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2018 (2) TMI 1961 - AT - Income TaxAssessment u/s 153A - addition u/s 68 - HELD THAT:- In an assessment made u/s.153A for an assessment year for which assessment has not been abated, then the jurisdiction of the AO to make addition in such an assessment, is confined to such incriminating search material and no addition dehors the search material can be made. In the instant case, we find that during the course of the relevant search only tally data of the assessee company was found which shows that the assessee has received cash credit from M/s Uniworth Agencies Pvt. Ltd. of ₹ 6.92 crores during the year under consideration. The said tally data does not show that the said cash credit was non-genuine or bogus. The argument of DR was that the statement of two persons, namely, Shri Raj Kumar Tharad and Shri Pradeep Kumar Garg were recorded u/s.131 on 13.11.2014 by the Investigating Wing and those statements show that the cash credit provided by M/s Uniworth Agencies Pvt. Ltd. to the assessee was an accommodation entry. According to DR the said statements recorded in post-search enquiry was a search material and, therefore, could be used in making addition even in case of unabated assessment. These statements were recorded on 13.11.2014 i.e. after completion of the search on 07.11.2014, therefore, these statements were not material found during the course of search. However, nowhere in these statements transactions which took place between the assessee and M/s Uniworth Agencies Pvt. Ltd. were impeached and no evidences were brought on record to show that cash was received from the assessee company by the said M/s Uniworth Agencies Pvt. Ltd. in lieu of cheque issued by that company to the assessee company. Most importantly it is not in dispute that the assessee company was not allowed any opportunity to cross-examine the two makers of the statements before using the same against the assessee. CIT(A) observed that lack of opportunity to cross-examine the operators is not fatal to the addition made by the AO. CIT(A) is contrary to the decision in case of M/s Andaman Timber Industries Vs. CCE [2015 (10) TMI 442 - SUPREME COURT] wherein held - According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. Addition in the instant case has been made solely on the basis of statement of two persons, who were admittedly entry operators and were not allowed to be cross-examined by the assessee company before assuming their submissions as gospel truth. We, thus, find that these statements are not admissible at all. In absence of these statements, there is absolutely no material available on record on the basis of which the impugned addition can be sustained. We have, therefore, no hesitation in deleting the impugned addition being not on the basis of any incriminating material found during the course of search as well as being not based on any admissable, reliable and relevant material. Accordingly, addition is deleted and the appeal of the assessee is allowed.
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