Ilaxi Textile Industries Pvt.Ltd.,, Surat v. The Income tax Officer,Ward-1(2),, Surat

ITA 551/AHD/2007 | 2003-2004
Pronouncement Date: 09-07-2010 | Result: Allowed

Appeal Details

RSA Number 55120514 RSA 2007
Assessee PAN AAACI4953R
Bench Ahmedabad
Appeal Number ITA 551/AHD/2007
Duration Of Justice 3 year(s) 5 month(s) 4 day(s)
Appellant Ilaxi Textile Industries Pvt.Ltd.,, Surat
Respondent The Income tax Officer,Ward-1(2),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 09-07-2010
Date Of Final Hearing 28-06-2010
Next Hearing Date 28-06-2010
Assessment Year 2003-2004
Appeal Filed On 05-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' [BEFORE S/SHRI MAHAVIR SINGH JM & A N PAHUJA AM] ITA NO.551/AHD/2007 (ASSESSMENT YEAR:-2003-04) M/S ILLAXI TEXTILE INDUSTRIES PVT. LTD. ROAD NO.6 INDUSTRIAL ESTATE UDHYOG NAGAR UDHNA SURAT [PAN: AAACI 4953 R] V/S INCOME-TAX OFFICER WARD-1(2) SURAT [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI MEHUL K PATEL AR REVENUE BY:- SHRI K MADHUSUDAN DR O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 05-12-2006 OF THE LD. CIT(APPEALS)-I SURAT RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT THE LEARNED CIT(A) HAS ERRED IN CONFIR MING THE ACTION OF THE AO IN MAKING ADDITION ON ACCOUNT OF GROSS PROFIT EA RNED ON UNACCOUNTED TRANSACTION OF RS.1 01 83 778/-. 2. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITION MAY PLEASE BE DELETED AS LEARNED MEMBERS OF THE TRIBUNAL MAY DEEM IT PROPER. 3. APPELLANT CRAVES LEAVE TO ADD ALTER OR DELETE A NY GROUND(S) EITHER BEFORE OR IN THE COURSE OF THE HEARING OF THE APPEA L. 2 FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING NIL INCOME FILED ON 29-11-2003 BY THE ASSESSEE MAN UFACTURING GREY CLOTH AFTER BEING PROCESSED ON 06-02-2004 U/S 143( 1) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT] WAS SELECTED FOR SCRUTINY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 25.11.2004. DURING THE COURSE OF ASSESSMENT PROCEED INGS THE ASSESSING OFFICER[AO IN SHORT] NOTICED THAT THE AS SESSEE HAD SHOWN GROSS PROFIT[GP] OF RS.44 549/- @ 0.82% ON SALES OF RS.54 29 271/- IN THE YEAR UNDER CONSIDERATION AS AGAINST LOSS OF RS. 46 284/- ON ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 2 SALES OF RS.19 11 433/- IN THE AY 2002-03 & GP @ 5. 86% ON SALES OF RS.1 19 93 137/- IN THE AY 2001-02. THE AO FURTH ER OBSERVED THAT THE COMPANY HAD EARLIER FOLLOWING DIRECTORS: 1. SHRI RAMESHCHANDRA N CHOKHAWALA 2. SHRI BHUPENDRABHAI N CHOKHAWALA 3. SHRI ANILKUMAR N CHOKHAWALA 4. SHRI ROHITKUMAR N CHOKHAWALA 5. SHRI NILESHBHAI B CHOKHAWALA SUBSEQUENTLY TWO DIRECTORS MENTIONED AT SERIAL NO. 2 & 3 ABOVE RESIGNED ON 23-09-2001 AND FOLLOWING TWO PERSONS WE RE APPOINTED AS DIRECTORS W.E.F.12-09-2001. 