TMI Blog2007 (7) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the books of account of M/s. J.K. Industries and Birla Tyres from whom the assessee made purchases of tyres. The Assessing Officer observed purchases of Rs. 1,89,454 made from those parties were not included in the purchases account. The assessee had debited these purchases to personal account of the company. Likewise, corresponding sales were also not reflected in the sales accounts. The assessee was asked to reconcile the same. However, the assessee had maintained accounts of both the parties, where the payments were not made bill-wise. Therefore, the assessee found it difficult to reconcile the same. Therefore, the Assessing Officer rejected the book version and estimated the undisclosed sales at Rs. 4 lakhs and estimated the GP on such sales and made the addition accordingly. Subsequently, the learned CIT revised the order under section 263 on the ground that the Assessing Officer had overlooked the fact regarding the purchases of Rs. 1,89,454, which have not been entered in the purchase account. The CIT further observed that the Assessing Officer had not verified whether corresponding items were reflected in sales of closing stock and if not whether further addition of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of accounts. Accordingly, the purchases were considered as unexplained investment. But, it is seen from the relevant purchases vis-a-vis their entries in the cash book that the same were debited to the account of the supplier and credited to the OBC Bank Ltd. The appellant receives from the suppliers i.e. M/s. J.K. Industries Ltd. and M/s. Birla Tyres the bills and the cheque bearing consolidated amount of the various purchases effected by the appellant is issued to the supplier, like the purchase bill for Rs. 6,252 was included in the amount of Rs. 1,50,000. Similarly, the purchase of Rs. 3,508 was included in the amount of Rs. 80,000. For certain purchases the payments were effected in the next year. Therefore, in the light of the entries reflected in the cash book vis-a-vis copy of account made available by the suppliers it does not remain the case of unexplained investment under section 69. It is finding of the Assessing Officer that the appellant was not able to co-relate the said purchases with the sale reflected in books of accounts. But said was the position of purchases also, not recorded as well as of the sales, which led to taxation of GP, earned on thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer obtained the copies of accounts from M/s. J.K. Industries and M/s. Birla Tyres, the assessee was not in a position to link the payments in respect of specific bills. However, during the course of appeal proceedings, the assessee obtained these details from the two parties and furnished the same before the CIT(A). He referred to p. 1 of the paper book, which is a copy of details of six bills referred to by the Assessing Officer in the assessment order. He submitted that out of the same two bills mentioned at sl. Nos. 3 and 4 amounting to Rs. 17,642 and Rs- 3,608 related to the subsequent assessment year as the sales were recorded by the parties on 9-5-2001 and 10-4-2001 respectively. As regards the remaining bills, the assessee had obtained the bills of the same from two parties and furnished the same before the CIT(Appeals). The party admitted having received the payments from the assessee. Amount of Rs. 95,165 in respect of bill No. 11351 dated 31-10-2000 was adjusted against the security on 28-2-2001. The remaining payments were duly reflected in the cash book. The relevant details have been placed at pp. 2 to 6 of the paper book. He submitted that these details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed xerox copies of the sale bills and receipts of disputed amount. The learned CIT (Appeals) admitted the fresh evidence without confronting the same to the Assessing Officer and by relying on such evidence, the learned CIT (A) deleted the addition. The Tribunal upheld the order of the CIT (Appeals). On appeal, the Hon ble Gauhati High Court held that the fresh evidence can be admitted by the CIT (Appeals) only if one of the conditions mentioned in rule 46A(1) of the Income-tax Rules, 1962 was satisfied. It was further held that even if such conditions exist, the learned CIT(Appeals) is not competent to straightway admit the fresh evidence without allowing an opportunity to the Assessing Officer as required under sub-rule (3) of rule 46A. Therefore, the Hon ble Gauhati High Court restored the matter to the file of the CIT (A) after setting aside the order of the Tribunal. The Hon ble Gauhati High Court also relied on the judgment of Bombay High Court in the case of Smt. Prabhavati S. Shah v. CIT [1998] 231 ITR 1 (Bom.) and judgment of Hon ble Allahabad High Court in the case of Haji Lal Mohd. Bin Works v. CIT [2005] 275 ITR 496 (All.). 7.1 Similar issue came up before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant shall not be entitled to produce before the Dy. CIT (A) or, as the case may be, the CIT(A), 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 Dy. CIT(A) or, as the case may be, the CIT(A) records in writing the reasons for its admission. (3) The Dy. CIT (A) or, as the case may be, the CIT (A) shall not take into account any evidence produced under sub-rule (1) unless the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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