DCIT, New Delhi v. Sh. Viney Krishan Chaudhri, New Delhi

ITA 4531/DEL/2011 | 2008-2009
Pronouncement Date: 28-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 453120114 RSA 2011
Assessee PAN AADPC7920L
Bench Delhi
Appeal Number ITA 4531/DEL/2011
Duration Of Justice 2 year(s) 18 day(s)
Appellant DCIT, New Delhi
Respondent Sh. Viney Krishan Chaudhri, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2013
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 28-10-2013
Date Of Final Hearing 17-09-2013
Next Hearing Date 17-09-2013
Assessment Year 2008-2009
Appeal Filed On 10-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SMT. DIVA SINGH JUDICIAL MEMBER AND SHRI J.S.REDDY ACCOUNTANT MEMBER I.T.A .NO.-4385/DEL/2011 (ASSESSMENT YEAR-2008-09) VINEY KRISHAN CHAUDHRI VS DCIT 80/1 BLOCK-II CIRCLE-16(1) WHS KIRTI NAGAR NEW DELHI. NEW DELHI. PAN-AADPC7920L (APPELLANT) (RESPONDENT) I.T.A .NO.-4531/DEL/2011 (ASSESSMENT YEAR-2008-09) DCIT VS VINEY KRISHAN CHAUDHRI CIRCLE-16(1) 80/1 BLOCK-II NEW DELHI. WHS KIRTI NAGAR NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAKESH NANDA CA RESPONDENT BY: SH. VIVEK KUMAR SR. DR PER DIVA SINGH JM THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND T HE REVENUE AGAINST THE ORDER DATED 11.07.2011 OF CIT(A)-XIX NEW DELHI PER TAINING TO 2008-09 ASSESSMENT YEAR. 2. THE ASSESSEE IN HIS APPEAL RAISED THE FOLLOWING GROUNDS :- 1. THE ORDER PASSED BY THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) NEW DELHI U/S 250 (6) PARTLY DISALLOWING THE APPEAL AGAINST THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TA X ACT 1961 BY THE LD. DEPUTY COMMISSIONER OF INCOME TAX ASSESSING THE TOT AL INCOME FOR ASSESSMENT YEAR 2008-09 IS BAD IN LAW AND NEEDS TO BE QUASHED TO THE EXTENT ADDITION OF RS.12 77 139/-. 2. THE ORDER PASSED BY THE LD. COMMISS IONER OF INCOME TAX (APPEALS) NEW DELHI HAS ERRED IN FACTS & LAW IN DI SALLOWING RS.12 77 139/- U/S 14A READ WITH RULE 8D. ITA NOS 4385 & 4531/DEL/ 2011 2 3. THE ORDER PASSED BY THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) NEW DELHI HAS ERRED IN FACTS AND LAW IN HOLDING THA T THE INTEREST OF RS.10 79 674/- IS LIABLE TO BE DISALLOWED U/S 14A R EAD WITH RULE 8D. 4. THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) NEW DELHI HAS ERRED IN FACTS AND LAW IN HOLDING THA T BORROWED FUNDS RE USED FOR MAKING INVESTMENTS AND SUSTAINED THE DISAL LOWANCE OF INTEREST OF RS.10 79 674/- OUT OF TOTAL INTEREST OF 10 95 391/- ON LOAN U/S 14A READ WITH RULE 8D. 5. THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) NEW DELHI HAS ERRED IN FACTS AND LAW IN HOLDING THT INTEREST ON BORROWED FUND IS COVERED UNDER RULE 8D (II) READ WITH SECTIO N 14A. 6. THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) NEW DELHI HAS ERRED IN FACTS AND LAW IN STATING THA T IT IS UNLIKELY THT NO EXPENSES HAVE BEEN INCURRED WHEN HUGE INVESTMENT IS MADE AND SUSTAINED THE DISALLOWANCE UNDER RULE 8D WITHOUT GIVING ANY R EASONS THEREOF. 