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TMI Blog2019 (5) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... mitting additional evidence in violation of Rule 46A of I.Tax Rules, 1962." 4. "The Order of the Ld. CIT (A) is erroneous both in law and on facts.'' 5. "Any other ground that may be adduced at the time of hearing." 3. Since, the issue in both the grounds of appeal are interrelated pertaining to addition u/s 68 of the Act on account of unexplained investment in share capital and cash deposit and, therefore, adjudicated simultaneously. 4. Briefly, the facts of the case are that a search action u/s 132 of the Act was conducted in the business premises of the assessee and consequently, the assessment was completed u/s 143(3) r.w.s. 153A of the Act. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has made investment in fixed assets and NABARD Bonds amounting to Rs. 21,00,000/- and Rs. 49,87,500/- respectively during the accounting period under consideration. The Assessing Officer further noticed that the assessee has shown credit of an aggregate amount of Rs. 56,00,000/- as share application money/share premium in the Balance Sheet as on 31.03.2009. The Assessing Officer required the assesse to explain the sources of investments in sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even by deputing Inspector, which was not done. Therefore, after considering the facts and circumstances of the case and the case laws relied up on by the appellant and the fact that all the persons are regularly assessed to tax and such investments are not disputed in their respective cases, the addition made by the AO is not sustainable and the same is deleted. This ground of appeal is, accordingly, allowed. ........... 4.3 I have gone through the observations of the A.O. and submissions of the appellant. The appellant has filed copies of bank statement, copy of cash book for the relevant periods, audited balance sheet with relevant schedule, to establish the opening cash balances, as additional evidences. The A.O. did not issue any query in this regard. Therefore, the same are admitted as additional evidences u/r.46A after affording opportunity to the A.O. Perusal of the cash book shows that the deposits were made out of cash balance available with the appellant as on the date of deposit. In fact the appellant has received Rs. 3,00,000/- on 01.08.2005 against the issue of shares from four investors and filed the confirmations of the concerned persons. Thus, the immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's observations: (Para-4) * Aggregate share application money of Rs. 54,50,000/-, Rs. 16,00,000/-, Rs. 56,00,000/- were found credited respectively in above assessment years and assessee failed to satisfactorily explain the same. * In Remand report, AO contended that assessee was allowed several opportunities but he did not comply. * Additional evidences can be admitted only if conditions stipulated in Rule 46 A are fulfilled, hence he objected. CIT(A)'s findings (Para 3.3) * Assessee filed additional evidences, which are Copies of acknowledgement of ITRs, Confirmation of Account, etc of the Investors. * Though particulars of investors were filed before AO, the documents could not be filed for non-cooperation of investors who happened to be outsiders. * Under such circumstances non-supply of requisite information by outside parties has to be held as 'sufficient cause' for not submitting such evidences during assessment proceedings and the evidences were admitted in the interest of justice. * Evidences establish the identity and creditworthiness of creditors and genuineness of the transactions. * AO did not conduct any enquiries to establish otherwise and simply ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and assessee failed to satisfactorily explain the same. Hence he added CIT(A)'s findings (Para 4.1) * Assessee filed copies of bank statements, cash book for relevant period, relevant schedules of Audit Report to establish opening balances as additional evidences. * A.O. did not issue any query hence, these evidences are admitted u/s.46A. * The immediate source of deposit is covered by available cash balance and no adverse inference could be possible. Assessee's Submissions * The Ld. A.O. did not raise any query requiring the appellant to explain the source of cash deposits and the addition made is against the principles of natural justice. * The deposits were made out of cash balance available in the books of the company. * The financial statements and books of account cannot be disbelieved without any material as immediate source of deposit is verifiable. The ld. CIT(A) has rightly allowed this ground of appeal after considering the facts of the case." 9. We have heard the rival contentions and perused the material available on record and the citation relied upon by the assessee. It is material fact on record that the additional evidences in the form of names, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same place where the Assessing Officer could have very easily invoked such enquiry, if he had any serious doubts about the genuineness of transactions. This could have been done either by the summons u/s 131 of the Act or even by deputing Inspector, which was not done. These facts have not been controverted by the ld. DR. The contention of the ld. DR that no details have been filed before the Assessing Officer in respect of share application and has no satisfaction in the absence of supporting documentary evidences being available on record regarding shifting onus on the assessee without being any enquiry initiated by the Assessing Officer. Once the details have been provided by the assessee during the appellate proceedings before the ld. CIT(A) which are also provided to the Assessing Officer to verify the same. The Assessing Officer was duty bound to invoke the necessary enquiry by way of issuance of summons u/s 131 of the Act or by way of deputing an Inspector which he fails to do so. Therefore, considering the facts and circumstances of the case that the investors are regularly assessed to income tax and investments are not disputed and as such investments made by them are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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