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2019 (2) TMI 1848 - AT - Income TaxAssessment u/s 153A - additions u/s 68 on account of share application money, special deposits against the issue of preferential equity shares treating the same as accommodation entries - HELD THAT:- Addition made by the A.O. u/s 153A of the Act is not sustainable and liable to be deleted when the assessment for the A.Y. 2010-11 was completed u/s 143(3) of the Act and was not pending as on the date of search on 02/7/2015. This ground of the assessee’s appeal stands allowed. Violation of principles of natural justice due to non-allowing the cross examination of the witness, whose statement was relied upon by the assessee - HELD THAT:- Where the assessee has repeatedly requested and demanded the cross examination of the witnesses whose statements were relied upon by the AO in the assessment order and further the report of the DDIT Investigation Kolkata is also based on the statement of such person then the denial of cross examination by the AO as well as ld. CIT (A) despite the fact that the assessee was ready to bear the cost of the cross examination of the witnesses is a gross violation of principles of natural justice. Thus the additions made by the AO on the basis of such statement without any tangible material is not sustainable in law and liable to be deleted. Addition u/s 68 in respect of the share capital received - HELD THAT:- Once the assessee has produced the relevant documentary evidence in support of the claim as well as repayment of the loan including the payment of interest, which were not disallowed or disturbed by the A.O. in any of the years then in absence of any contrary material brought by the A.O. to controvert or dispute the correctness of the evidence filed by the assessee, the addition made by the A.O. and confirmed by the ld. CIT(A) are not sustainable. Further the statement relied upon by the A.O. no where states that he has provided any accommodation entry to the assessee but reference in the statement is only to the extent that he has provided accommodation entries through another company. Further the A.O. has not pointed out any discrepancy in the record to show that the assessee’s own money has been routed back in the garb of unsecured loans. Accordingly we delete the addition made by the A.O. in respect of unsecured loan Disallowance u/s 14A - HELD THAT:- The fact recorded by the ld. CIT(A) that the assessee has not earned any exempt income during the year under consideration has not been disputed by the department and therefore, in view of the settled proposition of law on this point and particularly the decision of Chemvest Ltd. Vs CIT [2015 (9) TMI 238 - DELHI HIGH COURT] we do not find any error or illegality in the order of the ld. CIT(A) qua this issue. Hence, we uphold the same.
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