Sri. C.K. Jinan, Bangalore v. ITO, Bangalore

ITA 1058/BANG/2010 | 2004-2005
Pronouncement Date: 23-09-2011 | Result: Allowed

Appeal Details

RSA Number 105821114 RSA 2010
Assessee PAN ABLPJ3454F
Bench Bangalore
Appeal Number ITA 1058/BANG/2010
Duration Of Justice 1 year(s) 21 day(s)
Appellant Sri. C.K. Jinan, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 23-09-2011
Date Of Final Hearing 15-09-2011
Next Hearing Date 15-09-2011
Assessment Year 2004-2005
Appeal Filed On 02-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NO.1058/BANG/2010 ASSESSMENT YEAR : 2004-05 SHRI C.K. JINAN NO.45 DEFENCE COLONY 2 ND MAIN INDIRANAGAR BANGALORE 560 038. PAN : ABLPJ3454F VS THE INCOME TAX OFFICER WARD 7(2) BANGALORE. APPELLANT RESPONDENT APPELLANT BY : MS. SHEETAL BORKAR ADVOCATE RESPONDENT BY : SHRI PRATAP SINGH ADDL.CIT(DR) DATE OF HEARING : 15.09.2011 DATE OF PRONOUNCEMENT : 23.09.2011 O R D E R PER N.K. SAINI ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 25.6.2010 OF THE CIT(APPEALS)-III BANGALORE. 2. THE FOLLOWING EFFECTIVE GROUNDS HAS BEEN RAISED IN THIS APPEAL : 2. THE LEARNED COMMISSIONER (A) GROSSLY ERRED IN DISALLOWING SALES PROMOTION EXPENSES TO THE EXTENT OF ITA NO.1058/BANG/11 PAGE 2 OF 12 RS.25 25 456/- WITHOUT APPRECIATING THE DETAILS AND INFORMATION FURNISHED BY THE APPELLANT. 7. THE LEARNED CIT(A) ERRED IN CONFIRMING THE INTE REST LEVIED U/S. 234B OF THE ACT. 3. THE MAIN ISSUE INVOLVED IN THIS APPEAL RELATES T O THE SUSTENANCE OF DISALLOWANCE OF SALES PROMOTION EXPENSES TO THE EXT ENT OF RS.25 25 456. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT T HE ASSESSEE IS A PROPRIETOR OF M/S. SURYA LABORATORY WHICH IS ENGAGED IN MANUFA CTURING OF CHANDRIKA SOAP AND SIDHA HAIR SHAMPOO. THE ASSESSEE IS ALSO PARTNER IN M/S. S.V. PRODUCTS M/S. LAL PRODUCTS SIDHA MARKETING SERVIC ES AND CHANDRIKA PRODUCTS ALL ENGAGED IN IDENTICAL BUSINESS. THE AS SESSEE FILED ITS RETURN OF INCOME ON 1.11.2004 DECLARING AN INCOME OF RS.7 93 430. SUBSEQUENTLY THE SAID RETURN WAS REVISED ON 16.9.05 DECLARING AN INCOME OF RS.11 90 000 WHICH WAS PROCESSED U/S. 143(1) OF TH E INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT ]. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESS MENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED SALES PROM OTION EXPENSES AMOUNTING TO RS.33 25 456 MAJOR PORTION OF THE SAI D EXPENSES HAD BEEN PAID TO M/S. SIDHA MARKETING SERVICES A CONCERN IN WHICH THE ASSESSEE AND HIS FAMILY MEMBERS HAPPENED TO BE PARTNERS. TH E AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO PRODUCE THE MAIN PERSON OF SIDHA MARKETING SERVICES FOR EXAMINA TION. IN RESPONSE THE ASSESSEE PRODUCED ONE MR. K.S. MADHAVAN ON 28.11.06 AND HIS STATEMENT WAS RECORDED ON OATH. IN THE SAID STATEMENT IT WA S STATED THAT THE ASSESSEE AND HIS FAMILY MEMBERS WERE PARTNERS IN M/ S. SIDHA MARKETING ITA NO.1058/BANG/11 PAGE 3 OF 12 ON THE BASIS OF THE SAID STATEMENT THE AO WAS OF TH E VIEW THAT M/S. SIDHA MARKETING WAS ENTIRELY CONTROLLED BY THE ASSESSEE A ND HIS FAMILY MEMBERS AND WAS WORKING ONLY FOR THE ASSESSEE. HE POINTED OUT THAT M/S. SIDHA MARKETING HAD BEEN CLOSED AS OF NOW AND THEREFORE I T WAS NOT POSSIBLE TO VERIFY THE ACTUAL ACTIVITY OF THE SAID CONCERN AS O N DATE. HE ALSO POINTED OUT THAT ASSESSEE HAD INCURRED HUGE LOSSES IN MUMBA I & BANGALORE UNITS BECAUSE OF THE SALES PROMOTION EXPENSES ITSELF HE THEREFORE REJECTED THE ENTIRE CLAIM OF THE ASSESSEE TOWARDS SALES PROMOTIO N EXPENSES OF RS.33 25 456. 4. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A PPEALS) AND SUBMITTED THAT THE AO INADVERTENTLY DISALLOWED THE ENTIRE SALES PROMOTION EXPENSES WHEN IN FACT ONLY A SUM OF RS.27 62 552 WA S PAID TO THE FIRM M/S. SIDHA MARKETING AS SALES COMMISSION AND THE BA LANCE AMOUNT OF RS.5 62 904 WAS INCURRED TOWARDS OTHER PROMOTIONAL EXPENSES. IT WAS ALSO STATED THAT THE PAYMENT MADE TO THE SAID CONCERN WA S ONLY 5% TO 6% OF THE SALES VALUE WHICH WAS NOT EXCESSIVE OR UNREASON ABLE CONSIDERING THE PREVAILING MARKET CONDITIONS WHERE A COMMISSION OF 5% TO10% OF SALES WAS PAID FOR ALL CONSUMABLE PRODUCTS. RELIANCE WAS PLACED ON THE FOLLOWING CASES: (I) KARNATAKA HIGH COURT JUDGMENT IN DCIT V. MICRO TEX SEPARATORS LTD. 293 ITR 451 (KAR) (II) CIT V. INDO SAUDI SERVICES (TRAVEL) PVT. LTD. 310 ITR 306 (BOM) IT WAS ALSO SUBMITTED THAT IN THE COMMERCIAL WORLD THE PARTIES ARE ALWAYS FREE TO DETERMINE THE TERMS OF THE CONTRACT BASED O N COMMERCIAL ITA NO.1058/BANG/11 PAGE 4 OF 12 EXPEDIENCY AND WHAT WAS MATERIAL IN TAX JURISPRUDEN CE WAS EVASION OF TAX AND NOT THE LAWFUL ADJUSTMENT THEREOF. 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT IT COULD NOT BE DENIED THAT M/S. SIDH A MARKETING TO WHOM MAJORITY OF SALES PROMOTION PAYMENT WAS MADE WAS AN ENTITY CONTROLLED BY THE ASSESSEE AND HIS FAMILY MEMBERS AND THAT THE EM PLOYEE SHRI MADHAVAN PRODUCED BY THE ASSESSEE WAS NOT ABLE TO G IVE SATISFACTORY EXPLANATION TO THE WORK OR SERVICES RENDERED BY M/S . SIDHA MARKETING FOR ENHANCING THE SALES PROMOTION OF THE ASSESSEES BUS INESS WHICH WAS NECESSARY TO CLAIM ANY EXPENSES UNDER THIS HEAD. TH EREFORE IN PRINCIPLE THERE WAS NO REASON TO INTERFERE WITH THE VIEW OF T HE AO THAT SALES PROMOTION EXPENSES PAID TO M/S. SIDHA MARKETING WAS NOT IN ACCORDANCE WITH THE SERVICES RENDERED BY THEM. AT THE SAME TI ME THE LD. CIT(APPEALS) POINTED OUT THAT THE ASSESSEE HAD PAID ONLY A SUM O F RS.27 62 552 TO M/S. SIDHA MARKETING AS SALES COMMISSION. CONSIDERING T HE ABOVE FACTS THE LD. CIT(APPEALS) WAS OF THE VIEW THAT IT WOULD BE REASO NABLE TO ALLOW A SUM OF RS.8 LAKHS TOWARDS SALES PROMOTION EXPENSES. ACCOR DINGLY DISALLOWANCE FOR THE BALANCE AMOUNT OF RS.25 25 456 WAS SUSTAINE D. NOW THE ASSESSEE IS IN APPEAL. 6. DURING THE COURSE OF HEARING THE ASSESSEE MOVED AN APPLICATION UNDER RULE 29 OF THE APPELLATE TRIBUNAL RULES 1963 STATING THEREIN AS UNDER: IT IS SUBMITTED THAT THE FOLLOWING DOCUMENTS ARE N OT PRODUCED DURING THE ASSESSMENT PROCEEDINGS. THE DOCUMENTS M ENTIONED IN THE PAPER BOOK INDEX IN SL.NO.1 TO 5 WERE FILED BEF ORE THE LOWER AUTHORITY AND IT WAS BELIEVED THAT THE SAID DETAILS WERE SUFFICIENT. ITA NO.1058/BANG/11 PAGE 5 OF 12 IN THE CIRCUMSTANCES THE DOCUMENTS IN S.NO.6 & 7 C OULD NOT BE PLACED BEFORE ASSESSING OFFICER NOR BEFORE THE COMM ISSIONER OF INCOME TAX (A) SINCE WE WERE UNDER A BONAFIDE INFO RMATION THAT WHAT DETAILS WE HAVE FURNISHED EITHER BEFORE THE AS SESSING OFFICER OR CIT(A) WERE ADEQUATE. THE NON PRODUCTIO N OF THESE DOCUMENTS WAS ON ACCOUNT OF BONAFIDE MISTAKE AND NO T DUE TO ANY DELIBERATE OR MALAFIDE INTENTION. THESE DOCUME NTS ARE VERY MUCH ESSENTIAL IN ORDER TO PROVE THE ISSUE IN HAND AND THESE DOCUMENTS WERE ONLY SUPPORTING THE SUBMISSIONS ALRE ADY MADE BEFORE THE ASSESSING AUTHORITY AND CIT(A). ACCORDI NGLY THESE DOCUMENTS ARE BEING PLACED ON RECORD. IT IS THEREF ORE PRAYED THAT THE SAME MAY KINDLY BE ADMITTED AND KINDLY BE CONSI DERED WHILE DISPOSING THE APPEAL IN THE INTEREST OF JUSTICE. 7. THE LD. DR OPPOSED ADMISSION OF THE ADDITIONAL E VIDENCE AND SUBMITTED THAT THE ASSESSEE OUGHT TO HAVE FILED THO SE DOCUMENTS EITHER BEFORE THE AO OR BEFORE THE LD. CIT(APPEALS) AND SI NCE THOSE DOCUMENTS WERE NOT FURNISHED EARLIER THEY SHALL NOT BE ADMIT TED. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. THE DOCUMENTS FURNISHED BY THE ASSESSEE AS ADDITIONAL EVIDENCE AR E AS FOLLOWS: (1) COPY OF AGREEMENT DATED 16.7.1988 BETWEEN SIDHA MARKETING SERVICES & M/S. S.V. PRODUCTS (PLACED AT PAGES 21 22 OF THE PAPERBOOK ) (2) CHART SHOWING DETAILS OF PAYMENT MADE TO SIDHA MARKETING SERVICES (PLACED AT PAGE 23 OF PAPERBOOK) IN OUR OPINION THE DOCUMENTS WHICH ARE FURNISHED A LONG WITH THE APPLICATION UNDER RULE 29 OF THE APPELLATE TRIBUNAL RULES 1963 ARE ALTHOUGH FURNISHED FOR THE FIRST TIME BEFORE THE TR IBUNAL BUT THESE ARE RELEVANT AND GOES TO THE ROOT OF THE PRESENT CONTRO VERSY. NON-PRODUCTION OF ITA NO.1058/BANG/11 PAGE 6 OF 12 THOSE DOCUMENTS WAS ON ACCOUNT OF BONAFIDE MISTAKE AND NOT DUE TO DELIBERATE OR MALAFIDE INTENTION OF THE ASSESSEE. AS PER THE PROVISIONS CONTAINED IN RULE 29 OF THE APPELLATE TRIBUNAL RULE S 1963 THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIO NAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL. THE PROVISIONS CO NTAINED IN THE SAID RULE ARE PARI MATERIA WITH THE ORDER 41 RULE 27 OF THE CODE OF CIVIL PRO CEDURE 1908 WHICH ALSO DOES NOT ALLOW THE PARTY TO THE AP PEAL TO ADDUCE ANY ADDITIONAL EVIDENCE UNLESS AND UNTIL SUCH EXCEPTION AL CIRCUMSTANCES ARE SET OUT. IN THE INSTANT CASE COPY OF AGREEMENT D ATED 16.7.88 BETWEEN SIDHA MARKETING SERVICES AND M/S. S.V. PRODUCTS AS WELL AS THE CHART SHOWING THE DETAILS OF PAYMENT MADE TO M/S. SIDHA M ARKETING SERVICES COULD NOT BE PRODUCED BY THE ASSESSEE EITHER BEFORE THE AO OR BEFORE THE LD. CIT(A) UNDER THE BONAFIDE IMPRESSION THAT WHATE VER DETAILS HAD BEEN FURNISHED BEFORE THE AO OR THE LD. CIT(APPEALS) WER E ADEQUATE. IN OUR OPINION THE ASSESSEE COMMITTED A BONAFIDE MISTAKE WITHOUT ANY DELIBERATE OR MALAFIDE INTENTION. WE THEREFORE ARE OF THE OPINION THAT THE EXPLANATION OF THE ASSESSEE THAT DUE TO OVERSIGHT T HE AFORESAID DOCUMENTS NOW SUBMITTED AS ADDITIONAL EVIDENCE COULD NOT BE F URNISHED EITHER BEFORE THE AO OR THE LD. CIT(A) IS A PLAUSIBLE EXPLANATION . ACCORDINGLY WE ARE OF THE VIEW THAT THESE DOCUMENTS SHALL BE ADMITTED KEE PING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE BUT AT THE SAME TIME OPPORTUNITY IS TO BE GIVEN FOR REBUTTAL TO ANOTHER PARTY. 9. AS REGARDS TO THE ADMISSION OF THE ADDITIONAL EV IDENCE THE HONBLE MADRAS HIGH COURT IN THE CASE OF ANAIKAR TRADE AND ESTATES (P) LTD (NO.2) VS. CIT 186 ITR 313 HAS HELD AS UNDER: ITA NO.1058/BANG/11 PAGE 7 OF 12 THE TRIBUNAL HAS DISCRETION TO ALLOW THE PRODUCTIO N OF ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES 1963 IF T HE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR AFFIDAVIT T O BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTI AL CAUSE IT MAY ALLOW THE DOCUMENT TO BE PRODUCED OR THE AFFIDAVITS TO BE FILED. EVEN IF THERE WAS A FAILURE TO PRODUCE THE DOCUMENT S BEFORE THE ITO AND THE A.A.C THE TRIBUNAL HAS THE JURISDICTIO N IN THE INTERESTS OF JUSTICE TO ALLOW THE PRODUCTION OF SUC H VITAL DOCUMENTS. 10. IN THE PRESENT CASE ALSO THE DOCUMENTS FURNISHE D BY THE ASSESSEE ARE VITAL WHICH GO TO THE ROOT OF THE PRESENT CONTR OVERSY SO THESE ARE TO BE ADMITTED IN THE INTEREST OF NATURAL JUSTICE BUT THE SE DOCUMENTS ARE REQUIRED TO BE EXAMINED AND CONSIDERED AT THE LEVEL OF THE A O. WE THEREFORE SET ASIDE THE IMPUGNED ORDER AND REMAND THE PRESENT ISS UE BACK TO THE FILE OF THE LEARNED AO TO BE DECIDED AFRESH IN ACCORDANCE W ITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 11. FOR THE AFORESAID VIEW WE ARE ALSO FORTIFIED B Y THE DECISION OF THE ITAT DELHI BENCH F IN THE CASE OF UOP LIC V ADDIT IONAL DIRECTOR OF INCOME-TAX INTERNATIONAL TAXATION CIRCLE 2(2) NEW DELHI (2007) 108 LTD 186 WHEREIN RELEVANT FINDINGS GIVEN IN PARAS NO 30 31 33 48 52 READ AS UNDER: 30. IT IS A SETTLED POSITION THAT PRODUCTION OF ADDITIONAL EVIDENCE AT THE APPELLATE STAGE IS NOT A MATTER OF RIGHT TO LITIGATING PUBLIC AND ALLOWING OF PRODUCTION OF ADDITIONAL EVI DENCE IS IN THE DISCRETION OF THE TRIBUNAL. THE SAID DISCRETION H OWEVER IS TO BE EXERCISED JUDICIALLY AND NOT ARBITRARILY. AS HELD B Y HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V. KUM . SATYA SETIA (1983) 143 ITR 486 IT IS WITHIN THE DISCRETI ON OF THE APPELLATE AUTHORITY TO ALLOW PRODUCTION OF ADDITION AL EVIDENCE IF THE SAID AUTHORITY REQUIRES ANY DOCUMENT TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE. THE TRIB UNAL IS THE FINAL FACT FINDING BODY UNDER THE SCHEME OF THE INCOME TA X ACT 1961 AND POWERS THEREFORE HAVE NECESSARILY TO BE EXERC ISED BY IT FOR ITA NO.1058/BANG/11 PAGE 8 OF 12 DECIDING THE QUESTIONS OF FACT. WHILE EXERCISING IT S POWERS IF THE TRIBUNAL IS OF THE OPINION THAT ADDITIONAL EVIDENCE IS MATERIAL IN THE INTEREST OF JUSTICE FOR DECIDING A PARTICULAR I SSUE ITS DISCRETION CANNOT BE INTERFERED WITH UNLESS IT HAS BEEN EXERCI SED ON NON EXISTING OR IMAGINARY GROUNDS. IN THE CASE OR MAHAV IR SINGH (SUPRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE IT WAS HELD THAT SECTION 107 OF CPC ENABLES AN APPELLATE COURT TO TA KE ADDITIONAL EVIDENCE OR TO REQUIRE SUCH OTHER EVIDENCE TO BE TA KEN SUBJECT TO SUCH CONDITIONS AND LIMITATIONS AS ARE PRESCRIBED U NDER ORDER 41 OF RULE 27 OF CPC. IT WAS ALSO HELD THAT THE PARTIE S ARE NOT ENTITLED AS OF RIGHT TO THE ADMISSION OF SUCH EVI DENCE AND THE MATTER IS ENTIRELY IN THE DISCRETION OF THE COURT W HICH IS OF COURSE TO BE EXERCISED JUDICIALLY AND SPARINGLY. IT WAS OBSER VED THAT ORDER 41 RULE 27 OF CPC ENVISAGES CERTAIN CIRCUMSTA NCES WHEN ADDITIONAL EVIDENCE CAN BE ADDUCED AND ONE OF SUCH CIRCUMSTANCES IS WHERE THE APPELLATE COURT REQUIRES ANY DOCUMENT TO BE PRODUCED OR ANY WITNESS TO BE EXAMINED TO ENA BLE IT TO PRONOUNCE JUDGMENT OR FOR ANY OTHER SUBSTANTIAL CAU SE. IT WAS ALSO CLARIFIED THAT THE EXPRESSION TO ENABLE IT TO PRONOUNCE JUDGMENT CONTEMPLATES A SITUATION WHEN THE APPELLA TE COURT FINDS ITSELF UNABLE TO PRONOUNCE JUDGMENT OWING TO A LACUNA OR DEFECT IN THE EVIDENCE AS IT STANDS. IN THE CONT EXT IT WAS FURTHER CLARIFIED THAT THE ABILITY TO PRONOUNCE A JUDGMENT IS TO BE UNDERSTOOD AS THE ABILITY TO PRON OUNCE A JUDGMENT SATISFACTORY TO THE IT MIND OF COURT DEL IVERING IT. THIS POSITION WAS REITERATED AGAIN BY THE HONBLE SUPREME COURT IN THE CASE OF SYED ABDUL KHADER VS. RAMI REDDY AIR 1979 S.C. 553 CITED BY THE LD. COUNSEL FOR THE ASSESSEE. IN THE CASE OF MUNICIPAL CORP. OF GREATER BOMBAY VS. LALA PANCHAN AIR 1965 S.C. 1008 CITED BY THE LD. COUNSEL FOR THE ASSESSEE IT WAS OBSERVED BY THE HONBLE SUPREME COURT THAT THE POWER TO ADMIT ADDITIONAL EVIDENCE DOES NOT ENTITLE THE APPELLATE COURT TO LET IN FRESH EVIDENCE ONLY FOR T HE PURPOSE OF PRONOUNCING JUDGMENT IN A PARTICULAR WAY AND IT IS ONLY FOR REMOVING A LACUNA IN THE EVIDENC E THAT THE APPELLATE COURT IS EMPOWERED TO ADMIT ADDITIONA L EVIDENCE. IN THE CASE OF ARJAN SINGH V. KARTAR SING H AIR 1951 S.C. 193 IT WAS HELD THAT THE DISCRETION GIVEN TO THE APPELLATE COURT BY ORDER 41 RULE 27 OF CPC TO RECEIVE AND ADMIT ADDITIONAL EVIDENCE IS NOT AN ARB ITRARY ONE BUT IS A JUDICIAL ONE CIRCUMSCRIBED BY THE LIMI TATIONS SPECIFIED IN THAT RULE. IT WAS ALSO HELD THAT THE L EGITIMATE OCCASION FOR THE APPLICATION OF THE SAID RULE IS WH EN ON EXAMINING THE EVIDENCE AS IT STANDS SOME INHERENT LACUNA OR DEFECT BECOMES APPARENT. TO THE SIMILAR ITA NO.1058/BANG/11 PAGE 9 OF 12 EFFECT IS ANOTHER DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATHA SINGH VS. FINANCIAL COMMISSIONER TAXATION ALR 1976 S.C. 1053. 31. AS PER RULE 29 OF THE APPELLATE TRIBUNAL RULES 1963 THE TRIBUNAL HAS THE POWER TO ALLOW ADDITIONA L EVIDENCE NOT ONLY IF IT REQUIRES SUCH EVIDENCE TO ENABLE IT TO PRONOUNCE JUDGMENT BUT ALSO FOR ANY OTHER SUBSTANTIAL CAUSE. THERE MAY BE CASES WHERE EVEN THOUGH THE TRIBUNAL FINDS THAT IT IS ABLE TO PRONOU NCE JUDGMENT ON THE STAGE OF RECORD AS IT I S AND SO IT CANNOT STRICTLY SAY THAT IT REQUIRES ADDITIONAL EVIDENCE T O ENABLE IT TO PRONOUNCE JUDGMENT IT STILL CONSIDERS THAT IN THE INTEREST OF JUSTICE SOMETHING WHICH REMAINS OBSCURE SHOULD BE FILED UP SO THAT IT CAN PRONOUNCE THE JUDGMENT IN A MORE SATISF ACTORY MANNER. SUCH REQUIREMENT OF THE TRIBUNAL IS LIKELY TO ARISE ORDINARILY WHEN SOME INHERENT LACUNA OR DEFECT BECOMES APPARE NT UPON ITS APPRECIATION OF THE EVIDENCE. THE POWER OF THE TRIB UNAL TO ADMIT ADDITION EVIDENCE IN SUPPORT OF THE CLAIM IN APPEAL IS DISCRETIONARY AND NO FETTERS CAN BE IMPOS ED ON THE EXERCISE OF SUCH POWER. HOWEVER AS HELD BY HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RAM PRA SAD SHARMA VS. CIT (1979) 119 ITR 867 AND BY THE HONBLE ANDHR A PRADESH HIGH COURT IN THE CASE OF A. K. BABU KHAN VS. CWT ( 1976) 102 ITR 756 IT IS NOT AN ARBITRARY POWER BUT IT IS A JU DICIAL ONE CIRCUMSCRIBED BY THE LIMITATIONS GIVEN IN RULE 29 O F THE APPELLATE TRIBUNAL RULES 1963. THE CONDITIONS PREC EDENT FOR THE EXERCISE OF POWER UNDER RULE 29 MUST THEREFORE BE FOUND TO HAVE BEEN ESTABLISHED. HOWEVER WHERE THERE IS NO L ACK OF EVIDENCE BUT YET THE PLEA IN SUPPORT OF ADMITTIN G THE EVIDENCE IS SO DECISIVE AND OF CLINCHING VALUE WITH REFERENCE TO THE POINTS AT ISSUE IT IS OPEN TO THE TRIBUNAL TO INVOKE ITS POWER OF ALLOWING ADDITIONAL EVIDENCE TO RENDER SUBSTANTI AL JUSTICE AND NOT TO DEPRIVE THE PARTY OF SUCH JUSTICE ON TECHNIC AL GROUNDS. FURTHER AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF VELJL DOORAJ & CO. VS. CIT (1968) 68 ITR 708 WHEN THE EVIDENCE WAS AVAILABLE TO THE PARTY AT THE INITIAL STAGE AND HAD NOT BEEN PRODUCED BY HIM THE MERE FACT THAT EVIDENCE SOUGHT TO BE PRODUCED IS VITAL AND IMPORTANT DOES N OT PROVIDE A SUBSTANTIAL CAUSE TO ALLOW ITS ADMISSION AT THE APPELLATE STAGE. THE ADMISSIBILITY OF ADDITIONAL EV IDENCE DEPENDS ON WHETHER OR NOT THE SUBSTANTIAL CAUSE AND NOT TO ENABLE THE ASSESSEE OR THE DEPARTMENT TO TENDER FRESH EVIDENCE TO SUPPORT A NEW POINT OR TO MAKE OU T A NEW CASE. IN THE CASE OF N. KAMALAM (SUPRA) IT WAS ITA NO.1058/BANG/11 PAGE 10 OF 12 HELD THAT THE PROVISIONS OF RULE 27 OF ORDER 41 OF CPC 1908 ARE NOT DESIGNED TO HELP PARTIES TO PATCH UP W EAK POINTS AND MAKE UP FOR OMISSIONS EARLIER MADE. 33. IT IS ALSO WELL SETTLED THAT ONCE ADDITIONAL EV IDENCE IS TAKEN INTO CONSIDERATION IT HAS TO BE READ AS P ART OR THE RECORD AND BEFORE DRAWING ANY INFERENCE ON THE BASIS OF CONTENTS OF THAT DOCUMENT ADMITTED AS ADDITIONAL EVIDENCE AN OPPORTUNITY HAS TO BE GIVEN TO THE OTHER SIDE TO EXPLAIN OR REBUT THE SAME. AS HELD BY HONBLE MADRAS HIGH COURT IN THE CASE OF RSS SHANMUGAM PILLAI & SONS (SUPRA) IF THE TRIBUNAL FI NDS THAT THE DOCUMENTS FILED ARE QUITE RELEVANT AND FOR THE PURPOSE OF DECIDING THE ISSUE BEFORE IT IT WOULD B E WELL WITHIN ITS POWERS TO ADMIT THE EVIDENCE CONSIDER T HE SAME ON MERITS OR REMIT THE MATTER TO THE LOWER AUTHORITIES FOR EXAMINING THE SAME. IN THE CASE OF SMT. URMILA RATILAL (SUPRA) HONBLE GUJARAT HIGH COURT HAS HELD THAT WHEN THE ADDITIONAL EVIDENCE FIELD BY THE REVENUE WAS ADMITTED BY THE TRIBUNAL OVERRULING THE OBJECTION RAISED BY THE ASSESSEE INTEREST OF JUSTI CE DEMANDED THAT THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO EXPLAIN OR REBUT THE ADDITIONAL EVIDENCE BEFORE RELYING ON THE SAME. IN THE CASE OF CHARBHAI BIRI WORKS VS. ASSTT CIT (2003) 87 ITO 189 CITED BY THE LD. COUNSEL FOR THE ASSESSEE IT WAS HELD BY THE PUNE BENCH OF ITAT IN IT THIRD MEMBER DECISION THAT WHEN THE DOCUMENTS WHICH WERE NOT AVAILABLE BEFORE THE ASSESSING OFFIC ER WERE PRODUCED BEFORE THE TRIBUNAL FOR THE FIRST TIM E AND THE SAME WERE ADMITTED AS ADDITIONAL EVIDENCE BEING MATERIAL TO BE RESTORED TO THE FILE OF THE ASSESSIN G OFFICER TO VERIFY CORRECTNESS AND AUTHENTICITY OF S UCH DOCUMENTS AND TO ADJUDICATE THE MATTER AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE OF B EING HEARD. 48. AS ALREADY NOTED THE ADDITIONAL EVIDENCE WOULD BE RELEVANT TO CONSIDER AND DECIDE THE CASE ALREADY MADE OUT BY THE REVENUE AND IT IS THEREFORE NOT A CASE OF TENDERING OF FRESH EVIDENCE BY THE DEPARTMENT TO SUPPORT A NEW POINT OR TO MAKE OUT A NEW CASE. ACCORDING TO US THE ADDITIONAL EVIDENCE FILED BY T HE REVENUE IS QUITE RELEVANT FOR THE PURPOSE OF DECIDI NG THE ISSUE BEFORE US AND THE SAME THEREFORE CAN BE ADMITTED AS PER RULE 29 OF APPELLATE TRIBUNAL RULES 1963 AS HELD BY HONBL E MADRAS HIGH COURT IN THE CASE OF RSS SHANMUGAM PI1LAI & SONS ITA NO.1058/BANG/11 PAGE 11 OF 12 (SUPRA). THE SAID ADDITIONAL EVIDENCE ALSO NEEDS TO BE TAKEN INTO CONSIDERATION IN THE INTEREST OF JUSTICE FOR DECIDI NG THE ISSUE RELATING TO THE PE. 52. AS ALREADY NOTED THE ASSESSEE WAS GIVEN AN OPPO RTUNITY DURING THE COURSE OF HEARING TO ADVANCE THE ARGUMEN TS ON THE ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS ON MERI TS OF THE ISSUE TAKING INTO CONSIDERATION THE SAID ADDITIONAL EVIDE NCE AND AVAILING THIS OPPORTUNITY LD. COUNSEL FOR THE ASSESSEE HAS NOT ONLY RAISED ELABORATE ARGUMENTS ON BOTH THESE ASPEC TS BUT HAS ALSO FILED A DETAILED WRITTEN SUBMISSION. IN THE S AID WRITTEN SUBMISSION AN ATTEMPT HAS BEEN MADE BY HIM TO EXPLA IN EACH AND EVERY DOCUMENT SOUGHT TO BE FILED BY THE REVENUE AS ADDITIONAL EVIDENCE IN ORDER TO REBUT THE CASE SOUGHT TO BE MADE OUT BY THE REVENUE RELYING ON THE SAME ON MERITS. KEEPING IN V IEW THE FACT THAT THE ADDITIONAL EVIDENCE SO PRODUCED BY THE REV ENUE AS WELL AS ELABORATE EXPLANATION OFFERED BY HIM ASSESSEE TO RE BUT THE SAME IS VOLUMINOUS RUNNING INTO SEVERAL PAGES WHICH REQUIR ES IN-DEPTH EXAMINATION WE FIND THAT IT WOULD BE FAIR AND PROP ER AND IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE RELATING T O PE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER EXAMINING THE ADDITIONAL EVIDENCE AS WELL AS EXPLAN ATION OFFERED BY THE ASSESSEE WHILE REBUTTING THE SAME. THE ASSES SEE SHALL ALSO BE AT LIBERTY TO ADDUCE FURTHER EVIDENCE TO SUPPORT ITS CASE BEFORE THE ASSESSING OFFICER WHO SHALL TAKE INTO CONSIDERA TION THE SAME IN ACCORDANCE WITH LAW. SINCE THE OTHER ISSUES RAISED IN THIS APPEAL RELATED TO THE MAIN ISSUE OF PE WE DEEM IT APPROPRIATE TO RESTORE THESE ISSUES ALSO TO THE FILE OF THE ASSESS ING OFFICER FOR FRESH DECISION ALONG WITH THE MAIN ISSUE. IN SO FA R AS THE ISSUE RELATING TO THE LEVY OF INTEREST U/S 234B IS CONCER NED THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED BEFORE US THAT THE SAME IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF DELHI SPECIAL BENCH OF ITAT IN THE CASE OF MOTOROLA INC. VS. DY. CIT (2005) 95 ITD 269. WE THEREFORE DIRECT THE ASSESSING OFFICER TO DECIDE T HE ISSUE RELATING TO LEVY OF INTEREST U/S 234B IN THE LIGHT OF THE DECISION OF SPECIAL BENCH IN THE CASE OF MOTOROLA INC (SUPRA). THE IMPUGNED ORDER OF THE LD. CIT(A) O N ALL THE ISSUES INVOLVED IN THE PRESENT APPEAL IS ACCORD INGLY SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AS PER THE DIRECTIONS GIVEN HEREINABOVE. ITA NO.1058/BANG/11 PAGE 12 OF 12 12. IN VIEW OF THE ABOVE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) IS SET ASIDE AND THE ISSUE IS REMANDED BACK TO THE FIL E OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER PROVIDIN G DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 13. ANOTHER RELEVANT GROUND RAISED BY THE ASSESSEE RELATES TO THE CHARGING OF INTEREST U/S. 234B OF THE ACT. DURING THE COURSE OF HEARING IT WAS THE COMMON CONTENTION OF BOTH THE PARTIES THAT THIS IS CONSEQUENTIAL IN NATURE. WE ORDER ACCORDINGLY. 14. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF SEPTEMBER 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) ( N.K. SAIN I ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 23 RD SEPTEMBER 2011. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.