Dinesh Maheshwari, J. - (1.) BY way of this appeal under s. 260A of the IT Act, 1961 ('the Act'), the Revenue seeks to question the order dt. 31st May, 2011 passed by the Income -tax Appellate Tribunal, Jaipur Bench, Jaipur (Tribunal) in ITA No. 1218/Jp/2010 for the asst. yr. 2006 -07 whereby the Tribunal has affirmed the order dt. 3rd Aug., 2010 passed by the CIT(A -II), Jaipur partly allowing the appeal preferred by the assessee and deleting the additions made by the AO in the assessment order dt. 24th Nov., 2008 to the tune of Rs. 13,15,000 on account of unexplained share capital contribution and Rs. 39,40,000 on account of unexplained unsecured loans. Put in brief, the relevant background aspects of the matter are as follows : The respondent -assessee is engaged in trading and service of two wheelers. During the year under consideration, the assessee had shown gross profit of Rs. 30,43,890 against a turnover of Rs. 2,92,65,368. During the course of assessment proceedings, the assessee was provided with opportunities to attend the hearing and to present the requisite details in support of the income declared and to respond to the queries of the AO, and, on its failure to respond, a final show -cause notice dt. 5th Nov., 2008 containing the proposed grounds of concluding the assessment was issued and served upon the assessee. However, on the date fixed, neither the assessee nor its Authorized Representative attended the assessment proceeding nor any details of books of account were produced.
(2.) IN the given circumstances, the AO proceeded to conclude the assessment proceedings ex parte wherein, inter alia, the AO made the additions of Rs. 13,15,000 on account of unexplained share capital contribution, and Rs. 39,40,000 on account of unexplained unsecured loans. In the appeal before the CIT(A), the assessee, however, submitted the details, confirmations, returns, affidavits, bank statements etc. from various persons for share capital contribution as also for loans advanced, which could not be collected during the course of assessment proceedings, and prayed for admission of additional evidence. The CIT(A) proceeded to admit the additional evidence with the following observations: After considering the facts of the case and report of AO it is seen that at the appellate stage various confirmations, affidavits, copies of return of income and copies of statement of computation of total income along with bank account copies from various persons for share capital contribution as well as for loans advanced to the appellant were furnished, which could not be collected during the course of assessment proceedings. Since this information was to be collected from number of the persons and therefore, in my considered view relying upon various judicial decisions on the admission of additional evidence keeping in view the provisions of r. 46A(1)(c) of IT Rules the additional evidence furnished in the appellate proceedings are required to be admitted to decide various grounds of appeal judiciously and these are hereby admitted.
(3.) THEREAFTER , the CIT(A) proceeded to consider the question about justification in regard to various additions. In relation to the addition of Rs. 13,15,000 on account of share capital contribution, the CIT(A) referred to the fact that the contributors were all the income -tax assessees and their returns of income and copies of confirmation along with PANs had been furnished. After taking note of various relevant decisions including those of this Court and of the Hon'ble Supreme Court, the CIT(A) found that the requisite particulars as regards the persons concerned having been furnished, there remained no justification for the said addition, and proceeded to delete the same with the following observations: I have considered facts of the case and arguments taken by Shri Pandeya and Shri Poddar quite carefully. On the issue of share capital contribution in the case of the company keeping in view the latest decision of Hon'ble Supreme Court in the case of CIT v. Lovely Exports (P) Ltd. : (2008) 216 CTR (SC) 195 : (2008) 6 DTR (SC) 308 and Hon'ble Rajasthan High Court judgment in the case of CIT v. Shree Barkha Synthetics Ltd. : (2003) 182 CTR (Raj) 175 and in the case of CIT v. AKJ Granites (P) Ltd. : (2007) 212 CTR (Raj) 25 in my considered view when the shareholders have submitted confirmation, made the payment by cheque, having their PANs, filing their returns of income and furnished copies of return of income in the appellate proceedings and therefore, now there is no justification for the said addition of Rs. 13,15,000 on account of addition for new share capital contribution and the same is hereby deleted.;