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2015 (9) TMI 1628 - AT - Income TaxAddition u/s 68 - bogus credit - Denial of natural justice by providing no opportunity of being heard to the assessee - Held that:- Both the A.O. as well as CIT(A) being judicial authorities, were under obligation to adhere to the rule of natural justice by providing opportunity of being heard to the assessee to produce nine sundry creditors whose confirmations have been duly placed on record during assessment / remand proceedings. When the assessee has discharged its onus u/s 68 of the Act by providing confirmation letter from the sundry creditors, the onus stands shifted to the A.O. to controvert the same by bringing cogent evidence on record, that the said parties are not existing and their creditworthiness and genuineness is highly doubtful.A.O. has rather summarily dismissed the confirmation letters on the sole ground that the same are stereotyped and has never given findings that the confirmation filed by the assessee in respect of the nine sundry creditors are fake one and of non existing entities; No doubt Inspector, income tax deputed by the A.O. reported that M/s. R. K. Enterprises, Natraj Sanitary and Verma Engineering works are non-existing, but the assessee has never been provided opportunity to produce them, or to fill their latest addresses but outrightly, ignored the confirmations and business transactions submitted by the assessee; Notices sent to nine parties shown to have been received back unserved but thereafter, no opportunity has been provided to the assessee to provide their latest address or to produce the parties before the A.O. nor any effort has been made to serve them through substitute service; Confirmation filed by assessee pertaining to nine parties/sundry creditors ought not to have been rejected merely on the ground that the letters sent to them by the A.O. have been received back unserved except with thorough probe; Thus A.O. has failed to verify confirmations filed by the assessee rather rejected the same on the basis of conjectures and surmises. - Decided in favour of assessee.
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