Apex Heart Care Pvt. Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 4883/DEL/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3661 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 28-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 4883/DEL/2015 ASSTT. YEAR: 2011-12 O R D E R PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST ORDER DATED 26.5.2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-20, NEW DELHI {CIT (A)} AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED DECLARING A LOSS OF RS. 79,53,375/-. THE CASE WAS APEX HEART CARE PVT. LTD. 3-MM-II., PANCHKUIAN ROAD NEW DELHI 110 055 PAN AADCA4378D VS. ADDL. CIT, RANGE-37, CIVIC CENTRE, E-11 BLOCK NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI RAJESH MALHOTRA , CA DEPARTMENT BY : SHRI N.K. BANSAL, SR. DR DATE OF HEARING 06 /0 8 /201 9 DATE OF PRONOUNCEMENT 04 / 11 /2019 ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 2 SELECTED FOR SCRUTINY UNDER CASS AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) NOTICED THAT THE ASSESSEE COMPANY HAD MADE CERTAIN PAYMENTS IN LIEU OF CERTAIN SERVICES RENDERED TO VARIOUS SHAREHOLDERS / DIRECTORS OF THE COMPANY. THE AO WAS OF THE OPINION THAT MANY OF THE PAYMENTS WERE COVERED UNDER PROVISIONS OF SECTION 40(A)(2)(B) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) AND, THEREFORE, THE ASSESSEE WAS ASKED TO FILE COPIES OF CONTRACTS ENTERED INTO WITH THE PERSONS TO WHOM THE PAYMENTS WERE MADE. THE ASSESSEE WAS ALSO ASKED TO FILE DETAILS OF SERVICES RENDERED BY THE DIRECTORS/CONSULTANTS/ADVISORS ALONG WITH THE COPIES OF BILLS RAISED. THE AO NOTED THAT EXCEPT FOR DR. K.K. SETHI NO DETAILS REGARDING SERVICES ACTUALLY RENDERED WERE FILED BY THE ASSESSEE. THEREAFTER, THE AO MADE THE FOLLOWING DISALLOWANCES U/S 40(A)(2)(B) OF THE ACT :- (1)PAYMENT MADE TO SHRI S.R.KHURANA RS. 47,54,400/- (2)PAYMENT MADE TO SHIR ANUP SONI RS. 40,94,400/- (3)PAYMENT MADE TO DR. NEELAM SETHI RS. 30,00,000/- (4)PAYMENT MADE TO SHRI HARMOHINDER PAL SINGH RS.40,32,600/- ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 3 (5)PAYMENT MADE TO SHRI J.S. KHANGURA RS. 6,00,000/- 2.1 THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS. 85,28,025/- AFTER MAKING DISALLOWANCES OF RS. 1,64,81,400/- AS ABOVE. 2.2 THE LD. FIRST APPELLATE AUTHORITY, ON ASSESSEES APPEAL, PARTLY ALLOWED ASSESSEES APPEAL BY HOLDING THAT PAYMENTS IN THE CASE OF SHRI S.R. KHURANA, DR. NEELAM SETHI, SHRI HAR MOHINDER PAL SINGH AND SHRI ANUP SONI WERE TO BE ALLOWED PARTLY IN RESPECT OF ALL THESE FOUR PERSONS. THE REST OF THE DISALLOWANCES MADE BY THE AO WERE UPHELD. 2.3 NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL AND HAS CHALLENGED THE CONFIRMATION OF DISALLOWANCES BY THE LD. CIT (A). 