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2010 (4) TMI 1061 - AT - Income TaxThird member appointment - difference between the ld' JM and the ld' AM - addition u/s 68 - cash credits unexplained - JM confirmed the impugned deletion made by CIT(A) while the learned AM upheld the addition made by the AO - HELD THAT:- The assessee has given the complete addresses. The summons were duly served on these parties. AO had drawn an inference against the assessee and made the addition without enforcing the attendance of the parties to whom the summons were issued and duly served. AO even did not give an opportunity to the assessee that these parties did not appear even after the service of the summons but made the addition. As per me AO was bound to give opportunity to the assessee before taking the adverse inference against the assessee. Once the summons have duly been served on the parties, the identities of the parties are duly proved. AO has not done anything except serving summons so that the attendance of the parties could be enforced. Even the assessee was not made known about the non-appearance of the parties. T AO was duty bound to give opportunity to the assessee before drawing an inference against the assessee. The case of the assessee is duly covered by the decision of Nathu Ram Premchand’s case[1962 (8) TMI 81 - ALLAHABAD HIGH COURT]. - AM has not distinguished the facts of the case with the decision of the Allahabad High Court in the case of Nathu Ram Premchand (supra) while confirming the addition made by the Assessing Officer. Once the AO has not given opportunity to the assessee for the 3 creditors for which the assessee asked to issue summons, the inference cannot be drawn against the assessee. The summons were duly served. Under these facts, the assessee has discharged his onus what can be expected from. The CIT(A) has rightly deleted the addition and the learned JM was correct in law in holding that the issue is squarely covered by the decision of the jurisdictional High Court. Question No. 1 is answered in favour of the assessee. Unrecorded investments for purchase of goods - JM confirmed the action of the CIT(A) in deleting addition while the learned AM confirmed the addition - HELD THAT:- From the copy of account, as noted that against all the transactions relating to the assessee, the bill numbers are duly mentioned but in respect of the transactions which the assessee has denied, M/s. Narain Food Products has not mentioned any bill number but has shown the draft, bank etc. Thus no addition can be made merely on the basis of the evidence procured by the third party unless and until that party is put to the assessee for cross-examination, specially when the assessee has categorically denied the transaction. Statement relied on by the Revenue itself does not disclose the bill number through which transaction is entered into. It only contains ‘through drafts etc.,’ only. Therefore, this evidence, cannot be a valid evidence to make the addition. Once the assessee had denied the transaction, the Assessing Officer was bound to adduce the evidences for the rebuttal of assessee - AO has not done so. Therefore, under the facts of the case, I agree with the learned JM deleting the addition. The matter will now go before the regular Bench for deciding the appeal in accordance with the majority opinion.
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