TMI Blog2016 (8) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER This appeal by the Revenue and cross objection by the assessee are directed against the order of the CIT(A)-VII, New Delhi, dated 21/07/2010 for A.Y 2005-06 in first appeal No. 148/2007-08. 2. The revenue has raised the following grounds of appeal in its appeal: 1. The order of the learned CIT(Appeals) is erroneous contrary to facts law. 2. On the facts and in the circumstances of the case, the Ld CIT (A) erred in deleting the addition of RS. 50,00,000/- made by the A.O u/s 68 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] being the unexplained cash credits and ₹ 2,58,220/- being the interest paid on these unexplained cash credits. 2.1. The Ld. 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 hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing the confirmation letters, assessment particulars including PAN and copy of acknowledgement of Income Tax Return of the loan creditors,|. Inspector s report balancesheet P L account. Bank statement to show that the payments have been made through banking channels by the loan creditors. The identity of the aforementioned loan creditors has been established by submitting their permanent account number(PAN) and income tax returns. It is also observed that all the 8 loan creditors or lenders are corporate assessees, incorporated under Indian Companies Act; genuineness has been proved by the fact that the transactions have taken place through banking channels which is reflected in the bank statements of the bank accounts of the respective loan creditors and the creditworthiness has been established through submission 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Investigation Wing of the Income Tax Department on the basis of which addition in respect of the loans fom the three parties, namely, Maestro Marketing and Advertising Pvt. Ltd, Rajkar Electrical and Electronics Ltd and SRB Merchandise Pvt. Ltd. has been made. It has also been contented that no opportunity has been provided to the appellant to cross examine the parties rendering such statement. It is settled proposition of law that the information gathered behind the back assessee cannot be used against him unless until an opportunity of rebutting the same is to the assessee. It is against the principle of natural justice. Reliance is placed on the on of Hon ble Supreme Court in case of Prakash Chand Nahta v. Union of India [2001] 247 ITR 274 in support of the proposition that cross-examination of the witness is must, before 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 obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year ended 31.03.2006 and the assessment particulars including PAN and copy of acknowledgement of Income Tax Return of the loan creditors in respect of Maestro Marketing and Advertising PVT furnished on behalf of the appellant, the perusal of which reveals that (a) the aforementioned Companies are having funds consisting of share capital and reserve and surplus to the extent of ₹ 90.10 lacs and ₹ 1 crore respectively during financial year and (b) their permanent account number are AACCM 0826H and AABCR 4897G respectively. In respect of SRB Merchandise Pvt. Ltd the copies of assessment particulars including PAN and copy of acknowledgement of Income Tax Return of the loan creditors were furnished on behalf of the appellant, the perusal of which reveals that (a) its permanent account number is AABCS 6278E; (b)an amount of ₹ 250000/- has been received vide cheque no.932849 dated 21.7.2004 drawn on The Federal Bank Ltd.., Padam Singh Road, Karol Bagh, New Delhi; (c) SRB Merchandise Private 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 circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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