furnished ledger account before the assessing officer. However, the assessing officer did not accept the reply of the assessee, as the assessee has not given the explanation of the transaction which were specifically asked for by way of show-cause notice, the assessee had merely provided a computer printed self-serving unsigned ledger account, which was not sufficient to prove the above transaction, as genuine. The assessing officer noted that no transaction dated Sept,2016 and July 2016 is mentioned there, which clearly shows that these were the cash payments and that is why these entries are not reflecting in the ledger account of Sh. Bharat Bhai C Bharwad. Further assessee has not given any explanation to the payment of Rs.60,00,000/- done in London by V and Pankhania T/A West Home primp& Co. on assessee behalf to Sh. Bharat C. Bharwad, as clearly mentioned in page no 51. Neither assessee has given any bank statement showing that the money has been transferred to V and Pankhania T/A West Home primp& co through banking channels nor give any other evidence regarding that, in fact, in his reply, theassessee did not even reply on this point of query which clearly indicating that assessee has nothing to say and prove in this regard. Therefore, assessing officer held that assessee has laundered the money to London in cash and the corresponding amount is then being transferred by the V and Pankhania T/A West Home primp& Co. on assesseebehalf's, as clearly written in page no 51. So, assessee again failed to give the source of cash Rs.60,00,000/- that Page | 29 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. was in turn sent to London and then transferred to Shri Bharat C.Bharwad. Therefore, assessing officer noticed that in light of various incriminating materials available on records and non-submission of assessee of any corroborative evidence to prove these transaction, thepayment done of Rs.84,00,000/-(Rs.24,00,000/- + Rs.60,00,000/-) were treated unexplained transaction under section 69C of the Income Tax Act in the hands of the assessee. 22.Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before Ld, CIT(A), who has deleted the addition made by the Assessing Officer observing as follows: “Decision: 6.3 I have considered the facts of the case and the submissions of the appellant carefully. The AO has made the disallowance of Rs.84,00,000/- which consists of the payment of Rs.24,00,000/- and Rs.60,00,000/- on the basis of page No.1 to 116 of Annexure A/1 impounded during the course of survey at the group concern namely M/s. Classic Network Pvt. Ltd. As per AO the aforesaid payments were made to Shri Bharat Bharwad for purchase of the property as per affidavit for confirmation and payment receipts prepared on 31.12.2016. As per AO the aforesaid payments were made in the month of September 2016 and July, 2016 respectively. On the other side the appellant have submitted that the page No.51 of Annexure A/3 has not been signed by the appellant and signature of Shri Bharat ChhaganlalBharwad is appearing. Further it was submitted that in the aforesaid confirmation a payment of Rs.60,00,000/- vide cheque No.593143 dated 14.07.2016 has been paid to V &Pankhania, T/A West on behalf of the appellant by Shri Bharat C. Bharwad. For ready reference the wordings in the confirmation noted is reproduced as under: “Rs.60,00,000/- (Rupees Sixty Lacs) chq.No.596143 dated 14 th July 2016. (british pound sterling 60,000 @ Rs.100/- per pound sterling paid to us by V AND PANKHANIA T/A WEST, HOME IMP & PRP CO on your behalf.” On this payment the appellant has submitted that it was the payment made by Shri Bharat C. Bharwad to the above party through cheque as referred above and it is apparent that appellant has not made any payment to the aforesaid party. It is apparent from the notings made in the confirmation given by Shri Bharat C. Bharwad. So, from the wordings of the noting itself it is apparent that neither the appellant has made the payment either in cash or through cheque nor Shri Bharat C. Bharwad has made any payment in cash to the aforesaid party. So, there is no basis of the allegation of the AO that the appellant has made any cash payment to the aforesaid party. Page | 30 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. Now with regard to the payment of Rs.24,00,000/- the language noted in the confirmation as per impounded page referred above is as under: “Rs.10,00,000/- (Rupees Ten Lakhs) received in cash from Shri Rajlaxmi