Income Tax Appellate Tribunal - Delhi
Sikander Publishing (P) Ltd. vs Deputy Commissioner Of Income Tax on 13 August, 2003
Equivalent citations: (2003)81TTJ(DELHI)249
ORDER
P.N. Parashar, J.M.
1. These are two appeals by the same assesses against two different orders of learned CIT(A), both dt. 25th Feb., 2002, for asst. yr. 1997-98 and 1998-99.
2. Shri Pawan Kumar and Shri Pieyush Kaushik C.A.s appear on behalf of the assesses whereas Shri R.R. Prasad, Departmental Representative, represented the Department.
3. The assessee has moved separate applications, for the two assessment years in question, both dt. 10th April, 2003, for admission of additional evidence under Rule 29 of the ITAT Rules 1963. The learned representative of the assessee Shri Pieyush Kaushik submitted that before the Departmental authorities the assessee had filed confirmations from the American Express Bank (Luxemborg), evidencing the factum of transfer of various remittances from this account to the account of Joakim Aim and Anita Pandeya with Citi Bank, Mumbai and Delhi. According to the learned counsel, this evidence was adduced to explain the investment made by the two persons but the Revenue authorities insisted for personal accounts of these persons with the banks overseas from where two funds have been transferred into India. It is submitted that these documents could not be procured and furnished before the Revenue authorities as they were not available with the assessee earlier and since documents have been received from the banks, the same are to be adduced in evidence.
4. The learned counsel also submitted that the admission of additional evidence will cause no prejudice to the Department because the additional evidence sought to be admitted is only in support of the stand taken by the assessee. In support of the prayer made through the application reliance has been placed on the following decisions by the assessee :
1. K. Venkataramiah v. A Seetharama Reddy AIR 1967 SC 1526, 1530, and
2. Dwarika Prasad v. ITO (1998) 60 TTJ (Pat)(TM) 292 : (1997) 63 ITD 1 (TM)(Pat).
5. Learned Departmental Representative, on the other hand, opposed the application.
6. We have carefully considered the entire material on record including the orders passed by the authorities below and the grounds taken in these appeals. The main dispute is regarding the additions made under Section 68 of the IT Act, treating the entire amount invested by the assessee as undisclosed and unexplained cash credits. Before the AO the assessee had submitted that Ms. Anita Pandeya and Mr. Joakim Alm had invested the amount out of their income earned abroad. In support of the same they filed evidence in the shape of copy of personal bank account and copy of passport, etc. The assessee-company was asked by the AO to file the source and creditworthiness of the persons who had advanced secured loan to the company. Since it could not be done, the AO treated the entire amount as unexplained cash credit under Section 68. Before the learned CIT(A) it was submitted that the genuineness of the transaction was evident from the personal bank statements of the creditors. It was also submitted that since both the creditors and directors of shareholders of the company and both of them were maintaining two accounts with Citi Bank in India, the identity of both these persons stood established. Before the learned CIT(A) fax message dt. 21st Nov., 2001 from Price Waterhouse Coopers was also filed. The learned CIT(A) has not placed reliance on this evidence on the pretext that it was simply a photocopy of the fax message which has not been confirmed through a letter.
7. The assessee has moved application for admitting the additional evidence in the shape of following documents.
1. Confirmations of American Express Bank (Luxemborg) in respect of funds remitted to Citi Bank India account of Joakim Alm & Anita Pandeya; and
2. Balance Sheet and P&L a/c as on 31st March, 1998.
8. After considering the entire material we are of the view that in the interest of justice the prayer made on behalf of the assessee for admitting the aforesaid documents as additional evidence deserves to be allowed. In the case of Electra (Jaipur)(P) Ltd. v. IAC (1988) 26 ITD 236 (Del), the Tribunal Delhi Bench "A" had considered the issue relating to admitting the fresh evidence at length. The Bench has observed as under:
"The sole purpose of judiciary as well as of the Revenue is to get at the truth. If the truth is that the payment of commission was genuine and was dictated by the business needs, such a payment should not be disallowed merely on the ground that the evidence led was of such a nature as to create a very high degree of suspicion. There should be no objection to consider any evidence produced to test its authenticity, relevance and then to act on it. If the evidence was genuine, reliable, and proves the assessee's case then the assessee should not be denied the opportunity. But on the other hand, if the evidence led turns out to be spurious, fabricated or of irrelevant nature, such consequences as are provided for under the law will ensure. It is, therefore, incorrect to shut out an assessee in the process of administration of justice from leading evidence to prove its case. The earlier inability to lead evidence should not be held against the assessee unless it is known to the Court or suggested to the Court or there was evidence to suspect that the evidence was fabricated. In the instant case, there was no such suggestion and, therefore, the assessee's evidence was to be admitted. The CIT(A) was, therefore, directed to examine the payment of commission afresh and to issue orders accordingly."
9. In view of the above decision, if the evidence is genuine, reliable and proves the assessee's case then the assessee is not to be denied the opportunity.
10. The learned Departmental Representative on the other hand has placed reliance on the ratio of decision of the Hon'ble Allahabad High Court in the case of Ram Prasad Sharma v. CIT (1979) 119 ITR 867 (All). In that case it was observed that the assessee shall not be entitled to produce before AAC any evidence whether oral or documentary which was not produced in the course of proceedings before the ITO except in specified circumstances. It was also observed that the assessee had right to produce additional evidence only in circumstances specified in the rule and the assessee may be permitted to produce additional evidence in a fit case which falls outside the specified circumstances. In, that case the assessee filed return on receipt of notice under Section 139(2). During the course of assessment proceedings the assessee did not put in appearance nor did he furnish any evidence as required. Hence, the assessment was made under Section 147/144. Since the assessee did not prove the genuineness of the loans, the ITO treated the same as assessee's income from undisclosed sources. Thereafter the assessee moved application under Section 146 which was rejected by the ITO. At the time of hearing of the appeal before the learned CIT(A) the assessee sought permission to produce the certificate of the depositors. The AAC did not admit the fresh evidence on the ground that the ITO had given adequate opportunity to the assessee during assessment proceedings to prove the genuine character of the cash credits. Accordingly, he confirmed the addition. The assessee took the matter further. The Tribunal confirmed the order of the learned CIT(A). The assessee preferred reference, The question referred for the esteemed opinion of the High Court was as to whether the Tribunal was justified in confirming itself to the material on record before the ITO and not admitting the fresh evidence for the purpose of examining the taxability of Rs. 27,000 as income from undisclosed sources. The Hon'ble High Court after considering Rule 46A of the ITAT Rules held that it could not be said that AAC was not justified in refusing to give permission to adduce fresh evidence. In view of the above, it is clear that in that case the evidence was filed before the ITO by the assessee whereas in the present the assessee had filed evidence before the AO as referred to above and also made attempt to file evidence before the learned CIT(A). In view of these facts it is clear that the assessee is trying to file only supplementary material and not fresh material. In the case of K. Venkataramiah v. A. Seetharama Reddy (supra) it was held that under Rule 17(1). 0. 41 CPC the appellate Court has to allow additional evidences not only if it requires such evidence to enable it to pronounce the judgment but also for any other substantial cause. In the case of Dwarika Prasad v. ITO (supra) the Patna Bench of the Tribunal has held that the powers of the Tribunal to receive additional evidence in the appeal before them are just like the powers under Order 41, Rule 17 of the CPC. In view of the above cited decisions also the power is available to the Tribunal for admitting fresh evidence if the same is essential for just disposal of the matter. After considering the entire relevant circumstances pertaining to the present matter we are of the opinion that the additional evidence sought to be admitted requires admission for proper adjudication of the issue involved. It may be repeated that the assessee has not changed its stand nor is taking a new ground nor a new explanation different from the one which was taken before the AO and the learned CIT(A). Hence, the prayer made in the application is allowed. The evidence sought to be admitted by the assessee which is contained on pp 1 to 11 of the paper book is admitted.
11. We have also considered the grounds, of appeal and have heard the learned counsels of the parties in relation thereto. Since we have admitted additional evidence we consider it proper to setaside the orders of the learned CIT(A) for both the assessment years in question and restore the matter back to him for deciding the issues involved in these two appeals on merits. While doing so, the genuineness of the documents admitted and their evidentiary value shall be considered by the learned CIT(A), after providing due opportunity to the AO to examine the documents and also to rebut the same by adducing evidence, if it is so required. Hence, the grounds in these two appeals shall be adjudicated by the learned CIT(A) after providing full opportunity to both the sides i.e., to the Department, to the assessee and after considering the supplementary evidence admitted by us on merits as per law.
12. In the result, both the appeals are allowed for statistical purposes only .