7. THE ORDER PASSED BY THE LD. COMMISSIONER O F INCOME TAX (APPEALS) NEW DELHI HAS ERRED IN FACTS AND LAW IN HOLDING THE DISALLOWANCE O RS.1 97 465/- BEING 5% OF AVERAGE INVESTMENT UNDER RULE 8D (III) READ WITH SECTION 14A. 8. THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) NEW DELHI HAS ERRED IN FACTS AND LAW IN ALLOWING TH E RELIEF IN PRINCIPLE ON ACCOUNT OF ADDITION UNDER DIRECTOR COMMISSION OF RS .59 18 524/- SUBJECT TO VERIFICATION BY THE LD. AO IN SPITE OF THE FACT THT DIRECTORS COMMISSION WAS SUBJECTED TO TAX TWICE BY LD. A.O. 2.1. THE GROUNDS RAISED BY THE DEPARTMENT READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.59 18 524/- MADE BY THE A.O. TOWARDS UNDECLARED COMMISSIONS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN SETTING ASIDE THE I SSUE TO THE A.O. FOR FRESH ADJUDICATION AS HE HAS NO POWER TO SET ASIDE THE AS SESSMENT UNDER THE INCOME TAX ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN ACCEPTING THE RECON CILIATION STATEMENT AND OTHER DOCUMENT WHICH WAS NOT FILED BEFORE THE AO DURING T HE COURSE OF ASSESSMENT PROCEEDINGS BY CALLING FOR ADMITTING ADDITIONAL EVI DENCE IN CONTRAVENTION OF RULE 46A OF THE I.T. RULES WHICH PROVIDES FOR CONFRONTAT ION OF THE SAME TO THE AO MANDATORY. 4. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND MODIFY ALTER ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF APPEAL. ITA NOS 4385 & 4531/DEL/ 2011 3 3. THE LD. AR ADDRESSING THE GROUNDS OF APPEAL RAIS ED STATED THAT ONLY ONE ISSUE HAS BEEN AGITATED VIDE GROUND NO. 1 TO 7. THE RELEV ANT FACTS QUA THE FIRST ISSUE ADDRESSED BY THE ASSESSEE VIDE GROUND NO-1 TO 7 IT IS SEEN IS FOUND DISCUSSED AT PAGES 5 TO 7 OF THE ASSESSMENT ORDER WHEREIN THE AO MADE A DISALLOWANCE OF RS.12 77 139/- U/S 14A. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY THE ACTION OF THE AO WAS CONFIRMED BY THE CIT(A). A PERUSAL OF T HE IMPUGNED ORDER SHOWS THAT THE WRITTEN SUBMISSIONS ADVANCED BY THE ASSESSEE AR E REPRODUCED IN THE IMPUGNED ORDER ITSELF AT PARA 14.1 PAGES 8-9 STATING THAT O NLY THE SURPLUS FUNDS GENERATED OUT OF THE BUSINESS INCOME HAVE BEEN INVESTED IN THE MU TUAL FUNDS AND NONE OF BORROWED FUNDS WERE UTILIZED FOR MAKING THE INVESTM ENTS. THE SUBMISSION ADVANCED ARE EXTRACTED FROM THE IMPUGNED ORDER HEREUNDER:- 14.1.THE AR FILED DETAILED WRITTEN SUBMISSIONS IN THIS REGARD WHICH ARE AS UNDER :- A. THE ASSESSEE HAD EARNED EXEMPTED INCOME IN THE FORM OF DIVIDEND & LONG TERM CAPITAL GAIN. HE HAD SIMPLY INVESTED THE SURP LUS FUNDS GENERATED OUT OF BUSINESS INCOME IN MUTUAL FUNDS AND DIVIDEND INC OME IS EARNED ON SUCH INVESTMENT. NO EXPENSES HAVE BEEN INCURRED FOR EAR NING DIVIDEND WHICH IS EXEMPT AND AS RESULT NO DISALLOWANCE IS MADE U/S 14 A READ WITH RULE 8D. B. LD. AO HAS DISALLOWED INTEREST OF RS.10 79 674/- AN D ALLEGED THAT BORROWED FUNDS WERE USED FOR MAKING INVESTMENTS. THE DETAIL ED INFORMATION WAS FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS WHEREBY IT WAS CLEARLY DEMONSTRATED THAT NONE OF THE BORROWED FUN DS WERE USED FOR MAKING INVESTMENT IN MUTUAL FUNDS/SHARES. C. THE DETAILS OF UTILIZATION OF OVERDRAFT FOR TYRE BU SINESS AND CORRESPONDING BANK STATEMENTS ARE ENCLOSED IN THE PAPER BOOK. IT WAS CLEARLY DEMONSTRATED THROUGH THESE DOCUMENTS THAT NOT EVEN A SINGLE INVESTMENT WAS MADE FROM THE BANK TILL THE TIME THERE WAS OVER DRAFT IN THE CURRENT ACCOUNT. THE ASSESSEE STARTED INVESTING IN THE MUT UAL FUNDS ONLY AFTER THE PERIOD WHEN THE OVERDRAFT LOAN WAS FULLY PAID OFF T O THE BANK. D. IT IS SETTLED LAW THAT IN CASE THE BORROWED FUNDS H AVE NOT BEEN USED FOR EARNING EXEMPTED INCOME THEN NO DISALLOWANCE CAN BE MADE ON ACCOUNT OF INTEREST ON BORROWED FUNDS. E. IN VIEW OF THE ABOVE NO DISALLOWANCE OF ON ACCOUNT OF INTEREST CAN BE MADE U/S 14A AS NO BORROWED FUNDS WERE USED FOR MAKING I NVESTMENTS IN MUTUAL FUNDS. IT IS THEREFORE HUMBLY PRAYED THAT DISALLOW ANCE OF RS.1079674/- ON ACCOUNT OF INTEREST MAY KINDLY BE DELETED. ITA NOS 4385 & 4531/DEL/ 2011 4 3.1. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT WHI LE DECIDING THE ISSUE THE SAME ARE NOT ADDRESSED. AGGRIEVED BY THIS ACTION THE AS SESSEE IS IN APPEAL BEFORE THE ITAT. 3.2. LD. AR INVITING ATTENTION TO PAGE 5 AND PAGE 6 OF THE PAPER BOOK EMPHASIZING THE HIGHLIGHTED PORTION SUBMITTED THAT THE OVERDRAF T ACCOUNT OF THE ASSESSEE FOR TYRE BUSINESS WOULD SHOW THAT IT TURNED POSITIVE AFTER 3 0.07.2007 AND AFTER 16.08.2007 THE ASSESSEE HAS RECEIVED BUSINESS INCOME AND THE I NVESTMENT IN MUTUAL FUNDS HAS BEEN MADE THEREAFTER FROM THE SURPLUS FUNDS AVAILA BLE. IT WAS HIS SUBMISSION THAT NONE OF THESE ARGUMENTS AND FACTS ADVANCED BEFORE T HE CIT(A) AND THE AO HAVE BEEN CONSIDERED. RELIANCE WAS PLACED UPON ACIT VS M OHAN EXPORTS (P.) LTD. AND MAXOPP INVESTMENT LTD. VS CIT SO AS TO CONTEND THAT THE DISALLOWANCE WAS NOT WARRANTED ON FACTS. LD. SR. DR RELIED UPON THE IMP UGNED ORDER. HOWEVER ON THE SPECIFIC ARGUMENTS ADVANCED ON BEHALF OF THE ASSESS EE NAMELY THE WRITTEN SUBMISSIONS BEFORE THE CIT(A) WHICH HAS BEEN REPROD UCED IN THE IMPUGNED ORDER ITSELF WHICH ADMITTEDLY WAS NOT CONSIDERED BY THE C IT(A) SUBMITTED THAT IN THE CIRCUMSTANCES HE WOULD HAVE NO OBJECTION IF THE ISS UE IS RESTORED TO THE FILE OF THE AO TO BE CONSIDERED IN THE LIGHT OF THE DECISION OF THE DELHI HIGH COURT IN MAXOPP INVESTMENT LTD. 247 CTR 162 (DELHI). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE LIGHT OF THE ARGUMENTS ADVANCED AND THE MATERIAL AVAILABLE ON RECORD AND IN THE INTERESTS OF JUSTICE WE DEEM IT APPROPR IATE TO RESTORE THE ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE SAME IN THE LIGHT OF THE GUIDELINES LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF MAX OPP INVESTMENT LTD. VS CIT (CITED SUPRA). AS FAR AS THE APPLICABILITY OF THE RULE 8D IS CONCERNED THE SAME IS WELL-SETTLED AS IT SHALL APPLY FROM 2008-09 ASSESSM ENT YEAR I.E THE YEAR UNDER CONSIDERATION AS HELD BY THE BOMBAY HIGH COURT IN T HE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS DCIT [2010] 328 ITR 81/194 TAXMAN 203 WHICH HAS BEEN ITA NOS 4385 & 4531/DEL/ 2011 5 FOLLOWED IN THE CASE OF MAXOPP INVESTMENT BY THE JU RISDICTIONAL HIGH COURT. ACCORDINGLY GROUND NO-1 TO 7 ARE RESTORED TO THE A O WITH THE ABOVE DIRECTION. THE AO SHALL DECIDE THE ISSUE IN ACCORDANCE WITH LAW BY WAY OF SPEAKING ORDER AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 5. QUA THE NEXT ISSUE AGITATED BY THE ASSESSEE WHICH IS CORRESPONDING TO GROUND NO-1 IN THE DEPARTMENTS APPEAL THE FACTS FOUND DIS CUSSED IN THE ASSESSMENT ORDER ARE FOUND REPRODUCED IN THE IMPUGNED ORDER AT PAGE 6 PARA 9. THE SAME ARE REPRODUCED FOR READY-REFERENCE:- 9. VIDE THESE GROUNDS THE ASSESSEE CHALLENGED THE ACTION OF THE AO IN MAKING AN ADDITION OF RS.59 18 524/- TOWARDS UNDECLARED CO MMISSION INCOME. THE REASONS GIVEN BY THE AO ARE AS UNDER :- FROM THE RETURN OF INCOME AND COMPUTATION OF INCOM E SUBMITTED BY THE ASSESSEE IT APPEARS THAT THE ASSESSEE IS EMPLOYED AS DIRECTOR OF TIP TOP GENERAL SERVICES (P) LTD. AND GETTING SALARY FROM T HEM FOR HIS EMPLOYMENT. AS PER COMPUTATION OF INCOME SALARY INCOME OF RS.1 13 20 571/- IS OFFERED BY THE ASSESSEE RECEIVED FROM M/S TIP TOP GENERAL A GENCIES (P.) LTD. THE FORM 16 WAS NOT SUBMITTED BY THE ASSESSEE THOUGH I T IS STATED IN THE COMPUTATION OF INCOME THAT FORM 16 IS ALSO ATTACHED THEREWITH. I OBSERVED FROM THE BANK STATEMENTS SUBMITTED BY THE ASSESSEE THAT A SUM OF RS.57 96 602/- WAS GOT CREDITED IN HIS SAVING BANK ACCOUNT NO.01NMC 205119 ON 31.10.2007 BEING MAINTAINED WITH SOCIETE GENERAL RECEIVED FROM TIP TOP GENERAL SERVICES (P) LTD. AS COMMISSION AFT ER DEDUCTION OF TAX AT SOURCE. THE FACT THAT THIS AMOUNT IS RECEIVED BY THE ASSESSEE AS COMMISSION AFTER DEDUCTION OF TDS @ 2% AND EDUCATIO N CESS CLEARLY REVEALED FROM THE NARRATIONS OF THE BANK ENTRIES SU BMITTED BY THE ASSESSEE FOR THIS BANK ACCOUNT. BY MAKING REVERSE COMPUTATI ON OVER THIS AMOUNT THE GROSS AMOUNT OF COMMISSION IS WORKED OUT AT RS.59 1 8 524/-. SINCE THE ASSESSEE HAS NOT DISCLOSED THIS AMOUNT AS INCOME IN HIS RETURN OF INCOME THE ADDITION OF RS.59 18 524/- IS MADE TO THE INCOM E OF THE ASSESSEE UNDER THE BUSINESS INCOME HEAD. HENCE THE ADDITION OF R S.59 18 524/- IS BEING MADE. 6. THE SUBMISSIONS ADVANCED ON BEHALF OF THE ASSESS EE ARE ALSO FOUND REPRODUCED IN PARA 10 WHICH READ AS UNDER :- 10. THE AR FILED DETAILED WRITTEN SUBMISSIONS IN T HIS REGARD WHICH ARE AS UNDER :- A. THE ASSESSEE IS A DIRECTOR IN TIP TOP GENERAL AGENCIES PVT. LTD. AND RECEIVED SALARY INCLUDING COMMISSION. DURING THE P REVIOUS YEAR HE RECEIVED RS.5796602/- TOWARDS COMMISSION (GROSS RS. 87 81 400/- TDS @ ITA NOS 4385 & 4531/DEL/ 2011 6 33.99% RS.2 984 798/-) ON 31.10.2007 WHICH WAS CRED ITED IN HIS SAVING ACCOUNT ON 08.11.2007 WITH SOCIETE GENERALE BANK. B. IT HAS BEEN ALLEGED IN THE ASSESSMENT ORDER THAT RS .57 96 602/- WERE RECEIVED AFTER DEDUCTION OF TDS @ 2.06% AND IT HAS ALSO BEEN ALLEGED THAT SAID SUM IS NOT INCLUDED IN THE RETURNED INCOME AND AN ADDITION OF RS.59 18 524/- WAS ADDED AS BUSINESS INCOME. C. THE ABOVE MATTER WAS NEVER RAISED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE RELEVANT DIRECTORS COMMISSION IS DULY INCLUDED IN SALARY INCOME IN THE RETURNED INCOME AND THE ALSO IN SALAR Y TDS CERTIFICATE IN FORM 16 RECEIVED FROM TIP TOP GENERAL AGENCIES PVT. LTD. D. A COMPLETE RECONCILIATION STATEMENT FOR THE AMOUNTS RECEIVED FROM TIP TOP GENERAL AGENCIES TOWARDS DIRECTORS REMUNERATION INC LUDING COMMISSION ALONG WITH THE BANK STATEMENTS WHERE IN THE CORRESP ONDING RECEIPTS HAVE BEEN HIGHLIGHTED AND THE SALARY TDS CERTIFICATE IN FORM 16 ARE ENCLOSED IN THE PAPER BOOK FILED BEFORE YOUR GOOD SELF. E. IT IS APPARENT FROM ABOVE THAT LD. AO HAS MADE A MI STAKE AND ADDED RS.59 18 524/- TOWARDS DIRECTORS COMMISSION TO THE RETURNED INCOME WHICH HAS ALREADY BEEN INCLUDED IN THE RETURNED INCOME UN DER THE HEAD SALARIES. F. AS A RESULT SUM OF RS.59 18 524/- HAS BEEN TAXED T WICE BY LD. AO. WE THEREFORE HUMBLY PRAYED THAT ADDITION OF RS.59 18 524/- MAY KINDLY BE DELETED. 6.1. A PERUSAL OF THE IMPUGNED ORDER AT PARA 12 SHO WS THAT THE ISSUE HAS BEEN RESTORED TO THE AO TO VERIFY THE RECONCILIATION STA TEMENT AND OTHER DOCUMENTS WHICH WERE FILED FOR THE FIRST TIME BEFORE THE CIT(A). F OR READY-REFERENCE WE REPRODUCE THE SAME:- 12. THE APPELLANT IS A DIRECTOR IN M/S TIP TOP GE NERAL AGENCIES PVT. LTD AND RECEIVED SALARY INCLUDING COMMISSION. THE AO NOTIC ED THAT APPELLANTS BANK ACCOUNT WAS CREDITED WITH A SUM OF RS.57 96 602 WHI CH REPRESENTS COMMISSION RECEIPTS FROM TIP TOP GENERAL AGENCIES PVT. LTD. T HE AO ADDED THE GROSS COMMISSION AMOUNT ON THE GROUND THAT THE SAME IS NO T OFFERED FOR TAXATION. THE AR HAS STATED THAT THE COMMISSION INCOME WAS INCLUD ED IN SALARY INCOME AND NO QUERIES WERE RAISED IN THE COURSE OF ASSESSMENT PRO CEEDINGS AND THE AO HAS NOT MADE HIS INTENTION KNOWN TO ADD THE INCOME IN TERMS OF ANY SHOW CAUSE NOTICE. IN THE COURSE OF THESE PROCEEDINGS THE AR HAS FILED RE CONCILIATION STATEMENT AND OTHER DETAILS LIKE FORM NO-16. IT IS SEEN FROM THE FORM NO.16 THE SALARY INCOME WAS RS.1 12 60 600 WHICH INCLUDED COMMISSION INCOME OF RS.88 60 600. THE TDS WAS RS.37 50 990. THE GROSS SALARY INCOME OFFE RED FOR TAXATION WAS RS.1 13 20 571. THE AR EXPLAINED THAT NET COMMISSI ON INCOME OF RS.57 96 602 (GROSS RS.87 81 400 MINUS TDS @ 33.90% OF 29 84 798 ) WAS CREDITED IN THE BANK A/C MAINTAINED WITH SOCIETE GENERALE BANK. IT APPEARS PRIMA FACIE THE COMMISSION IS PROPERLY REFLECTED. ITA NOS 4385 & 4531/DEL/ 2011 7 IN VIEW OF THE ABOVE DISCUSSION THE AO IS HEREBY DIRECTED TO VERIFY THE RECONCILIATION STATEMENT AND OTHER DOCUMENTS WHICH ARE BROUGHT ON RECORD FOR THE FIRST TIME AND IF HE IS SATISFIED WITH THE GENU INENESS OF THE DOCUMENTS AND EXPLANATION NO ADDITION IS CALLED FOR. THE ISSUE IS SET ASIDE FOR LIMITED VERIFICATION ONLY. ACCORDINGLY GROUND NOS.5 AND 6 ARE ALLOWED IN PRI NCIPLE. 6.2. THE DEPARTMENT HAS AGITATED BY GROUND NO- 2 TH AT THE CIT(A) DOES NOT HAVE THE POWER TO SET ASIDE THE ISSUE TO THE AO AND BY G ROUND NO-3 IT IS AGITATED THAT HE HAS ERRED IN ENTERTAINING FRESH EVIDENCE WHICH REQU IRED THE SAME TO BE CONFRONTED TO THE AO AS PER RULE 46A (3) OF THE INCOME TAX RULES 1962. 7. WE HAVE HEARD THE PARTIES BEFORE THE BENCH QUA T HE GROUNDS RAISED. BEFORE WE PROCEED TO DECIDE THE SAME WE HOLD THAT THE GROU ND NO-2 OF THE DEPARTMENT DESERVES TO BE UPHELD. A PERUSAL OF SECTION 251(1 )(A) SHOWS THAT THE COMMISSIONER (APPEAL) HAS BEEN EMPOWERED BY THE STATUTE TO EITHE R CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESSMENT. THE POWER TO SET ASIDE HAS B EEN OMITTED BY THE FINANCE ACT 2001 W.E.F 01.06.2001. ACCORDINGLY THE ACTION OF TH E CIT(A) IN RESTORING THE ISSUE TO THE AO CANNOT BE UPHELD. ADDRESSING GROUND NO-3 OF THE REVENUE IT IS SEEN THAT THE CIT(A) HAS THE POWER TO ADMIT FRESH EVIDENCE BY SPECIFIC ORDER UNDER RULE 46A OF THE INCOME TAX RULES 1962. THE POWER SO EXERCI SED HAS BEEN ON THE PLEA ADVANCED ON BEHALF OF THE ASSESSEE THAT NO QUERIES IN THE COURSE OF THE ASSESSMENT PROCEEDINGS QUA THE ISSUE WERE RAISED BY THE AO. A S SUCH THE ACTION OF THE CIT(A) IN ADMITTING FRESH EVIDENCE CANNOT BE FAULTED WITH. HOWEVER IT IS SEEN THAT THE RULES FURTHER REQUIRE THAT OPPORTUNITY TO REBUT THE FRES H EVIDENCES BY EVIDENCE DOCUMENT ETC BY WAY OF A REMAND REPORT SHOULD HAVE BEEN PRO VIDED TO THE AO WHICH ADMITTEDLY HAS NOT BEEN DONE BY THE CIT(A) WHO HAS INSTEAD RESTORED THE ISSUE TO THE AO WHICH HE WAS NOT EMPOWERED TO DO SO AS SECTI ON 251(1)(A) DOES NOT EMPOWER THE CIT(A) TO RESTORE THE ISSUE TO THE AO A S HE CAN ONLY CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESSMENT. IN THE CIRCUMSTANC ES HOLDING THAT THE FRESH EVIDENCE ADMITTED WAS NECESSARY AND CRUCIAL FOR DET ERMINING THE ISSUE AS THE AO ITA NOS 4385 & 4531/DEL/ 2011 8 HAS NOT PROCEEDED ON A SOUND FOOTING BY STRAIGHTAWA Y MAKING THE ADDITION ON THE GROUND THAT FORM NO-16 WAS NOT AVAILABLE WHICH HE C OULD HAVE EASILY CALLED FOR IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. WE ALLOW GROUND NO. 2 AND 3 OF THE DEPARTMENT AND SET ASIDE THE IMPUGNED ORDER TO THE EXTENT DISCUSSED ABOVE. WHILE SO DOING WE ALSO ALLOW GROUND NO. 8 OF THE ASSESSEE AND RESTORE THE ISSUE BACK TO THE FILE TO THE AO WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW BY WAY OF A SPEAKING ORDER AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AS THE SAME IS INTERLINKED. THE EVIDENCE REL IED UPON BY THE ASSESSEE IN SUPPORT OF ITS CLAIM SHALL BE TAKEN INTO CONSIDERATION BY T HE AO BEFORE ARRIVING AT THE CONCLUSION. ACCORDINGLY GROUND NO-8 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7.1. GROUND NO-1 OF THE DEPARTMENT IS MISPLACED AS THE CIT(A) HAS NOT DELETED THE ADDITION ACCORDINGLY GROUND NO-1 IS REJECTED GROUN D NO-2 OF THE DEPARTMENT IS ALLOWED AND GROUND NO-3 OF THE DEPARTMENT IS ALLOWE D FOR STATISTICAL PURPOSES. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE I.E ITA NO-4385/DEL/2011 IS ALLOWED FOR STATISTICAL PURPOSES AND ITA NO-4531/DEL/2011 I S PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH OF OCTOBER 2013. SD/- SD/- (J.S.REDDY) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 28/10/2013 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTA NT REGISTRAR ITAT NEW DELHI