2015 (5) TMI 896

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....unexplained sources. 3. The appellant craves leave to add, amend any / all the grounds of appeal before or during the course of hearing of the appeal. 3. The grounds raised in the Assessee's Cross Objection being 26/Del/2013 (A.Y. 2008-09) read as under:- "1. On the facts and circumstances of the case and in law, the notice u/s 153C issued in this case is illegal & without jurisdiction and accordingly, the assessment order passed on the foundation of such notice is not sustainable and is liable to be quashed and the Commissioner of Income Tax (Appeals) has erred in not holding so. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) should have held that the assessment order passed by the Assessing Officer is bad-in-Iaw and void. " 2. On the facts and circumstances of the case and in law, the addition I disallowance made by the assessing officer is beyond the scope I jurisdiction of provisions of section 153C r.w.s. 153A and the Commissioner of Income Tax (Appeals) erred in not holding so. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) should have held that the addition made by t....

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....SK Gupta during FY 2003-04 to FY 2007-08. A gist of the purported accommodation entry accepted by M/s Shrim Investment Solutions Pvt. Ltd. in Financial Year 2007-08 is Rs. 32,00,000/-. The assessee was asked to explain the above transactions vide questionnaire dated 30.9.2011. The assessee has filed its replies with documentary evidences, but same was rejected by the AO and the amount of Rs. 32,00,000/- is treated as unexplained money of the assessee earned from unexplained sources and is added to the total income of the assessee vide assessment order dated 30.12.2011 passed u/s. 153C r.w.s. 143(3) of the I.T. Act, 1961. 5. Aggrieved with the aforesaid assessment order, assessee appealed before the Ld. CIT(A), who vide impugned order dated 09.07.2013 has allowed the appeal of the assessee for statistical purposes. 6. Now the Revenue is in Appeals and Assessee has filed Cross Objections before the Tribunal. 7. We have heard both the parties and perused the relevant records, especially the orders passed by the Ld. First Appellate Authority. We find that the Ld. CIT(A) has reproduced the grounds of appeal filed by the assessee, written submissions of the assessee from pages 1....

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.... was held that it is open to the ITO to collect materials to facilitate assessment even by private enquiry, but if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it. In Gargi Din Jwala Prasad v. CIT [1974] 96 ITR 97 (All.) it was held that the elementary principle of natural justice is that the assessee should have knowledge of the material which is going to be used against him so that he may be able to meet it. In the present case, the appellant claims that it was neither provided copy of the statements (s) relied upon nor the opportunity to cross-examine the person(s) who made the statement. The revenue on the other hand claims that the assessee was provided opportunity but did not avail of it. The assessee contests it. The Hon'ble Supreme Court in Tin Box Co. vs. ClT [2001] 116 Taxman 491 (SC) held that "where the Tribunal had recorded that it agreed with the assessee's submission that the ITO had not given to the assessee proper opportunity of being heard, the Tribunal would not be justified in not setting aside the assessment order and remanding the matter to the assessing a....

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.... while the finding of the ITSC that Sh. SK Gupta is an entry operator is final qua the said person. This is not final qua the persons / entities alleged to have been taken entries from that person. That finding needs to be examined and corroborated in the facts of each case. The real facts could have emerged had the cross examination been got conducted by the revenue. That has not happened. In this view of the matter, I hold that the case of unexplained cash credit has not yet been established against the appellant. This ground of appeal succeeds. Appellant gets relief of Rs. 32,00,000/-." 7.3 After considering the finding given by the Ld. CIT(A) on the addition of Rs. 32 lacs, we are of the considered view that Ld. CIT(A) has deleted the addition in dispute contrary to the principle of natural justice. It is very clear from the submission of the assessee that the AO has made the addition on the basis of statement given by SK Gupta. It is also admitted position that the AO has neither provided the statement of Sh. SK Gupta not provided an opportunity of cross examination to the assessee. A reference is invited to Pages 9 to 11 of the assessment order, wherein the AO has himself ....