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2017 (5) TMI 119 - ITAT AHMEDABAD

2017 (5) TMI 119 - ITAT AHMEDABAD - TMI - Admission of additional evidence u/r 46A - Dis-allowance of interest expenditure - set off of interest expenditure against salary income - According to the assessee he has not made investment for earning exempt income, rather, he has made investment for the purpose of business - Held that: - the AO has never asked assessee to produce copies of acknowledge exhibiting return filed by the lenders. He has issued one SCN to the assessee and thereafter issued .....

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the proceedings before the ld.CIT(A) vide which the ld.CIT(A) failed to take cognizance of the application moved for permission to lead additional evidence - this irregularity is required to be removed and proceeding is to be instituted at the stage where this irregularity has happened. - Matter remanded back to CIT(A) - Decided partly in favor of assessee. - ITA No.2431/Ahd/2016 - Dated:- 1-5-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For The Assesse .....

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n the facts and circumstances of the appellants case the order passed by the Id.AO is bad in law and deserved to be annulled. 1.1 In law and in facts and circumstances of the case, the order passed by the Id.AO in this case is bad in law and deserves to be annulled. 2. In law and in facts and circumstances of the case, the Id.AO grossly erred in not considering the additional evidences submitted before him under rule 46 A of the Income Tax rules. 3. In law and in the facts and circumstances of t .....

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g of appeal or before such hearing. 3. The ld.counsel for the assessee at the very outset challenged action of the CIT(A) for not taking any cognizance of the application moved by the assessee under Rule 46A of the income Tax Rules, 1962. In other words, he pressed ground no.2 first. 4. Before adverting to this ground, we would like to make reference to the facts in brief. The assessee has filed his return of income on 4.9.2012 declaring total income at ₹ 9,66,860/-. The return of the asse .....

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ce was issued on 10.3.2015 and assessment order was passed on 30.3.2015. The AO has made basically two additions to the income of the assessee. The assessment order is in Hindi. Computation made by the AO has been reproduced by the assessee in the statement of facts filed before us and that computation reads as under: Particulars Amount (Rs.) Income as per return of income 9,66,860 Additions: Vide para-5 of the Assessment Interest Expense 45,68,876/- House Property Loss 1,50,000/- Additions: Vid .....

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s Pvt. Ltd. According to the assessee he has not made investment for earning exempt income, rather, he has made investment for the purpose of business. The ld.AO did not consider single aspect with regard to this issue. Reply of the assessee in response to the show cause notice has been running into six pages and the AO has just recorded finding in three lines. He observed that interest expenditure cannot be claimed against salary income which is being drawn by the assessee as director in Godhan .....

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d to the evidence submitted by Bahubali Exim Pvt.Ltd. and Marine Gems Pvt.Ltd. The ld.AO has made an addition of ₹ 2.45 crores. Apart from that the ld.AO has made one more addition of ₹ 1.50 lakhs which has been deleted by the ld.CIT(A). 6. The ld.counsel for the assessee while impugning the order of the ld.CIT(A) contended that as far as addition of ₹ 2.45 crores with the aid of section 68 of the Act is concerned, the assessee has submitted confirmation and copies of bank acco .....

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30.3.2015. The AO has never intimated the assessee that summons have not been served to the creditors. He has also not directed the assessee to produce their income tax returns. In this situation, the assessee has filed an application under Rule 46A of the Income Tax Rules before the ld.CIT(A) for permission to adduce additional evidence. By way of this application, the assessee sought to produce copy of confirmation from whom the assessee has taken unsecured loans along with acknowledge receipt .....

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entions raised by the ld.counsel for the assessee with respect to non-adjudication of the application moved under Rule 46 of the Income Tax Rules, 1962. 7. In ground no.2 the assessee has challenged the action of the ld.CIT(A) vide which the ld.CIT(A) failed to take cognizance of the application of the assessee moved under Rule 46A. 8. We find that this application was filed before the ld.CIT(A) for permission to lead additional evidence. Before deciding the appeal of the assessee, the ld.CIT(A) .....

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re the [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 u .....

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e 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 (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the [Assessing Officer] has been allowed a reasonable opportunity- (a) to examine the evidence or document or to crossexamine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the a .....

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