3.0 THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY IN DELHI UNDER THE NAME AND STYLE OF DELHI HEART AND LUNG INSTITUTE. IT WAS SUBMITTED THAT THE HOSPITAL WAS ESTABLISHED IN JUNE 2003 BY DR. K.K. SETHI AND HIS WIFE DR. NEELAM SETHI. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD ENGAGED OTHER PROFESSIONALS TO DEVELOP AND RUN THIS HOSPITAL NAMELY SHRI S.R. KHURANA WHO IS CHARTERED ACCOUNTANT, ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 4 SHRI ANUP SONI WHO IS MBA AND LOOKS AFTER THE BUSINESS AND MARKETING, SHRI HAR MOHINDER PAL SINGH WHO IS AN ENGINEER WHO LOOKS AFTER ENGINEERING SERVICES AND OTHER ADMINISTRATIVE MATTERS AND SHRI J.S. KHANGURA FOR MARKETING ACTIVITIES IN PUNJAB. IT WAS SUBMITTED THAT ALL THE PROFESSIONALS RENDERED SERVICES IN THEIR PROFESSIONAL CAPACITIES SINCE PAST MANY YEARS AND THAT THESE PAYMENTS WERE BEING ALLOWED AS EXPENDITURE IN EARLIER SCRUTINY ASSESSMENTS. IT WAS SUBMITTED THAT EVERY YEAR THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT WHEREIN NO SUCH DISALLOWANCES HAD BEEN MADE. THE LD. AR FILED COPIES OF THE ASSESSMENT ORDERS OF THE PRECEDING FIVE ASSESSMENT YEARS TO DEMONSTRATE THIS. IT WAS ALSO SUBMITTED THAT IN SUBSEQUENT YEAR I.E. ASSESSMENT YEAR 2012-13 ONLY THE PAYMENT TO SHRI HAR MOHINDER PAL SINGH WAS DISALLOWED. THE LD. AR FURTHER SUBMITTED THAT THESE DISALLOWANCES HAVE BEEN MADE BY THE AO ON AN AD HOC BASIS ON THE GROUND THAT THE PROOF OF SERVICES RENDERED COULD NOT BE ESTABLISHED. IT WAS SUBMITTED THAT IT IS ALSO TO BE NOTED THAT THE CONCERNED PAYEES HAVE EVEN PAID SERVICE TAX ON THESE PAYMENTS APART FROM PAYING INCOME TAX ON THE SAME. IT WAS ALSO SUBMITTED THAT ALL THESE PAYMENTS WERE MADE AFTER DUE DEDUCTION OF TAX AT SOURCE AND THEREFORE THIS ALSO CANNOT BE REASON FOR ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 5 DISALLOWANCE. IT WAS FURTHER SUBMITTED THAT EXCEPT FOR SHRI HAR MOHINDER PAL SINGH, ALL THE OTHER PAYEES WERE IN THE TAX SLAB RATE OF 30% AND, THEREFORE, IT COULD NOT BE SAID THAT IT WAS A DEVICE TO AVOID TAX. THE LD. AR SUBMITTED THAT THE AGREEMENTS BETWEEN THE ASSESSEE COMPANY AND THE PAYEES ALONG WITH PROOF OF THEIR PROFESSIONAL QUALIFICATIONS HAD BEEN FILED BEFORE THE AO BUT THE SAME WERE NOT CONSIDERED. 3.1 THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED AN APPLICATION UNDER RULE 29 OF THE ITAT RULES FOR ADMISSION OF ADDITIONAL DOCUMENTS ON 11.3.2019. IT WAS SUBMITTED THAT THESE EVIDENCES WERE NOT FILED EARLIER BECAUSE THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT SINCE IDENTICAL PAYMENTS HAD BEEN ALLOWED IN THE ASSESSMENT PROCEEDINGS IN EARLIER ASSESSMENT YEARS, THIS ISSUE STOOD COVERED IN FAVOUR OF THE ASSESSEE. THE LD. AR SUBMITTED THAT AS PER THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. TEXT HUNDRED INDIA PVT. LTD. IN ITA NOS. 2077, 2061 AND 2065/2010, IT HAS BEEN HELD THAT DISCRETION LIES WITH THE TRIBUNAL TO ADMIT ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE ONCE THE TRIBUNAL AFFIRMS THE OPINION THAT DOING SO WOULD BE NECESSARY FOR PROPER ADJUDICATION OF THE ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 6 MATTER. THE LD. AR SUBMITTED THAT THE FOLLOWING DOCUMENTS WERE BEING SOUGHT FOR BEING ADMITTED AS ADDITIONAL EVIDENCES:- S.NO. PARTICULARS PAGE NO. IN PAPER BOOK-III (BEING SEPARATE PAPER BO OK OF ADDITIONAL EVIDENCES) 1. 2. 3. 1.FEW DOCUMENTARY EVIDENCES SHOWING SERVICES RENDERED BY MRS. NEELAM SETHI (A) COPY OF THE MINUTES SHOWING SYNOPSIS OF THE DECISIONS TAKEN BY THE MANAGEMENT OF THE BOARD (B) SAMPLE OF THE ATTE NDANCE REGISTER (C) COPIES OF THE PURCHASE ORDERS AND FEW BILLS/INVOICES APPROVED BY MRS. NEELAM SETHI. II. FEW DOCUMENTARY EVIDENCES SHOWING SERVICES RENDERED BY MR. S.R. KHURANA (A) COPY OF THE MINUTES SHOWING SYNOPSIS OF THE DECISIONS TAKEN BY THE MANAGEMENT OF THE BOARD (B) SAMPLE OF THE ATTENDANCE REGISTER. (C) COPIES OF THE PURCHASE ORDERS, FEW BILLS/INVOICES, MEDICLAIM RELATED MATTER AND INCOME TAX MATTERS ETC. APPROVED BY MR. S.R. KHURANA III. FEW DOCUMENTARY EVIDENCES SHOWING SERVICES RENDERED BY MR. ANUP SONI (A) COPY OF THE MINUTES SHOWING SYNOPSIS OF THE DECISIONS TAKEN BY THE MANAGEMENT OF THE BOARD. (B) SAMPLE OF THE ATTENDANCE REGISTER 225-298 299-303 304-519 520-590 591-595 596-785 786-856 857-861 862-1058 ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 7 4. (C) COPIES OF THE BILLS/INVOICES APPROVED BY MR. ANUP SONI IV. FEW DOCUMENTARY EVIDENCES SHOWING SERVICE S RENDERED BY MR. HMP SINGH (A) COPY OF THE MINUTES SHOWING SYNOPSIS OF THE DECISIONS TAKEN BY THE MANAGEMENT OF THE BOARD. (B) SAMPLE OF THE ATTENDANCE REGISTER (C) COPIES OF THE MEDICLAIM RELATED MATTER AND INSURANCE POLICY APPROVED BY MR. HMP SINGH 1059-1131 1132-1136 1137-1313 4.0 IN RESPONSE, THE LD. SR. DR, AT THE OUTSET, OPPOSED THE ASSESSEES PRAYER FOR ADMITTING ADDITIONAL EVIDENCES. IT WAS SUBMITTED THAT THE ASSESSEE WAS AT FAULT FOR NOT SUBMITTING THESE EVIDENCES BEFORE THE LOWER AUTHORITIES IN THE FIRST PLACE. IT WAS FURTHER SUBMITTED THAT IN THE ASSESSMENT ORDER THE AO HAS CATEGORICALLY STATED THAT NO EVIDENCES WERE FILED BY THE ASSESSEE EVEN WHEN CALLED UPON TO DO SO. IT WAS SUBMITTED THAT THE MERE FACT THAT THE EVIDENCE SOUGHT TO BE ADMITTED IS VITAL DOES NOT PROVIDE A SUBSTANTIAL REASON TO ALLOW ITS ADMISSION AT THE TRIBUNALS STAGE ESPECIALLY WHEN THE EVIDENCE WAS AVAILABLE WITH THE ASSESSEE AT THE INITIAL STAGE AND HAS NOT BEEN PRODUCED BY IT WITHOUT ANY SUFFICIENT CAUSE. ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 8 4.1 ON MERITS OF THE DISALLOWANCE, THE LD. SR. DR SUBMITTED THAT, AS WAS EVIDENT FROM THE ASSESSMENT ORDER, THE ASSESSEE HAD NOT FILED ANY DETAILS REGARDING THE SERVICES ACTUALLY RENDERED BY THE PAYEES IN SPITE OF SPECIFICALLY BEING ASKED BY THE AO AND VARIOUS OPPORTUNITIES ALLOWED TO IT. IT WAS SUBMITTED THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS CAST UPON IT WHEREIN THE REASONABLENESS OF PAYMENT MADE TO RELATED PARTIES HAD TO BE PROVED BY THE ASSESSEE AND NOT BY THE DEPARTMENT. IT WAS FURTHER SUBMITTED THAT IN THE EARLIER YEARS ASSESSMENT ORDERS APPARENTLY NO EXAMINATION OF THE ISSUE HAD BEEN DONE BY THE AO AND, THEREFORE, THE SAME COULDNOT BE TAKEN AS A PRECEDENT. IT WAS FURTHER SUBMITTED THAT THE PAYMENTS HAVE TO BE JUSTIFIED ON A YEAR TO YEAR BASIS WHICH THE ASSESSEE HAD FAILED TO DO IN THIS YEAR UNDER CONSIDERATION. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. INITIALLY, WE HAVE TO CONSIDER THE ASSESSEES PLEA FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES, 1963. RULE 29 READS AS UNDER: 29. THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL, BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR ANY WITNESS TO BE EXAMINED ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 9 OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE, OR , IF THE INCOME-TAX AUTHORITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THE TRIBUNAL, FOR REASONS TO BE RECORDED, MAY ALLOW SUCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED. 5.1 THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF INCOME TAX OFFICER VS. B.N. BHATTACHARYA REPORTED IN 112 ITR 423 (CAL.) EVEN PERMITTED THE FILING OF ADDITIONAL EVIDENCE BEFORE IT AT THE APPELLATE STAGE WHERE THE QUESTION WAS AS TO WHETHER THE NOTICE WAS PROPERLY SERVED UPON THE ASSESSEE OR NOT. RECORD OF THE PROCESS SERVER AND THE INCOME TAX OFFICER WERE PRODUCED AND THE OBJECTION OF THE ASSESSEE THAT SUCH EVIDENCE COULD NOT BE ADMITTED WAS TURNED DOWN INVOKING THE POWER TO ADMIT SUCH EVIDENCE UNDER ORDER 41 RULE 27(1) OF THE CODE OF CIVIL PROCEDURE. FOLLOWING PERTINENT OBSERVATIONS WERE MADE IN THE PROCESS. BUT IT WAS OBSERVED BY THE SUPREME COURT IN THE CASE OF K. VENKATRAMAIAH V. A. SEETHARAMA REDDY, AIR 1963 SC 1526, THAT UNDER RULE 27(1) OF ORDER 41 OF THE CODE OF CIVIL PROCEDURE, THE APPELLATE COURT HAS THE POWER TO ALLOW ADDITIONAL EVIDENCE NOT ONLY IF IT REQUIRES SUCH EVIDENCE 'TO ENABLE IT TO PRONOUNCE JUDGMENT', BUT ALSO FOR ANY OTHER SUBSTANTIAL CAUSE'. THERE MIGHT WELL BE CASES WHERE EVEN THOUGH THE COURT FOUND THAT IT WAS ABLE TO PRONOUNCE JUDGMENT ON THE STATE OF RECORD AS IT WAS, AND SO IT COULD NOT STRICTLY SAY THAT IT REQUIRED ADDITIONAL EVIDENCE TO ENABLE IT TO ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 10 PRONOUNCE JUDGMENT, IT STILL CONSIDERED THAT IN THE INTEREST OF JUSTICE SOMETHING WHICH REMAINED OBSCURE SHOULD BE FILLED UP SO THAT IT COULD PRONOUNCE ITS JUDGMENT IN A MORE SATISFACTORY MANNER. SUCH A CASE WOULD BE ONE FOR ALLOWING ADDITIONAL EVIDENCE FOR ANY OTHER SUBSTANTIAL CAUSE UNDER RULE 27(1)(B) OF ORDER 41 OF THE CODE. IN THE INSTANT CASE, IN THE AFFIDAVIT-IN-OPPOSITION FILED BEFORE THE LEARNED TRIAL JUDGE, IT HAD BEEN STATED THAT THE NOTICE HAD BEEN SERVED BY AFFIXATION AT 8/1, DACRES LANE, CALCUTTA.' 