TMI Blog2022 (7) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... ing brought out to show that cash was received from the Assessee by UAPL in lieu of the cheque issued by UAPL to the Assessee. Further, the name of the Assessee did not appear in the statement made to the IO by the Directors of the UAPL. The said loan amount of Rs.3.06 crores was not mentioned by them as an accommodation entry. The said two persons were not allowed to be cross-examined by the Assessee. As regards the observation of the CIT (A) that the lack of opportunity to the Assessee to cross examine the Directors of UAPL was not fatal to the addition made by the AO, the ITAT found the said proposition to be contrary to the law explained by the Supreme Court in its decision in M/s. Andaman Timber Industries [ 2015 (10) TMI 442 - SUPR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ITAT) in IT (SS) A No.02/CTK/2018 for the Assessment Year (AY) 2012-13. ITA No.85 of 2018 by the Revenue is directed against an order dated 22nd March, 2018 passed by the ITAT in IT (SS) A No.03/CTK/2018 for the AY 2013-14. Since the appeals are directed against the orders of the ITAT allowing the appeals of the same Assessee but for different AYs and the factual backgrounds are similar, both the appeals are being disposed of by this common judgment. 2. In both appeals, the common questions sought to be urged by the Revenue are whether the ITAT was justified in deleting additions made under Section 68 of the Income Tax Act, 1961 (Act) to the taxable income of the Assessee by not treating the corresponding unsecured loan as bogus and sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate assessment order was passed for AY 2013-14 determining the total income as Rs.3.06 crores. The appeals filed by the Assessee against the respective assessment orders were dismissed by the Commissioner of Income Tax (Appeals) [CIT (A)] by order dated 13th November, 2017. Being aggrieved, the Assessee preferred further appeals to the ITAT which have been allowed by the respective impugned orders for the two AYs. 7. The ITAT noted that for both AYs in question, the Assessee claimed to have received a corresponding loan amount from UAPL i.e. Rs.6.92 crores by cheque for the AY 2012-13 and Rs. 3.06 crores through banking channels for the AY 2013-14. The fact that the Investigating Officer (IO) examined the Directors of the UAPL was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor. The loan amount of Rs.3.06 crores had been repaid in the financial year 2014-15. The further contention was that since the assessment proceedings had commenced in August, 2015 the Assessee had no control or influence over the Directors of UAPL to compel them to appear before the AO. On the other hand, the AO could have required them to appear before him for examination but he did not exercise the power available with him under the Act for that purpose. Therefore, no adverse inference could be drawn against the Assessee. 11. As regards AY 2012-13 it was noted by the ITAT that it was an unabated assessment and unless there was incriminating material, no addition could be made. In particular it was noticed that the statement of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (2021) 437 ITR 573 (Ori) and Smt. Smrutisudha Nayak v. Union of India (2021) 439 ITR 193 (Ori) relied on the decision of Delhi High Court in CIT v. Kabul Chawla (2016) 380 ITR 573 (Del) where inter alia it was observed as under: (iv) Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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