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2013 (4) TMI 466 - AT - Income TaxBogus purchases of ‘colour & chemicals’ - Shri Rohit Panwala stoutly stated that he never supplied chemicals/colour & neither knew any of the director nor any employees of the assessee company - CIT(A) restricted the addition of Rs.44,56,916/- to Rs.11,24,250/- made by AO - Held that:- There is violation of natural justice as assessee was not offered for cross-examination to Rohit panwala and, therefore, addition cannot be made on the basis of such statement of Rohit Panwala alone. Accepting the arguments of assessee that all the concerns from whom assessee has shown to have made purchases of colour and chemicals are owned by different persons. It was incumbent on the AO to call these persons or prove that they were nonexistent. If there are some existing owners of these concerns then their statements should have been recorded and these persons should have also been offered for cross-examination. The statement of any other person claiming to be the owner of these concerns applying to the facts of assessee’s case cannot be blindly relied upon without confronting the ostensible owner. Since no enquiry/investigation has been carried out into the existence of ostensible owner the reliance of the AO merely on the statement of Rohit Panwala is vitiated. As relying on Suman Silk Mills Pvt . Ltd. (2013 (4) TMI 465 - ITAT AHMEDABAD) the entire case of the Revenue revolves around the statement of Rohit Panwala. Since no cross examination of Rohit Panwala is allowed to the assessee then his statement recorded at the back of the assessee cannot be read in evidence against him. In this regard as decided in Kishinchand Chelaram vs. CIT (1980 (9) TMI 3 - SUPREME Court)wherein it is held that opportunity to controvert should be given to the assessee. Then there is no reason to make any addition in the case of the present assessee solely on the ground of statement of Rohit Panwala - appeal of the assessee is allowed. Commission paid on bogus purchase - CIT(A) deleted the addition made by AO - Held that:- DR did not place any material in support of their ground - Against revenue.
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