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2015 (7) TMI 782 - BOMBAY HIGH COURT

2015 (7) TMI 782 - BOMBAY HIGH COURT - [2015] 376 ITR 342 (Bom) - Reopening of assessment - disallowance of expenditure incurred for receiving services from M/s Inorbit and M/s Nupur as bogus as evidenced by statement of representatives of M/s Inorbit and M/s Nupur - Held that:- There has been a breach of principles of natural justice in as much as the Assessing Officer has in his order placed reliance upon the statements of representatives of M/s Inorbit and M/s Nupur to come to the conclusion .....

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f coming to the conclusion that no cross examination was called for in the present facts. This reason itself makes the impugned order vulnerable.

Moreover, in the present facts, the appellant had also filed affidavit of the representatives of M/s Inorbit and M/s Nupur which indicates that they had received payment from the appellant for rendering of services to the appellant. These affidavits also have not been taken into account by any authority including the Tribunal while upholding .....

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f the Income Tax Act, 1961 (the 'Act') the challenge is to the order dated 16 January 2013 of the Income Tax Appellate Tribunal (the 'Tribunal'). The Assessment Year involved is Assessment Year 2007-08. 2. Although numerous questions have been framed, at the hearing the appellant only urged the following questions which are admitted as substantial question of law: "(a) Whether the Tribunal is justified in law in holding that the appellant had failed to show that it had rende .....

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he subject Assessment Year 2007-08, the appellant had engaged services of M/s Inorbit Advertising and Marketing Services P. Ltd. ('Inorbit') and M/s Nupur Management Consultancy Pvt. Ltd. ('Nupur') to enable them to carryout promotional and advertisement activities. The amounts of ₹ 1.15 crores paid to them was treated as expenditure to arrive at its profit while filing its return of income. This was accepted by the Assessing Officer u/s 143(1) of the Act. 5. Thereafter on .....

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ilable to them the statement recorded of the representatives of M/s Inorbit and M/s Nupur which were allegedly adverse to them. Thereafter the appellant sought cross examination of the deponents of the statements made on behalf of M/s Inorbit and M/s Nupur. In spite of the above request, the Assessing Officer passed an assessment order dated 24 December 2012 under Section 143(3) r/w 147 of the Act disallowing the expenditure of ₹ 1.15 crores. This without giving an opportunity to cross exa .....

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dings against them has commenced and also culminated by placing reliance upon the statement of representatives of M/s Inorbit and M/s Nupur who were not offered for cross examination. The Tribunal by the impugned order after accepting the fact that the cross examination sought by the parties was not given by the Assessing Officer proceeded to uphold the order of lower authorities. Notwithstanding the above, the impugned order holds that it is a final fact finding authority and it could direct cr .....

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ion has led to breach of principles of natural justice. The statements relied upon were general in nature and also subjecting the statements to cross examine could assist in bring out the truth. In particular it was emphasized that in an identical fact situation where two parties involved herein M/s Inorbit and M/s Nupur had alleged to have rendered services to one M/s Satellite Cable TV Network, the Tribunal had set aside the order adverse to M/s Satellite Cable TV Networks for failure to made .....

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the case of M/s Satellite Cable TV Network rendered on 23 May 2012 in Income Tax Appeal No. 4619/Mum/2011 set aside the orders of CIT(A) and Assessing Officer and restored the issue to the Assessing Officer to pass a fresh order after providing an opportunity to the assessee therein to cross examine the representatives of M/s Inorbit and M/s Nupur who had made the statement adverse to M/s Satellite Cable TV Network Ltd. It is submitted that the facts are identical and the same test/measure as a .....

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