1. SHRI GOKUL PRASAD PANDEY ALIAS G.P. PANDEY 2. SHRI MAHENDRA SINGH THIS CHANGE IN THE DIRECTORSHIP WAS AFFIRMED BY SHR I NILESH CHOKHAWALA ONE OF THE DIRECTORS OF THE ASSESSEE COM PANY BY SIGNING THE FORM NO.32 AS PER REQUIREMENTS OF THE C OMPANIES ACT 1956. THE AO NOTICED THAT THE ASSESSEE WAS GRA NTED FIVE LICENSES BY THE DGFT AHMEDABAD AS DETAILED IN PARA 5(II) OF THE ASSESSMENT ORDER .IN TERMS OF PARA 4.1.1 OF EXPORT & IMPORT POLICY 2002-07 LICENSE HOLDER IS REQUIRED EITHER TO MANUF ACTURE OR GET MANUFACTURES THE FINAL PRODUCT WITH DUTY FREE IMPOR TED RAW MATERIAL AND FINAL PRODUCT HAS TO BE EXPORTED WITHIN 18 MONT HS. THE ASSESSEE COMPANY IMPORTED RAW MATERIAL WORTH RS.4 92 73 945/ - IN THE FY 2002-03 UNDER THE ADVANCE LICENSES AS DETAILED ON P AGE 4 TO 7 OF THE ASSESSMENT ORDER. SUBSEQUENTLY DIRECTORATE OF REVENUE INTELLIGENCE (DRI) CONDUCTED A SEARCH IN THE REGIST ERED OFFICE OF THE ASSESSEE COMPANY AS WELL AS RESIDENTIAL PREMISES OF ONE OF THE DIRECTORS OF THE ASSESSEE ON 2.5.2003 WHEN IT TRANS PIRED 8 19 204 KGS. OF POLYESTER YARN VALUED AT RS.4 92 73 945/- IMPORTED BY THE ASSESSEE WAS SOLD IN THE OPEN MARKET IN CONTRAVENTI ON OF TERMS OF ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 3 SUB-PARA (A) & (B) OF PARAGRAPH 4.1.1 OF IMPORT AND EXPORT POLICY 2002-07. IT ALSO TRANSPIRED THAT NONE OF THE TRANSA CTIONS WERE ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE ASSES SEE EVEN WHEN THESE WERE CARRIED OUT THROUGH TWO BANK ACCOUNTS O PENED WITH DEVELOPMENT CREDIT BANK SURAT AND INDUS IND BANK SURAT MENTIONED IN PARA-6(I) ON PAGE-7 OF THE ASSESSMENT ORDER. THE TRANSACTIONS IN THESE BANK ACCOUNTS REFLECTED UNREC ORDED PURCHASES AND SALES MAINLY RELATING TO HIGH SEAS PURCHASES O N THE STRENGTH OF ADVANCED LICENSES OBTAINED BY THE ASSESSEE. TO A QU ERY BY THE AO THE ASSESSEE REPRESENTED BEFORE THE A.O. THAT THE A SSESSEE COMPANY WAS IN NO WAY INVOLVED IN THE FRAUD DETECTE D BY DRI. IT WAS STATED THAT THE FRAUD WAS CONDUCTED BY SHRI GOKUL P RASAD PANDEY AND OTHERS AND THAT THE COMPANY WERE IN NO WAY INVO LVED IN THE TRANSACTIONS DONE BY GOKUL PRASAD PANDEY WITHOUT T HE KNOWLEDGE OF THE OTHER DIRECTORS OF THE ASSESSEE COMPANY NOR THE OTHER DIRECTORS WERE ISSUED ANY SHOW-CAUSE NOTICE BY THE DRI .HOWEVER THE A.O. DID NOT ACCEPT THIS EXPLANATION ON THE GRO UND THAT SHRI GOKUL PRASAD PANDEY ALIAS G.P. PANDEY AND SHRI MAHE NDRA SINGH WERE APPOINTED NEW DIRECTORS WITH THE CONSENT OF T HE EXISTING DIRECTORS AND THEREFORE THE TRANSACTIONS MADE BY G OKUL PRASAD PANDEY IN THE NAME OF THE COMPANY WERE THE TRANSACT IONS OF THE ASSESSEE COMPANY ONLY. IT WAS FURTHER MENTIONED BY THE AO THAT SHRI ARUN SHARMA C.A. DURING THE EXAMINATION U/S 1 31 OF THE ACT STATED THAT SHRI GOKUL PRASAD PANDEY AND MAHENDRA SINGH WERE APPOINTED AS DIRECTORS WITH THE DUE CONSENT OF NILE SH B. CHOKHAWALA THE WORKING DIRECTOR AND THE DEAL WAS F INALIZED FOR 50 LACS BETWEEN SHRI GOKUL PRASAD PANDEY AND NARESH CH OKHAWALA.AN AMOUNT OF RS.12 LACS WAS PAID TO THE OUTGOING SHARE HOLDERS OF THE CHOKHAWALA FAMILY IT WAS REVEALED. MOREOVER BOTH THE BANK ACCOUNTS VIZ. DEVELOPMENT CREDIT BANK SURAT A/C. NO.040-940- 02/CA AND INDUS IND BANK LTD. SURAT A/C. NO.023-62 9713-050 WERE ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 4 OPENED ON THE BASIS OF RESOLUTION PASSED BY THE BOA RD OF DIRECTORS OF THE COMPANY IN THE MEETINGS DATED 13.12.01 AND 2 7.5.02. THEREFORE THERE WAS NO REASON FOR THE COMPANY TO D ENY THE EXISTENCE OF THESE TWO BANK ACCOUNTS OR THE TRANSAC TIONS DONE IN THESE TWO BANK ACCOUNTS ESPECIALLY WHEN THE ENTIRE BOARD HAD APPROVED THE OPENING OF THESE TWO BANK ACCOUNTS AND AT THE RELEVANT TIME MR. GOKUL PRASAD PANDEY WAS THE DIREC TOR OF THE ASSESSEE COMPANY THE AO OBSERVED. EVEN M/S. SHABNA M SYNTHETICS SUYOG FIBRES LTD AND BABA SYNTHETICS CO NFIRMED THAT THEY HAD SOLD THE GOODS TO THE ASSESSEE COMPANY I.E . ILAXI TEXTILES INDUSTRIES PVT. LTD. ACCORDINGLY THE AO ADDED AN AMOUNT OF RS.1 01 83 778/- CALCULATED UNDER: INDUS IND BANK (A/C NO.040~940-02-C/A) PEAK 26-6-02 RS.31 42 620 GP @ 5% 4 29 74 714 RS.21 48 736 RS.52 91 356 DEVELOPMENT CREDIT BANK (A/C NO.629713050) PEAK 29-7-02 RS.37 67 803 GP @ 5% 2 24 92 378 RS.L1 24 619 RS.48 92 422 -------------------- RS.L 01 83 778 3. ON APPEAL DESPITE SEEKING ADJOURNMENTS ON 8.11 .2006 15.11.2006 20.11.2006.22.11.2006 NONE APPEARED BEF ORE THE LD. CIT(A) ON THE NEXT DATE OF HEARING ON 29.11.2006. I N THESE CIRCUMSTANCES THE ASSESSEE DID NOT MAKE ANY SUBMIS SIONS BEFORE THE LD. CIT(A) .ACCORDINGLY THE LD. CIT(A) DISMISS ED THE APPEAL ON THE BASIS OF FACTS FOUND BY THE AO IN THE FOLLOWING TE RMS:- ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 5 2.7 I HAVE CONSIDERED THE ASSESSMENT ORDER CAREFUL LY AND HAVE CONSIDERED ITS MERITS. THE FACTS OF THE CASE WHICH CLEARLY SHOW THAT THE ADDITION WAS RIGHTLY MADE ARE AS UNDER: 1. THE TRANSACTIONS NOT SHOWN IN THE BOOKS OF ACCOU NTS AND AS DISCUSSED ABOVE HAVE TAKEN PLACE IN TWO BANK ACCOUN TS WHICH WERE OPENED AFTER THE APPROVAL OF THE BOARD OF DIRE CTORS IN A MEETING HELD AS PER RULES. 2. THE TRANSACTIONS WERE CARRIED OUT BY ONE OF THE DIRECTORS WHO WAS PART OF THE BOARD WHO HAD APPROVED THE OPENING OF B ANK ACCOUNTS. 3. THE TRANSACTIONS WERE CARRIED OUT BY THE DIRECTO R WHO APPOINTED BY THE BOARD OF DIRECTORS AS PER RULES WHICH WAS ALSO INFORMED TO THE ROC AS PER RULES. 4. THREE OF THE PARTIES WHO HAVE SOLD THE GOODS TO THE ASSESSEE COMPANY AND STATED THAT THE GOODS WERE SOLD TO THE ASSESSEE COMPANY ONLY AND NOBODY ELSE. 2.8 IN VIEW OF THE ABOVE THE ASSESSEE COMPANY CANN OT SAY THAT THE TRANSACTIONS MADE IN THE BANK ACCOUNTS OPENED AFTER APPROVAL BY THE BOARD WERE DONE BY FAKE PERSONS. THE BANKS ACCOUNTS WERE DULY OPENED AFTER FOLLOWING ALL THE RULES AND NECESSARY DOCUMEN TS. ALL THE TRANSACTIONS HAVE BEEN DONE IN THE NAME OF ASSESSEE-COMPANY ONLY . 2.9 IN VIEW OF THE ABOVE REASONS AND SINCE THE APP ELLANT HAS NOT FILED ANY SUBMISSION AS STATED ABOVE THE APPEAL IS DISMIS SED. BOTH THE GROUNDS ARE DISMISSED. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAIN ST THE AFORESAID FINDINGS OF THE LD. CIT(A). THOUGH THE LD. AR APPEA RING ON BEHALF OF THE ASSESSEE DID NOT EXPLAIN ANY REASONS FOR NOT AP PEARING BEFORE THE LD. CIT(A) HE INVITED OUR ATTENTION TO AN APPL ICATION DATED 25 TH JUNE 2010 REQUESTING FOR ADMISSION OF ADDITIONA L EVIDENCE ON THE GROUND THAT THIS EVIDENCE CONSISTS OF PAPERS DOCU MENTS AND ORDERS OBTAINED AFTER PASSING OF THE ASSESSMENT ORDER AND THE IMPUGNED ORDER OF THE LD. CIT(A). THE SAID APPLICATION OR T HE ACCOMPANYING AFFIDAVIT DID NOT MENTION AS TO WHICH SPECIFIC DOCU MENTS WERE NOW BEING SOUGHT TO BE ADMITTED IN EVIDENCE. TO A QUERY BY THE BENCH THE LD. AR PLEADED THAT THE FOLLOWING DOCUMENTS PLA CED IN THE PAPER BOOK AT SL. NO.4 TO 8 IN PAPER BOOK OBTAINED AFTER PASSING OF THE IMPUGNED ORDER OF THE LD. CIT(A) MAY BE ADMITTED BY WAY OF ADDL. EVIDENCE . ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 6 I) ORDER OF CESTAT SETTING ASIDE ORDER OF COMMI SSIONER OF CUSTOMS (IMPORT) [PAGES 23 TO 26] II). ORDER OF COMMISSIONER OF CUSTOMS (IMPORT) [PAG ES 27 TO 183] III). COPY OF SURRENDER OF EXCISE REGISTRATION CERT IFICATE [PAGES 184 TO 184] IV). COPY EVIDENCING SURRENDER OF ELECTRICITY CONNE CTION OF COMPANY TO GEB ON 26-07-1999 [PAGES 185 TO 188] V). COPY EVIDENCING SURRENDER OF FACTORY LICENCE ON 12-04-2001 [PAGES 189 TO 191] THE LD. AR POINTED OUT THAT THE AFORESAID DOCUMEN TS HAVE A DIRECT BEARING ON THE ISSUE IN APPEAL AND THEREFORE THESE ADDITIONAL EVIDENCES MAY BE ADMITTED IN THE INTEREST OF JUSTICE. 4.1 THE LEARNED DR ON THE OTHER HAND WHILE OPPOSI NG THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE CONTENDED TH AT THE ASSESSEE DID NOT HAVE ANY RIGHT TO SUBMIT ADDITIONAL EVIDENC E VOLUNTARILY. INTER ALIA THE LD. DR RELIED UPON DECISION IN THE CASE O F GAMMON INDIA LTD. VS. CIT 214 ITR 50(BOM). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. APPARENTLY THE ADDITION OF RS.1 01 83 77 8/- HAD BEEN MADE ON THE BASIS OF TRANSACTIONS IN AFORESAID TWO BANK ACCOUNTS DETECTED BY THE DRI DURING THE SEARCH IN THE PREMIS ES OF THE COMPANY AND ONE OF THE DIRECTOR. THE AO CONCLUDED T HAT TRANSACTIONS WERE DONE BY AND ON BEHALF OF THE COMP ANY WHILE NO SUBMISSIONS WERE MADE BEFORE THE LD. CIT(A). THUS THE IMPUGNED ORDER OF THE LD. CIT(A) IS BASED ON FACTS NOTICED B Y THE AO. THE LD. AR APPEARING BEFORE US DID NOT EXPLAIN THE REASONS FOR NOT CONTROVERTING THE FINDINGS OF THE AO BEFORE THE LD. CIT(A) AND INSTEAD IT WAS CONTENDED THAT THE COMPANY DID NOT HAVE ANY ROLE I N THE TRANSACTIONS THROUGH THE AFORESAID TWO BANK ACCOU NTS NOR PASSED ANY RESOLUTION FOR OPENING THE SAID BANK ACCOUNTS. THOUGH THE ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 7 COMMISSIONER OF CUSTOMS(IMPORT) VIDE HIS ORDER DATE D 31.1.2008 INTER ALIA IMPOSED A PENALTY ON THE ASSESSEE COMPA NY WE FIND THAT CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL (CESTAT) VIDE THEIR ORDER DATED IN APPEAL NOS.C/613 640 641 6 95 804 805 & 822/2008 RESTORED THE MATTER TO THE FILE OF THE COM MISSIONER CUSTOMS IN THE FOLLOWING TERMS: 2. BRIEFLY STATED THE ISSUE IS OF MIS-USE OF ADVA NCE LICENSES BY ILLAXI TEXTILES INDUSTRIES PVL LTD. THE SHOW CAUSE NOTICE WAS ISSUE D TO THEM ALONG WITH THE OTHER APPELLANTS IN RESPECT OF IMPORTS MADE THROUG H NHAVA SHEVA PORT AS ALSO THROUGH MUMBAI PORT. VIDE NOTIFICATION THE PRESENT COMMISSIONER WAS AUTHORIZED TO DEAL WITH BOTH THE IMPORTS BY A SINGLE ORDER. TH E SHOW CAUSE NOTICES ALSO REFER TO BOTH THE IMPORTS. HOWEVER THE COMMISSIONER WHI LE ADJUDICATING THE MATTER ONLY REFERRED TO THE FACTS OF THE IMPORTS MADE AT N HAVA SHEVA AND DID NOT ADVERT TO THE IMPORTS MADE AT MUMBAI PORT. CONSEQUENTLY LE SSER DUTY STANDS CONFIRMED BY HIM. 3. ON THE ABOVE ISSUE REVENUE HAS FILED AN APPEAL. HOWEVER LEARNED DR FAIRLY CONCEDES THAT THAT SUBSEQUENTLY THE COMMISSI ONER HAS PASSED A CORRIGENDUM CONFIRMING THE DEMAND OF DUTY IN RESPEC T OF IMPORTS MADE THROUGH MUMBAI PORT ALSO. NEVERTHELESS HE SUBMITS THAT THE MATTER NEEDS GO BACK TO HIM INASMUCH AS THE COMMISSIONER HAS IMPOSED A JOINT PE NALTY IN TERMS OF PROVISIONS OF SECTION 112 AND 114(A) OF THE CUSTOMS ACT 1962. AS PER VARIOUS DECISIONS OF THE TRIBUNAL SUCH JOINT IMPOSITION OF PENALTY UNDER TWO DIFFERENT SECTIONS IS NOT PERMISSIBLE. ACCORDINGLY A PRAYER IS MADE TO REMAND THE MATTER TO THE COMMISSIONER. FURTHER IT IS CONTENDED IN THE APPEAL FILED BY THE REVENUE THAT NO PENALTY STANDS IMPOSED UPON RATANLAL SINGHAL THOUG H THE PENALTIES ON THE OTHER IDENTICALLY SITUATED PERSONS HAVE BEEN IMPOSED. THI S SEEMS TO BE AN INADVERTENT MISTAKE ON THE PART OF THE ADJUDICATING AUTHORITY FOR WHICH PURPOSE PRAYER FOR REMAND IS BEING REITERATED. 4. LEARNED ADVOCATE APPEARING FOR THE ASSESSEES AGR EE TO THE REMAND REQUEST OF THE REVENUE. IN FACT IT IS ALSO THEIR G RIEVANCE THAT PENALTIES IMPOSED UPON VARIOUS APPELLANTS ARE NOT COMMENSURATE OR ARE DISPROPORTIONATE TO THE ROLE PLAYED BY THEM AS ALSO TO THE ALLEGED AMOUNTS INVOL VED BY THEM. FURTHER IN. SOME OF THE CASES THE ADJUDICATING AUTHORITY HAS NO T DISCUSSED IN DETAIL THE ROLES PLAYED BY SOME OF THE APPELLANTS AND HAVE SIMPLY IM POSED PENALTIES UPON THEM. 5. FOR ALL THE ABOVE RECORDED REASONS WE SET ASIDE THE IMPUGNED ORDER AND REMAND THE MATTER TO THE COMMISSIONER FOR FRESH ADJ UDICATION AFTER TAKING NOTE OF THE ABOVE GRIEVANCE PLACED BEFORE US BY BOTH THE SI DES. HOWEVER WE MAKE IT CLEAR THAT WE HAVE NOT GONE INTO THE MERITS OF THE CASE AND HAVE EXPRESSED NO OPINION ON THE SAME. BOTH THE SIDES ARE AT LIBERTY TO PUT FORTH THEIR VIEWPOINTS BEFORE THE ADJUDICATING AUTHORITY WHICH WILL BE TA KEN NOTE OF BY HIM IN DENOVO PROCEEDINGS. 6. STAY PETITIONS AS ALSO THE APPEALS ARE DEPOSED O F IN THE ABOVE TERMS. ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 8 5.1. APPARENTLY THE CESTAT IN THEIR AFORESAID ORDER HAVE RESTORED THE MATTER TO THE COMMISSIONER INTER ALIA IN ORDER TO ASCERT AIN THE ROLE OF EACH OF THE PERSONS INVOLVED. THE AO IN THE INSTANT CASE PROC EEDED ON THE BASIS OF FACTS FOUND BY THE DRI WHILE THE ASSESSEE CHOSE NOT TO MA KE ANY SUBMISSIONS BEFORE THE LD. CIT(A). THE AO IN HIS ORDER CONCLUDED THAT THE TRANSACTIONS THROUGH THE AFORESAID TWO BANK ACCOUNTS WERE DONE BY AND ON BEH ALF OF THE ASSESSEE COMPANY WHILE THE LATTER IS DENYING. SINCE THE AO DID NOT MAKE NECESSARY INDEPENDENT ENQUIRIES IN ORDER TO ASCERTAIN THE F ACTS NOR THE ASSESSEE MADE ANY SUBMISSIONS BEFORE THE LD. CIT(A) WHILE THE DOC UMENTS NOW SOUGHT TO BE ADMITTED IN EVIDENCE IN OUR OPINION WOULD UNRAVE L THE OBSCURITY AS TO WHETHER OR NOT THE ASSESSEE COMPANY ALONE HAD UNDERTAKEN THE TRANSACTIONS THROUGH THE AFORESAID TWO BANK ACCOUNTS WE ARE OF THE VIEW THA T THE AFORESAID ADDITIONAL EVIDENCE SOUGHT TO BE ADMITTED IS VITAL AND ESSENTI AL FOR THE PURPOSE OF CONSIDERATION OF THE SUBJECT-MATTER OF APPEAL AND T O ARRIVE AT A FINAL AND ULTIMATE DECISION IN A FAIR AND JUST MANNER. THE TRIBUNAL U NDER RULE 29 OF THE ITAT RULES 1963 HAS POWER TO ADMIT ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE OR IF THERE EXISTS SUBSTANTIAL CAUSE. THE CAUSE OF JUSTICE WILL BE BETTER SERVED IF THE AFORESAID DOCUMENTS PLACED IN PAPER BOOK FILED ON 25.6.2010 A RE ADMITTED BECAUSE THESE DOCUMENTS HAVE A NEXUS WITH THE FACTS OF THE CASE A ND ALSO VERY ESSENTIAL FOR PROPER APPRECIATION AND ADJUDICATION OF THE LIS/CO NTROVERSY INVOLVED. ACCORDINGLY PRAYER FOR ADMISSION OF AFORESAID ADDITIONAL EVIDEN CE UNDER RULE 29 OF THE ITAT RULES 1963 IS ACCEPTED IN THE LIGHT OF GUIDELINES LAID DOWN IN THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF PARI MANGA LDAS GIRDHARIDAS VS. CIT (1977) 6 CTR(GUJ)647. HONBLE HIGH COURT IN THE SAID DECISION HELD INTER ALIA THAT ADDITIONAL EVIDENCE CAN BE ADMITTED IF THE TRIBUNAL CONSIDERS THAT IN THE INTEREST OF JUSTICE SOMETHING WHICH REMAINS OBSCURE SHOULD BE FILLED UP SO THAT IT CAN PRONOUNCE ITS ORDER IN A MORE SATISFACTORY MANN ER . OSTENSIBLY THE POWER OF THE TRIBUNAL IN TERMS OF R. 29 TO ADMIT FRESH EVIDE NCE ENTAILS AN ELEMENT OF DISCRETION WHICH IS REQUIRED TO BE EXERCISED IN A J UDICIOUS MANNER. THE POWERS OF THE TRIBUNAL TO ADMIT ADDITIONAL EVIDENCE ARE NOT O NLY IN SITUATIONS WHERE THE EVIDENCE COULD NOT BE PRODUCED BEFORE LOWER AUTHORI TIES OWING TO LACK OF ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 9 ADEQUATE OPPORTUNITY BUT ALSO SITUATIONS WHERE THE FRESH EVIDENCE WOULD ENABLE THE TRIBUNAL TO PASS ORDER OR FOR ANY OTHER SUBSTAN TIAL CAUSE. IN THE INSTANT CASE WE FIND THAT THE AFORESAID EVIDENCE SEEKS TO REMOVE THE OBSCURITY IN THE FACTS ASSESSMENT HAVING BEEN MADE ON THE BASIS OF MATERI AL FOUND BY THE DRI. SINCE THE FRESH EVIDENCE NOW BEING PRODUCED SEEKS TO CORR ECT AND BETTER APPRECIATION OF FACTS IN OUR VIEW THE ADMISSION OF THE SAME IS VERY MUCH WITHIN THE REALM OF THE EXPRESSION 'FOR ANY OTHER SUBSTANTIAL CAUSE' IN R. 29 OF THE ITAT RULES 1963. MOREOVER TRIBUNAL HAS JURISDICTION TO ADMIT ADDITI ONAL EVIDENCE REGARDING A SUBSEQUENT EVENT AS HELD IN COMMISSIONER OF AGRICUL TURAL INCOME-TAX VS. AMALGMATED TEA ESTATES CO. LTD. 77 ITR 455(KERALA). 5.2 THE DECISION IN GAMMON INDIA LTD.(SUPRA) RELI ED UPON BY THE LD. DR RELATES TO ADMISSION OF ADDITIONAL GROUND A ND IS THUS NOT RELEVANT TO THE FACTS OF THE CASE UNDER CONSIDERATI ON. EVEN OTHERWISE THE LD. DR DID NOT DEMONSTRATE AS TO HOW THIS DECIS ION IS OF ANY HELP TO THE REVENUE. 5.3 IN VIEW OF THE FOREGOING WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO H IS FILE FOR DECIDING THE ISSUES AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF AFOR ESAID ADDITIONAL EVIDENCE AND OF COURSE AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOT H THE PARTIES. THE LD. CIT(A) IS FREE TO UNDERTAKE ANY INDEPENDENT ENQUIRES IF FOU ND NECESSARY AND THEREAFTER MAY PASS SUCH ORDER AS HE DEEMS PROPER IN ACCORDAN CE WITH LAW . THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE IN THE PROCEEDINGS B EFORE THE LD. CIT(A) SO THAT MATTER IS EXPEDITIOUSLY DISPOSED OF. WITH THESE OBS ERVATIONS GROUND NOS. 1 & 2 IN THE APPEAL ARE DISPOSED OF. 6. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TE RMS OF THE RESIDUARY GROUND NO.3 ACCORDINGLY THE SAID GROUND IS DISMISSED. ITA NO.551/AHD/2007 FOR AY 2003-04 ILAXI TEXTILE INDUSTRIES PVT. LTD. 10 7. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 9- 7-2010 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 9-7-2010 COPY OF THE ORDER FORWARDED TO: 1. ILLAXI TEXTILE INDUSTRIES PVT. LTD. ROAD NO.6 INDUSTRIAL ESTATE UDHYOG NAGAR UDHNA SURAT 2. THE ITO WARD-1(2) SURAT 3. CIT CONCERNED 4. CIT(A)-I SURAT 5. THE DR BENCH-B ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD