2015 (3) TMI 809

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....lar is the question but there is change in the amount, i.e., Rs. 2 Crores instead of Rs. 70 Lakhs. 2. We have heard Mr.Manish Bhatt, learned Senior Counsel for the appellant Revenue. 3. It appears that as per the AO, since he found that the creditworthiness of the purchaser of the shares and the fact that the shares thereafter were transferred at the price of Rs. 10/- per share to the sister company of the assessee, he did not accept the explanation given under section 68 of the Income Tax Act (hereinafter referred to as the "Act") and the said amount of share money credited in the books of accounts of the assessee were considered as unexplained income and therefore, added as income of the assessee. In the appeal before the Commissioner (....

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....But strangely, thereafter, the Assessing Officer did not take any step to allow effective opportunity to the assessee to crossexamine the makers of the statements. The Assessing Officer did not pursue the matter further. Thus, we find that the assessee was not allowed any real opportunity to crossexamine the persons who made the statement at the back of the assessee. In our considered view, in the circumstances, the statement of those persons cannot be read against the assessee. Our above view finds support from the decision of the Hon'ble Jurisdictional High Court in the case of (i) Heirs and Legal Representatives of Late Laxmanbhai S. Patel Vs. Commissioner of Income Tax (supra) (ii) CIT Vs. Indrajit Singh Suri (supra) (iii) DCIT V....

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....as genuineness of the transaction were not proved and therefore, irrespective of the fact that the persons who had given statements were not made available for crossexamination, the Tribunal has committed error in accepting the explanation as sufficient and thereby deleting the amount as income of the assessee concerned. He also relied upon the decision of this Court in the case of Umesh Krishnani Vs. ITO in Tax Appeal No.800/12 decided on 15.12.2013 and he contended that as the preliminary burden was not discharged by the assessee, the Tribunal has not considered the said aspect and hence, the matter deserves consideration on the question raised. 5. As recorded by the Tribunal, the Tribunal found that the initial burden was discharged by ....

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.... passed over and it was only by way of an eye wash. Such could be proved by the Revenue in the present case through the statement of the persons, but unfortunately, they were not made available for crossexamination and therefore, the statements could be used as an evidence against the asseessee. No other evidence was available with the Revenue. 7. Under these circumstances, if the Tribunal has found that the explanation under section 68 of the Act was acceptable in absence of nondischarge of the burden upon the Revenue, such a finding of fact would not call for interference when the appeal before this Court is limited to the substantial questions of law. The decision upon which the reliance has been placed by Mr.Bhatt in Tax Appeal No.800/....