Delhi ITAT : Additional evidence acceptance explained, LinkedIn profile can be an evidence, GE Energy parts Vs ADIT

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “ NEW DELHI
BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER
AND
SHRI C.M. GARG : JUDICIAL MEMBER
ITA No. 671/Del/2011
Asstt. Yr: 2001-02
GE Energy Parts Inc. Vs. Addl. Director of Income-tax,
AIFACS Building, 1, Rafi Marg, Circle 1(2), International
New Delhi-110001. Taxation, New Delhi.
PAN: AACCG 2798 N
Department by : Shri Sanjeev Sharma CIT(DR) &
Shri Vivek Kumar CIT(DR)
Assessee by : Shri S. Ganesh Sr. Counsel along with
Ms. Anuradha Dutt Adv.; S/Shri Rashi Dhir,
Sachit Jolly, Rahul Sateeja adv. &
Ms. Shwetha Bidhuri &
Ms.Roohina Dua Advocates
 
Interim order on application dated 19-2-2014 filed by the department under
Rule 29 of the ITAT Rules, 1963 for admission of additional evidence:
Before we proceed to consider the admissibility of this additional
evidence filed by the department, we may point out the proceedings which
took place in this lead appeal of GE group of cases on various dates. Hearing
of the appeal commenced on 28-1-2014 and continued on 29-1-2014 and 18-
2-2014. Thereafter on 19-2-2014 the revenue sought permission to file the
following documents as additional evidence:
S.
No.
Vol. of
Paper
book
Particulars Page no.
1. Vol. III Linkedin Profiles of Employees 1 to 94
2. Vol. IV Whistleblower’s Writ petition in Hon’ble Delhi High
Court
1 to 177
2. On 20-2-2014 the asses
see filed its reply. After detailed hearing and
after considering the arguments and written submissions of ld. CIT(DR), ld.
Counsel for the assessee sought further time to file a detailed reply.
Accordingly, the following order-sheet noting was recorded on 20-2-2014:
“20-2-14: Ld. DR had filed an application for admission of additional
documents on 19-2-14. Ld. Counsel sought time to file a reply by 20-2-14
viz. today. Ld. Counsel files a reply objecting to admission of additional
documents. After detailed hearing and after considering the department’s
stand, ld. Counsel requested for filing a detailed reply against admission
of additional documents.
Accordingly, the appeals are adjourned to 25-3-14.”
2.1. Thereafter from 25-3-2014 the appeal got adjourned from time to time
as per the order-sheet notings and finally from 27-5-2014 again the hearing
of the appeal commenced but the arguments on the admission of additional
evidence were deferred to 2-6-2014 as ld. Sr. counsel was not available.
2.2. From 2-6-2014 to 4-6-2014, arguments on admission of additional
evidence were advanced by both the parties and written submissions were
exchanged and, thereafter, it was agreed by both the parties that the issue
regarding admissibility of additional evidence be first decided before hearing
the appeal any further. Accordingly, we accede to the request of both the
parties to firstly decide the issue of admissibility of additional evidence.
2.3. At the out set ld. Sr. Counsel, Shri S. Ganesh, for the assessee
submitted that the department has not moved any formal application for
admission of additional evidence. In this regard ld. CIT(DR) has relied upon
the decision of Third Member in the case of Mascon Global Ltd. Vs. ACIT
37 SOT 202 (Chennai) (TM), wherein in para 10, ld. Third Member has
observed as under:
“10. So far as the additional evidence is concerned, I find that
it consists of the replies made by the Internal revenue Service of
the USA to the assessee through E-mail. The E-mail itself is
titled “IRS E-mail Tax Law Assistance”. The assessee has also
filed publication No. 538 Titled “Business Expenses” and this
publication has also been issued by the Department of
Treasury, Internal revenue Service, Washington DC. This gives
details of what interest an assessee can and cannot deduct
under the US Tax Laws. Another document filed before the
Tribunal was an E-mail from the IRS, US Department of
Treasury which explains what are employment taxes, what is
federal tax and so on. All these seem to have been gathered by
the assessee from the Website of the IRS of USA. I do agree that
whatever stated therein may not be binding on the Indian
Income-tax authorities. However, they are relevant an can
throw light on the nature of the interest and the allowability
thereof. They do not in any way bind our authorities but they
can afford guidance. The Indian Tax authorities may take their
own decision after referring to the papers submitted by the
assessee. The other objection of the ld. Judicial Member is that
these papers are not authenticated. I see that they have been
downloaded from the Website of the IRS of USA. The ld.
Accountant Member has stated that it would be open to the CIT
to examine even the veracity of these papers. This provides for
an adequate safe guard to protect the interest of the revenue.
The contents of the website can be cross checked for accuracy
and veracity., The other objection of the ld. Judicial Member is
that her is no formal application under Rule 29 of the ITAT
Rules for admission of the additional evidence. On going
through the Rule, I do not find any requirement therein that
there should be a formal written application before the
Tribunal for admission of the additional evidence. These are
rules of procedure and, in a fit case, and depending on the
circumstances, it would be open to the Tribunal to admit
additional evidence when it is produced in Court and an oral
application is made. I do not think that there is any hard and
fast rule in this behalf and it should be left to the discretion of
the Bench. I am unable to say that the ld. Accountant Member
exercised such discretion improperly. Rule 29 permits the
Tribunal to admit the additional evidence for any substantial
cause. Apparently, the ld. Accountant Member ahs admitted the
additional evidence on this ground with which I am unable to
disagree. The intention behind the Rule is that substantial
justice should be done and the interest of justice should be the
overriding consideration. Having this in mind I hold that there
is no error in the ld. Accountant Member admitting the
additional evidence and sending it to the CIT for examination
and decision.”(emphasis supplied by us)
2.4. In view of above discussion, we do not find any merit in the
preliminary objection raised by the ld. Sr. counsel for the assessee.
Accordingly the same is rejected.
3. In the petition for admission of additional evidence it is submitted on
behalf of department that the documents are available in public domain and
down loaded from the web site of internet and the source is indicated against
the same. It is further stated that these documents, refer to certain material
facts and will help in advancing the cause of justice. Therefore, it is prayed
that the same be admitted as additional evidence to the proceedings under
consideration.
4. Ld. CIT(DR) pointed out that in this case a survey u/s 133A of the Act
was conducted at the office premises of General Electric International
Operations Company Inc. (“GEIOC”) on 2-3-2007. During the course of
survey, copies of various documents were obtained and statements of
various persons were also recorded. Inquiries were made as to sales made
through various GE Overseas entities, employees working from the liaison
office of GEIOC, roles and responsibilities of various employees etc.
