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2021 (8) TMI 707 - AT - Income TaxAddition u/s 68 - Addition made on account of receipt of share application money - No cross examination of parties provided - CIT-A deleted the addition - HELD THAT:- As pointed out that from the audited financial statements of the investor companies, no where the name of Shri Shirish C Shah appears. More so, when the AO in order to investigate the transactions, had issued notices u/s 133(6) of the Act and summons u/s 131 which were duly responded directly by the investor companies before him. In any case, no opportunity of cross examination of Shri Shirish C Shah was even provided to the assessee by the ld AO. It is the primary duty on the part of the ld AO to provide cross examination of parties, in case, if he desires to place reliance on any statement against the assessee, in order to controvert the same. Admittedly, Shri Shirish C Shah becomes the witness of the department as it is the ld AO who is placing reliance on the statement given by him during his search proceedings. DR merely reiterated the observations of the ld AO that the directors of investor companies did not appear in person before him in response to the summons issued u/s 131 of the Act to them, eventhough the relevant details called for in the summons, were duly provided by them. Only this fact of non-appearance of those directors of investor companies in person, had drawn the ld AO to treat the receipt of share application monies as accommodation entries and thereby making addition u/s 68 in the hands of the assessee company (i.e recipient company). In view of the aforesaid observations, these arguments of the ld DR would not come to the rescue of the revenue. Accordingly, we hold that the CIT-A had rightly deleted the addition made u/s 68 in the hands of the assessee company, on which we do not find any infirmity. The ground raised by the revenue is dismissed.
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