TaxTMI 
TaxTMI 
TaxTMI 
2012 (11) TMI 703
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.... was taken up for scrutiny and the assessing officer made various additions. In the appeal filed before the Ld CIT (A), the first appellate authority deleted the additions stated in para 2 supra. Hence the revenue is in appeal before us assailing the decision of Ld CIT (A) in granting the relief stated above. 4. The first issue relates to the deletion of Rs.69,75,846/- relating to Commission expenses. The assessee claimed a sum of Rs.84,47,845/- as deduction towards Commission payments, out of which a sum of Rs.79,46,846/- was claimed to have been paid to Shri Sandeep Mehta, proprietor of M/s Safal Inc., Mumbai. When enquired about this payment, the assessee filed copies of Agreement entered between it and M/s Sandeep Mehta and also copies of ledger accounts. According to the assessee, it has paid commission to Shri Sandeep Mehta in the form of Commission as well as reimbursement of expenses. Accordingly, the assessee stated that it could not produce vouchers or bills relating to the expenses incurred on behalf of Shri Sandeep Mehta. The assessing officer called for details of said commission from Shri Sandeep Mehta u/s 133(6) of the Act, to which he replied that he has received o....
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....000/- and not Rs.79,46,846/- as accounted for in the books of the assessee company. It is settled position of law that an assessee could not be put in a disadvantageous position on the basis of evidences collected behind his back without confronting the same with him. To this extent, we do not find any justification in the action of the assessing officer in not affording the opportunity of cross examination of Shri Sandeep Mehta to the assessee. 8. The Ld A.R placed reliance on the decision of Hon'ble jurisdictional Gujarat High Court in the case of Mahendra Ambalal Patel, referred supra, to contend that the impugned addition is liable to be deleted in the absence of cross examination. We have carefully considered the said decision and notice that the said decision has been rendered in the context of Chapter XIV-B of the Act relating to block assessment. There cannot be any dispute that the provisions of the Act relating to the block assessment is a separate code by itself, wherein the evidences found during the course of search are the only basis for making the block assessment. In the above said case, the AO therein made the addition in the hands of the assessee "M", on the basi....
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.... Ld CIT (A) on this issue and restore the same to the file of the AO with a direction to consider the issue by duly considering the agreement, books of account, the nature of commission expenses and other evidences that may be produced before him by the assessee. More importantly, the AO should provide the opportunity of cross examination and also sufficient opportunity of being heard to the assessee. 10. The next issue in the appeal of the revenue relates to the disallowance of Rs.51,36,721/- relating to the "Finance charges" claimed by the assessee. The "Finance Charges" claimed by the assessee related to interest payable on loans taken from the following banks:- (a) Ahmedabad People's Co-op Bank Ltd Account No.51 (b) Ahmedabad People's Co-op Bank Ltd Account No.54 (c) Ahmedabad People's Co-op Bank Ltd Account No.1004 (d) Ahemadabad people's Co-op Bank Ltd Vehicle loan (e) Pragati Co-op Bank, Ahmedabad (f) Andhra Bank The AO noticed that the interest payable on the said bank loans were shown as outstanding as at the year end, to which the provisions of sec.43B are attracted unless the assessee makes payment of the same before the due date for filing return of income. Acco....
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....ails of the share holders who have made fresh contributions in certain format. However, the assessee supplied those details which were available with it and in particular, it could not furnish the Permanent Account Number of share holders whose contribution was more than Rs.50,000/-. The AO issued notices to those share holders, numbering 13, calling for details. However, six share holders did not respond and the letters issued to other share holders were returned with remarks "Incomplete address" or "Left". Hence the AO added the above said sum of Rs.36,60,925/- to the total income of the assessee u/s 68 of the Act. The Ld CIT (A) deleted the said addition by placing reliance on the following decisions:- (a) Interlink Petroleum Ltd Vs. DCIT (2004)(83 TTJ 274 (Ahd). (b) CIT Vs. Steller Investment Ltd (2000) (Delhi) (c) CIT Vs. Sophia Finance Co. (205 ITR 98). Aggrieved, the revenue is in appeal before us. 14. The Ld D.R submitted that the assessee has failed to discharge the burden placed upon it u/s 68 of the Act, i.e. it has failed to prove the identity and credit worthiness of the creditors and also the genuineness of the transactions. Further the notices issued to the sha....