4.1. Ld. CIT(DR) pointed out that it was noticed that GE group was
engaged in various sales activities in India, for which the business head were
generally expats, who were appointed to head Indian operations, with the
support staff provided by GE India Industrial Pvt. Ltd. (“GEIIPL”) and also
by various third parties. These expats were on the payroll of GE
International Inc. (GEII), but working for various businesses of GE Group.
4.2. Ld. CIT(DR) pointed out, as noted in the assessment order, that as
per the application made to RBI and permission obtained, the liaison office
was to act as a communication channel between the head office and the
customers in India. However, as a result of survey, it was found that the
company instead of undertaking the permitted activities, was employing
various persons and providing the services of such persons to the GE group
entities worldwide. The activities indicated that the GEIOC was carrying out
business in India through a PE and the income attributable to such PE was
taxable in India. But the company had not furnished such income in the
return of income filed for any year.
4.3. Ld. CIT(DR) pointed out that in the assessment order AO observed
that the expatriate employees of GE group were responsible and looked
after the business of GE group as a whole, irrespective of any GE group
company making sales in India. The bifurcation of sales by various entities
was decided by the GE management, as was evident from the documents
seized during the course of survey. After detailed analysis of documents
found during the course of survey, it was observed that for A.Y. 2002-03 to
2006-07 these expats and their team had at their disposal a fixed place of
business in the form of office premises at AIFACS, 1, Rafi Marg, New
Delhi. From these survey documents it was revealed that the activities of the
non-resident GE group entities being conducted from the fixed place of
business referred to above were not of the preparatory or auxiliary character
but constituted the PE as provided in paragraph 2 of Article 5 of respective
tax treaties.
4.4. Ld. CIT(DR) further pointed out that this conclusion was arrived at on
the basis of analysis of various documents found during the course of survey
in the form of agreements/ purchase orders/ copies of contracts which
proved the active involvement of the employees of Indian company and
expats in the conclusion of contract on behalf of such non-resident GE
Group entities. Therefore, it was concluded that GEIPL also constituted the
agent, other than an agent of independent status, of the non-resident GE
Group entities. This resulted into the creation of the dependent agent PE as
per the provision of tax treaties and business connection as per the
provisions of Explanation 2 to section 9(1)(i) of the Act.
4.5. Ld. CIT(DR) submitted that in the back drop of these facts, since
assessee had not filed any return of income, notice u/s 148 was issued after
recording the reasons. He pointed out that in the reasons recorded, in para 7,
page 21 of the assessment order, the assessing officer, inter alia, has
observed as under:
“The information regarding the employees of GE in India prior
to the present expats is not given by the GE group, however,
there have been the persons working for such sales throughout
the period 01-04-2000 to till date.
4.6. Ld. CIT(DR) pointed out that the business carried on by the
overseas company through the foreign employees was never disclosed
to the tax authorities.
4.7. Ld. CIT(DR) submitted that vide summons issued u/s 131 dated 2-3-
07 to the Chief Executive Officer of GEIOC, the assessee was asked to
submit copy of employment letters of employees working for overseas group
companies of services relating to sourcing and sales. Further, on 7-3-2007 a
letter was issued to GEIOC which reads as under:
“F. No. DDIT/Cir.1(2)/Intl. Taxation/2006-07 Dated: 07.03.2007
To
Principal Officer
M/s GEIOC Inc.
AIFACS, 1 Rafi Marg, New Delhi-110001.
Sir,
Sub: Survey u/s 133A in the case of GEIOC Inc. – Information-reg.
During the course of survey, it was found that the following
employees of GE International Inc. were occupying the cabins/ office
space in the business premises of M/s GEIOC:
(i) Dan Nalawade
(ii) Riccardo Pracacci
(iii) William Blair
(iv) Ash Nair
(v) Kenneth Pierson
(vi) Sameer Aggarwal
(vii) Prat Kumar”
2. Some information with regard to the person namely Riccardo
Pracacci Was collected during the survey. The following information in
respect of the remaining six employees is requested:
(i) Copy of employment letter.
(ii) Full copy of last income tax return field in India.
(iii) A self attested declaration from the employees with regard
to responsibilities and work attended by them in India.
(iv) Copy of any self appraisal submitted by them with regard
to work done by them in India.
3. The information is requested by 11.00 AM of 16.03.2007
Yours faithfully,
Sd/-
(D. Vijay Kumar Chadha)
Dy. Director of Income Tax,
Circle-1(2), Intl. Taxation, New Delhi.”
4.8. The assessee partly responded to these summons/ notices dated 2-3-
2007 and 7-3-2007 vide its letter dated 16-3-2007 and 9-4-2007. In the letter
dated 16-3-2007 the assessee, inter alia, stated in para 1.2 as under:
“Kindly note that our client does not have access to
employment letters of all employees of GE overseas group
companies working in India. However, as requested in your
letter dated March 7,2007, our client has procured and
enclosed copies of assignment letters (at Annexure 3) for the
following employees of GE International Inc. US (GEII”):
Dan Nalawade
Riccardo Pracacci
William Blair
Ashfaq Nainar
Kenneth Pierson
Sameer Aggarwal
Prat Kumar”
4.9. With reference to these summons/ notices and reply thereto, ld.
CIT(DR) submitted that assessing officer was not provided full information
of employees which formed part of specific sales team that provided services
to specific business group (energy/ oil and gas/aviation/ infrastructure etc.)
or specific entity during all the years under appeal.
4.10. Ld. CIT(DR) further submitted that assessee had filed objections to
the reasons recorded but did not object to the AO's observations regarding
non-furnishing of information as reproduced earlier.
4.11. Ld. CIT(DR) submitted that in course of hearing, ld. Counsel has tried
to set up new pleas regarding the modus operandi which can be appreciated
only when the entire information regarding employees is available before the
Tribunal. He submitted that assessee had provided common reply/
submissions/ modus operandi in respect of the assessee and clubbed all the
assessment proceedings. In this regard he referred to letter dated 16-12-2008
filed by Price Water House Coopers, the subject of which reads as “General
Electric Non-resident Entities (Collectively referred to as ‘GE Overseas’ or
‘GE Overseas entities) assessment year 2001-02 to 2006-07”. He submitted
that this modus operandi was not objected before the AO nor disputed before
the ld. CIT(A) and the assessee has now for the first time made legal
allegations/ claims particularly that specific entity wise information on
persons providing services during various assessment years was not
available with the AO. He pointed out that ld. Counsel further claimed that
the employees were only acting as communication channel. Ld. CIT(DR)
further pointed out that assessee has filed TPO’s orders for A.Yrs. 2004-05
to 2008-09 which, though available with assessee, were not provided to
assessing officer.
4.12. Ld. CIT(DR) submitted that in the back drop of these new claims
advanced by the ld. Counsel it is now necessary that the additional evidence
now sought to be placed before the Tribunal, may be admitted.
4.13. Ld. CIT(DR) pointed out that as the very specific information was not
provided by the assessee and accordingly not objected/ disputed before the
AO/ ld. CIT(A), and now if the Tribunal take cognizance of the allegations
made for the first time then it should have information to adjudicate the issue
properly.
4.14. Ld CIT(DR) submitted that for examining the new claims advanced
by the assessee it is necessary that assessee should provide all information
relating to all Indian as well as expats, their duration of employment,
designation, emoluments, basis of incentives/ bonus, nature of job, duties
and responsibilities, terms and conditions of employment etc. and
specifically for which overseas entity they were part of sales team. Copy of
EMS for all the employees for all the years under appeal that were providing
sales services to overseas entities must also be provided. He submitted that if
the assessee provides these informations then revenue will not press for
admission of additional evidence. However, in absence of any information
on these counts, the revenue has filed additional evidence I the form of
Linkedin profile to rebut the fresh unsubstantiated claims made by the
assessee.
4.15. Ld. CIT(DR) in his written submissions dated 5-6-2014, placed on
record, has further submitted in paras 2.3 & 2.4 as under:
“As the information on expats was not filed, the AO vide letter dated
14.11.2008 (Paragraph 11 of the assessment order (page 44)) again
asked the assessee to submit, "The details of expatriates looking
after the business of the assessee in India, who were present in India
during various years? Please provide name, designation, name of
employer, duration of stay, copy of secondment / employment
/assignment letter. The details of the office, which was being used for
. providing the services. In the reply dated 16.12.2008, the assessee
stated that, " It is humbly submitted that we are in the process of
collection of the data in relation to the expatriates who were
associated with the sales activities of the GE overseas entities and
would be furnishing them shortly"(item (v) on page 47 of the
assessment order). As the specific information was not provided, the
AO discussed the modus operandi of doing business in India by all
overseas entities subject to assessment proceedings and for all
years under appeal. This modus operandi has. not been objected
/disputed before the lower authorities or even before the Hon'ble
Tribunal. And, if the assesee makes any fresh allegations/claims then
it must also submit all these information to substantiate its claim. It
cannot make wild allegations that the AO did not provide
information in the assessment order.
2.4 Vide letter dated 14.11.2008 (page 490 and 491 of Assessee's
PB-volume 2), the AO asked the assessee provide information,
"please state, whether any support services were provided by any
entity in India, if yes, copy of agreement, details of year wise
payment, names of employees of the entity working for the assessee
and the nature of services provided by such persons? Please also
state, whether such persons were in any way connected with the
negotiation of prices or in the finalization of contracts/purchase
orders? (Query no. (vi) on page 44 of the assessment order)". The
reply of the assessee is quoted by the AO on pages 44 to 48 of the
assessment order. In regard to this query, the assessee vide letter
dated 23.12.2008 submitted that, "in this regard, reliance is placed
on our submission dated 16.12.2008 and December 23, 2008 (filed
in response to questionnaire dated December 16, 2008) wherein
nature of support services provided by GEIIPL have been explained
in detail. Furthermore, as required by your Honour we are
providing details of employees of GEIIPL who were providing such
services. Details relating to financial years 2003-04 to 2005-06 are
enclosed as Annexure-4" (see page 511 of assessee's PB-Volume 2).
The AO has commented on this part submission information in point
(v) on page 50 of the assessment order and point (vi) on page 51.
Further, the assessee did not provide information for assessment
years 2001-02 to 2003-04. Additionally, it did not provide
information that which employee is working for which entity. It did
not provide information on year wise payments made by all overseas
entities to GEIIPL. As discussed elsewhere, GEIIPL has also not
identified any of the overseas entity in its transfer pricing
documentation other than GEIOC.
4.16. With reference to above specific information, called for by the
assessing officer, ld. CIT(DR) submitted that for proper adjudication of the
issue it is necessary that the entire information regarding employees be
available before the ITAT.
4.17. Ld. CIT(DR) further submitted that Linkedin profile contains
information on person’s education, details of employment, a summary of
person’s job profile/ experience etc.
4.18. Ld. CIT(DR) pointed out that these informations are necessary to
dislodge the assessee’s claim that such employees are worth nothing and
they act as a communication channel only and perform very limited
functions as mentioned in the agreement between GEIIPL and GEIOC. He
pointed out that these Linkedin profile establish that these individuals are
very highly qualified, they have international experience, they have worked
at high positions in the GE in India and outside India and they were
responsible for sale of GE products in India. He submitted that the Linkedin
profile also shows with which they were working. This is factual
information and the assessee was provided with the same on 19-2-2014. He
pointed out that assessee availed about two and half months and was to file
factual rebuttal but it has not submitted anything on facts to disprove the
contents of Linkedin profile.
4.19. As regards the whistleblower’s writ petition filed before the Hon’ble
Delhi High court, ld. CIT(DR) submitted that the same is to be admitted
because it highlights various activities undertaken by the assessee and its
modus operandi.
5. Ld. Sr. Counsel Shri S. Ganesh for the assessee submitted that
Linkedin profile of various employees filed by ld. DR has no probative
value, what-so-ever, and the said Linkedin profiles have no relevance to or
any bearing, what-so-ever, on the issues which arise for consideration in the
present case. He submitted that each linkedin profile is merely a particular
employee’s appraisal/ vision of himself and the same does not in any way
have the imprimatur or endorsement or approval directly or indirectly of his
employer company. Further, an employee’s description of himself, without
further and detailed inquiry and investigation cannot possibly form the basis
for reaching any clear, cogent and/ or reliable conclusion with regard to
precise nature of the activities of the Indian entities. He further submitted
that department has not explained why this matter is now sought to be placed
on record on the 4th day of the final hearing of the appeal i.e., 3 days after
assessee’s counsel had concluded his arguments. He further pointed out that
no attempt has been made to contend that the said linkedin profile (which are
all dated 4-2-2014), were not available at any earlier point of time or that
there was any other ground or reason as to why the aid material could not be
placed on the record of the proceedings, if not during the course of
assessment, at least before the CIT(A) or at an earlier stage shortly after the
filing of the present appeal on 4-2-2011.
5.1. Ld. Sr. Counsel submitted that it will cause great prejudice to assessee
if these linkedin profiles are admitted at this stage. He submitted that
assessee would be deprived of an opportunity of rebutting the correctness of
the statements and contentions contained in the linkedin profiles.
5.2. As regards whistleblower writ petition, ld. Sr. Counsel filed before us
copies of the Hon’ble High Court decisions in the following cases
- WP(C) 1280/2012 dated 7-3-2012 Seema Sapra Vs. General
Electric Co. & ors.
- OMP 647 of 2012 and IA no. 13193 of 2012 dated 5-11-2012 - GE
India Industrial Pvt. Ltd. Vs. Deema Sapra
- OMP 647 of 2012 and IA no. 13193 of 2012 dated 17-10-2012 -
GE Industrial Pvt. Ltd. Vs. Deema Sapra
- WP(C) 1280/2012 dated 9-5-2012 Seema Sapra Vs. General
Electric Co. & ors.
- WP(C) 1280/2012 dated 14-5-2012 Seema Sapra Vs. General
Electric Co. & ors.
5.3. With reference to these decisions, ld. Sr. counsel pointed out that the
so called whistleblower has had the strongest possible stricture and adverse
comments made against her by several Judges and Benches of the Hon’ble
Delhi High Court. Ld. Sr. counsel further submitted that in any case the
whistleblower writ petition was filed in 2012 and was available on the
internet shortly after it was filed. Therefore, revenue has to explain why this
material was not placed on record earlier.
5.4. Ld. Sr. counsel referred to Rule 29 and pointed out that the same is
analogous to Order 41 Rule 27 of the CPC which reads as under:
“Rule 29 of the IT AT Rules, as would be observed, is analogous to
Order 41 Rule 27 of the Code of Civil Procedure, 1908 (" CPC")
which reads as under: "27. Production of additional evidence in
Appellate Court.-
(1) The parties to an appeal shall not be entitled to produce additional
evidence, whether oral or documentary, in the Appellate Court.
But if—
(a) the Court from whose decree the appeal is preferred has refused to
admit evidence which ought to have been admitted, or
(a a) the party seeking to produce additional evidence, establishes
that notwithstanding the exercise of due diligence, such evidence was
not within his knowledge or could not, after the exercise of due
diligence, be produced by him at the time when the decree appealed
against was passed, or
(b) the Appellate Court requires any document to be produced or any
witness to be examined to enable it to pronounce judgment, or for any
other substantial cause, the Appellate Court may allow such evidence
or document to be produced, or witness to be examined.
(2) Wherever additional evidence is allowed to be produced by an
Appellate Court, the Court shall record the reason for its admission."
5.5. Ld. Sr. counsel referred to the decision of Hon’ble Supreme Court in
the case of Malayalam Plantations Ltd. Vs. State of Kerala (2010) 13 SCC
487, wherein while explaining the scope of Order 41 Rule 27, it was held as
under:
"It is trite to observe that under Order 41, Rule 27, additional evidence
could be adduced in one of the three situations, namely, (a) whether
the trial Court has illegally refused the evidence although it ought to
have been permitted; (b) whether the evidence sought to be adduced
by the party was not available to it despite the exercise of due
diligence; (c) whether additional evidence was necessary in order
to enable the Appellate Court to pronounce the judgment or any
other substantial cause of similar nature. It is equally well-settled
that additional evidence cannot be permitted to be adduced so as to
fill in the lacunae or to patch up the weak points in the case.
5.6. Ld. Counsel submitted that on a conjoint reading of Rule 29 of the
ITAT Rules, Order 41 Rule 27 of the CPC and the decision of the
apex Court in Malayalam Plantations (supra), it follows that the
following conditions must exist before any document can be adduced
as additional evidence:
(a) The document/ information sought to be adduced is
evidence' capable of standing judicial scrutiny,
(b) The additional evidence was not available to the party
seeking to adduce the said evidence despite the exercise
of due diligence, and
(c) The evidence is relevant and necessary for determination
of the issue(s) in dispute.
5.7. Ld. Sr. counsel further submitted that Linkedin is a social networking
website, which has been operational since May 2003. It is only in the nature
hearsay and cannot be adduced as evidence as held by Hon’ble Supreme
Court in the case of Quamarul Islam Vs. S.K. Kanta AIR 1994 SC 1733 and
Laxmi Raj Shetty v. State of Tamilnadu (1988) 3 SCC 319. He further
referred to the decision of United States Court of Appeals in the case of
Automotive Support Group LLC v. Dale Hightower and the United States
District Court of California in the case of VB Conversions LLC v. Now
Solutions Inc.
5.8. Ld. Counsel further submitted that there is inordinate delay in
production of the additional evidence and, therefore, the same cannot be
adduced at this stage. He further pointed out that assessment order was
passed on 30-12-2008 which was upheld by ld. CIT(A) vide order dated 30-
9-2010 in entirety. Thereafter the appeal was preferred before the Tribunal
on 4-2-2011. The plea of the department has always been that on the basis of
ample evidence collected during survey and in the proceedings pursuant to
the survey it was clearly established beyond doubt that the assessee had PE
in India. He, therefore, submitted that on the basis of available evidence on
record, the appeal was decided by ld. CIT(A) against assessee. Therefore,
there is no need for filing of the evidence now before the ITAT.
5.9. Ld. Counsel pointed out that it is only when the deficiencies in the
evidence produced by the department were brought to the notice of the
Tribunal, the Department tried to fill in the gaps by adducing fresh evidence.
He submitted that Rule 29 of the ITAT Rules always cannot be exercised to
allow any party to fill in the gaps of incomplete work done earlier. In this
regard he relied on the decision of Hon’ble Delhi High Court in the case of
Velji Deoraj & Co. V. CIT (1968) 68 ITR 708 to the following effect:
“Now, the power of the Tribunal to admit additional evidence in
appeal is governed by rule 29 of the rules and orders relating to the
Appellate Tribunal. That rule is similar in terms to Order 41, rule
27, of the Code of Civil Procedure. Now, it is well settled that the
admissibility of additional evidence in appeal under the provisions
of Order 41, rule 27, of the Civil Procedure Code is made to depend
not upon the relevancy or materiality to the issue before the court of
the evidence sought to be admitted or upon the fact whether or not
the applicant had sufficient opportunity of adducing the evidence at
an earlier stage, but upon whether or not the appellate court
requires the evidence to enable it to pronounce judgment or for any
other substantial cause. The admission of additional evidence at the
appellate stage is not referable to any right of the party to produce
the evidence but is dependent solely on the requirement of the court
and it is for the court to decide whether for pronouncing its
judgment or for any other substantial cause it is necessary to have
the additional evidence before it. The mere fact that the evidence
sought to be produced is vital and important does not provide a
substantial cause to allow its admission at the appellate stage
especially when the evidence was available to the party at the initial
stage and had not been produced by him. As has been observed by
the Privy Council in Parsotim v. Lal Mohar, the rule is not intended
to allow a litigant who has been unsuccessful in the lower courts to
patch up the weak parts of his case and fill up omissions in the court
of appeal.”
5.10. Ld. Sr. counsel also relied on the order of ITAT in the case of Honda
Trading Corp. India Pvt. Ltd. Vs. ACIT ( ITA no. 5297/Del/2011, to which
one of us (ld. JM) was a party, wherein it was observed as under:
“10. After careful consideration of the facts and circumstances of the
case, we observe that the only reason given by the assessee is that it
was a foreign database which was costly to obtain and, therefore,
the assessee could not furnish the same at the earlier stage. The
counsel for the assessee has not disputed the fact that additional
evidence submitted by the assessee was available in public domain
at the time of proceedings conducted before the authorities below. In
view of above, we are inclined to hold that the assessee was not
prevented by sufficient cause from bringing additional evidence on
record earlier before TPO, DRP and Assessing Officer. If at every
stage of proceedings, the assessee conducts a fresh search and finds
new comparables to leverage the ALP, then the process would be
endless and we are of the opinion that the same cannot be admitted
as additional evidence at this stage of Tribunal proceedings. For
this assessee has to show that he was prevented to submit this
additional evidence due to reasonable cause beyond his control but
there is nothing to show that the assessee could not produce
additional evidence due to circumstances beyond his control and
reasonable cause. In this situation, we are inclined to hold that
additional evidence submitted by the assessee cannot be admitted at
this appellate stage and, therefore, the application of the assessee is
rejected.”
5.11. Ld. Sr. Counsel has also relied on various case laws to submit that the
reasons recorded by the assessing officer for initiating reassessment
proceedings cannot be improved upon by placing reliance on fresh material.
6. In the rejoinder, ld. CIT(DR) Shri Sanjeev Sharma submitted that Shri
Chandan Jain was the Chief Financial Office of the GIC and he did not
provide the correct answer to question nos. 31 to 38 contained at page 14H,
14-I & 14J of Vol. V of assessee’s paper book, which are reproduced
hereunder:
What is the job responsibilities of Reccardo Procacci ?
Ans. To the best of my knowledge his job is business development
for Oil and Gas. I would not know if he has any responsibilities if
any. Please state any employees of GE India Industrial (P) Ltd.,
work for GE group entities in its Sales servicing business in India.
Ans. These are certain number of people who are engaged by GE
India Industrial (1') Ltd towards marketing and sales. If any other
persons are providing above services r will provide the information.
33. I am Showing you page 87 of Annexure-[l which contain the
various division of GE. businesses please note which of these
businesses arc not conducted through GE Subsidiary in India,
either partly or wholly.
Ans 33. The business which arc not conducted through
subsidiaries arc Energy( project offices). There are some other
business like Aviation, Oil and Gas and aviation financial
services where equipments arc sold or leased from overseas. I
will check this information correctly and revert back to you.
34 I am again showing the list of 7 person of GE International
Inc. what are their job responsibilities in India?
Ans 34. To the best of my knowledge there job responsibilities
are business development and market assessment for their
respective business as mentioned in page no 27 in Annexure F.
The business looked at are:
1. Dan Nalawade - Equipment services
2. Riccardo Procecci - Oil and Gas eqUipment
3. William Blair - Aviation
4. Ash Narar - Transportation
5. Kenneth Piesson - Sly Transportation
6. Sameer Aggarwal- We will let you know
7. PratKenn -Fewer Infrastructure
Q. 35. Whether for any business of the GE. Group entity not
wholly conducted through subsidiaries in India i.e. in the field
of Oil and Gas, Aviation. Transportation are being subcontracted
or getting it done through any third party.
Ans. I am not aware of this but I can get back to you.
Q. 36. Who IS the Principle officer of G.E industrial India (P)
limited?
Ans. There IS no Principle Officer for G.E industrial India (P)
limited.
Q. 37. Please provide the names of employees of G.E Industrial
India Private Limited, who are working for the other G.E group
entities business in India.
Ans. I have to check and I will revert.
Q. 38. Who is looking after the business of Aircraft - Engine
leasing business of G.E grou p in India?
Ans. Nalin Jain deals with Customer Relation with respect to
aircraft engine business. Ashish Sonawala deals with customer
relation with respect to Aircraft Finance .
6.1. Ld. CIT(DR) further submitted that as department cannot improve
upon the reasons recorded by adducing fresh material, the assessee also
cannot go beyond the objections raised by it to the reasons recorded in the
issue of notice u/s 148 of the Act. In this regard ld. CIT(DR) relied on the
decision in the case of Hon’ble Bombay High Court in WP no. 2595/2013 in
the case of M/s Crown Consultants Pvt. Ltd. Vs. CIT & another, which has
observed as under:
“7. We have considered the rival contentions. The notice dated 28
September 2012 seeks to reopen assessment beyond the period of 4 years
i.e. beyond the period of four years from assessment year 2007-08. The
case of the revenue argued before us is limited to its ground that the
assessee has not reported a loan of Rs. 1,19,42,900/- received from its
directors and their family members in the financial statement filed along
with return of income. Thus, there was a failure to truly and fully
disclose all material facts necessary for assessment. The petitioner’s
contention before us is that the alleged loan transaction has in fact been
reflected in their financial staemnt as margin money which theyhad
eceived from tis directors and their family members while carrying on its
business of share and stock broker. This margin money was reflected in
Schedule 8 to the balance sheet for the year ending 31 March 2007.
However, we find that this submission is being made before us for the
first time as in their objections to the reasons for reopening filed on 5
November 2012 the petitioner did not state that the loan amount
mentioned in the reasons for reopening is nothing but margin money
which stands reflected as margin deposits in Schedule 8 of the balance
sheet. The response of the petitioner in its objection was that they are
not obliged to disclose in their return of income and financial statement
the transaction of its directors and their family members.
Just as the revenue cannot improve upon its case for reopening
before the Court and but must stand or fall by the reasons
recorded for reopening the assessment, the same test would be
applicable in case of an assessee i.e. it must stand or fall by its
objection to the grounds for reopening of assessment. It is not open
to the assessee to urge fresh objections before the Court which the
Assessing officer had no occasion to deal with, unless of course,
the notice to reopen is ex-facie without jurisdiction not requiring
consideration of any argument such as beyond limitation. In view
of the above, we find substance in the submissions on behalf of the
revenue that the Assessing officer had tangible material to come to
prima facie view that income chargeable to tax has escaped
assessment.
6.2. Ld. CIT(DR) further submitted that it is the claim of the ld. Sr.
counsel that only 12 employees are presently serving in the GE and therefore
at least it could have found the EMS of these 12 employees.
6.3. Ld. CIT(DR) submitted that there is no ground to go to employees to
file affidavits in regard to their linkedin profile, because if assessee wants to
controvert the statements and profile then it can simply file the employment
and EMS for the years they had worked in GE and are relevant to the year under appeal. Regarding the submission of ld. Sr. counsel that in the linkedin
profiles employees exaggerate their achievement, ld. CIT(DR) submitted
that a person will not write any factually incorrect information as they can be
proven wrong by their peers/ friends. He pointed out that employer/ head
hunting companies use linkedin profiles of persons to do preliminary
research on potential employees. Further, linkedin profiles can be viewed by
anyone, particularly friends/ colleagues and no person will give any factually
incorrect information which can be easily verified and such information is
subjected to peers scrutiny or cross checking.
6.4. Ld. CIT(DR) further submitted that the assessee had filed EMS-2006
of of Ashfaq Nainar (Pages 57 to 66 of PB dated 3-6-14 ). In this regard ld.
CIT(DR) has compared the contents of this EMS with the linkedin profiles
of Ash Nainar available on pages 12 to 14 of PB Vol. 3 filed by the
revenue:
“9. The assessee has filed EMS-2006 of of Ashfaq Nainar (Pages 57 to
66 of Revenue’s PB). As an illustration, the contents of this EMS are
compared with the linkedin profiles of Ash Nainar available on pages 12
to 14 of Volume 3 filed by the revenue:
Sr.
No.
Description EMS linkedin profile (taken
in Feb 2014
Comments
1. Education Gannon University And
Loyola College
Gannon University
And Loyola College
Match
2. Qualification Proven expertise in
international sales for over
14 years particularly
focused on Asia
Excellent customer
negotiation and dispute
resolution skills
Over 16 years of
executive level sales
experience in Asian
Markets for new
aftermarket and
product upgrade.
Wide ranging
experience in bid
proposal and contract
negotiation
Similar
3. Employment
history
Regional Managing
Director *Asia):
responsibility all of Asia
except China. Function:
Responsible for
leading GE
Transportation …
locomotive
Sales, located in Delhi,
Area: Infrastructure: Rail
(see other place of postings/
employment also). He has
been posted in Erie, USA
and Jakarta.
procurement and
maintenance contracts
within the region
4. Achievements Relocated to India bringing
sharper focus to signaling
and locomotive business.
Led Asia team to USD 29
M order and USD 20 M
sales. See Managers
assessment on page 63
Responsible for
leading GE …
maintenance contracts
within the region.
Similar.
6.5. With reference to aforementioned comparison chart ld. CIT(DR)
pointed out that the information in the Linkedin profile cannot be said to be
hearsay. The information in the Linkedin profile is neither false nor modest.
Under such circumstances there is no harm in relying on the information
contained in the Linkedin profile so far as it relates to education, experience,
employment profile and also nature of job performed by persons.
6.6. Ld. CIT(DR) further pointed out that on account of non production of
documents and relevant information, the assessing officer could not carry
out the correct analysis for the purpose of determination of ALP and,
therefore, the assessee’s one of the alternate claim that the payment had
been made at arm’s length to different entities cannot be verified. He
submitted that for computing the arm’s length price comparison with a
realistic and correct data is to be carried out which had not been done by the
assessee. For proper analysis all the functions performed by persons it is
necessary that details regarding functions carried out by employees are
available on record for which Linkedin profile will be very useful.
6.7. As regards the submissions of ld. Sr. counsel, regarding verification
of the information contained in the Linkedin profile, ld. CIT(DR) submitted
that these arguments have no basis as far as the information on the
education, employment history and job profile of the person is concerned.
These have been employees of GE and, therefore, GE can only prove that
any information is false.
6.8. As regards the submissions of ld. Sr. Counsel of there being
inordinate delay in producing the evidence, ld. CIT(DR) pointed out that this
information was searched on the internet in the month of February 2014 and
was not available with the Revenue prior to that time. Ld. CIT(DR)
submitted that the assessee did not object to various facts before the
assessing officer or the CIT(A) and has been objecting for the first time
before the Tribunal. Further he did not file the TP orders for A.Y. 2004-05 to
2008-09 before the lower authorities and the claim based on these orders are
being made for the first time before the Tribunal.
6.9. As regards the two US cases relied upon by ld. Sr. counsel, ld.
CIT(DR) submitted that the evidence of Linkedin profile referred in two US
cases was discussed in different context and has nothing to do with the use
of facts available in the Linkedin profile in the present case.
6.10. Ld. CIT(DR) further submitted that no fresh opportunity need to be
given to the assessee to file rebuttal evidence. The assessee is shifting its
stand. Earlier on 20-2-2014, it sought time to file factual rebuttal to the
contents of Linkedin profile and after three and half months it has not filed a
single factual rebuttal.
7. We have considered the rival submissions and have perused the record
of the case. Before we proceed to consider the detailed arguments advanced
before us by both the sides, it would be useful to consider various provisions
dealing with powers of the Tribunal for admission of additional evidence.
Section 254(1) provides that the Tribunal may, after giving both parties to
the appeal an opportunity of being heard, “pass such orders therein as it
thinks fit”. Section 255 deals with the procedure before the Appellate
Tribunal in discharge of its powers and functions. Section 255(6) reads as
under:
(6) The Appellate Tribunal shall, for the purpose of discharging its
functions, have all the powers which are vested in the income-tax authorities
referred to in section 131, and any proceeding before the Appellate Tribunal
shall be deemed to be a judicial proceeding within the meaning of sections
193 and 228 and for the purpose of section 196 of the Indian Penal Code
(45 of 1860), and the Appellate Tribunal shall be deemed to be a civil court
for all the purposes of section 195 and Chapter XXXV of the Code of
Criminal Procedure, 1898 (5 of 1898)..
7.1. A bare perusal of this section makes it clear that the Tribunal has all
the powers vested in it which are vested in the income-tax authorities with
reference to section 131. This takes us to section 131 which deals with the
powers regarding discovery, production of evidence etc. Thus, the Tribunal
has all the powers which are vested with the income-tax authorities
regarding discovery, production of evidence etc.
7.2. Section 131(1) reads as under:
Power regarding discovery, production of evidence, etc.
131. (1) The [Assessing] Officer, [Deputy Commissioner (Appeals)],
[Joint Commissioner] [, Commissioner (Appeals)] and [Chief Commissioner
or Commissioner] shall, for the purposes of this Act, have the
same powers as are vested in a court under the Code of Civil Procedure,
1908 (5 of 1908), when trying a suit in respect of the following matters,
namely :—
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any officer of a
banking company and examining him on oath;
(c) compelling the production of books of account and other
documents; and
(d) issuing commissions.
7.3. Thus, the powers of Tribunal in dealing with appeals are expressed in
the widest possible terms and Tribunal has wide powers including the
powers of compelling the production of books of a/cs and other documents.
7.4. Rule 29 of the ITAT Rules reads as under:
"29. Production of additional evidence before the Tribunal- The
parties to the appeal shall not be entitled to produce additional
evidence either oral or documentary before the Tribunal, but if the
Tribunal requires any documents to be produced or any witness to
be examined or any affidavit to be filed to enable it to pass orders
or for any other substantial cause, or, if the income-tax authorities
have decided the case 'without giving sufficient opportunity to the
assessee to adduce evidence either on points specified by them or
not specified by them, the Tribunal, for reasons to be recorded, may
allow such document to be produced or witness to be examined or
affidavit to be filed or may allow such evidence to be adduced."
7.5. The basic ingredient for exercising powers under Rule 29 for
admission of additional evidence is that Tribunal should come to the
conclusion that a particular document would be necessary for consideration
to enable it to pas orders or for any other substantial cause. The document
can be brought to the notice of Tribunal by either party.
7.6. The Tribunal is final fact finding body and, therefore, the powers have
been conferred on it u/s 131 and Rule 29 to enable it to record a factual
finding after considering the entire evidence. For dispensation of justice
wide powers have been given to Tribunal.
7.7. At the time of admission of additional evidence the Tribunal is
required to examine whether prima facie the evidence is relevant to the facts
in issue or not. As per section 3 of the Evidence Act, one fact is set to be
relevant to another when the one is connected with the other in any of the
ways referred to in the provisions of Evidence Act relating to the relevancy
of facts. The fact in issue u/s 3 of the Evidence Act means and includes any
fact from which either by itself or in connection with other facts the
existence/ non-existence nature or extent of any right, liability or possibility
asserted or denied in any suit or proceedings necessarily follows.
7.8. Section 5 of the Evidence Act deals with the relevancy of facts. As per
this section, evidence may be given in any suit or proceeding of the
acceptance or non-acceptance of every fact in issue and of such other facts
as are herein declared to be relevant and of no others.
7.9. Section 11(2) of the Evidence Act, 1872 reads as under:
11. When facts not otherwise relevant become relevant, - Facts not
otherwise relevant are relevant –
(1) ….. .
If by themselves or in connection with other facts they make the
existence or non-existence of any fact in issue or relevant fact highly
probable or improbable.
7.10. In the present appeal there are primarily three issues for consideration,
viz.
(i) validity of reopening u/s 148;
(ii) Whether there is PE or not (which is primarily a factual finding to
be recorded by Tribunal after due appreciation of facts on record)
(iii) Attribution of profits.
7.11. As far as the second issue regarding existence of PE is concerned,
that is a factual finding to be recorded on the basis of evidence on record
and, if Tribunal considers that additional evidence is relevant to the fact in
issue, which is existence or not of PE, then in order to advance the cause of
justice, the additional evidence should be admitted. In order to enable the
Tribunal to decide disputes before it in a lawful, fair and judicious manner, it
necessarily is required to look into and consider such and other material
having a direct nexus and bearing on the subject matter of the appeal.
7.12. We will consider various objections of assessee.
A. NO ENQUIRIES MADE BY AO IN REGARD TO
EMPLOYEES OF GEIPL WHO WER WORKING FOR
OTHER GE ENTITIES:-
7.13. Admittedly, in the reasons recorded by assessing officer it was
categorically stated, as noted earlier, that the information regarding the
employees of GE in India prior to the present expats was not given by GE
group. However, assessing officer had recorded a finding that there had been
the persons working for such sales through out the period 1-4-2000 to till
date. This factual finding recorded by assessing officer was not objected to
by the assessee while filing objections before assessing officer. At this stage
it would be relevant to examine the assessee’s contention that no such
information was called for by assessing officer.
7.14. In this regard it would be relevant to refer to the summons dated 2-3-
2007, wherein specifically assessing officer has required the Chief Executive
Officer of GIC to file copy of employment letters of employees working for
overseas group of GE for services relating to sourcing and CST. The
assessee categorically in its reply dated 16-3-2007 in para 1.2 reproduced
earlier, inter alia, stated that it had no access to employment letters of all
employees of GE Overseas group companies working in India. The assessee
in Annexure 13 to the letter dated 13-3-2007 had submitted the names of
employees of GE India Industrial Pvt. Ltd., who were working for other GE
group entity of the business in India which were 43 in number.
7.15. In course of survey while recording the statement of Chief Finance
Officer Shri Chandan Jain a specific question no. 37 was put to him to
provide the names of employees of GEIPL who were working in the other
GE group entities in India for which he answered that he will check and
revert back.
7.16. Thus, it cannot be said that assessing officer had not made inquiries
regarding the employees of GEIPL who were working for other GE entities.
The assessee did not provide this information. In the back drop of these
facts, now the department is seeking admission of Linkedin profiles of
various employees which has been down loaded from the website and is
available in public domain.
B. INORDINAE DELAY IN FILING EVIDENCE:-
7.17. One of the objections raised by ld. Sr. counsel is that there is
inordinate delay in bringing on record this information and department has
not pointed out any reason as to why this information was not produced
earlier. From this it is clear that ld. Sr. counsel is not denying that the
information regarding employees is relevant to the issue but his contention
is that there is inordinate delay and secondly this is the self appraisal of
employees and, therefore, this is hearsay evidence.
7.18. In our opinion merely because the Linkedin profiles was available in
public domain and was not referred to by assessing officer the department
cannot be prevented from bringing that information on record so as to arrive
at the correct factual finding on the issue regarding PE. This cannot be said
to be a case of inordinate delay because assessing officer had drawn an
adverse inference on account of non-furnishing of information by assessee
and when assessee is trying to take milage out of its conduct, the department
is bringing on record additional evidence in the form of linkdin profile of
employees to demonstrate that the conclusion drawn by department was
fully justified. All the cases relied by assessee or referred to by ld. CIT(DR)
are with reference to additional evidence brought before the Tribunal for the
first time by assessee. But none of the cases deals with a situation where
assessee withholds some information from the department and then claims
that information relevant to the facts in issue should not be admitted. There
is no quarrel with the ld. Sr. counsel’s submissions that reasons recorded
cannot be improved upon by department by production of fresh material. For
deciding whether the reopening is in accordance with law or not, only prima
facie belief of the assessing officer regarding escapement of income is to be
examined and no conclusive proof of the evidence has to be there for
upholding the validity of reasons recorded. However, for arriving at final
finding of fact the fresh material can be considered Where in order to
substantiate its finding (not for reasons recorded for initiation of
proceedings u/s 148), the department seeks admission of additional
evidence, then same considerations cannot apply which apply to a case
where the evidence was available with the assessee but he did not produce
the same. The inordinate delay theory cannot be invoked in a case where
cause of justice will be defeated rather than being sub-served.
7.19. In this regard we may refer to Rule 46A which is relevant for
assessee’s own case. The same deals with production of additional evidence
before ld. CIT(A) by assessee. In Rule 46A stringent provisions are made
before entitling the assessee to produce fresh evidence because normally
assessee is in possession of all evidence. However, rule 46A(4) gives wide
powers to ld. CIT(A) to entertain fresh evidence for sub-serving the cause of
justice. The test laid down in Rule 46A, therefore, cannot be applied in case
department seeks to file additional evidence because department is to collect
the evidence through various sources and primarily banks upon the
information to be furnished by assessee.
7.20. The assessee cannot be permitted to first scuttle the investigations/
inquiries by not furnishing the necessary information and then claim benefit
out of the same. At the end of the day it is the determination of correct
taxability of assessee , which should guide the proper course of action. There
is no gain saying that pitted against the technicalities and cause of justice,
cause of justice should prevail. It is true that either party cannot make out a
new case by implanting additional evidence but where the additional
evidence only supplements the information on the basis of which a factual
finding is to be arrived at and not supplant the information, then Tribunal
can and should look into those details. It would be travesty of justice to
ignore the additional evidence at admission stage only before arriving at a
correct finding of fact. As a matter of fact assessee should have no
complaints in getting the relevant information being brought on record from
the appreciation of which correct factual finding can be arrived at. In the
present case we find that Linkedin profiles sought to be filed by the
department has considerable bearing on the subject matter of appeal and
therefore, in our opinion it should be admitted by the Tribunal. The assessee
will be free to rebut the information contained in linkedin profiles by
bringing on record contrary facts to dislodge the claims made in linkedin
profiles.
C. LINKEDIN PROFILES IS HEARSAY EVIDENCE:-
7.21. Ld. Sr. Counsel has submitted that Linkedin profiles is an hearsay
evidence and has no probative value. In this regard ld. Sr. counsel has relied
on two decisions of US courts. The said decisions have been rendered
entirely on different factual considerations. In the case of Automotive
Support (supra), the issue was regarding breach of contract. As far as the
decision in the case of VB Conversions LLC (supra) is concerned, there also
the dispute was in regard to fraudulent code to hack into software on
multiple occasions. Thus, in both the cases dispute related to particular
employees. Therefore those decisions are not relevant for the present
controversy.
7.22. Ld. Sr. counsel has submitted that Linkedin profiles is self appraisal
of employees and, therefore, it is hearsay evidence. We are unable to accept
this contention. Linkedin profiles is not in the nature of hearsay because it is
the employee who himself has given all the relevant details and the same
relate to him. These detalis are akin to admission made by a person. No third
party is involved in creating of this Linkedin profiles and, therefore, it
cannot be said to be an hearsay evidence.
7.23. Section 60 of the Evidence Act requires that oral evidence must in all
cases what-ever, be direct. It is well settled law that admission though not
conclusive is binding and decisive on point unless it is successfully
withdrawn or proved to be erroneous (Narayan v. Gopal AIR 1960 SC 100 ).
The Linkedin profiles are in the nature of admissions of persons on their job
profile. The data is in pubic domain.
OTHER ISSUES:
7.24. One of the pleas of ld. Sr. counsel is that since CIT(A) had decided
the issue without considering the Linkedin profiles against the assessee,
therefore, now there is no necessity for admission of this additional evidence
in the form of Linkedin profiles. In our opinion, since the TP orders were not
before the ld. CIT(A) and now assessee has filed the same, though it was in
its possession earlier also, therefore, in order to determine the ALP of the
payments made to various entities having regard to the functions performed
by employees, it would be appropriate to consider the evidence which the
department also is filing. The ld CIT(A)’s order has been assailed before us
by the assessee on various counts and since the Linkedin profiles has direct
nexus with the fact in issue, therefore, it is to be admitted. There is no hard
and fast rule that merely because ld. CIT(A) has decided the appeal,
Tribunal cannot entertain the additional evidence because this will render
Rule 29 otiose.
7.25. Ld. Sr. counsel has relied on the decision of co-ordinate Bench in the
case of Honda Trading Corp. India Pvt. Ltd. (supra). In this case the
assessee’s explanation for non production of evidence at earlier stage of
proceeding was only that foreign data base was costly to obtain. This
explanation was not found to be sufficient because it was not disputed that
additional evidence was not available. However, in the present case facts are
entirely different. Here assessee was required to furnish information about
employees which was not furnished and now its plea is that assessing officer
had no information. Here is not a case of incomplete work done by assessing
officer because he had called for information.
7.26. The strict Rules of Evidence are not applicable to income-tax
proceedings. The evidences sought to be filed by Revenue are only
supporting in nature and would assist in appreciating the facts in a more
judicial manner.
7.27. In view of above discussion we admit the Linkedin profiles filed by
the department vide Vol. III pages 1 to 94.
7.28. As far as the second additional evidence in the form of
Whistleblower’s writ petition before Hon’ble Delhi High Court is
concerned, we find from the written submissions of assessee dated 20-2-
2014 that the writ petition is not worth considering in view of various
decisions of Hon’ble Delhi High Court filed in the paper book by the
counsel in view of the stringent observations made by Hon’ble Delhi High
Court. We, therefore, decline to admit the same.
7.29. In the result, vol. III filed by the department being Linkedin profiles is
admitted and vol. IV whistleblower petition filed by the department is not
admitted.
8. These are stay granted matters. The appeals have extensively been
heard on merits. The appeals are fixed for further hearing on merits on 21-
07-2014.
Order pronounced in open court on 4-7-2014.
Let a copy of order be provided to both the parties.
Sd/- Sd/-
( C.M. GARG ) ( S.V. MEHROTRA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 04-07-2014.