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2019 (3) TMI 1118 - AT - Income TaxAddition of unexplained cash credit u/s 68 - return was selected for scrutiny under CASS - applicability of section 68 to share sale proceeds on mere basis of stated investigation wing inputs to AO and without books being available before AO and Ld CIT(A) qua share sale transaction - serious violation of principle of natural justice - HELD THAT:- Credit in bank account simply or any other raw information available to AO can’t be loosely called as books of account u/s 68 of the Act. After the detailed analysis of various ingredients of section 68 no hesitation to accept the jurisdictional plea raised that invocation of section 68 in extant facts sans valid and proper books of account of assessee is invalid and accordingly addition made by AO as sustained by Ld CIT(A) is held to be incorrect and reversed. Signification of correct assumption of jurisdiction is must. ITAT at this belated stage can’t improve the order of AO and covert the addition from section 68 to section 69A etc. Even otherwise provisions of section 68 of the Act has been held can’t be applicable to mere share sale which is not akin to receipt of gift, loan, share capital, advance etc AO directed to delete the additions made in captioned appeals in so far as it relates to share sale proceeds and alleged commission portion is concerned. Impact of cross examination - denial of natural justice - HELD THAT:- We strongly rely on the following string of decisions of various courts to hold that when revenue strongly relies on statements of certain persons to implicate an assessee, principle of cross examination has to invariably followed if truth and justice needs to be found out. Thus on the issue of lack of cross examination and violation of principle of natural justice, we have no hesitation to accept the plea of Ld AR that lack of cross examination and violation of principle of natural justice results is total nullity of the entire addition, hence, the additions in dispute is hereby deleted. - Decided in favour of assessee.
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