TMI Blog2017 (2) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... z, Accountant Member and Shri Ram Lal Negi , Judicial Member For The Appellant : Shri Abhishek Sharma For The Respondent : Shri Vipul Joshi ORDER Per Jason P. Boaz, A.M. This appeal by Revenue is directed against the order of the CIT(A)-17, Mumbai dated 18.09.2014 for A.Y. 2011-12. 2. The facts of the case, briefly, are as under: - 2.1 The assessee company, stated to be in the business of renting of property, filed its return of income for A.Y. 2011-12 declaring loss of ₹ 6,75,90,696/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 31.12.2013, wherein the assessee s income was determined at ₹ 86,16,260/-. In doing so, the Assessing Officer (AO); (i) treated the assessee s returned business income from letting out of property as income from house property and accordingly recomputed the same at ₹ 5,55,39,292/-, and (ii) in this regard also disallowed the assessee s claim for interest paid on borrowed capital to the extent of ₹ 4,98,87,988/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that perusal of paras 6 to 6.2 of the order of amount for A.Y. 2011-12 clearly establish that this bank statement on the basis of which assessee was given relief was never furnished before the AO in assessment proceedings. The learned D.R. submits that the above averments clearly establish that in the impugned order the learned CIT(A) has allowed the assessee relief on this issue, solely based on additional evidence placed before him in appellate proceedings, without affording the assessee adequate opportunity as required under Rule 46A of the I.T. Rules, 1962. It is prayed that in these circumstances, the order of the learned CIT(A) giving relief to the assessee be set aside, for de novo consideration and fresh adjudication after affording the AO adequate opportunity under Rule 46A of the I.T. Rules. 3.3 The learned A.R. of the assessee was not able to contravene the learned D.R. s arguments/grounds raised that the learned CIT(A) had given the assessee relief based on additional evidence admittedly filed in appellate proceedings. The learned A.R. of the assessee, however, opposed the prayer of Revenue that the decision of the learned CIT(A) on this issue be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the [Assessing Officer], except in the following circumstances, namely :- (a) where the [Assessing Officer] has refused to admit 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 relevant 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 adduce 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 Commissioner (Appeals)] records in writing the reasons for its admission. (3) The [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, as discussed above, we find, as contended by Revenue in the grounds raised, that the learned CIT(A) allowed the assessee relief on the interest disallowed by the AO on the basis of additional evidence/documents filed for the first time before him in appellate proceedings, which was never placed before the AO, and without giving the AO adequate opportunity of being heard in the matter as required for the purposes laid in Rule 46A(3) of the Rules. This has led to a gross violation of the principles of natural justice. In this view of the matter, we set aside the order of the learned CIT(A) on the issue of interest disallowance raised by Revenue (supra) and restore the matter to the file of the learned CIT(A) for de novo consideration and adjudication, after affording the AO adequate opportunities of being heard in terms of Rule 46A(3) of the Rules for examination, verification and rebuttal of the said additional evidence put forth by the assessee. We hold and direct accordingly. Consequently grounds raised by Revenue are treated as allowed for statistical purposes. 4. Before parting, we refer to the judicial pronouncements cited by the learned AR (supra). We have carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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