Logistic (Gujarat) Pvt. Ltd. on 18 th Sept. 2015. Rs.14,00,000/- (Rupees Fourteen Lakhs) received in cash from Shri Rajlaxmi Logistic (Gujarat) Pvt. Ltd. on 20 th Sept. 2016.” On the above notings, it was submitted that the payment to Shri Bharat C. Bharwad has been made by Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd. and not by the appellant as apparent from the notings on the confirmation. So, the appellant has not made any cash payments to Shri Bharwad. Moreover, the payment of Rs. 10,00,000/- was made on 18.09.2015 which falls in F.Y.2015-16 relevant to A.Y.2016-17 and not for the year under consideration. So, this amount cannot be considered for addition in the year under consideration. Having considered the facts and submission it is true that the payments of Rs.24,00,000/- have been made by Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd. to Shri Bharat C. Bharwad and no where it says that the appellant has made the payment in cash to Shri Bharwad or Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd.. Therefore, when the appellant has not made the cash payment then the question of making the addition of the unexplained cash payment in the hands of the appellant does not arise. In fact there were no enquiries made by the AO with Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd. to ascertain whether the appellant has made any cash payment to him in lieu of the payment made by it to Shri Bharwad. Therefore, without any enquiry findings or any basis the addition in the hands of the appellant for payments made to Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd. to Shri Bharwad is not correct. Moreover, as per notings on the confirmation it is apparent that the Rs.10,00,000/- in cash has been paid by Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd. to Shri Bharwad on 18.09.2015 which falls in A.Y.2016-17 and not in A.Y.2017-18. In view of the above discussion, there is no basis for making the addition of Rs.24,00,000/- in the hands of the appellant. Hence same is deleted. Further with regard to cheque payment of Rs.60,00,000/- to V &Pankhania, again it is noticed that this payment has been made by Shri Bharwad to the above party and it has not been paid by cash therefore there is no basis to assume that the appellant has made the cash payment to the above party for which addition has been made by the AO. Thus, in absence of supporting evidence/any enquiry findings the addition made is not sustainable and hence the same is deleted. Thus the ground of appeal is allowed. 7. The ground of appeal No.4 is against the taxation @ 60% u/s 115BBE of the Act is unjustified and bad in law. Decision 7.1 I have considered the facts of the case and the submission of the appellant. As discussed in the preceding paras of this order that the AO has made the disallowance of the sub contract expenses which were recorded in the books of Page | 31 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. accounts of the appellant. Moreover, the provisions of section 69C are not applicable on this disallowance as the source of expenses are from the books of accounts and not out of any undisclosed income. Moreover, the additions/disallowances made have been found not sustainable and hence deleted. Therefore, invoking the provisions of section 15BBE of I.T. Act is not correct and also does not required. Therefore, the income has to be taxed as per the normal rate. Thus this ground of appeal is allowed.” 23.Aggrieved by the above findings of Ld. CIT(A), the Revenue is in appeal before us. 24.Learned Commissioner of Income Tax – Departmental Representative (Ld. CIT-DR) for the Revenue, argued that ld CIT(A) has ignored the impounded non- judicial stamp paper, wherein Shri Bharat Bharwad has confirmed that he has received the impugned payments on behalf of the assessee-firm.The payments made to Shri Bharat Bharwad were evidently on behalf of the assessee- firm and the sources of these payments were not explained during the course of assessment proceedings.Besides, the payments made to Shri Bharat Bharwad, by V. N. Pankhania, on behalf of the assessee- firm, was erroneously interpreted by the Ld. CIT(A), as payment made by Shri Bharat Bharwad to Shri Pankhania. Since the assessee has failed to explain the source of payments made to Shri Bharat Bharwad, hence addition made by the assessing officer may be confirmed. 25. On the other hand, ld Counsel for the assessee, relied on the findings of ld.CIT(A) and argued that amount of Rs. 14,00,000/- is stated to be not paid by assessee and hence can't be addedin hands of assessee u/s.69C of the Act and two payments of Rs.10,00,000/- pertained to Financial Year 2015-16 and in any case, wasnot made by assessee and hence addition of said amounts could not be made in the year under consideration. The amount of Rs. 60,00,000/- is stated to be paid by cheque and that too not by assessee; Page | 32 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. hence does not fall u/s 69C of the Act, therefore, ld.CIT(A) has rightly deleted the addition. 26. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that assessee has not explained the amount of Rs. 14,00,000/- to the assessing officer and also not explained that two payments of Rs. 10,00,000/- pertained to Financial Year 2015-16, besides, it was not explained to the assessing officer that amount of Rs. 60,00,000/- was paid by cheque or by cash. These explanations were furnished by the assessee, first time before ld CIT(A). Before the assessing officer, the assessee has furnished only a computer printed self-serving unsigned ledger account, which was not sufficient to prove the above transaction. 27. We have gone through the findings of ld CIT(A) and noted that the assessee has explained the transaction to the ld CIT(A) and not the assessing officer. Before the assessing officer, the assessee furnished a computer printed self-serving unsigned ledger account, and did not explain the transaction. During the assessment proceedings, the assessing officer has provided ample number of opportunities to the assessee to submit the details and documents required for scrutiny assessment, however, the assessee has failed to submit the documents and explanation, on time, to enable the assessing officer to conduct further enquiry. We find that during the assessment proceedings, the assessing officer provided the following opportunities of hearings: Page | 33 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. Sl. No. Notice Date Due Date Remarks 1 Notice u/s. 142(1) 07-10-2019 18-10-2019 No reply 2 Questionnaire cum notice u/s. 142(1) 15-10-2019 21-10-2019 No reply 3 Queries raised/Notice u/s. 142(1) 23-10-2019 28-10-2019 No reply 4 Reminder/Opportunity letter 01-11-2019 - No reply 5 No submission letter/opportunity letter 09-11-2019 13-11-2019 No reply 6 No submission letter/opportunity letter 19-11-2019 22-11-2019 No reply 7 Notice u/s. 142(1) 04-12-2019 06-12-2019 Incomplete Reply given 8 Show Cause Notice 12-12-2019 16-12-2019 Reply given on 15- 12-2019 At the fag-end of the year, the assessee has furnished the unsigned ledger copy to the assessing officer, therefore it was impossible for the assessing officer to conduct enquiries, as noted by ld CIT(A) below: “....In fact there were no enquiries made by the AO with Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd. to ascertain whether the appellant has made any cash payment to him in lieu of the payment made by it to Shri Bharwad. Therefore, without any enquiry findings or any basis the addition in the hands of the appellant for payments made to Shree Rajlaxmi Logistic (Gujarat) Pvt. Ltd. to Shri Bharwad is not correct...” 28. We do not accept the above findings of ld CIT(A), as the assessee did not furnish the explanation and documents, on time, to the assessing officer to conduct enquiries. Even the above transaction was explained by the assessee, first time, before the ld CIT(A), as noted by us above, therefore the assessing officer did not get opportunity to examine the explanation of the Page | 34 ITA No.43/RJT/2021 AY 2017-18 ACIT vs. M/s Classic Construction Co. assessee about the said transaction, hence it is against the principle of natural justice.The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as “audi alteram partem rule”. It says that no one should be condemned unheard. Considering these facts, we remit this issue back to the file of the assessing officer to adjudicate the issue afresh in accordance with law. 29. In the result, Ground Nos.3 to 7 raised by the Revenue, are allowed for statistical purposes. 30. In the combined result, appeal filed by the Revenue is allowed for statistical purposes. Order is pronounced in the Open Court on 29/05/2024. Sd/- Sd/- (DINESH MOHAN SINHA) (DR. ARJUN LAL SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot; "दनांक/ Date: 29/05/2024 True Copy Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order, Assistant Registrar/Sr. PS/PS ITAT, Rajkot