TMI Blog2020 (4) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... he affidavit of Mr. Rajender Jain retracting the statement made by him during the course of search. In such a situation, it is even more important that the assessee should be given an opportunity to cross examine the party particularly when he has confirmed the transaction made by the assessee. Another factor which could go in favour of the assessee is that the assessee has also shown the sale of such diamonds subsequently to one of the parties in Hyderabad who have been confirmed the transaction and the assessee has also received the consideration through banking channels. There cannot be any sale of stock if there were no purchases. Therefore, this factor also needs to be considered - assessments for both the years are set aside and are remanded to the file of the AO for reconsideration and for re-adjudication as directed above. - ITA Nos. 1316 And 1317/Hyd/2019 - - - Dated:- 22-1-2020 - Smt. P. Madhavi Devi, Judicial Member For the Assessee : Sri K.C. Devdas For the Revenue : Sri Sunku Srinivas, DR ORDER Both are assessee s appeals for the A.Ys 2008-09 2009-10 against the individual orders of the CIT (A)-6, Hyderabad, dated 5.6.2019 respectively. 2. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso copy of the intimation u/s 143(1). On verification of these details, AO found that the assessee had a transaction of ₹ 14,06,840/- with M/s Krishna Diam for ₹ 9,06,750/- on 24.12.2007 and ₹ 5,00,110/- on 14.01.2008. Therefore, the assessee was required to produce the books of account and also the details of the purchases. The assessee filed letters dated 12.02.2016 04.03.2016 along with copies of the retail invoice No.155 dated 24.12.2007 for ₹ 9,06,750/-, Retail Invoice No.163 dated 14.01.2008 for ₹ 5,00,110/- with proof in support of payments through cheque, confirmation of the account for the financial year 2007-08 by M/s. Krishna Diam wherein the suppliers had confirmed the transactions entered into. The assessee firm also submitted copies of the VAT form along with the sale bills. It was also stated that from the stock of purchases made from Krishna Diam, the assessee has sold stocks worth ₹ 8,19,035/- to M/s. Vittaldas Co., on 18.01.2008 and enclosed a cheque received from M/s. Vithaldas Co. for the said sum. 4. The AO, however, was not convinced with the said conformations and evidence filed by the assessee. He held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustaining the order of the Learned Assessing Officer ('AO ) is erroneous and unsustainable both on facts and in law 2. The CIT(A) failed to note that there was no tangible material brought on record by the Aa to believe that income has escaped assessment and the reason should not arise from another authority or department, thus being contrary to the provisions contained in Section 147,148,149,150,151 of the IT Act, 1961. 3. The CIT(A) failed to note that the assessment proceeding was conducted merely on the basis of the information received by the DGIT, Mumbai despite submitting all the necessary evidences and as such there was no independent application of mind to assess the genuineness of the purchases. 4. The CIT(A) failed to note that the entire purchase of ₹ 14,06,860/- was genuine, duly recorded in the books of accounts and was corroborated with the necessary evidences being. purchase bills, sales bills, VAT returns, confirmation from the supplier of the transactions and bank statements Therefore, the entire order passed by the CIT(A) is erroneous and unsustainable on facts. 5. The CIT(A) erred in dismissing the ground wherein there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , submitted that the order of the AO and the CIT (A) should be confirmed for both the A.Ys. Both the parties have relied upon several case law and have filed copies before the Tribunal. Both the parties also filed written submissions as well. 10. Having regard to the rival contentions and the material on record, I find that the result of the search at Mumbai Surat was that the parties who have been searched had given statements on oath that they are into accommodation entry business and that they are not into real trading of diamonds. In such circumstances, the DGIT (Inv.) Mumbai has forwarded the report to the AO of the assessee since the name of the assessee appeared as one of the beneficiaries of the accommodation entries provided by such searched parties. The AO after receipt of the said report seems to have examined whether the assessee is being the beneficiary of such accommodation entries and since he did not find the return of income filed by the assessee in order to verify the same, a notice u/s 148 has been issued. Thereafter, the assessee has filed the copy of the return of income and request for copy of the reasons for reopening, which have been supplied to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the returned incomes for both the AYs. Therefore, there is clearly a statement on the basis of which the additions have been made in the hands of the assessee. It is settled position of the principles of natural justice that the assessee should not be deprived of an opportunity to cross examine a person whose statement is being relied upon to make the addition in the hands of the assessee. When the assessee has subsequently requested the AO to provide an opportunity to cross examine the person, whose statement is being relied upon, he ought to have been provided the same or at least he could have been provided with the statement of the said person to enable the assessee to rebut such statement with necessary evidence. 11. In view of the same, I deem it fit and proper to remand the issue to the file of the AO with a direction to provide a copy of the statement (wherein the assessee s name is mentioned as beneficiary) to the assessee and provide it with an opportunity to cross examine such person, if necessary. 12. In the case for the AY 2009-10, the assessee had also filed a copy of the affidavit of Mr. Rajender Jain retracting the statement made by him during the course of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
