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2015 (10) TMI 1486 - AT - Income TaxAddition made under section 144 - penalty under section 271(1)(c) - Held that:- Even though A.O. has given many opportunities and also issued show cause notices proposing additions under section 144, just because assessee Managing Director could not appear on the given date, in our view, the additions could not be made without analyzing the business activity of assessee. A.O. can enquire expenditure claims made in the P & L account. However, the outstanding sundry creditors or liabilities are not from the P & L account but are Balance Sheet amounts. The outstanding amount cannot become income, unless it is established that the credits were received during the year and further they are unexplained. Nothing was brought on record by the A.O. and only the outstanding amount was brought to tax without examining the nature of the amounts. Moreover, when assessee sought to file additional evidence, in our view, Ld. CIT(A) rejected admission of the same without any valid reason. Assessee is justifying that Managing Director could not appear before the A.O. on the given date due to ill-health. If Ld. CIT(A) has any doubt about the claims made, then it is for the Ld. CIT(A) to ask assessee to furnish necessary evidences. Without doing so the contention cannot be rejected on the reason that necessary evidence was not furnished. Even otherwise, the additions per se cannot be justified without examining the contentions. In view of this, we have no hesitation in setting aside the order of the Ld. CIT(A) and A.O. and restore the assessment to the file of A.O. to do it afresh, as per the facts of the case and law on the subject. Needless to say that assessee should be given due opportunity in the proceedings. - Decided in favour of assessee for statistical purposes.
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