Disallowance of Expenditure & Business Expenditure

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH “H” New Delhi

BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA

ITA No. 4934/Del/2012

Asstt. Yr: 2008-09

Vijay Kumar Arora

L-90, Lajpat Nagar-II,

New Delhi-110024.

PAN: AAJPA 1367 R

(Appellant)

Vs.

Income-tax Officer,

Ward-32(3), New Delhi.

(Respondent)

Appellant by: Shri N.K. Karhail Adv.

Respondent by: Shri Sameer Sharma Sr. DR

O R D E R

PER R.P. TOLANI, J.M:

This is assessee’s appeal against CIT(A)’s order dated 2-07- 2012 relating to A.Y. 2008-09. Various grounds are raised, which in effect raise following issues:

(i) disallowance of expenditure; and

(ii) disallowance of business expenditure.

2. Ld. Counsel for the assessee contends that assessee’s assessment in question was framed u/s 143(3) making various additions alleging that assessee could not file necessary evidence ignoring the fact that sufficient time was not given to the assessee. Assessee appealed before CIT(A) and application for admission of additional evidence was made. The application was forwarded by CIT(A) to assessing officer and remand report was called thereon. Despite carrying out this lengthy exercise and detailed explanation on admission of additional evidence, CIT(A) arbitrarily held that assessee did not comply with statutory notices and requirement of filing the details of evidence despite sufficient opportunities, therefore, the additional evidence was rejected to be admitted and additions were confirmed. Aggrieved, assessee is before us.

2.1. Ld. Counsel contends that a detailed application was made before the CIT(A) citing valid reasons that the assessee was undergoing a rough patch in his family problems relating to the divorce of his daughter and due to these disturbances could not file the evidence required by the assessing officer in time. These reasons are sufficient to constitute a reasonable cause in not being able to file the required documents. The CIT(A) after having called for a remand report, in the interest of justice ought to have admitted the additional evidence and decided the issues after considering the evidence. Ignoring remand report and rejoinder thereon and without properly referring to additional evidence the same has been summarily rejected and the assessee’s case has been shut out at the first appellate stage itself, which leads to manifest injustice. It is pleaded that the ends of justice will be met if the additional evidence is admitted and lower authorities rare directed to consider the matter afresh.

3. Ld. DR is heard, who supported the order of CIT(A).

4. We have heard rival contentions and perused the entire material available on record. From the record it emerges that the assessee filed a detailed application for admission of additional evidence citing proper reasons, assessee also relied on various case laws. In our considered view, CIT(A) having called for a remand report and assessee’s rejoinder thereon ought to have admitted the additional evidence in the interest of justice. The assessee had filed a detailed application for admission of additional evidence citing various case law, which, in our considered opinion, deserved the additional evidence to be admitted. In view thereof, we admit the additional evidence and set aside the matter back to the file of assessing officer to decide the assessee’s assessment afresh after giving the assessee proper opportunity of being heard. We order accordingly.

5. In the result, assessee’s appeal is allowed for statistical purpose.

Order pronounced in open court on 07-08-2013.

Sd/- Sd/-

(B.C. MEENA) (R.P. TOLANI)

ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 7th August 2013.

MP

Copy to:

1. Assessee

2. AO

3. CIT

4. CIT(A)

5. DR