Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 911 - AT - Income TaxAddition u/s 68 - unexplained loans - not allowing Assessee to cross-examine witnesses by adjudicating authority - violation of principles of natural justice - Held that:- To substantiate the loan transaction, assessee has filed confirmation with respect to the loan received through cheque. This loan was already repaid by cheque. Also found that AO has issued summon u/s.131 to the creditor who filed letter dated 28/02/2015 alongwith copy of ledger account, bank statement, rate of interest and proof of repayment of loan. Also found that Proprietor of M/s. Mayank Impex (Creditor) attended and his statement had also recorded u/s.131. Mr. Sanjay K, Choudhary, Proprietor of M/s. Mayank Impex in his statement stated that they were engaged in the business of import and trading of diamonds. Also found that assessee was not given any opportunity to cross-examine the lender party and was also not provided copy of statement / reports relied upon by the A O while making the addition. As per considered view denial of such opportunity goes to the root of the matter and strike at the very foundation of the assessment order. Not providing such opportunity amounted to violation of principle of natural justice, a serious flaw which makes the order nullity. Hon’ble Supreme Court in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] has held that not allowing Assessee to cross-examine witnesses by adjudicating authority though statements of those witnesses were made as basis of impugned order, amounted in serious flaw which made impugned order nullity as it amounted to violation of principles of natural justice. Thus no merit for the addition made by AO without allowing assessee an opportunity to cross examine the person on whose statement addition was made. - Decided in favour of assessee.
|