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TMI Blog2016 (8) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT (A) ignored the fact that the assessee did not discharge the onus of proving the creditworthiness of the credits and genuineness of the transactions. The ld. CIT(A) also ignored the findings recorded by the A.O that the assessee received the money in question from the country operators. 3. The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of the hearing". 3. The assessee has raised the following grounds in its cross objection: "1. That the learned Commissioner of Income Tax, (Appeals) grossly erred in law and on the facts of the appellant case in confirming the adhoc disallowance of Rs. 1 lakh u/s 14A of the Income-tax Act. 2. That the learned Commissioner of Income Tax further erred in directing the AO to recalculate the amount of disallowance in accordance with Rule 8D of the I.T. Rules, 1962. 3. That Ruler 8D is not applicable to the year under assessment. 4.That the order passed by the ld. CIT(A) on this issue is bad in law." Revenue's appeal 4. Ground Nos. 1 and 3 of the Revenue being general in nature need no adjudication. Hence Ground Nos. 1 and 3 of the Revenue stand dismissed. 5. The ld. DR conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission of their balance sheet and profit & loss account. Needless to mention that the creditworthiness is reflected through sources of funds in the balance sheet, the details ol which were made available by the assessee during the assessment/ remand and appellate proceedings, on the basis of which it can be concluded that the lenders had sufficient funds to make the investment and to advance loans and those investments/ loans have been duly disclosed in its Balance Sheet. 4.7 When the assessee had filed the confirmation letters and the details such as permanent account number (PAN), copy of Income tax return, balance sheet and profit & loss account, A.O. cannot be precluded from further investigation for the purpose of finding the genuineness of transaction and creditworthiness of the creditors. In the instant case, nothing of that sort has been undertaken by the A.O. It is also observed that the Assessing Officer could not point out any discrepancy in the evidences relied upon by the assessee. He has neither brought out any direct or inferential evidence to contradict the contention of the assessee. It is further observed that even though A.O. has vast powers u/s 131 and 133(6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the A.O. relies on the statement of the witness for making addition. The assessee has the right to cross-examine if an assessing authority is relying on the testimony of a witness. The assessee is to be afforded an opportunity to cross-examine him as held in the case of CIT v. Eastern Commercial Enterprises, (1994) 210 ITR 103, 111 (Cal), wherein it was observed by the High Court of Calcutta that it is trite law that cross-examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against a party unless the party is put on notice of the case made out against him. He must be supplied the contents of /all such evidence, both oral and documentary, so that he can prepare to meet the case against him. This necessarily also postulates that he should cross-examine the witness hostile to him. In C. Vasantlal & Co. v. CIT (1962) 45 ITR 206 (SC), the Supreme Court held that it was open to an Income-tax Officer to collect materials to facilitate assessment even by private enquiry. But if he desires to use the materials so collected, the assessee must be informed of the materials and must be given an adequate opportunity of explaining it. Similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited is engaged in real estate business and it is having its office at -416, Antariksh Bhawan, K.G. Marg,Connaught Place, New Delhi - 110001. 4.11 Under the facts and circumstances of the case stated above, it is held that the addition of Rs. 50,00,000/- made on account of unsecured loans from the loan creditors cannot be sustained and accordingly, the same is directed to be deleted. The consequential addition on account of interest paid to the extent of Rs. 2,58,220/- to the loan creditors is also directed to be deleted. As a result, ground of appeal no. 2 is allowed" In view of the above, when we logically analyse the rival contentions of both the sides, then, we clearly observe that the assessee had filed confirmation letters and detai ls such as PAN, copy of Income-tax Return, balance sheet and profit and loss account of the alleged creditors and the CIT(A), after considering these documentary evidences, concluded that the primary onus of proof has been discharged by the assessee. We further observe that the CIT(A) also noted that the AO did not provide copies of the statements of the persons recorded by the Investigation Wing of the Income-tax Department on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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