TMI Blog2011 (1) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 lacs was treated as capital receipt not chargeable to tax. In the note annexed to the computation of total income, it was stated by the assessee that the said amount of ₹ 95 lacs has been received by her towards damage caused to her reputation. During the course of assessment proceedings, the assessee was called upon by the A.O. to justify the treatment given by her to the amount of ₹ 95 lacs received on account of compensation from M/s CoCo Cola India Ltd. as capital receipt. The assessee was also required by the A.O. to explain as to why the said amount should not be treated as revenue receipt chargeable to tax in her hands. As stated by the A.O. in his order, the assessee, however, did not offer any explanation and in the absence thereof, the A.O. found it difficult to ascertain the true nature the amount of ₹ 95 lacs received by the assessee. He, therefore, treated the said amount as income of the assessee and brought the same to tax in her hands in the assessment completed u/s 143(3). 3. Against the order passed by the A.O. u/s 143(3), an appeal was preferred by the assessee before the ld. CIT(A) and a written submission was filed on her behalf before hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company demanded ₹ 1.45 crore from the appellant terminating the agreement. On 7/4.03, the appellant replied to Coco Cola through her solicitors. In this letter the appellant alleged sexual harassment by employees of Coco Cola. The appellant also demanded the balance payment of ₹ 50 lakh reserving her right to claim damages. Ultimately, it appears that there was an agreement entered into between the appellant and Coco Cola on 18/9/03. A copy of the agreement is on record. At para 2 of the agreement it has been mentioned that the company agreed to pay to the appellant ₹ 1,45,00,000/- as compensation without admission of liability towards the appellant s alleged claims against Coco Cola arising out of, or in relation to the celebrity Agreement, and subsequent termination thereof as hereinabove stated. The said amount shall be accepted by SS in full and final settlement for all her claims against CoCo Cola arising of or in relation to the Celebrity Agreement and the subsequent termination thereof and SS confirms that she has no claims of whatsoever nature against Coco-Cola . In terms of such agreement, Justice S.P. Bharucha (retired) was to conduct inquiries. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployee of M/s Coco Cola India Ltd. He took us through the correspondence exchanged between the assessee and M/s Coco Cola India Ltd. in this context during the relevant period to show the nature of dispute and the allegation made by the assessee. He submitted that the assessee finally took the matter with Global Chairman of Coco Cola India Ltd. Group and with his intervention, a settlement was arrived at by which the assessee received a sum of ₹ 1.45 crores. According to him, the said amount to the extent of ₹ 50 lacs was treated by the assessee as received under the original contract and the same was offered to tax as her income. However, the balance amount of ₹ 95 lacs which was received by her as compensation for termination of contract was claimed to be exempt by her being a capital receipt. He submitted that the A.O., however, treated the said amount as income of the assessee and assessed the same in her hands on the ground that there was failure on the part of the assessee to support and substantiate her claim that the amount of ₹ 95 lacs constituted capital receipt. He submitted that since sufficient and proper opportunity was not afforded by the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal or cross objection challenging the action of the ld. CIT(A) in admitting the additional evidence filed by the assessee. 7. The learned D.R., on the other hand, submitted that if the impugned order passed by the ld. CIT(A) is not properly made in as much as additional evidence has been admitted by him without complying with the requirements of Rule 46-A of the Income Tax Rules, 1962, the Tribunal has the power to give proper direction to the ld. CIT(A) to pass the order afresh after complying with the requirements of the said Rules properly. On merit, he contended that the amount of ₹ 95 lacs was paid by the M/s Coco Cola India Ltd. to the assessee not as a result of any allegation made by the assessee such as sexual harassment etc. He invited our attention to the relevant portion of the termination agreement and submitted that the said amount was paid by M/s Coco Cola India Ltd. without admitting any liability whatsoever. He contended that the said amount received by the assessee thus was in the nature of revenue receipt chargeable to tax in her hands as rightly held by the authorities below. In support of this contention, the ld. D.R. relied on the decisions of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Although he has made a mention of the relevant documents filed by the assessee and has also referred to some of the said documents while deciding the issue relating to taxability of ₹ 95 lacs, there is no mention by him that the said documents constituted additional evidence filed by the assessee for the first time before him. He has not passed any order recording any reasons for admitting the said additional evidence filed by the assessee. He has also not allowed any opportunity to the A.O. to examine the said additional evidence filed by the assessee for the first time. It is, no doubt, true that Rule 46-A of Income Tax Rules, 1962 permits the assessee to file additional evidence before the ld. CIT(A) but sub-Rule (1) thereof lays down the circumstances in which alone the assessee is entitled to produce additional evidence. Further, sub-Rule (2) of Rule 46-A mandates that no additional evidence shall be admitted under sub rule (1) unless CIT(A) records in writing the reasons for its admission. Under Rule sub rule (3) of Rule 46-A, the ld. CIT(A) should not take into account any additional evidence produced under sub rule (1), unless the A.O. has been allowed a reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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