ADVANCE CARDIOLOGIX, MUMBAI V. ASST CIT 11(2), MUMBAI

ITA 8059/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3143 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 01-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Unexplained expenditure; Business expenditure; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 69C; 143(3); 133(6); 131; 68; 10

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 8059 /MUM/2011 ( / ASSESSMENT YEAR : 2008-09) M/S. ADVANCE CARDIOLOGIX E-202,2 ND FLOOR, CRYSTAL PLAZA, NEW LINK ROAD, OPP. INFINITY MALL, ANDHERI(W), MUMBAI-400 053 / V. ASSISTANT COMMISSIONER OF INCOME TAX RANGE 11(2) AAYAKAR BHAVAN MUMBAI. ./ PAN : AANFA7822F ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI HARI S RAHEJA REVENUE BY : SHRI A. RAMACHANDRAN / DATE OF HEARING : 16-6-2016 / DATE OF PRONOUNCEMENT : 12-09-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE FIRM, BEING ITA NO. 8059/MUM/2011, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 28 TH SEPTEMBER, 2011 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 3, MU MBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2008-09, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSME NT ORDER DATED 21 ST DECEMBER, 2010 PASSED BY THE LEARNED ASSESSING OFFI CER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INCOME TAX ACT,1961 (HE REINAFTER CALLED THE ACT). ITA 8059/MUM/2011 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE FIR M IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL , MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOW ANCE IN RESPECT OF COMMISSION PAYMENT AMOUNTING TO RS. 6,90,500/- TO SHRI . CHANDRA P. PANDEY AND RS. 6,05,000/- TO SHRI MOTILAL SHARMA AND TREATING THE SAME AS UNEXPLAINED EXPENDITURE U/S. 69C OF THE INCOM E TAX ACT,1961. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIO N OF RS. 7,50,000/- BEING LOAN OF RS. 2,50,000/- FROM SHRI. PANKAJ PERI WAL AND RS.5,00,000/- FROM SHRI. RAGHULAL LAXMI NARAYAN TRE ATING THEM AS UNEXPLAINED DEPOSITS U/S 68 OF INCOME TAX ACT,1961. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWA NCE OF BUSINESS EXPENSES OF RS.23,035/- BY TREATING THE SAME AS PERSON AL IN NATURE. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWA NCE OF BUSINESS EXPENSES OF RS. 40,132/- BY TREATING THE SAME AS INCUR RED FOR FRIENDS AND RELATIVES. 3. AT THE OUTSET LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ASSESSEE DID NOT WISH TO PERSUE GROUND NO. 3 AND 4 AND THE SAME MAY BE DISMISSED AS NOT PRESSED. THE LD. DR DID NOT OBJE CTED TO THE DISMISSAL OF GROUND NO. 3 AND 4 RAISED BY THE ASSESSEE IN THE AP PEAL FILED WITH THE TRIBUNAL. AFTER CONSIDERING THE ARGUMENTS OF BOTH T HE PARTIES, WE HEREBY DISMISS GROUND NO. 3 AND 4 RAISED BY THE ASSESSEE I N MEMO OF APPEAL FILED WITH THE TRIBUNAL AS NOT BEING PRESSED. WE ORDER AC CORDINGLY. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF DEALING IN CARDIO LOGICAL PRODUCTS, SURGICAL AND MEDICAL DISPOSABLES. 5. THE ASSESSMENT WAS FRAMED BY THE AO U/S 143(3) O F THE ACT VIDE ASSESSMENT ORDERS DATED 21-12-2010 WHERE , INTER-AL IA, ADDITIONS WERE MADE BY DISALLOWING COMMISSIONS PAYMENTS MADE BY THE ASS ESSEE OF RS. 6,90,500/- TO MR. CHANDRA P. PANDEY AND RS. 6,05,00 0/- TO SH MOTILAL ITA 8059/MUM/2011 3 SHARMA BY TREATING THE SAME AS UNEXPLAINED EXPENDIT URE U/S. 69C OF THE ACT ON THE GROUNDS THAT DESPITE ISSUE OF SUMMONS U/S 13 1 OF THE ACT WHICH SUMMONS WERE RETURNED WITH POSTAL REMARKS NOT KNOW N , THESE TWO PARTIES FAILED TO APPEAR BEFORE THE AO. THE ASSESSEE WAS CO NFRONTED WITH THE RETURN OF SUMMONS U/S 131 OF THE ACT BUT THE ASSESSEE DID NOT PRODUCED THESE TWO PARTIES NOR THEIR NEW ADDRESSES WERE SUBMITTED BY T HE ASSESSEE BEFORE THE AO DURING COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT. THE AO HELD THAT IDENTITY OF THESE PART IES AND THE GENUINENESS OF THE COMMISSION PAYMENT COULD NOT BE PROVED BY THE A SSESSEE WHICH LED TO DISALLOWANCE OF THESE COMMISSION EXPENSES CLAIMED A S DEDUCTION BY THE ASSESSEE IN RETURN OF INCOME FILED WITH THE REVENUE . THE ASSESSEE DID FILED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS U/S 143 (3) READ WITH SECTION 143(2) OF THE ACT , THE DETAILS OF COMMISSION PAID AND CONFIRMATIONS FROM THESE TWO PARTIES. DURING APPELLATE PROCEEDINGS BEF ORE THE LEARNED CIT(A) , THE ASSESSEE SUBMITTED THAT THESE TWO PARTIES NAMELY MR . CHANDRA P. PANDEY AND SH MOTILAL SHARMA COULD NOT APPEAR BEFORE THE AO AS THEY WERE OUT OF STATION AND BY THE TIME THEY COULD COMPLY WITH DIRECTIONS O F THE AO, THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS ALREADY PASSED BY T HE AO. THUS, THE ASSESSEE REQUESTED THE LEARNED CIT(A) TO ADMIT ADDITIONAL EV IDENCES U/R 46A OF INCOME TAX RULES, 1962 IN ORDER TO ESTABLISH THE GENUINENE SS OF THE TRANSACTIONS AND IDENTITY OF THESE TWO PARTIES. THE LEARNED CIT(A) F ORWARDED THE ADDITIONAL EVIDENCES TO THE AO FOR REMAND REPORT. THE AO OBJEC TED TO THE ADMISSION OF ADDITIONAL EVIDENCES U/R 46A OF THE INCOME TAX RULE S, 1962 AS IT DID NOT COMPLY WITH REQUIREMENTS OF RULE 46A OF INCOME TAX RULES, 1962 AND ON MERITS THE AO OBSERVED IN HIS REMAND REPORT THAT IF THE ASSESSEE COULD PRODUCE THAT THESE TWO PARTIES WERE OUT OF STATION AT THAT TIME WHEN THE AO SUMMONED THEM U/S. 131 OF THE ACT FOR PERSONAL APPE ARANCES BEFORE THE AO, THEN ADDITIONAL EVIDENCES CAN BE ADMITTED. IN REJOI NDER, THE ASSESSEE SUBMITTED THAT THE AO ERRED IN CONCLUDING THAT THE SUFFICIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEE DURING ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH ITA 8059/MUM/2011 4 SECTION 143(2) OF THE ACT. IT WAS SUBMITTED THAT TH ESE TWO PARTIES WERE AT KOLKATTA WHEN THE AO SUMMONED THEM U/S 131 OF THE A CT AND THEY SENT THE DOCUMENTS DESIRED BY THE AO BUT BY THE TIME DOCUMEN TS REACHED THE AO, THE ASSESSMENT ORDER WAS ALREADY FRAMED BY THE AO. TH E ASSESSEE PLEADED THAT IN THE INTEREST OF JUSTICE AND FAIR PLAY, THE ADDIT IONAL EVIDENCES SUBMITTED AT THE APPELLATE STAGE BEFORE THE LEARNED CIT(A) BE AD MITTED. IT WAS SUBMITTED THAT BOTH THESE PARTIES ARE REGULAR INCOME TAX PAYE RS AND ONUS WAS SUFFICIENTLY DISCHARGED AS DETAILS AND DOCUMENTS AR E DULY SUBMITTED WITH RESPECT TO COMMISSION PAYMENTS TO BOTH THESE PARTIE S. THE ASSESSEE SUBMITTED THAT SECTION 69C OF THE ACT CANNOT BE INV OKED AS SOURCE OF PAYMENT IS EXPLAINED AS PAYMENTS WERE MADE BY ACCOU NT PAYEE CHEQUE BY THE ASSESSEE FROM ITS BANK ACCOUNT AND TAX WAS DEDU CTED AT SOURCE BEFORE MAKING PAYMENT TO THESE PARTIES AND THE SAID PAYEES HAVE DULY INCLUDED THE SAID INCOME IN THEIR RETURN OF INCOME AND PAID DUE TAXES TO THE REVENUE. THE LEARNED CIT(A) ACKNOWLEDGED THAT WITH RESPECT T O BOTH THE PARTIES, THE ASSESSEE HAS FILED AS AN ADDITIONAL EVIDENCES BEFOR E HIM U/R 46A OF INCOME TAX RULES, 1962 , THE DOCUMENTS VIZ. COPY OF INCOME TAX RETURN, CONFIRMATION LETTER, COPY OF SERVICES RENDERED , BILL , DEBIT NO TE FOR COMMISSION PAYMENT, TDS CERTIFICATE AND BANK STATEMENT BUT THE SAME WER E NOT SUBMITTED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS AND HENCE THES E ADDITIONAL EVIDENCES ARE NOT ADMISSIBLE AT THIS APPELLATE STAGE KEEPING IN VIEW RULE 46A OF INCOME TAX RULES , 1962. THE NEW ADDRESS OF THESE TWO PART IES ARE SUBMITTED AT THIS APPELLATE STAGE WHILE SUMMONS SENT BY THE AO RETURN ED UNSERVED AND NEW ADDRESSES WERE NOT SUBMITTED BEFORE THE AO DURING A SSESSMENT PROCEEDINGS DESPITE AO ASKING THE SAME FROM THE ASSESSEE. THESE TWO PARTIES HAVE REDUCED COMMISSION PAYMENTS FROM THESE COMMISSION I NCOME RECEIVED FROM THE ASSESSEE. THE BANK STATEMENT OF THESE TWO PARTI ES ARE NOT FURNISHED AND TDS CERTIFICATES ARE ALSO NOT SUBMITTED AND HENCE T HE ADDITIONS WERE CONFIRMED BY LEARNED CIT(A) VIDE APPELLATE ORDER DA TED 28-09-2011. ITA 8059/MUM/2011 5 6. AGGRIEVED BY THE APPELLATE ORDER DATED 28-09-201 1, THE ASSESSEE FILED SECOND APPEAL BEFORE THE TRIBUNAL AND THE LEARNED C OUNSEL FOR THE ASSESSEE CONTENDED THAT ADDITIONAL EVIDENCES WERE DULY FILED BEFORE THE LEARNED CIT(A) TO PROVE THAT THESE COMMISSION PAYMENTS ARE GENUINE AND TO ESTABLISH THE IDENTITY OF THESE PARTIES. THE AUTHORITIES BELOW ER RED IN NOT ADMITTING ADDITIONAL EVIDENCES ON TECHNICAL GROUNDS THAT THE SAME WERE NOT PRODUCED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT BOTH THESE PARTIES WERE OUT OF STATION TO KOLKATTA WHEN THE AO SUMMONED THEM AND THERE IS A NEW ADDRESS OF THESE PARTIES WHICH I S DULY SUBMITTED BEFORE THE LEARNED CIT(A). IT WAS PRAYED THAT THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE AO AND THE ASSESSEE WILL DULY SUBMIT ALL RELEVANT E VIDENCES AND EXPLANATION TO PROVE THE IDENTITY OF PARTIES AND THESE COMMISSI ON PAYMENTS ARE GENUINE. IT WAS SUBMITTED THAT COMPLETE DETAILS OF THESE PAR TIES ALONG WITH SERVICES RENDERED, INVOICES, BANK STATEMENTS, TDS CERTIFICAT ES, CONFIRMATIONS WERE SUBMITTED AS ADDITIONAL EVIDENCES BUT THE SAME WERE NOT ADMITTED. THE SAID ADDITIONAL EVIDENCES ARE PLACED IN PAPER BOOK FILED WITH THE TRIBUNAL( PAGE 10-21,43-57/PB). THE LEARNED DR RELIED ON THE ORDE RS OF LEARNED CIT(A).IT WAS SUBMITTED THAT BOTH THE PARTIES SENT ALL DETAIL S DIRECTLY TO THE AO IN RESPONSE TO SUMMONS U/S 131 OF THE ACT BY SPEED POS T WHICH REACHED AFTER THE ASSESSMENT WAS CONCLUDED BY THE AO AND THE SAME WAS NOT TAKEN COGNIZANCE BY THE AO WHILE FRAMING ASSESSMENT ORDER U/S 143(3) OF THE ACT. 7.WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERU SED THE MATERIAL ON RECORD. THE ASSESSEE IS ENGAGED IN BUSINESS OF DEAL ING IN CARDIO LOGICAL PRODUCTS, SURGICAL AND MEDICAL DISPOSABLE. THE ASSE SSEE IS STATED TO HAVE PAID COMMISSION OF RS.6,90,500/- TO SH. CHANDRA P. PANDEY AND RS. 6,05,000/- TO SH MOTILAL SHARMA PURPORTEDLY ON SALE S OF PRODUCTS DEALT WITH BY THE ASSESSEE . THE ASSESSEE HAS STATED TO HAVE S UBMITTED INVOICES AND LEDGER ACCOUNTS OF THESE PARTIES ALONG WITH BANK ST ATEMENT BEFORE THE AO ITA 8059/MUM/2011 6 DURING THE ASSESSMENT PROCEEDINGS ( PAGE 10-21/PB). THE PAYMENTS ARE STATED TO HAVE BEEN PAID BY CHEQUE AND TAX WAS STAT ED TO BE DEDUCTED AT SOURCE ON THESE COMMISSION PAYMENT. THE AO ISSUED S UMMONS TO THESE TWO PARTIES U/S 131 OF THE ACT TO APPEAR BEFORE HIM TO VERIFY THE IDENTITY OF PARTIES AND GENUINENESS OF THE TRANSACTIONS BUT THE SUMMONS RETURNED BACK UNSERVED. THE ASSESSEE WAS CONFRONTED BY THE AO BUT THE ASSESSEE DID NOT FURNISH THEIR NEW ADDRESS NOR PRODUCED THE PARTIES DURING ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT. IT IS THE SAY OF THE ASSESSEE THAT BOTH THESE PARTIES WERE OUT OF STATIO N WHEN THE AO SUMMONED THEM FOR PERSONAL ATTENDANCE AND THESE PARTIES SENT DOCUMENTS BY SPEED POST ON 20-12-2010 CONSISTING OF ACKNOWLEDGMENT OF THEIR RETURN OF INCOME , COPY OF CAPITAL ACCOUNT, COPY OF PROOF OF SPEED POST AS EVIDENCE OF SENDING THESE DOCUMENTS BY POST TO THE AO, COPY OF TDS CERTIFICAT E, COPY OF THEIR BANK STATEMENT , WHICH REACHED THE AO AFTER THE ASSESSME NT WAS FRAMED U/S 143(3) OF THE ACT ON 21-12-2010 . IT IS THE SAY OF THE ASSESSEE THAT THESE DOCUMENTS WERE NOT ADMITTED WHEN THEY WERE SUBMITTE D BEFORE THE LEARNED CIT(A) ON THE TECHNICAL GROUNDS THAT THE ASSESSEE F AILED TO PRODUCE DOCUMENTS BEFORE THE AO DESPITE SUFFICIENT OPPORTUN ITY BEING GRANTED TO THE ASSESSEE. IN OUR CONSIDERED VIEW KEEPING IN VIEW FA CTUAL MATRIX OF THE CASE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE AND FAIR PLAY, THESE ADDITIONAL EVIDENCES NEED TO BE ADMITTED AND ADJUDICATED ON ME RITS. THUS, IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE ARE INCLINED TO SET ASIDE AND RESTORE THIS ISSUE TO THE FILE OF THE AO FOR DE-NOVO DETERMINATI ON OF THE MATTER ON MERITS AFTER CONSIDERING AND EVALUATING THESE ADDITIONAL E VIDENCES ON MERITS. NEEDLESS TO SAY THAT PROPER AND ADEQUATE OPPORTUNIT Y OF BEING HEARD SHALL BE PROVIDED BY THE AO TO THE ASSESSEE IN ACCORDANCE WI TH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW. THE AO SHALL ADMIT ALL RELEVANT EVIDENCES AND EXPLANATIONS SUBMITTED BY THE ASSESSEE TO SUPPORT I TS CONTENTIONS AND THE SAME SHALL BE ADJUDICATED BY THE AO ON MERIT. THIS DISPOSES OF GROUND NO. 1 ITA 8059/MUM/2011 7 RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL. WE ORDER ACCORDINGLY. 8. IN GROUND NO. 2 RAISED BY THE ASSESSEE IN THE ME MO OF APPEAL FILED WITH THE TRIBUNAL, THE ASSESSEE IS AGGRIEVED BY THE ADDITION OF RS. 7,50,000/- WITH RESPECT TO LOANS RAISED BY THE ASSESSEE FROM TWO PA RTIES NAMELY SH PANKAJ PERIWAL OF RS. 2,50,000/- AND LOAN OF RS. 5,00,000 /- FROM SH. RAGHULAL LAXMI NARAYAN, VIDE ASSESSMENT ORDER DATED 21-12-20 10 PASSED U/S 143(3) OF THE ACT ON THE GROUNDS THAT THE SAID TWO LENDERS HAVE NOT SUBMITTED ANY RESPONSE TO NOTICES U/S 133(6) OF THE ACT ISSUED BY THE AO DURING ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT WHICH LED TO AO TO COME TO CONCLUSION THAT THEIR IDENTITY AND CREDITWO RTHINESS OF THESE LENDERS WERE NOT PROVED NOR GENUINENESS OF THE LOAN TRANSAC TIONS WERE ESTABLISHED AND THUS AO ADDED THE SAID SUM AS AN UNEXPLAINED DE POSITS U/S 68 OF THE ACT , WHICH ADDITION STOOD CONFIRMED/UPHELD BY LEAR NED CIT(A) IN HIS APPELLATE ORDER DATED 28-09-2011. THE ASSESSEE SUBM ITTED BEFORE THE LEARNED CIT(A) THAT THESE PARTIES ARE FROM KOLKATTA AND THE Y DID SEND THE COMPLIANCE TO NOTICE ISSUED BY THE AO U/S 133(6) OF THE ACT DI RECTLY TO THE AO BUT THE AO HAS FAILED TO TAKE COGNIZANCE OF THE SAME. THE ASSE SSEE SUBMITTED THE SAID COMPLIANCE LETTER AS ADDITIONAL EVIDENCE BEFORE THE LEARNED CIT(A) AND PRAYED THAT THE SAME MAY BE ADMITTED AS ADDITIONAL EVIDENC E U/R 46A OF INCOME TAX RULES, 1962 DESPITE THE FACT THAT THE SAME WERE SEN T DIRECTLY BY THESE PARTIES TO THE AO IN RESPONSE TO NOTICE U/S 133(6) OF THE A CT WHICH AO FAILED TO TAKE COGNIZANCE WHILE FRAMING ASSESSMENT ORDER DATED 21- 12-2010 U/S 143(3) OF THE ACT. THE AO IN HIS REMAND REPORT STATED THAT TH E ASSESSEE COULD NOT PROVE THE IDENTITY AND CAPACITY OF THE CREDITORS AS WELL GENUINENESS OF THE LOAN TRANSACTIONS COULD NOT BE PROVED AND NO RESPONSE W AS RECEIVED W.R.T. NOTICES U/S. 133(6) OF THE ACT DESPITE SUFFICIENT TIME GIVE N TO PRODUCE THE DOCUMENTS. THE COPIES OF CONFIRMATION LETTERS, COPY OF INCOME TAX RETURN OF THE CREDITORS,, COPY OF BANK ACCOUNT WERE SUBMITTED AS ADDITIONAL E VIDENCES . THE LEARNED ITA 8059/MUM/2011 8 CIT(A) REJECTED THE CONTENTIONS OF THE ASSESSEE AND CONFIRMED THE ADDITIONS VIDE APPELLATE ORDER DATED 28-09-2011. 9.AGGRIEVED BY THE APPELLATE ORDER DATED 28-09-2011 , THE ASSESSEE FILED SECOND APPEAL BEFORE THE TRIBUNAL AND THE LEARNED C OUNSEL FOR THE SSESSEE CONTENDED THAT ADDITIONAL EVIDENCES WERE DULY FILED BEFORE THE LEARNED CIT(A) TO PROVE THAT THESE LOANS OF RS. 7,50,000/- RECEIVE D FROM THESE TWO PARTIES WERE GENUINE AND TO ESTABLISH THE IDENTITY AND CRED ITWORTHINESS OF THESE TWO PARTIES. THE AUTHORITIES BELOW ERRED IN NOT ADMITTI NG ADDITIONAL EVIDENCES ON TECHNICAL GROUNDS THAT THE SAME WERE NOT PRODUCED B EFORE THE AO DURING ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT BOTH THESE PARTIES WERE FROM KOLKATTA AND WHEN THE AO CALLED THE INFORMATION VID E NOTICES U/S 133(6) OF THE ACT, THESE PARTIES SENT THE INFORMATION CALLED FOR DIRECTLY TO THE AO BUT THE SAME WAS NOT TAKEN COGNIZANCE BY THE AO WHILE FRAMI NG IMPUGNED ASSESSMENT ORDER DATED 21-12-2010 U/S 143(3) OF THE ACT . THESE EVIDENCES WERE FILED BEFORE THE LEARNED CIT(A) AS ADDITIONAL EVIDENCES U/R 46A OF INCOME TAX RULES, 1962 BUT THE SAME WERE NOT ADMITTED. IT WAS PRAYED THAT THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE AO AND TH E ASSESSEE WILL DULY SUBMIT ALL RELEVANT EVIDENCES AND EXPLANATION TO PROVE THE IDENTITY AND CREDITWORTHINESS OF CREDITORS AND TO PROVE THAT THE SE LOANS ARE GENUINE. IT WAS SUBMITTED THAT COMPLETE DETAILS OF THESE PARTIES SU CH AS CONFIRMATION OF LOANS FROM THESE PARTIES ALONG WITH TDS CERTIFICATE, LEDG ER ACCOUNT AND BANK STATEMENTS WERE SUBMITTED BEFORE THE AO DURING ASSE SSMENT PROCEEDINGS(PB/PAGE 22-37) AND AS ADDITIONAL EVIDEN CES COPY OF ACKNOWLEDGEMENT OF RETURN OF THESE PARTIES, BANK AC COUNTS OF THESE PARTIES , TDS CERTIFICATE WERE SUBMITTED BEFORE LEARNED CIT(A ) BUT THE SAME WERE NOT ADMITTED BY AO/CIT(A). THE SAID ADDITIONAL EVIDENCE S ARE PLACED IN PAPER BOOK FILED WITH THE TRIBUNAL( PAGE 58-67/PB). THE L EARNED DR RELIED ON THE ORDERS OF LEARNED CIT(A). ITA 8059/MUM/2011 9 