Smt. Rajeshwati, Rohtak V. ITO, Rohtak

ITA 5671/DEL/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7491 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 15-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: GAUTAM JAINAR
• Keywords: Rejection of books of accounts; Principle of natural justice; Additional evidence; Non compliance
• Section: 44AD; 143(3); 234B; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI F BENC H BEFORE SHRI U.B.S. BEDI, JM & SHRI A.N. PAHUJA, AM ITA NO.5671/DEL./2010 ASSESSMENT YEAR: 2007-08 SMT. RAJESHWATI, PROP. SAHIL ENGG. WORKS, 965/25, CHINOT COLONY, ROHTAK V/S . INCOME TAX OFFICER, WARD- 2,ROHTAK [PAN: AAUPW 0165 A] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI GAUTAM JAIN,AR REVENUE BY SMT. ANUSHA KHURANA, DR DATE OF HEARING 12-01-2012 DATE OF PRONOUNCEMENT 20-01-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 15.12.2010 BY THE ASSESSEE A GAINST AN ORDER DATED 25 TH OCTOBER, 2010 OF THE LEARNED CIT(A), ROHTAK, RAISE S THE FOLLOWING GROUNDS:- 1. THAT THE LEARNED CIT(A), ROHTAK HAS ERRED BOTH I N LAW AND ON FACTS IN DETERMINING THE TOTAL INCOME OF THE APP ELLANT AT 8% OF THE GROSS RECEIPTS BY RELYING UPON THE PROVIS IONS CONTAINED IN SECTION 44AD OF THE ACT AND, DISREGARD ING THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT WHERE IN INCOME WAS DECLARED @3.45% OF THE GROSS RECEIPTS AN D, THUS, SUSTAINING AN ADDITION OF ` `5,42,700/- TO THE DECLARED INCOME BY THE ASSESSEE IN THE RETURN OF INCOME. 1.1 THAT THE LEARNED CIT(A) IN DETERMINING THE ABOV E INCOME OF THE APPELLANT, HAS GROSSLY ERRED BOTH IN UPHOLDING THE REJECTION OF BOOKS OF ACCOUNTS U/S 145 OF THE ACT O N VAGUE, IRRELEVANT BASIS AND, WITHOUT APPRECIATING THE DETA ILED WRITTEN SUBMISSIONS OF THE APPELLANT AND, THE EVIDENCE TEND ERED DURING THE COURSE OF APPELLATE PROCEEDINGS. 1.2 THAT THE LEARNED CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN HOLDING THAT ADDITIONAL EVIDENCE FURNISHED BY THE APPELLANT DOES NOT DESERVE TO BE ADMITTED UNDER RUL E 46A OF INCOME-TAX RULES, 1962 WITHOUT APPRECIATING THAT MU STER ROLL/ACQUITTANCE ROLL HAD BEEN MAINTAINED BY THE AP PELLANT I.T.A. NO.5671/DEL./2010 2 AND, ONCE THEY WERE FURNISHED IN THE APPELLATE PROC EEDINGS, THE SAME HAD TO BE ACCEPTED AS SUCH AS NON-FURNISHI NG OF MUSTER ROLL WAS THE ESSENTIAL BASIS ON WHICH BOOKS OF ACCOUNTS ARE REJECTED BY THE LEARNED ASSESSING OFFI CER IN THE ORDER OF ASSESSMENT FRAMED U/S 143(3) OF THE ACT AN D FURTHER, THERE WAS SUFFICIENT CAUSE FOR NOT HAVING PRODUCED SUCH EVIDENCE IN THE COURSE OF ASSESSMENT PROCEEDIN GS. 2. THAT IN ANY CASE AND WITHOUT PREJUDICE, THE LEAR NED CIT(A) HAS FAILED TO APPRECIATE THAT RATE OF NET PROFIT CA NNOT BE ADOPTED MECHANICALLY PARTICULARLY WHEN EVEN IN THE PRECEDING ASSESSMENT YEARS DECLARED NET PROFIT WAS COMMENSURATE WITH INSTANT YEAR RESULTS THEREFORE, APPARENTLY, APPLICATION OF NET PROFIT RATE AT 8% IS HIGHLY UNJUSTIFIED, MISCONCEIVED AND HENCE UNSUSTAINABLE. 3. THAT THE LEARNED CIT HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING THE LEVY OF INTEREST U/S 234B A ND U/S 234D OF THE ACT. 2. ADVERTING FIRST TO GROUND NOS. 1, 1.1 AND 1.2 I N THE APPEAL, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLA RING INCOME OF ` ` 3,41,100/- FILED ON 23.10.2007 BY THE ASSESSEE, A CIVIL CONTRACTOR, WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ISSUED ON 26.09.2008 . NON E RESPONDED TO THIS NOTICE NOR TO THE SUBSEQUENT NOTICES ISSUED ON 18.05.2009,17.0 6.2009, 10.7.2009, 31.08.2009 AND 05.10.2009 U/S 143(2) OF THE ACT. IN RESPONSE TO ANOTHER NOTICE DATED 19.10.2009 U/S 143(2)/142(1) OF THE ACT, SHR I ARVIND JAIN, CA ATTENDED AND WAS REQUIRED TO FILE MUSTER ROLL/QUITTANCE ROLL AND DETAILS OF TRADE CREDITORS . THE CASE WAS ADJOURNED TO 30.10.2009 FOR THIS PURPOSE. ON 30.10.2009, SHRI ARVIND JAIN, CA FILED ONLY A PHOTOCOPY OF QUITTANCE ROLL F OR THE MONTH OF MAY 2006. IN THESE CIRCUMSTANCES, AFTER PERUSING THE BOOKS OF AC COUNT, THE AO OBSERVED THE FOLLOWING DEFECTS IN THE ACCOUNTS:- I) COMPUTERIZED BOOKS OF ACCOUNT WERE PRODUCED WHI CH DOES NOT APPEAR TO HAVE BEEN MAINTAINED DURING THE REGULAR COURSE OF BUSINESS. I.T.A. NO.5671/DEL./2010 3 II) NO MUSTER ROLL/QUITTANCE ROLL EXCEPT PHOTOCOPY OF THE QUITTANCE ROLL FOR THE MONTH OF MAY 2006 OR SUPPORT ING VOUCHERS WERE PRODUCED SO AS TO EXAMINE THE AUTHENTICITY OF THE CLAIM UNDER THE HEAD WAGES PAID OF ` ` 14,60,150/- WHICH CONSTITUTE 13.69% OF THE TOTAL EXPENDITURE INCURRED. III) DRAWINGS FOR HOUSE HOLD EXPENSES WERE ` `.36,000/- ONLY. IV) THE NET PROFIT DECLARED ON GROSS PAYMENT OF ` ` 1,10,02,715/- WAS 3.45%. V) THERE WAS RAW MATERIAL OR WORK IN PROGRESS AT TH E END OF THE TEAR. VI) DETAILS OF SUNDRY CREDITORS OF ` ` 8,47,233/- VIZ COMPLETE NAME AND ADDRESS, COPY OF ACCOUNT WERE NOT FILED. 2.1 IN THE LIGHT OF AFORESAID DEFECTS, THE AO REJ ECTED THE BOOK RESULTS HAVING RECOURSE TO PROVISIONS OF SECTION 145 OF THE ACT AN D ESTIMATED INCOME @12% OF THE GROSS RECEIPTS AFTER EXCLUDING THE COST OF MATE RIAL SUPPLIED BY THE RESPECTIVE DEPARTMENTS. ACCORDINGLY INCOME WAS DETERMINED AT ` ` 13,20,325/-. INTER ALIA, THE AO RELIED UPON THE DECISION DATED 14.11.2008 OF HONBLE JURISDICTIONAL HIGH COURT IN M/S PRABHAT KUMAR CONTRACTOR ,SIRSA IN I.T .A. NO.293 OF 2008. 3. ON APPEAL, THE LEARNED CIT(A) WHILE UPHOLDING T HE REJECTION OF BOOK RESULTS, REDUCED THE PROFIT WITH THE APPLICATION OF RATE OF 8% ON THE NET CONTRACT RECEIPTS, HOLDING AS UNDER:- I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS MA DE BY THE AR. THE ADDITIONAL EVIDENCE SOUGHT TO BE PRODUCED DURIN G THE APPEAL PROCEEDINGS IS NOTHING BUT THE MUSTER ROLL/ACQUITTA NCE ROLL. IT IS NOTHING BUT SHEETS OF PAPER CONTAINING SOME NAMES A GAINST WHICH NUMBER OF DAYS, RATE AND AMOUNT HAS BEEN SPECIFIED AND SIGNATURE APPENDED. THIS CANNOT BE TERMED AS ADDITIONAL EVIDE NCE CONSIDERING THAT IT IS NOTHING BUT PART OF THE BOOK S OF ACCOUNT. THERE IS NOTHING TO EXAMINE OR CROSS EXAMINE THE SO CALLED ADDITIONAL EVIDENCE PRODUCED. THEREFORE, THE CONTE NTION OF THE AR I.T.A. NO.5671/DEL./2010 4 THAT AS THE ASSESSING OFFICER HAS FAILED TO CROSS E XAMINE THE EVIDENCE, IT WOULD BE DEEMED TO HAVE BEEN ADMITTED DOES NOT HOLD GOOD. THE MAINTENANCE OF BOOKS OF ACCOUNT IS NOT I N DOUBT. THE ASSESSING OFFICER HAS GIVEN REASONS FOR REJECTING T HE BOOKS OF ACCOUNTS /AND ESTIMATING THE PROFIT OF THE APPELLAN T. THE SUFFICIENCY OR OTHERWISE OF THE CONCLUSION ARRIVED AT BY THE AS SESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT CANNOT BE QUESTIONED UNLESS IT IS WHIMSICAL, WITHOUT ANY BASIS OR PERVERSE. AS THE R EASONS FOR REJECTION OF THE BOOKS OF ACCOUNT ARE APPROPRIATE, THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE PROFIT IS UPHEL D. ANY ESTIMATION OF PROFIT HAS TO BE ON A REASONABLE BASIS.ADOPTING THE JUDGMENT OF M/S PRABHAT KUMAR CONTRACTOR SIRSA IN ITA NO. 293 OF 2008 DATED 14.11.2008 TO THE ASSESSEE DOES NOT A PPEAR TO BE APPROPRIATE AS THE FACTS ARE TOTALLY DIFFERENT. HOW EVER, PROVISIONS OF SECTION 44AD COULD BE TAKEN AS GUIDANCE FOR ESTIMAT ING THE PROFITS OF THE APPELLANT, THOUGH THE TURNOVER IS MORE THAT ` 40 LACS. HAVING REGARD TO THE FACTS OF THE CASE, I FEEL THAT ENDS O F JUSTICE WOULD BE MET IF THE PROFIT IS ESTIMATED AT 8% OF THE NET CON TRACT RECEIPTS. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD.CIT(A). WHILE CARRYING US THROU GH THE IMPUGNED ORDER, THE LEARNED AR CONTENDED THAT THE AO DID NOT POINT OUT ANY DEFECT IN THE BOOKS OF ACCOUNT EXCEPT NON PRODUCTION ON MUSTER ROLL/QUITTA NCE ROLL. THOUGH THE ASSESSEE SUBMITTED REQUEST FOR ADMISSION OF ADDITIO NAL EVIDENCE WITH THE PRODUCTION OF MUSTER ROLL/QUITTANCE ROLL, THE LD. C IT(A) REJECTED THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THESE WERE NOTHING BUT SHEETS OF PAPERS CONTAINING SOME NAMES AGAINST WHIC H NUMBER OF DAYS, RATE AND AMOUNT HAS BEEN SPECIFIED AND SIGNATURE APPENDED. IN ANY CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN APPLYING NET PROFIT @8%, ESPEC IALLY WHEN NET PROFIT @5% HAS BEEN ACCEPTED