The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has directed for fresh adjudication as the Commissioner of Income Tax Appeals (CIT(A)) failed to admit additional evidence as stipulated under rule 46A of Income Tax Rules 1962.
The assessee Umano Healthcare Pvt. Ltd company was engaged in the business of trading of medicines. For AY 2015-16, it filed its return electronically on 26.09.2015 declaring loss. The case was selected for scrutiny. Notice under section 143(2) of the Income Tax Act, 1961 dated 27.06.2016 was issued and duly served upon the assessee and assessing officer (AO) found that the assessee had paid as ROC fees for increase in authorised share capital.
The assessee submitted that it was revenue expenditure and should not be disallowed. Treating the expenditure as capital in nature, the AO disallowed the same under section 37(1) of the Act and added it to the income of the assessee.
Pratap Gupta,on behalf of the assessee drew attention to paper books which were filed before the CIT(A) containing request for admission of additional evidence as stipulated under Rule 46A of the Income Tax Rules, 1962 and additional evidence which could not be filed before the AO.
He further submitted that the CIT(A) did not consider the additional evidence filed before him and urged that the matter be restored to the file of the AO for fresh adjudication.Indu Bala Saini,who appeared on behalf of the revenue had no objection thereto.
The Division Bench of Shamim Yahya, (Accountant Member) and Astha Chandra, (Judicial Member) allowed the appeal observing that, it was necessary to look into the submissions of the assessee made before the CIT(A) in the light of the material / document (additional evidence) placed before the CIT(A) which he had not considered in his appellate order. The Bench directed to afford reasonable opportunity of being heard to the assessee and fresh assessment proceedings.
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