10.WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE MATERIAL ON RECORD. THE ASSESSEE IS ENGAGED IN BUSINESS OF DEAL ING IN CARDIO LOGICAL PRODUCTS, SURGICAL AND MEDICAL DISPOSABLE. THE ASSE SSEE IS STATED TO HAVE RAISED LOANS OF RS.7,50,000/- FROM THE TWO PARTIE S NAMELY MR PANKAJ PERIWAL( RS. 2,50,000/- ) AND MR. RAGHULAL LAXMI NA RAYAN( RS. 5,00,000) DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED A SSESSMENT YEAR. THE ASSESSEE SUBMITTED LOAN CONFIRMATION BEFORE THE AO DURING ASSESSMENT PROCEEDINGS ALONG WITH LEDGER ACCOUNT COPY, ASSESSE ES BANK STATEMENT, TDS CERTIFICATE. THE AO ISSUED NOTICE U/S 133(6) OF THE ACT TO VERIFY THE IDENTITY, CREDITWORTHINESS OF THE LOAN CREDITORS AND TO ESTAB LISH THE GENUINENESS OF THE LOAN TRANSACTION . THE SAID PARTIES ARE STATED TO B E BASED IN KOLKATTA AND SUBMITTED DETAILS SUCH AS LOAN CONFIRMATION, THEIR COPIES OF RETURN OF INCOME, BANK STATEMENT AND TDS CERTIFICATE DIRECTLY TO THE AO WHICH WAS STATED TO HAVE NOT BEEN TAKEN COGNIZANCE BY THE AO WHILE FRAM ING ASSESSMENT ORDER DATED 21-12-2010 U/S 143(3) OF THE ACT. THESE DOCUM ENTS WERE PRODUCED BY THE ASSESSEE DURING APPELLATE PROCEEDINGS BEFORE TH E LEARNED CIT(A) WITH A PRAYER TO ADMIT THESE ADDITIONAL EVIDENCES U/R 46A OF THE INCOME TAX RULES, 1962 WHICH REQUEST OF THE ASSESSEE WAS NOT ACCEPTED BY THE CIT(A)/AO ON THE GROUNDS THAT THE SUFFICIENT OPPORTUNITY WAS GRANTED TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN OUR CONSID ERED VIEW KEEPING IN VIEW FACTUAL MATRIX OF THE CASE AND IN THE INTEREST OF S UBSTANTIAL JUSTICE AND FAIR PLAY, THESE ADDITIONAL EVIDENCES NEED TO BE ADMITTE D AND ADJUDICATED ON MERITS. THUS, IN THE INTEREST OF SUBSTANTIAL JUSTIC E, WE ARE INCLINED TO SET ASIDE AND RESTORE THIS ISSUE ALSO TO THE FILE OF THE AO F OR DE-NOVO DETERMINATION OF THE MATTER ON MERITS AFTER CONSIDERING AND EVALUATI NG THESE ADDITIONAL EVIDENCES ON MERITS. NEEDLESS TO SAY THAT PROPER AN D ADEQUATE OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED BY THE AO TO THE ASSE SSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LA W. THE AO SHALL ADMIT ALL RELEVANT EVIDENCES AND EXPLANATIONS SUBMITTED BY TH E ASSESSEE TO SUPPORT ITS CONTENTIONS AND THE SAME SHALL BE ADJUDICATED BY TH E AO ON MERIT. THIS ITA 8059/MUM/2011 10 DISPOSES OF GROUND NO. 2 RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL. WE ORDER ACCORDINGLY. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN ITA NO. 8059/MUM/2011 FOR THE ASSESSMENT YEAR 2008-09 IS PARTLY ALLOWED A S INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2016. # $% &' 12-09-2016 ( ) SD/- SD/- (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 12-09-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI