1. This appeal is filed by the Revenue under Section 260A of the IT Act, 1961, stating that the following questions of law arise out of the order of the Tribunal dt. 28th Feb., 2003 in ITA No. 25/Nag/2001.

(i) Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in law in deciding that the learned CIT(A) ought to have exercised its powers to receive new/additional evidence for deciding the issue in terms of Rule 46A(4) of the Rules, 1962

(ii) Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in law in admitting the additional/new evidence under Rule 29 of theAT Rules, 1963

(iii) Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in law in setting aside the matter to the file of the AO relating to the additions of Rs. 6,06,725

(iv) Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in deleting the addition of Rs. 1,16,000 on the basis of additional/new evidence produced by the assessee before it

(v) Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in deleting the addition of Rs. 1,40,000 on the basis of additional/new evidence produced by the assessee before it

2. The assessment year involved herein is asst. yr. 1997-98.

3. The assessee is a company and it runs a Speciality Poly Trauma Hospital at Nagpur. In the assessment year in question, the AO made various additions inter aha on the ground that the assessee failed to establish the genuineness of the loan transaction between the assessee and various creditors and also the payments made to SICOM towards the payment of interest.

4. Before CIT(A), the assessee produced confirmation letters from various creditors and a letter dt. 19th Sept., 2000 from SICOM to the effect that the assessee had paid the amount towards interest. However, the CIT(A) dismissed the appeal on the ground that under Rule 46A(1) of the Rules, 1962, no fresh evidence could be permitted for the first time in appeal. With reference to the payment made to the SICOM, the CIT(A) held that the amount mentioned in the letter of SICOM and the amount claimed by the assessee did not tally. Accordingly, the CIT(A) upheld the disallowance made by the AO.

5. On further appeal filed by the assessee, the Tribunal held that in the light of Rule 46A(4), the CIT(A) ought to have permitted the assessee to produce confirmation letters given by 12 unsecured creditors as the same were necessary for disposal of the appeal on merits. Accordingly, the Tribunal set aside the additions of Rs. 6,06,725, and remanded the matter for fresh consideration.

6. The Tribunal further held that although the assessee had claimed that it had taken loan from Shri M.M. Dandekar, in fact it is established that the assessee was liable to pay to Mr. Dandekar Rs. 1,16,000 for the project consultancy work done by him. Accordingly the Tribunal deleted the addition of Rs, 1,16,000 made on account of Mr. Dandekar. Similarly the Tribunal deleted the addition of Rs. 1,40,000 as it was established that the said amount was paid by the assessee to SICOM for processing loan of Rs. 70,00,000 and the Collector of Stamps had endorsed the same.

7. Challenging the aforesaid order, the present appeal is being filed by the Revenue.

The first contention of the Revenue is that the Tribunal was not justified in invoking Rule 46A(4) of the Rules and allowing additional evidence to be produce before CIT(A) for the first time. It is contended that the mere fact that the evidence sought to be produced is vital and important, does not provide substantial cause to allow its admission at the appellate stage when the evidence was available to the assessee at the initial stage and was not produced by him. In our opinion, there is no merit in this contention because Rule 46A(4) provides that notwithstanding Rule 46A(1), the appellate authority can permit production of documents which enable him to dispose of the appeal. In the facts of the case, the finding given by the Tribunal is that the documents produced were necessary for disposal of the appeal on merits and no question of law arises from such finding of fact recorded by the Tribunal.

8. In the light of the additional evidence permitted to be adduced, the Tribunal had deleted this addition of Rs. 6,06,725 and remanded the matter for fresh consideration. It is admitted by counsel on both sides that on remand the addition of Rs. 6,06,725 has been deleted by the lower authorities and the Revenue is in appeal before the Tribunal. Thus the dispute regarding deletion of Rs. 6,06,725 in the present appeal does not survive.

9. As the assessee has established that no loan is taken from Mr. Dandekar and in fact the assessee is liable to pay Rs. 1,16,000 to Mr. Dandekar, the Tribunal was justified in deleting the said addition. Similarly, the assessee has established that the amount of Rs. 1,14,000 has in fact been paid towards stamp duty charges and, therefore, deletion of the said amount cannot be faulted.

10. In this view of the matter, we do not find any merit in the appeal and the same is hereby dismissed with no order as to costs.