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Judgment
Per Kavitha Rajagopal, JM:
This appeal is filed by the assessee, challenging the order of the Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18.
The assessee has raised the following grounds of appeal.
“1.The order passed by the Ld. CIT(A) dismissing the appeal of the appellant is bad in law and on the facts and circumstances of the case.
2.The Ld. CIT(A) has erred in law and on facts in confirming the action of the Assessing Officer in assessing the income at Rs. 1,66,84,150/-invoking the provisions of Section 115BBE of the Income Tax Act, 1961 by failing to appreciate that the Appellant had provided sufficient explanation regarding the source of funds/credits.
3.The Ld. CIT(A) has erred in law and on facts in not adjudicating the appeal based on the additional evidence filed by the Appellant under Rule 46A. In that the Ld. CIT(A) failed to appreciate that once the additional evidence was forwarded to the Assessing Officer for a Remand Report, the said evidence is deemed to have been admitted and ignoring such evidence, which goes to the root of the matter, while passing the impugned order is contrary to the settled principles of judicial precedent and natural justice.
4.The Ld. CIT(A) erred in dismissing the appeal without providing a proper and meaningful opportunity of being heard and advancing oral arguments, thereby violating the principles of natural justice.
5.The Ld. CIT(A) has gravely erred in disposing off the appeal of the Appellant summarily, mechanically and without any application of mind.
6.The Ld. CIT(A) erred in confirming the initiation of penalty proceedings, which is unwarranted given the facts of the case.
7.The above grounds of appeals are independent and without prejudice to one another.
8.The appellant may be allowed to add / withdraw or amend any ground of appeal at the time of hearing.”
Brief facts of the case are that, the assessee company is engaged in manufacturing of beverages and had filed its original return of income dated 26/10/2017 with a loss of Rs. 14,51,39,386/- under the normal provision where the turnover of the company was declared at Rs. 1,96,43,84,600/- on which gross profit of Rs. 58,44,17,476/- which was shown @ 29.75% and net profit of Rs. 15,75,49, 406/- was shown @ -8.02%. The assessee’s case was selected for scrutiny and notices u/s 143(2) and 142(1) were duly issued and served upon the assessee. The Ld. A.O. then passed the assessment order u/s 143(3) of the Act dated 30/12/2019 determining total loss of Rs. 14,51,39,386/- after making an addition of Rs. 1,66,84,150/- as unexplained cash u/s 68 of the Act chargeable to tax u/ s 115BBE @ 60%.
Aggrieved, the assessee was in appeal before the first appellate authority who vide order dated 17/02/2026 upheld the addition made by the A.O. by rejecting the assessees’ additional evidences filed under Rule 46A of the Rules.
Aggrieved, the assessee is in appeal before us, challenging the impugned order of the Ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has made a cash deposit during demonization period aggregating to Rs. 3,05,34,500/- out of which Rs. 2,38,34,500/- was made in specified bank notes (SBN). The Ld. A.O. after duly considering the assessee’s submission held that 30% of the said deposit was from sales during the period of September 2016 to 08th November, 2016 to the extent of Rs. 71,50,350/- and treated the balance amount of Rs. 1,66,84,150/- to be unexplained cash credit as bogus sales and bogus cash deposits credited to the books of account of the assessee during the said period. Before the Ld. CIT(A), the assessee filed an application for admission of additional evidence under Rule 46A of the Income Tax Rules, 1962, where the assessee intended to furnish Business Transfer Agreements and the addresses of all retailers from whom deposits were received. The assessee stated that the said documents were not produced before the Ld. A.O. as no sufficient opportunity was provided. The Ld. CIT(A) rejected the admission of additional evidence filed under Rule 46A of the Rule on the ground that thought the assessee had sufficient opportunity to adduce the said evidence before the Ld. A.O. the same was not produced and the assessee has failed to explain that there was sufficient cause for non prosecution of the evidences before the Ld. A.O. The Ld. CIT(A) upheld the addition made by the Ld. A.O.
Before us, the Ld. Authorized Representative (in short “Ld. AR)” contended that the assessee has got a good case on the merits and due to unavoidable circumstances the assessee was unable to produce the additional evidence before the Ld. A.O.
The Ld. Departmental Representative (in short “Ld. DR)” supported the findings of the Ld. CIT(A). On the above factual matrix of the case, it is observed that the Ld. CIT(A) has denied the additional evidences filed by the assessee and had also not adjudicated the issue on the merits. As the basis of the said evidences, though the Ld. CIT(A) had the power of co-terminus as that of the Ld. A.O. In order to extend, the assessee one more opportunity to adduce all documentary evidences, we deem it fit to remand this issue back to the file of Ld. A.O. by adhering to the principles of natural justice and in the interest of justice dispensation. The assessee is directed to strictly comply with the proceeding before the Ld. A.O. and to furnish all relevant documentary evidences in support of its claim and the Ld. A.O. is directed to pass a de-novo assessment order on the basis of the submissions and evidences filed by the assessee along with admitting the additional evidences proposed to be filed by the assessee.
Hence, the grounds of appeal raised by the assessee are hereby allowed for statistical purpose.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.