5.2 THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. TEXT HUNDRED INDIA PVT. LTD. (SUPRA) REFERRED TO THE ABOVE OBSERVATIONS OF THE HONBLE CALCUTTA HIGH COURT IN ITS JUDGEMENT AND, THEREAFTER, IN PARAGRAPHS 13, 14 OPINED AS UNDER :- 13. THE AFORESAID CASE LAW CLEARLY LAYS DOWN A NEAT PRINCIPLE OF1AW THAT DISCRETION LIES WITH THE TRIBUNAL TO ADMIT ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE ONCE THE TRIBUNAL AFFIRMS THE OPINION THAT DOING SO WOULD BE NECESSARY FOR PROPER ADJUDICATION OF THE MATTER. THIS CAN BE DONE EVEN WHEN APPLICATION IS FILED BY ONE OF THE PARTIES TO THE APPEAL AND IT NEED NOT TO BE A SUO MOTTO ACTION OF THE TRIBUNAL. THE AFORESAID RULE IS MADE ENABLING THE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE IN ITS DISCRETION IF THE TRIBUNAL HOLDS THE VIEW THAT SUCH ADDITIONAL EVIDENCE WOULD BE NECESSARY TO DO SUBSTANTIAL JUSTICE IN THE MATTER. IT IS WELL SETTLED THAT THE PROCEDURE IS HANDMADE OF JUSTICE AND JUSTICE SHOULD NOT BE ALLOWED TO BE CHOKED ONLY BECAUSE OF SOME INADVERTENT ERROR OR OMISSION ON THE PART OF ONE OF THE PARTIES TO LEAD EVIDENCE AT THE APPROPRIATE STAGE. ONCE IT IS FOUND THAT THE PARTY INTENDING TO LEAD EVIDENCE BEFORE THE TRIBUNAL FOR THE FIRST TIME WAS PREVENTED BY SUFFICIENT CAUSE TO LEAD SUCH AN EVIDENCE AND THAT THIS EVIDENCE WOULD HAVE MATERIAL BEARING ON THE ISSUE WHICH NEEDS TO BE DECIDED BY THE TRIBUNAL AND ENDS OF JUSTICE DEMAND ADMISSION OF SUCH AN EVIDENCE, THE TRIBUNAL CAN PASS AN ORDER TO THAT EFFECT. 14. THE NEXT QUESTION WHICH ARISES FOR CONSIDERATION IS AS TO WHETHER THE EXERCISE OF DISCRETION IN THE INSTANT CASE PERMITTING THE ADDITIONAL EVIDENCE BY THE TRIBUNAL, IS APPOSITE? IT IS UNDISPUTED THAT RULE 29 OF THE RULES IS AKIN TO ORDER 41 RULE 27(1) OF THE CODE OF CIVIL PROCEDURE. THE TRUE TEST IN THIS BEHALF, AS LAID DOWN BY THE COURTS, IS WHETHER THE APPELLATE COURT IS ABLE TO PRONOUNCE ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 11 JUDGMENT ON THE MATERIALS BEFORE IT WITHOUT TAKING INTO CONSIDERATION THE ADDITIONAL EVIDENCE SOUGHT TO BE ADDUCED. THE LEGITIMATE OCCASION, THEREFORE, FOR EXERCISE OF DISCRETION UNDER THIS RULE IS NOT BEFORE THE APPELLATE COURT HEARS AND EXAMINES THE CASE BEFORE IT, BUT ARISES WHEN ON EXAMINING THE EVIDENCE AS IT STANDS, SOME INHERENT LACUNA OR DEFECT BECOMES APPARENT TO THE APPELLATE COURT COMING IN ITS WAY TO PRONOUNCE JUDGMENT, THE EXPRESSION TO ENABLE IT TO PRONOUNCE JUDGMENT CAN BE INVOKED. REFERENCE IS NOT TO PRONOUNCE ANY JUDGMENT OR JUDGMENT IN A PARTICULAR WAY, BUT IS TO PRONOUNCE ITS JUDGMENT SATISFACTORY TO THE