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2019 (5) TMI 1255 - AT - Income TaxAdmission of additional evidence - sufficient cause - CIT(A) appreciated the reasonable cause put forth by the assessee for delay in filing the appeal - HELD THAT:- In my view, approach of the CIT(A) appears to be incongruous and does not stand the test of reason. Rule 46A of the Rules prescribes circumstances under which additional evidence can be admitted after allowing opportunity to the AO. One of the conditions laid down in Rule 46A of the Rules is when there is sufficient cause for failure to produce the evidence before the AO. While evaluating sufficient cause for failure to produce evidence before the AO, the test of reasonableness and human probabilities must be applied so as to aid the object of assessment proceedings, i.e., determination of the income liable for taxation. Assessment proceedings and appellate proceedings under the Act, between the assessee and Revenue, are not adversarial proceedings. The ultimate object of assessment and appellate proceedings is to determine the correct income of the assessee liable for taxation and technicalities must not come in the way of determination of the correct total income. Therefore, the refusal by the CIT(A) to admit additional evidence, in the facts and circumstances of the case on hand, does not stand to reason. Claim of Exemption u/s 54 - in remand report AO has only remarked that there is a claim for exemption u/s 54 and that no return of income has been filed by the assessee for AY 2009-10 - HELD THAT:- No adverse remarks have been made by the AO with regard to the computation of LTCG as well as the entitlement to claim exemption u/s 54. It is, therefore, clear that the AO was satisfied about the sale / purchase of the said properties and the investment benefit available to the assessee u/s 54. In the remand report, the AO has only remarked that there is a claim for exemption u/s 54 and that no return of income has been filed by the assessee for Assessment Year 2009-10. This remark by the AO cannot be a factor to deny the assessee its legitimate claim for exemption u/s 54. There is no prohibition under the Act on the assessee in claiming exemption u/s 54 in case it has not filed a return of income. Such a legal claim can be put forth at any stage of assessment / appellate proceedings and should be considered on merits in the light of the details / documents / corroborative evidence filed in this regard. Having considered the entire material on record on this issue and taking into account the peculiar facts and circumstances of the case on hand, the assessee is entitled to exemption u/s 54 and therefore the entire sale consideration assessed by the AO is hereby deleted. - Decided in favour of assessee.
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