TMI Blog2014 (11) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the books of accounts - assessee submitted that the statement and evidences were recorded at the back of the Assessee and the Assessee was not granted an opportunity to cross-examine the persons – the submissions of the Assessee has not controverted by Revenue - in view of the principle of natural justice, Assessee should be granted on opportunity to cross-examine the persons whose statements have been relied by AO – thus, the matter is remitted back to the AO to grant an opportunity to the Assessee to cross-examine the creditors and also make available evidences on which he has relied for making the additions – Decided in favour of revenue. Addition made – Capital contribution not reflected in bank statement – Held that:- AO had made the addition of ₹ 6 lacs for the reason that the amount of capital contribution was not reflected in the bank statement of the partners - assessee contended that the amount was received from Shri Vajubhai Jani and for which Assessee has also placed on record the copy of the confirmation from Vajubhai Jani and the copy of his bank account – the documents were not before the AO – thus, the matter is remitted back to the AO for verificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the addition of ₹ 2,42,180/- and ₹ 8,95,000/- by holding that it is covered in the amount of ₹ 41 lakhs debited in the Profit Loss Account. 4. The Ld.CIT(A) has erred in deleting the addition of Capital of ₹ 6 Lakhs by not appreciating the fact that neither this amount was reflected in the account of partner Shri Ghanibhai A Vadia nor confirmed by him. The Ld.CIT(A) further erred in holding that the said amount of ₹ 6 lakhs was received as loan from one Shri Vajubhai Jani particularly when no such plea was taken before the Assessing Officer during the assessment proceedings nor any evidence was submitted during the appellate proceedings in the paper book of the assessee forwarded to the Assessing Officer for remand report by the CIT(A). 1st ground is with respect to deletion of addition made u/s 40(a)(ia) of the Act. 4. During the course of assessment proceedings, on verification the details of masonary work expenses of ₹ 5,36,300/-. A.O noticed that out of total expenses, ₹ 1,29,500/- was cash payment to Shri Amrishbhai, ₹ 53,500/- to Shri Sadikbhai and ₹ 64,000/- to Shri Dharmeshbhai Kadia. He noticed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh and Assessee was liable to deduct the tax before making the payment. On the other hand before us on behalf of Assessee, it is submitted that the persons to whom the payments were made, were the employees of Assessee and there was employer employee relationship and further since the payments was less than prescribed limit, Assessee was not required to deduct TDS. We find that the aforesaid submission of Assessee for not deducting TDS was not taken before A.O. We further find that there is no finding of CIT(A) on the submission of Assessee that there existed employer employee relationship and the payments were below the prescribed limit. We therefore feel that the aforesaid aspect needs to be examined at the end of A.O. We therefore remit the matter to the file of A.O to examine the issue in the light of submissions made by the Assessee and thereafter to decide the issue in accordance with law. Needless to state that A.O shall grant adequate opportunity of hearing to the Assessee. In the result, this ground of Revenue is allowed for statistical purposes. Ground no. 2 3 are interconnected and therefore considered together. 7. During the course of assessment proceedings, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 68 is invoked then the facts of the case will have to be examined on the touch stone of three basis conditions laid down in the section viz. identity of the person, his/her creditworthiness and the genuineness of the transactions. Discussions made in the assessment order indicate that the AO has primarily not disputed the identity of the persons making advances (except those who did not appear), creditworthiness of the persons and the genuineness of the transaction. The principle argument of the AO is that the dates of payments given in the statement do not match with the entries in appellant's books along with the amounts. Perusal of the order indicates that the Id.AO has while making two different additions of ₹ 4,11,000/ (Ground No.1) and ₹ 26,90,000/- (Ground No.2) has in a way also committed the error of making double addition i.e. the amount received from the person for which he found that explanation was not satisfactory he makes an addition including it the figure of ₹ 26,90,000/- and also adding 10% of the amount in the figure of ₹ 4,11,000/-. The following instances are illustrated as under: - (a) Shri Arvind B. Kajaria's name is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scovery of truth. The right of cross-examination belongs to an adverse party and parties who do not hold that position should not be allowed to take part in the cross-examination. .. As a general rule, evidence is not legally admissible against a party, who at the time it was given had no opportunity to cross-examine the witness or of rebutting their testimony by other evidence. When two or more persons are tried on the same indictment and are separately defended any witness called by one of them may be cross-examined on behalf of the others, if he gives any testimony to incriminate them. A defendant may cross-examine his co-defendant who gives evidence or any of his co-defendant's witnesses, if his co-defendant's interest is hostile to his own-Though there is no specific provision in the Indian Evidence Act providing for such an opportunity for a defendantrespondent to cross-examine a co-defendant/co-respondent, however, having regard to the object and scope of cross examination, it is settled law that when allegations are made against the party to the proceedings, before that evidence could be acted upon, that party should have an ample opportunity to cross-examine the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place the additions made by the Id. AO by not affording opportunity of cross examination cannot be sustained. 3.4. Coming to the factual aspects of the case it is seen that in majority of cases the amounts stated by the parties in their statements tally with the aggregate amounts recorded by the appellant in its books as also with the amounts indicated in the registered sale deeds: During the course of appellate proceedings, the appellant has filed a chart in its paper book where the above amounts were found tallying in majority of cases. Thus, no disturbance is required to be made in respect of such amounts. Thus the condition specified u/s.68 are satisfied. Even the Id. AO has not made any comments upon the lack of identity of persons or their credit worthiness etc. Without prejudice to the same, it is seen that some of the parties did not come forward to the summons issued by the AO. During the course of appellate proceedings also the said parties were not produced. The appellant's submissions and paper book is also silent in respect of these persons. Thus, summons issued to one Shri Sirajbhai Mankad (Rs.1,50,000/-), Manishbhai Narharibhai (Rs.1,75,000/-) Meenaben Gohel ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd perused the material on record. We find that A.O has made the addition after considering the statements given by the various creditors and on the basis of the books of accounts. Before us, on behalf of assessee it is submitted that the statement and evidences were recorded at the back of the Assessee and the Assessee was not granted an opportunity to cross-examine the persons. The aforesaid submissions of the Assessee has not controverted by Revenue. In these circumstances we are of the view that in view of the principle of natural justice, Assessee should be granted on opportunity to cross-examine the persons whose statements have been relied by A.O. We therefore remit the issue to the file of A.O and direct the A.O to grant an opportunity to the Assessee to cross-examine the creditors and also make available evidences on which he has relied for making the additions. With respect to the deletion of addition of ₹ 2,42,180/- and ₹ 8,95,000/-. We find that CIT(A) has held to be a case of double addition . Before us Revenue has not been brought any material on record to controvert the findings of CIT(A) with respect to double addition. We therefore find no reason to int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Id. AO of ₹ 6,00.000/- is deleted and the ground of appeal raised bearing No.6 stands allowed. 12. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. Before us. Ld. D.R. supported the order of A.O and further submitted that no material has been placed on record by the Assessee to support its contention that the amount that was deposited by the partners was from the loan received from Vajubhai Jani. He therefore submitted that CIT(A) has erred in deleting the addition. He thus supported the order of A.O. The ld. A.R. on the other hand reiterated the submissions made before A.O and CIT(A) and supported his order. Before us ld. A.R. further submitted that it can produce the copy of the confirmation and the bank statement of Vajubhai Jani in support its contention that the amount that was deposited by the partners was in fact received from Vajubhai Jani. 13. We have heard the rival submissions and perused the material on record. We find that A.O had made the addition of ₹ 6 lacs for the reason that the amount of capital contribution was not reflected in the bank statement of the partners. It is assessee s submission that the amount was received ..... 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