ITO Vs Raj Maitry & Eskon Developer (ITAT Mumbai)
The Revenue appealed against the order dated 17.03.2023 passed by the National Faceless Appeal Centre (NFAC) under Section 250 of the Income-tax Act, 1961 for Assessment Year 2018-19. The principal issue was whether the Commissioner (Appeals) had erred in admitting additional evidence without giving the Assessing Officer (AO) an opportunity to examine it under Rule 46A(3) of the Income-tax Rules, 1962.
The assessee, a partnership firm, filed its return of income on 22.09.2018 declaring total income of ₹28,68,540. The case was selected for complete scrutiny in respect of income from real estate business and unsecured loans. During assessment proceedings, several notices under Sections 142(1) and 143(2) were issued. While there was no compliance to some notices, partial compliance was made to later notices. The assessment was completed under Section 143(3) read with Section 144B, making additions of ₹2,90,30,000 towards unsecured loans and ₹12,63,66,352 towards advances received from customers under Section 68 of the Act.
The Commissioner (Appeals) deleted both additions. Aggrieved, the Revenue challenged the order before the Tribunal, contending that the Commissioner (Appeals) had admitted additional evidence without complying with Rule 46A(3) and had accepted evidence which had not been examined during assessment proceedings.
