SUSHMITA SEN, MUMBAI v. ACIT 11(1), MUMBAI

ITA 5132/MUM/2008 | 2004-2005
Pronouncement Date: 14-01-2011 | Result: Allowed

Appeal Details

RSA Number 513219914 RSA 2008
Assessee PAN ABPPS3422C
Bench Mumbai
Appeal Number ITA 5132/MUM/2008
Duration Of Justice 2 year(s) 5 month(s) 2 day(s)
Appellant SUSHMITA SEN, MUMBAI
Respondent ACIT 11(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 14-01-2011
Date Of Final Hearing 01-12-2010
Next Hearing Date 01-12-2010
Assessment Year 2004-2005
Appeal Filed On 12-08-2008
Judgment Text
1 ITA 5132/MUM/08 MS. SUSHMITASEN IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E BEFORE SHRI P.M. JAGTAP A.M. AND SHRI V. DURGA RAO JM ITA NO. 5132/MUM/2008 ASSESSMENT YEAR 2004-05 MS. SUSHMITA SEN 6 TH & 7 TH FLOOR SADGURU SUNDARI DR. AMBEDKAR ROAD KHAR (W) MUMBAI . PAN ABPPS3422C VS. A.C.I.T. 11(1) ROOM NO. 467 AAYAKAR BHAWAN MUMBAI 400 020. APPELLANT RESPONDENT APPELLANT BY SHRI ARVIND SONDE SHRI S.A. MUKADAM RESPONDENT BY SHRI SONGATE ORDER PER P.M. JAGTAP A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- XI MUMBAI DATED 19.3.2008 AND THE SOLITARY ISSUE ARISI NG OUT OF THE SAME RELATES TO THE ADDITION OF ` 95 LACS MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF COMPENSATION CLAIMED TO BE RECEIVED BY THE ASSESSEE FROM COCO-COLA INDIA LTD.. 2. THE ASSESSEE IN THE PRESENT CASE IS A FILM AC TRESS WHO DERIVES INCOME BY WAY OF FEES FOR ACTING ASSIGNMENT IN FILMS STAGE SHOWS AND END ORSEMENTS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HER ON 1. 11.04 DECLARING TOTAL INCOME OF ` 1 57 54 384/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS IT WAS NOTED BY THE A.O. THAT THE ASSESSEE HAS RECEIVED A SUM OF ` 1.45 CRORES FROM M/S COCO-COLA INDIA LTD. OUT OF WHICH A SUM OF ` 50 LACS WAS OFFERED TO TAX AS INCOME AND THE REMAI NING AMOUNT OF ` 95 LACS WAS TREATED AS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. IN THE NOTE ANNEXED TO THE COMPUTATION OF TOTAL INCOME IT WAS STATED BY THE A SSESSEE THAT THE SAID AMOUNT OF ` 95 2 ITA 5132/MUM/08 MS. SUSHMITASEN LACS HAS BEEN RECEIVED BY HER TOWARDS DAMAGE CAUSED TO HER REPUTATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CALLED UPON BY THE A.O. TO JUSTIFY THE TREATMENT GIVEN BY HER TO THE AMOUNT OF ` 95 LACS RECEIVED ON ACCOUNT OF COMPENSATION FROM M/S COCO COLA INDIA LTD. AS CAPITAL RECEIPT. THE ASSESSEE WAS ALSO REQUIRED BY THE A.O. TO EXPLAIN AS TO WHY THE SAID AMOUNT SHOULD NO T BE TREATED AS REVENUE RECEIPT CHARGEABLE TO TAX IN HER HANDS. AS STATED BY THE A .O. IN HIS ORDER THE ASSESSEE HOWEVER DID NOT OFFER ANY EXPLANATION AND IN THE ABSENCE TH EREOF THE A.O. FOUND IT DIFFICULT TO ASCERTAIN THE TRUE NATURE THE AMOUNT OF ` 95 LACS RECEIVED BY THE ASSESSEE. HE THEREFORE TREATED THE SAID AMOUNT AS INCOME OF THE ASSESSEE A ND BROUGHT THE SAME TO TAX IN HER HANDS IN THE ASSESSMENT COMPLETED U/S 143(3). 3. AGAINST THE ORDER PASSED BY THE A.O. U/S 143(3) AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND A WRITTEN SUBMI SSION WAS FILED ON HER BEHALF BEFORE HIM ALONG WITH THE SUPPORTING DOCUMENTS WHILE CHALL ENGING THE ADDITION OF ` 95 LACS MADE BY THE A.O. THE CONTENTIONS MAINLY RAISED BY THE ASSESSEE IN THE SAID WRITTEN SUBMISSION AS SUMMARIZED BY THE LD. CIT(A) IN HIS IMPUGNED ORDER WERE AS UNDER:- - DURING THE ASSESSMENT PROCEEDINGS A LETTER WAS PRE PARED BUT THE A.O. DECLINED TO ACCEPT THE SAME BECAUSE THE ASSESSMENT ORDER WAS ALREADY PASSED. - THE APPELLANT HAD ENTERED INTO AN AGREEMENT WITH M/S COCO COLA TO RENDER SERVICE AS A MODEL TO ADVERTISE ENDORSE AND PROMOT E THEIR PRODUCT FOR TWO YEARS AT S CONSIDERATION OF ` 1 50 00 000/-. - DURING PENDENCY OF THE AGREEMENT THE SAID COMPA NY SENT A LETTER TO TERMINATE THE CONTRACT ON ACCOUNT ALLEGED BREACH. - THE APPELLANT REFUTED SUCH CHARGES AND GAVE HER REASONS THROUGH HER SOLICITOR M/S BACHUBHAI MOMIN & CO. - CONSEQUENTLY AN AGREEMENT WAS ARRIVED AT AND TH E APPELLANT WAS PAID A COMPENSATION OF ` 1 45 00 000/-. - THE COPIES OF LETTER WRITTEN BY THE APPELLANT TH ROUGH THE SOLICITOR AND A COPY OF THE SUBSEQUENT AGREEMENT ARE ON RECORD. - THE APPELLANT HAD A BALANCE PAYMENT OF ` 50 LAKH AGAINST HER EXISTING CELEBRITY CONTRACT. THUS ` 50 LAKH WAS CONSIDERED AS PART OF HER 3 ITA 5132/MUM/08 MS. SUSHMITASEN PROFESSIONAL RECEIPTS WHEREAS THE BALANCE AMOUNT OF ` 95 LAKH WAS TAKEN AS COMPENSATION. 4. THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSE E BEFORE HIM WERE NOT FOUND ACCEPTABLE BY THE LD. CIT(A) AND HE PROCEEDED TO CO NFIRM THE ADDITION OF ` 95 LACS MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF COMPENSATION RECEIVED FROM M/S COCO COLA INDIA LTD. FOR THE FOLLOWING REASONS GIVEN IN PARA NO. 3.2 AND 3.3 OF HIS IMPUGNED ORDER:- I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MAT ERIALS ON RECORD. IT IS SEEN THAT THE APPELLANT HAD RECEIVED ` 1 45 00 000/- FROM THE SAID COMPANY IN ONE GO. THEREFORE THE BIFURCATION IS ONLY AT THE LEVE L OF THE APPELLANT. FROM THE COPY OF CELEBRITY ENGAGEMENT CONTRACT IT IS SEEN THAT THER E WAS AN AGREEMENT ENTERED INTO BETWEEN THE APPELLANT AND COCO COLA ON 6.2.02. TH E AGREEMENT AT PARA 7 LISTS OUT CONSIDERATION AND PAYMENT TERMS. THE TOTAL AMOUN T OF CONTRACT WAS FOR ` 1 50 00 000/-. PARA 9 OF THE CONTRACT DEALS WITH T HE FAULTS AND ITS CONSEQUENCES. THERE IS ON RECORD A LETTER DATED 27/2/03 FROM COCO COLA TO THE APPELLANT ALLEGING BREACH OF CONTRACT. IN THE PROCESS THE COMPANY DE MANDED ` 1.45 CRORE FROM THE APPELLANT TERMINATING THE AGREEMENT. ON 7/4.03 TH E APPELLANT REPLIED TO COCO COLA THROUGH HER SOLICITORS. IN THIS LETTER THE APPELLA NT ALLEGED SEXUAL HARASSMENT BY EMPLOYEES OF COCO COLA. THE APPELLANT ALSO DEMANDE D THE BALANCE PAYMENT OF ` 50 LAKH RESERVING HER RIGHT TO CLAIM DAMAGES. ULTIMAT ELY IT APPEARS THAT THERE WAS AN AGREEMENT ENTERED INTO BETWEEN THE APPELLANT AND CO CO COLA ON 18/9/03. A COPY OF THE AGREEMENT IS ON RECORD. AT PARA 2 OF THE AGREE MENT IT HAS BEEN MENTIONED THAT THE COMPANY AGREED TO PAY TO THE APPELLANT ` 1 45 00 000/- AS COMPENSATION WITHOUT ADMISSION OF LIABILITY TOWARDS THE APPELLANTS ALL EGED CLAIMS AGAINST COCO COLA ARISING OUT OF OR IN RELATION TO THE CELEBRITY AGR EEMENT AND SUBSEQUENT TERMINATION THEREOF AS HEREINABOVE STATED. THE SAID AMOUNT SHA LL BE ACCEPTED BY SS IN FULL AND FINAL SETTLEMENT FOR ALL HER CLAIMS AGAINST COCO CO LA ARISING OF OR IN RELATION TO THE CELEBRITY AGREEMENT AND THE SUBSEQUENT TERMINATION THEREOF AND SS CONFIRMS THAT SHE HAS NO CLAIMS OF WHATSOEVER NATURE AGAINST COCO -COLA. IN TERMS OF SUCH AGREEMENT JUSTICE S.P. BHARUCHA (RETIRED) WAS TO C ONDUCT INQUIRIES. THE APPELLANT RECEIVE ` 1 45 00 000/- ON 22.9.03. A COPY OF THE RECEIPT I S ON RECORD. FROM THE SEQUENCE OF EVENTS IT FOLLOWS THAT THE AP PELLANT HAD RECEIVED ` 1 45 00 000/- FROM COCO COLA. THE APPELLANT HAS MA DE A BIFURCATION OF ` 50/- LAKH FOR REVENUE PURPOSES AND THE BALANCE AMOUNT WAS TRE ATED AS COMPENSATION AND A CAPITAL RECEIPT. FROM THE AGREEMENT IT IS SEEN THA T THE ENTIRE AMOUNT OF ` 1 45 00 000/- WAS THE COMPENSATION. THERE IS NO PR OVISION IN INCOME TAX LAW TO TREAT PART OR WHOLE OF SUCH RECEIPTS AS BEING OF CA PITAL NATURE. IN ANY CASE IF A PART OF IT WERE REVENUE IN NATURE THE OTHER PART COULD NOT HAVE BEEN CAPITAL IN NATURE. THE FACT OF THE MATTER IS THAT THE APPELLANT RECEIVED ` 1 45 00 000/- FROM THE SAID COMPANY AND SHOULD HAVE OFFERED THE ENTIRE AMOUNT F OR TAXATION. TREATING ` 95 LAKH AS COMPENSATION THEREBY BEING CAPITAL IN NATURE I S NOT SUPPORTED BY PROVISIONS OF LAW. IN ANY CASE SUCH DOCUMENTS WERE NOT SUBMITTE D BEFORE THE A.O. THE A.O. COULD NOT BUT HAVE MADE THE SAID ADDITION. ASSUMIN G THAT SUCH DOCUMENTS COULD NOT BE SUBMITTED IT IS SEEN FROM SUCH DOCUMENTS THAT T HE APPELLANT IS IN RECEIPT OF A 4 ITA 5132/MUM/08 MS. SUSHMITASEN CONSOLIDATED AMOUNT OF ` 1 45 00 000/-.SECTION 28(II) CLEARLY SPECIFIES THA T COMPENSATION IS A TAXABLE ITEM. THE EXCEPTIONS TO SUCH TAXABILITY ARE U/S 10 OF THE I.T. ACT. THE CASE OF THE APPELLANT IS NOT COVERED BY ANY OF THE PROVISIONS U/S 10. THEREFORE I AM OF THE OPINION THAT THE ENTIRE AMOU NT OF ` 1 45 00 000/- SHOULD HAVE BEEN OFFERED FOR TAXATION. THE A.O. HAS RIGHTLY BR OUGHT THE BALANCE AMOUNT OF ` 95 LAKHS TO TAX. CONSEQUENTLY APPEAL UNDER THAT HEAD DESERVES TO BE REJECTED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSES SEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAD ENTERED INTO A CONTRACT WITH COCO COLA INDIA LTD. FOR ENDORSEMENT OF THEIR PRODUCTS FOR A TOTAL CONSIDERATION OF ` 1.50 CRORES. HE SUBMITTED THAT IN PURSUANCE OF THE SAID CONTRACT A SUM OF ` 1 CRORE WAS RECEIVED BY THE ASSESSEE AND THEREAFTE R SOME DISPUTE AROSE BETWEEN THE ASSESSEE AND M/S COCO COLA INDIA LTD. HE SUBMITTED THAT THE CONTRACT BETWEEN THE ASSESSEE AND M/S COCO COLA INDIA LTD. WAS FINALLY T ERMINATED FOR VARIOUS REASONS ONE OF WHICH WAS THE ALLEGATION MADE BY THE ASSESSEE OF SE XUAL HARASSMENT AGAINST ONE SENIOR EMPLOYEE OF M/S COCO COLA INDIA LTD. HE TOOK US THR OUGH THE CORRESPONDENCE EXCHANGED BETWEEN THE ASSESSEE AND M/S COCO COLA INDIA LTD. I N THIS CONTEXT DURING THE RELEVANT PERIOD TO SHOW THE NATURE OF DISPUTE AND THE ALLEGA TION MADE BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE FINALLY TOOK THE MATTER WITH GLOBAL CHAIRMAN OF COCO COLA INDIA LTD. GROUP AND WITH HIS INTERVENTION A SETTL EMENT WAS ARRIVED AT BY WHICH THE ASSESSEE RECEIVED A SUM OF ` 1.45 CRORES. ACCORDING TO HIM THE SAID AMOUNT TO THE EXTENT OF ` 50 LACS WAS TREATED BY THE ASSESSEE AS RECEIVED UN DER THE ORIGINAL CONTRACT AND THE SAME WAS OFFERED TO TAX AS HER INCOME. HOWEVER TH E BALANCE AMOUNT OF ` 95 LACS WHICH WAS RECEIVED BY HER AS COMPENSATION FOR TERMINATION OF CONTRACT WAS CLAIMED TO BE EXEMPT BY HER BEING A CAPITAL RECEIPT. HE SUBMITTE D THAT THE A.O. HOWEVER TREATED THE SAID AMOUNT AS INCOME OF THE ASSESSEE AND ASSESSED THE SAME IN HER HANDS ON THE GROUND THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO SUPPORT AND SUBSTANTIATE HER CLAIM THAT THE AMOUNT OF ` 95 LACS CONSTITUTED CAPITAL RECEIPT. HE SUBMITTED THAT SINCE SUFFICIENT AND PROPER OPPORTUNITY WAS NOT AFFORDED BY THE A.O. TO THE ASSESSEE TO FILE THE DOCUMENTARY EVIDENCE IN SUPPORT OF HER CLAIM THE SAID DOCUMENT ARY EVIDENCE WAS FILED BY HER AS 5 ITA 5132/MUM/08 MS. SUSHMITASEN ADDITIONAL EVIDENCE DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A). HE TOOK US THROUGH THE COPIES OF THE SAID DOCUMENTARY EVIDENCE PLACED IN HIS PAPER BOOK AND MADE AN VEHEMENT ATTEMPT TO SHOW THAT THE AMOUNT OF ` 95 LACS RECEIVED BY THE ASSESSEE AS COMPENSATION FOR TERMINATION OF CONTRACT WAS A C APITAL RECEIPT. HE CONTENDED THAT THE SAID DOCUMENTARY EVIDENCE WAS SUFFICIENT TO SHOW TH AT THE AMOUNT OF ` 95 LACS RECEIVED BY THE ASSESSEE IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX BUT THE LD. CIT(A) HAS NOT PROPERLY APPRECIATED THE CASE OF THE ASSESSEE BASED ON THE SAID EVIDENCE. HE SUBMITTED THAT THE LD. CIT(A) INSTEAD OF EXAMINING THE NATURE OF THE RECEIPT OF ` 95 LACS INDEPENDENTLY TREATED THE SAME AS REVENUE RECEIPT ON THE GROUND THAT THE OTHER AMOUNT OF ` 50 LACS RECEIVED BY THE ASSESSEE ON TERMINATION OF CONTRACT WAS OFFERED BY HER AS INCOME CHARGEABLE TO TAX. HE CONDEMNED THIS APPROAC H ADOPTED BY THE LD. CIT(A) AND SUBMITTED THAT THE LD. CIT(A) WAS ALSO NOT JUSTIFIE D IN INVOKING THE PROVISIONS OF SECTION 28(II) TO TREAT THE AMOUNT OF ` 95 LACS IN QUESTION AS INCOME OF THE ASSESSEE WITH OUT CONSIDERING THAT THE SAID PROVISIONS WERE NOT APPLI CABLE IN THE CASE OF THE ASSESSEE. IN SUPPORT OF HIS CONTENTION THAT THE AMOUNT OF ` 95 LACS RECEIVED BY THE ASSESSEE IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX THE LEARNED COUNSEL HAS RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- I) PARIMISETTI SEETHARAMAMMA VS. CIT - 57 ITR 532 (SC) II) PRINCESS MAHESHWARI DEVI OF PRATAPGARH VS CIT -147 ITR 258 (BOM) III) CIT VS. J.B. LODHA -174 ITR 318 (AP) IV) S. ZORASTER AND CO VS. CIT - 322 ITR 35 (RAJ.) 6. WHEN IT WAS POINTED OUT BY THE BENCH THAT THE DO CUMENTARY EVIDENCE FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LD. CIT(A) A S ADDITIONAL EVIDENCE HAS BEEN ADMITTED BY THE LATER WITHOUT PASSING ANY SPEAKING ORDER AND WITHOUT GIVING ANY OPPORTUNITY TO THE A.O. TO VERIFY THE SAME THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE SAID ADDITIONAL EVIDENCE HAS BEEN EXAMINED BY THE LD. CI T(A) AND ONLY ON SUCH EXAMINATION THE ISSUE RELATING TO THE NATURE OF ISSUE IN QUESTI ON HAS BEEN DECIDED BY HIM ON MERIT. HE CONTENDED THAT THE REVENUE IN ANY CASE HAS NOT FI LED ANY CROSS APPEAL OR CROSS OBJECTION 6 ITA 5132/MUM/08 MS. SUSHMITASEN CHALLENGING THE ACTION OF THE LD. CIT(A) IN ADMITTI NG THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 7. THE LEARNED D.R. ON THE OTHER HAND SUBMIT TED THAT IF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS NOT PROPERLY MADE IN AS MUCH AS A DDITIONAL EVIDENCE HAS BEEN ADMITTED BY HIM WITHOUT COMPLYING WITH THE REQUIREMENTS OF R ULE 46-A OF THE INCOME TAX RULES 1962 THE TRIBUNAL HAS THE POWER TO GIVE PROPER DIR ECTION TO THE LD. CIT(A) TO PASS THE ORDER AFRESH AFTER COMPLYING WITH THE REQUIREMENTS OF THE SAID RULES PROPERLY. ON MERIT HE CONTENDED THAT THE AMOUNT OF ` 95 LACS WAS PAID BY THE M/S COCO COLA INDIA LTD. TO THE ASSESSEE NOT AS A RESULT OF ANY ALLEGATION MADE BY THE ASSESSEE SUCH AS SEXUAL HARASSMENT ETC. HE INVITED OUR ATTENTION TO THE REL EVANT PORTION OF THE TERMINATION AGREEMENT AND SUBMITTED THAT THE SAID AMOUNT WAS PA ID BY M/S COCO COLA INDIA LTD. WITHOUT ADMITTING ANY LIABILITY WHATSOEVER. HE CONT ENDED THAT THE SAID AMOUNT RECEIVED BY THE ASSESSEE THUS WAS IN THE NATURE OF REVENUE R ECEIPT CHARGEABLE TO TAX IN HER HANDS AS RIGHTLY HELD BY THE AUTHORITIES BELOW. IN SUPPORT O F THIS CONTENTION THE LD. D.R. RELIED ON THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SOUTH INDIA PICTURES LTD. 29 ITR 910 AND IN THE CASE OF CIT VS. RAI BAHADUR J AIRAM VALJI & ORS. 35 ITR 148 AND ALSO THAT OF HONBLE CALCUTTA HIGH COURT IN THE CAS E OF CIT VS. SIEWART AND DHOLAKIA PVT. LTD. 95 ITR 573 (CAL.). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSION A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE AMOUNT OF ` 95 LACS IN DISPUTE RECEIVED BY THE ASSESSEE ON TERMINATION OF AGREEMENT FROM M/S COCO COLA INDIA L TD. HAS BEEN TREATED BY THE REVENUE AUTHORITIES AS REVENUE RECEIPT CHARGEABLE TO TAX IN HER HANDS AS AGAINST THE CLAIM OF THE ASSESSEE THAT THE SAME IS A CAPITAL RECEIPT NOT CHA RGEABLE TO TAX. BEFORE US THE LEARNED D.R. HAS RAISED HIS ARGUMENTS SUPPORTING THE REVENU ES CASE THAT THE SAID AMOUNT IS A REVENUE RECEIPT CHARGEABLE TO TAX IN THE HANDS OF T HE ASSESSEE AND HAS RELIED UPON SOME JUDICIAL PRONOUNCEMENTS IN SUPPORT THEREOF. 7 ITA 5132/MUM/08 MS. SUSHMITASEN 9. THE LEARNED COUNSEL FOR THE ASSESSEE ON T HE OTHER HAND HAS VEHEMENTLY JUSTIFIED THE ASSESSEES CLAIM THAT THE SAID AMOUNT RECEIVED ON TERMINATION OF AGREEMENT IS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. IN SUPPORT THEREOF HE HAS RELIED BESIDES VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY HIM ON THE FOLLOWING DOCUM ENTARY EVIDENCE:- 1. CELEBRITY ENGAGEMENT CONTRACT WITH COCO-COLA INDIA P. LTD. DT. 11/02/2002. 2. LETTER DT. 28/11/2002 FROM COCO-COLA INDIA 3. LETTER DT. 02/12/2002 TO COCO-COLA INDIA 4. LETTER DT. 11/12/2002 FROM COCO-COLA INDIA 5. LETTER DT. 24.12.2002 TO COCO-COLA INDIA IN REP LY TO LETTER DT. 11/12/2002 OF COCO-COLA 6. LETTER DT. 11/01/2003 TO COCO-COLA INDIA 7. LETTER DT. 27/02/2003 FROM COCO-COLA INDIA TERM INATING THE CONTRACT AND ASKING FOR REFUND AS WELL AS BUSINESS LOSS. 8. NOTICE DT. 07/04/2003 FROM BACHUBHAI MUNIM & CO . TO COCO-COLA 9. SETTLEMENT AGREEMENT WITH COCO-COLA INDIA P. LT D. DT. 18/09/2003 10. THE COPIES OF ABOVE DOCUMENTS ARE PLACED ON REC ORD BEFORE US IN THE PAPER BOOK FILED BY THE ASSESSEE AND AS STATED IN THE CERTIFIC ATE GIVEN BY THE ASSESSEE THE SAID DOCUMENTS WERE NOT FILED BEFORE THE A.O. AND THE SA ME WERE FILED AS ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) FOR THE FIRST TIME. A PERUSA L OF THE IMPUGNED ORDER OF THE LD. CIT(A) HOWEVER SHOWS THAT THERE IS NO MENTION TO ANY APPLICATION FILED BY THE ASSESSEE SEEKING ADMISSION OF THE SAID DOCUMENTS AS ADDITION AL EVIDENCE. ALTHOUGH HE HAS MADE A MENTION OF THE RELEVANT DOCUMENTS FILED BY THE ASSE SSEE AND HAS ALSO REFERRED TO SOME OF THE SAID DOCUMENTS WHILE DECIDING THE ISSUE RELATIN G TO TAXABILITY OF ` 95 LACS THERE IS NO MENTION BY HIM THAT THE SAID DOCUMENTS CONSTITUTED ADDITIONAL EVIDENCE FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE HIM. HE HAS NOT PASSED ANY ORDER RECORDING ANY REASONS FOR ADMITTING THE SAID ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. HE HAS ALSO NOT ALLOWED ANY OPPORTUNITY TO THE A.O. TO EXAMINE THE SAID ADD ITIONAL EVIDENCE FILED BY THE ASSESSEE FOR THE FIRST TIME. IT IS NO DOUBT TRUE THAT RUL E 46-A OF INCOME TAX RULES 1962 PERMITS THE ASSESSEE TO FILE ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) BUT SUB-RULE (1) THEREOF 8 ITA 5132/MUM/08 MS. SUSHMITASEN LAYS DOWN THE CIRCUMSTANCES IN WHICH ALONE THE ASSE SSEE IS ENTITLED TO PRODUCE ADDITIONAL EVIDENCE. FURTHER SUB-RULE (2) OF RULE 46-A MANDA TES THAT NO ADDITIONAL EVIDENCE SHALL BE ADMITTED UNDER SUB RULE (1) UNLESS CIT(A) RECORD S IN WRITING THE REASONS FOR ITS ADMISSION. UNDER RULE SUB RULE (3) OF RULE 46-A T HE LD. CIT(A) SHOULD NOT TAKE INTO ACCOUNT ANY ADDITIONAL EVIDENCE PRODUCED UNDER SUB RULE (1) UNLESS THE A.O. HAS BEEN ALLOWED A REASONABLE OPPORTUNITY TO EXAMINE THE SAI D EVIDENCE OR TO PRODUCE ANY EVIDENCE OR DOCUMENT IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE. 11. IN THE CASE OF CIT VS. RANJEET KUMAR CHOWDHARY 288 ITR 179 (GAU) THE ASSESSEE HAD PRODUCED PHOTOCOPIES OF SALES BILLS AN D RECEIPTS ONLY BEFORE THE LD. CIT(A) WHO ALLOWED THE ASSESSEE TO PRODUCE THE SAME AS ADD ITIONAL EVIDENCE WITHOUT RECORDING ANY PLAUSIBLE REASONS AND WITHOUT GIVING OPPORTUNIT Y OF HEARING TO THE A.O. AND WHEN THE MATTER REACHED TO THE HONBLE GAUHATI HIGH COURT I T WAS HELD BY THEIR LORDSHIPS THAT THE CIT(A) WAS NOT JUSTIFIED IN ADMITTING THE ADDI TIONAL EVIDENCE WITHOUT COMPLYING WITH THE PROVISIONS OF RULE 46-A. IT WAS HELD THAT THE APPELLATE AUTHORITY ACTED IN VIOLATION OF RULE 46-A IN ACCEPTING THE ADDITIONAL EVIDENCE. IT WAS ALSO HELD THAT THE APPELLATE AUTHORITY CANNOT ACT WHIMSICALLY WHILE EX ERCISING THE JURISDICTION UNDER RULE 46-A. 12. KEEPING IN VIEW THE DECISION OF HONBLE GAUHATI HIGH COURT IN THE CASE OF RANJEET KUMAR CHOUDHURY (SUPRA) AND HAVING REGARD T O THE FACTS OF THE CASE WE ARE OF THE VIEW THAT THE IMPUGNED ORDER OF THE LD. CIT(A) DISPOSING OF THE APPEAL OF THE ASSESSEE BY ADMITTING THE ADDITIONAL EVIDENCE WITHOUT COMPLY ING WITH THE MANDATORY REQUIREMENTS OF RULE 46-A IS REQUIRED TO BE SET ASIDE AND THE MA TTER HAS TO BE REMITTED BACK TO HIM FOR DECIDING THE APPEAL OF THE ASSESSEE AFRESH ON MERIT S AS PER LAW. WE FIND NO MERIT IN THE OBJECTION RAISED BY THE LEARNED COUNSEL FOR THE ASS ESSEE IN THIS REGARD THAT THE REVENUE HAS NOT CHALLENGED THE ORDER OF THE LD. CIT(A) ON T HIS ISSUE BY FILING ANY APPEAL OR CROSS OBJECTION. IN OUR OPINION THE ISSUE RELATING TO TH E ADMISSION OF ADDITIONAL EVIDENCE WITHOUT PASSING ANY SPEAKING ORDER OR WITHOUT ALLOW ING ANY OPPORTUNITY TO THE A.O. TO 9 ITA 5132/MUM/08 MS. SUSHMITASEN EXAMINE THE SAME HAS BEEN DECIDED BY THE LD. CIT(A) AGAINST THE REVENUE AND AS A RESPONDENT THE REVENUE IS AT LIBERTY TO RAISE THE SAID ISSUE AS PER RULE 27 OF APPELLATE TRIBUNAL RULES 1963. EVEN OTHERWISE IF THE ORDER OF THE LD. CIT(A) IS FOUND TO BE PASSED IN VIOLATION OF MANDATORY RULE 46-A THE TRI BUNAL IN OUR OPINION IS DULY EMPOWERED TO SET ASIDE THE SAME WITH A DIRECTION T O THE LD. CIT(A) TO MAKE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER COMPLYING WITH THE SAID RULE. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND REST ORE THE MATTER TO HIS FILE WITH A DIRECTION TO DISPOSE OF THE APPEAL OF THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW AFTER COMPLYING WITH THE REQUIREMENTS OF RULE 46-A. 13. IN THE RESULT APPEAL OF TH E ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PU RPOSE. ORDER PRONOUNCED ON 14 TH JANUARY 2011. SD/- SD/- (V. DURGA RAO) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI DATED 14 TH JANUARY 2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XII MUMBAI 4. THE CIT- XI MUMBAI 5. THE DR BENCH E 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 10 ITA 5132/MUM/08 MS. SUSHMITASEN DATE INITIALS 1 DRAFT DICTATED ON 7.1.11 11.1.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 10.1.11 11.1.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER