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2015 (8) TMI 1162 - ITAT BANGALORE

2015 (8) TMI 1162 - ITAT BANGALORE - TMI - Unexplained cash credits - identity and credit worthiness of the creditors and the genuineness of the transactions had not been established - CIT (Appeals) denying the admission of additional evidence submitted by the assessee in appellate proceedings under Rule 46A - Held that:- It appears from a plain reading of the order of assessment that the Assessing Officer at this stage, instead of putting the assessee on notice by affording the assessee an oppo .....

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6A of the Rules on the ground that the assessee was unable to establish reasonable cause since it was afforded adequate opportunity by the Assessing Officer. Thus we are of the view that the assessee was prevented by reasonable and sufficient cause from presenting the details, sought to be filed and admitted as additional evidence, since it had no opportunity to do so before the Assessing Officer and was not allowed to do so before the learned CIT (Appeals). We, therefore, in the interest of jus .....

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ssessment Year 2009-10. 2. The facts of the case, briefly, are as under :- 2.1 The assessee, a firm engaged in business as builders and developers, filed its return of income for Assessment Year 2009-10 on 31.7.2009 declaring income of ₹ 21,53,140. The case was taken up for scrutiny and the assessment was subsequently concluded under Section 143(3) of the Income Tax Act, 1961 (in short 'the Act') vide order dt.26.12.2011 wherein the income of the assessee was determined at ₹ .....

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assessment for Assessment Year 2009-10 dt.26.12.2011, the assessee preferred an appeal before the CIT (Appeals) - III, Bangalore challenging the additions of ₹ 35,00,000 made by the Assessing Officer in respect of the above unexplained cash credits amounting to ₹ 35 lakhs. The learned CIT (Appeals) dismissed the assessee's appeal vide order dt.24.2.2014. 3. The assessee, being aggrieved by the order of the CIT (Appeals) - III, Bangalore dt.24.2.2014 for Assessment Year 2009-10, .....

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the technicalities shall not be come in the way of rendering the justice. 3. On the facts and circumstances of the case and under the provisions of law the CIT (Appeals) erred in sustaining the addition made by the Assessing Officer under Section 68 by holding that credit worthiness of the lender of the lender has not been proved, though the appellant is not bound to prove sources of source. 4. On the facts and circumstances of the case, the Hon'ble CIT (Appeals) erred in sustaining the add .....

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re received through proper banking channel and the appellant submitted the PAN and assessing authority under whom the loan creditors were assessed. Hence, the addition being erroneous on both of the facts and law. 7. For these and other reasons, which may be adduced at the time of hearing, the appellant prays this Hon'ble Bench to delete the addition made by the Assessing Officer or may pass such other order as the Bench may think fit. 8. Appellant craves leaves to add, to alter, to amend an .....

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Representative urged this ground before the Bench. It is submitted by the learned Authorised Representative that in the course of assessment proceedings, the Assessing Officer required the assessee to establish the genuineness of the loans from the following persons appearing in the balance sheet of the firm as on 31.3.2009 :- (i) Abu Bakar : Rs.10 lakhs. (ii) Zoheb ur Rehman : Rs.10lakhs. (iii) Sawanth Shetty : Rs.10 lakhs. (iv) Ateeq : Rs.5 lakhs. 5.1.2 It is submitted, that simultaneously, th .....

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s were advanced to the assessee by cheques. In the case of Mr.Sawanth Shetty, the summons issued by the Assessing Officer under Section 131 of the Act was returned unserved. The learned Authorised Representative contends that the Assessing Officer brushed aside whatever evidences were placed before her and proceeded to hold that the loans from the above four persons amounting to ₹ 35 lakhs were not established to be genuine and brought the same amount to tax in the assessee's hands. Th .....

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natural justice since the assessee was not provided due and adequate opportunity of being heard in the matter and to adduce evidence to rebut the Assessing Officer s presumption and to buttress its own case. 5.1.3 The learned Authorised Representative submitted that in appellate proceedings before the learned CIT (Appeals), the assessee had made an application dt.21.1.2014 seeking for admission of additional evidence under Rule 46A of the Rules which was rejected by the learned CIT (Appeals) on .....

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called for information under Section 131 of the Act, which were filed in the case of 3 parties, with one summons in the case of Mr. Sawanth Shetty being returned unserved. The Assessing Officer by virtue of the principles of natural justice ought to have put the assessee on notice, by way of a show cause notice, before coming to an adverse finding in the matter. A plain reading of the order of assessment would clearly establish that no such opportunity was afforded to the assessee. The learned A .....

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amounting to ₹ 35,00,000 and prayed that in the interest of equity and justice, the said additional evidence be admitted and the same be restored to the file of the Assessing Officer for fresh consideration. 5.2 Per contra, the learned Departmental Representative supported the orders of the authorities below and prayed for dismissal of this ground as the Assessing Officer had afforded the assessee adequate opportunity of being heard in the matter. 5.3.1 We have heard the rival contentions .....

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amounting to ₹ 35 lakhs advanced by the aforesaid four persons (details at para 5.1.1 supra). It appears while some of the details called for from the assessee were filed, the Assessing Officer, simultaneously also issued summons under Section 131 of the Act to the four persons directing them to produce certain details. In the case of 3 parties Mr. Abu Bakar, Mr. Zoheb ur Rehman and Mr. Ateeq, the details called for appear to have been placed before her and also confirming that the loans .....

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the assessee on notice by affording the assessee an opportunity of being heard and to adduce evidence to rebut the Assessing Officer s view and buttress its own stands that the aforesaid four loans were genuine, proceeded to render an adverse finding in the matter thereby violating the principles of natural justice by not affording the assessee adequate opportunity to present evidence in this regard. 5.3.2 We find that on appeal too, the learned CIT (Appeals) in the impugned order, declined to a .....

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rse view in the matter, the assessee was denied the opportunity to rebut her views and buttress its own view on the genuineness of the aforesaid loans by adducing evidence in that regard thereby violating the principles of natural justice. We are also of the view that the learned CIT (Appeals) on a wrong appreciation of the facts of the matter, i.e. that the assessee was provided adequate opportunity by the Assessing Officer; declined to admit the additional evidence sought to be admitted U/R 46 .....

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