IN THE PRECEDING YEAR IN PROCEEDINGS U/S 143(3) OF THE ACT AS AGAINST 3.45% SHOWN IN THE YEAR UNDER CONSIDERATION , THE LD. AR POINTED OUT . ON THE OTHER HAND, THE LD. DR SUPPORTED THE FINDING S OF THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE ASSESSEE DID NOT APPEAR BEFORE TH E AO DESPITE REPEATED OPPORTUNITY FOR HEARING ON 15 TH OCTOBER, 2008, 28 TH MAY, 2009, 25 TH JUNE, 2009; I.T.A. NO.5671/DEL./2010 5 21.7.2009; 9 TH SEPTEMBER, 2009 AND 15 TH OCTOBER, 2009. NO REASONS HAVE BEEN ADDUCED BEFORE US NOR THESE ARE EVIDENT FROM THE IM PUGNED ORDER AS TO WHY THE ASSESSEE DID NOT APPEAR BEFORE THE AO. IT WAS ONLY AT THE FAG END ON 30 TH OCTOBER, 2009 THAT SHRI ARVIND JAIN, CA FILED A PHO TOCOPY OF QUITTANCE ROLL FOR THE MONTH OF MAY, 2006 AND THE ASSESSMENT WAS COMPLETED ON SAME DAY I.E., 30 TH OCTOBER, 2009. THOUGH THE ASSESSEE PRODUCED THE BO OKS OF ACCOUNT WITH VOUCHERS FOR PURCHASE OF RAW MATERIAL BEFORE THE AO , THE LATTER REJECTED BOOK RESULTS ON THE GROUND THAT COMPUTERISED BOOKS OF AC COUNT DID NOT APPEAR TO HAVE BEEN MAINTAINED DURING THE COURSE OF BUSINESS WHILE THE MUSTER ROLL/QUITTANCE ROLL WAS NOT PRODUCED NOR THE ASSESSEE SUBMITTED NAME AN D ADDRESSES OF THE SUNDRY CREDITORS OR THEIR COPY OF ACCOUNT. ON APPE AL, THE ASSESSEE CONTENDED THAT THE AO DID NOT PROVIDE SUFFICIENT OPPORTUNITY AND ACCORDINGLY, THE ASSESSEE REQUESTED FOR ADMISSION OF ADDITIONAL EVIDENCE IN T HE FORM OF MUSTER ROLL/QUITTANCE ROLL. THOUGH THE ADDITIONAL EVIDENC E WAS FORWARDED TO THE AO, THE LATTER OPPOSED ITS ADMISSION ON THE GROUND THAT SUF FICIENT OPPORTUNITY WAS PROVIDED TO THE ASSESSEE. THE LEARNED CIT(A) DISRE GARDED THE SAID EVIDENCE WITHOUT RECORDING ANY REASONS FOR ITS ADMISSION OR OTHERWISE WHILE STATING THAT THE SAID EVIDENCE CANNOT BE TERMED AS ADDITIONAL EV IDENCE, BEING PART OF BOOKS OF ACCOUNT. WHILE OBSERVING THAT MAINTENANCE OF BO OKS IS NOT IN DOUBT, THE LEARNED CIT(A) UPHELD THE REJECTION OF BOOK RESULTS ON THE GROUND THAT THE REASONS GIVEN BY THE ASSESSING OFFICER FOR SUCH REJ ECTION WERE APPROPRIATE AND APPLIED ESTIMATED RATE OF 8% ON THE NET CONTRACT RE CEIPTS TAKING CUE FROM THE PROVISIONS OF SECTION 44AD OF THE ACT. AS IS APPAR ENT FROM THE FINDINGS IN THE IMPUGNED ORDER, THE LD. CIT(A) HAVE NOT ADDUCED ANY REASONS FOR NOT ADMITTING ADDITIONAL EVIDENCE WHILE UPHOLDING THE REJECTION OF BOOK RESULTS AND ESTIMATION OF PROFIT @8% EVEN WHEN THE ASSESSEE PLEADED THAT S UFFICIENT OPPORTUNITY HAD NOT BEEN PROVIDED BY THE AO. WE FIND THAT RIGHT SI NCE 15 TH OCTOBER,2008 TO 15 TH OCTOBER, 2009 THE ASSESSEE DID NOT APPEAR BEFORE TH E AO AND REASONS FOR SUCH NON COMPLIANCE WITH VARIOUS NOTICES ARE NOT EVIDEN T FROM THE IMPUGNED ORDER. IT WAS ONLY A FEW DAYS BEFORE COMPLETION OF ASSESSMENT THAT THE ASSESSEES REPRESENTATIVE APPEARED BUT DID NOT FILE COMPLETE D ETAILS OF MUSTER ROLL/QUITTANCE I.T.A. NO.5671/DEL./2010 6 ROLL OR OF TRADE CREDITORS. NOW WHAT ARE THE REASO NS GIVEN IN THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE AND WHY THE ASSESS EE DID NOT RESPOND TO VARIOUS NOTICES ISSUED BY THE AO, HAS NOT BEEN EXPL AINED BEFORE US. AS ALREADY STATED, THE LD. CIT(A) ALSO DID NOT RECORD ANY REAS ONS FOR ADMISSION OR OTHERWISE OF ADDITIONAL EVIDENCE NOR RECORDED HIS SPECIFIC FI NDINGS ON THE REASONS GIVEN BY THE AO FOR REJECTING THE BOOK RESULTS. IN NUTSHELL, THE LD. CIT(A) UPHELD THE REJECTION OF BOOK RESULTS WITHOUT FOLLOWING THE PRO CEDURE LAID DOWN UNDER RULE 46A OF THE IT RULES,1962 . AS IS APPARENT FROM THE FACTS OF THE CASE, THE LD. CIT(A) ARRIVED AT HIS CONCLUSIONS WITHOUT ASCERTAIN ING AS TO WHETHER OR NOT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM SUB MITTING THE AFORESAID ADDITIONAL DOCUMENTS/INFORMATION BEFORE THE AO AS PER PROVISIONS OF RULE 46A OF THE IT RULES, 1962 NOR ANY SUCH SUFFICIENT CAUSE HAS BEEN MENTIONED BEFORE US BY THE LD. AR. EVEN A COPY OF THE REQUEST MADE F OR ADMISSION OF ADDITIONAL EVIDENCE HAS NOT BEEN PLACED BEFORE US. HERE WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF RULE 46A OF THE IT RULES 19 62, WHICH READS AS UNDER: (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER TH AN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE ASS ESSING OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY:-- (A) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMI T EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVAN T TO ANY GROUND OF APPEAL; OR (D) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO A DDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE DEPUTY COMMISSIONER (APPEALS) OR AS THE CASE MAY BE, THE C OMMISSIONER (APPEALS) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. I.T.A. NO.5671/DEL./2010 7 (3)THE DEPUTY COMMISSIONER(APPEALS) OR, AS THE CA SE MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE INCOME-TAX OFFICER HA S BEEN ALLOWED A REASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITN ESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMI NATION OF ANY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTH ER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETH ER ON HIS OWN MOTION OR ON THE REQUEST OF THE ASSESSING OFFICER) UNDER CLAUSE (A) OF SUB SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECT ION 271..' 5.1 IT IS EVIDENT FROM THE AFORESAID PROVISIONS THAT THE LD. CIT(A) CAN TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-R. (1)(B) & (C) OF RULE 46A OF THE IT RULES, 1962 IF THE ASSESSEE WAS PREVENTED BY SUFF ICIENT CAUSE . IN HAJI LAL MOHD. BIRI WORKS' CASE [2005] 275 ITR 496 (ALL), BY MAKING AN ELABORATE DISCUSSION ON RULE 46A OF THE RULES IN PARAGRAPH 10 AT PAGE 500 AND 501, IT WAS HELD THAT UNDER RULE 46A THE AUTHORITY IS NOT PERMI TTED TO ACT WHIMSICALLY WHILE EXERCISING THE JURISDICTION UNDER IT .IN THE CASE U NDER CONSIDERATION, THE ASSESSEE PLACED BEFORE THE LD. CIT(A) THE AFORESAID MUSTER R OLL/QUITTANCE ROLL AND ADMITTEDLY, THE SAID DOCUMENTS WERE NOT SUBMITTED B EFORE THE AO. THE POWERS OF THE CIT(A) IN TERMS OF RULE 46A TO ADMIT FRESH EVI DENCE, ENTAILS AN ELEMENT OF DISCRETION WHICH IS REQUIRED TO BE EXERCISED IN A J UDICIOUS MANNER. THE POWERS OF THE CIT(A) TO ADMIT ADDITIONAL EVIDENCE ARE NOT ON LY IN SITUATIONS WHERE THE EVIDENCE COULD NOT BE PRODUCED BEFORE LOWER AUTHORI TIES OWING TO LACK OF ADEQUATE OPPORTUNITY BUT ALSO IN SITUATIONS WHERE T HE FRESH EVIDENCE WOULD ENABLE THE CIT(A) TO DISPOSE OF THE APPEAL OR FOR ANY OTHER SUBSTANTIAL CAUSE. OF COURSE, THE POWER IS TO BE EXERCISED JUDICIOUSLY A ND FOR REASONS TO BE RECORDED. SINCE IN THE CASE UNDER CONSIDERATION, THE LD. CIT( A) DID NOT FOLLOW THE PROCEDURE LAID DOWN IN RULE 46A OF THE IT RULES,1962 NOR EVE N RECORDED ANY FINDINGS AS TO WHETHER OR NOT THE ASSESSEE WAS PREVENTED BY SUFFIC IENT CAUSE FROM PRODUCING THE SAID EVIDENCE/DOCUMENTS BEFORE THE AO, WE FIND MERIT IN THE UNDISPUTED I.T.A. NO.5671/DEL./2010 8 CONTENTIONS OF THE LEARNED AR AND THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, VACATE THE FINDINGS OF THE LD. CIT(A) AND RES TORE THE ISSUES RAISED IN VARIOUS GROUNDS OF APPEAL BEFORE US TO HIS FILE, WITH THE D IRECTIONS TO FOLLOW THE MANDATE IN TERMS OF RULE 46A OF THE IT RULES, 1962 AS ALSO PRINCIPLES OF NATURAL JUSTICE AND THEREAFTER, DISPOSE OF THE MATTER IN ACCORDA NCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. WITH T HESE DIRECTIONS, GROUND NOS. 1, 1.1,& 1.2 IN THE APPEAL ARE DISPOSED OF, AS INDICA TED HEREINBEFORE. AS A COROLLARY, GROUND NOS. 2 & 3 DO NOT SURVIVE FOR OUR ADJUDICATION AT THIS STAGE. 6. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 7. IN THE RESULT, APPEAL IS ALLOWED BUT FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT SD/- SD/- (U.B. S. BEDI) (A.N. PA HUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER NS COPY OF THE ORDER FORWARDED TO :- 1. SMT. RAJESHWATI, PROP, SAHIL ENGG. WORKS, 965/25 , CHINOT COLONY, ROHTAK. 2. INCOME TAX OFFICER, WARD 2, ROHTAK. 3. CIT (APPEALS), ROHTAK. 4. THE CIT CONCERNED. 5. THE DR, ITAT,F BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI