CIT(A) shall have to show cause AO before admitting additional evidences on assessee's application.
The AO asked the assessee to furnish confirmation letters from customers who had paid advances by cash (& not cheque) which the assessee complied with. In the assessment order, the AO treated the advances received by cheque as “unexplained cash credits” u/s 68. Before the CIT (A), the assessee produced confirmation letters from customers who paid by cheque. The CIT(A) admitted the additional evidence under Rule 46A & without giving the AO an opportunity, deleted the addition. In appeal by the department, the Tribunal upheld the CIT(A)’s action on the ground that as the AO had not called for the confirmations before making the addition, the CIT(A) was justified in admitting the additional evidence and there was no reason to set-aside the matter to the AO for a second innings. On further appeal to the High Court, HELD allowing the appeal.
The AO asked the assessee to furnish confirmation letters from customers who had paid advances by cash (& not cheque) which the assessee complied with. In the assessment order, the AO treated the advances received by cheque as “unexplained cash credits” u/s 68. Before the CIT (A), the assessee produced confirmation letters from customers who paid by cheque. The CIT(A) admitted the additional evidence under Rule 46A & without giving the AO an opportunity, deleted the addition. In appeal by the department, the Tribunal upheld the CIT(A)’s action on the ground that as the AO had not called for the confirmations before making the addition, the CIT(A) was justified in admitting the additional evidence and there was no reason to set-aside the matter to the AO for a second innings. On further appeal to the High Court, HELD allowing the appeal.
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