MIND OF COURT DELIVERING IT. THE PROVISION DOES NOT APPLY WHERE WITH EXISTING EVIDENCE ON RECORD THE APPELLATE COURT CAN PRONOUNCE A SATISFACTORY JUDGMENT. IT IS ALSO APPARENT THAT THE REQUIREMENT OF THE COURT TO ENABLE IT TO PRONOUNCE JUDGMENT CANNOT REFER TO PRONOUNCEMENT OF JUDGMENT IN ONE WAY OR THE OTHER BUT IS ONLY TO THE EXTENT WHETHER SATISFACTORY PRONOUNCEMENT OF JUDGMENT ON THE BASIS OF MATERIAL ON RECORD IS POSSIBLE. IN ARJAN SINGH V. KARTAR SINGH, AIR 1951 SC 193, WHILE INTERPRETING THE PROVISIONS OF ORDER 41 RULE 27, THE COURT REMARKED AS FOLLOWS:- 'THE LEGITIMATE OCCASION FOR THE APPLICATION OF ORDER 41, RULE 27 IS WHEN ON EXAMINING THE EVIDENCE AS IT STANDS, SOME INHERENT LACUNA OR DEFECT BECOMES APPARENT, NOT WHERE A DISCOVERY IS MADE, OUTSIDE THE COURT OF FRESH EVIDENCE AND THE APPLICATION IS MADE TO IMPART IT. THE TRUE TEST, THEREFORE, IS WHETHER THE APPELLATE COURT IS ABLE TO PRONOUNCE JUDGMENT ON THE MATERIALS BEFORE IT WITHOUT TAKING INTO CONSIDERATION THE ADDITIONAL EVIDENCE SOUGHT TO BE ADDUCED.' 5.3 THUS, THE HONBLE JURISDICTIONAL HIGH COURT HAS ORDAINED THAT THE TRIBUNAL CAN ADMIT ADDITIONAL EVIDENCE IN INTEREST OF JUSTICE ONCE IT IS AFFIRMED THAT DOING SO WOULD BE NECESSARY FOR ADJUDICATION OF THE MATTER. ALTHOUGH, THE ASSESSEE DID NOT PRODUCE THE REQUIRED EVIDENCES BEFORE THE AO EVEN THEN IT WAS CALLED UPON TO DO SO, WE ARE OF THE CONSIDERED OPINION THAT THESE ADDITIONAL EVIDENCES, IF ADMITTED, WOULD HELP IN PROPER ADJUDICATION OF THE MATTER AT HAND. THEREFORE, IN THE INTEREST OF JUSTICE WE ADMIT THESE ADDITIONAL EVIDENCES. ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 12 5.4 SINCE THESE ADDITIONAL EVIDENCES ARE BEING ADMITTED AT THE SECOND APPELLATE STAGE AND THE AO DID NOT HAVE ANY OPPORTUNITY TO GO THROUGH THESE EVIDENCES AND EXAMINE THE SAME BEFORE ADJUDICATING THE ISSUE AT HAND, IT WOULD BE IN FITNESS OF CASE IF THE ISSUE IS RESTORED TO THE FILE OF THE AO FOR DE NOVO ADJUDICATION AFTER DULY CONSIDERING THESE ADDITIONAL EVIDENCES. NEEDLESS TO SAY THAT THE AO WOULD PROVIDE ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE WHILE ADJUDICATING THE ISSUE. WE ALSO DIRECT THAT THE ASSESSEE TO APPEAR BEFORE THE AO AND SUBSTANTIATE ITS CLAIM IN LIGHT OF THESE ADDITIONAL EVIDENCES WHEN CALLED UPON TO DO SO, FAILING WHICH THE AO WOULD BE AT LIBERTY TO PROCEED EX PARTE QUA THE ASSESSEE AND DECIDE THE ISSUE AS PER LAW. 5.5 SINCE WE ARE RESTORING THE ENTIRE ISSUE TO THE FILE OF THE AO, WE ARE NOT COMMENTING ON THE MERITS OF THE DISALLOWANCES AT THIS STAGE. 6.0 IN THE FINAL RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (N.K.BILLAIYA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04/11/2019 VEENA COPY FORWARDED TO ITA NO. 4883/DEL/2015 APEX HEART CARE PVT. LTD. VS ACIT 13 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI