TaxTMI 
TaxTMI 
2009 (12) TMI 951
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....nt year 2000-01, which was accepted under section 143(1) of the Act. Thereafter, however, a notice under section 148 of the Act was issued to the respondent-assessee on 24-3-2003. If was stated that the assessee had sold certain shares to M/s Yadav and Company, during the financial year ending on 31-3-1999. A sum of Rs. 49,41,030 was payable by M/s. Yadav and Company as on 31-3-1999 on this account. This amount was paid in the year in question by cheques drawn on Union Bank of India. The search and seizure operation was conducted in the premises of M/s. Yadav and Company in March, 2002. On 7-3-2002 statement of Sh. Mohinder Singh Yadav and Sh. O.P. Yadav of M/s. Yadav and Company was recorded under section 132(4) of the Act. In this statement Sh. Mohinder Singh Yadav denied having any account in Union Bank of India, Moti Bagh Branch. This was the reason for opening the assessment by issuing notice under section 148 of the Act. The Assessing Officer treated the receipt of aforesaid consideration as sham and bogus in view of the statement of Mr. Mohinder Singh Yadav that M/s. Yadav and Company had no such account with Union Bank of India, Moti Bagh Branch. According to the Assessing ....
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....ven opportunity to cross-examine Sh. Mohinder Singh Yadav and Sh. O.P. Yadav was not afforded to the assessee. On this basis the aforesaid addition was deleted. 5. The ITAT found that these are the findings of facts recorded by the CIT(A) with which it concord and thus, dismissed the appeal of the revenue. 6. The main emphasis of learned counsel for the revenue is to demonstrate that the findings of CIT(A) and ITAT are perverse on account of non-application of mind to the specific observations made by the Assessing Officer. The appeal was accordingly, admitted on the following questions of law : "1. Whether the learned ITAT was correct in law in deleting the addition of Rs. 49,41,030 made by the Assessing Officer under section 68 of the Act on account of unexplained cash credit? 2. Whether the order passed by the learned ITAT is vitiated by perversity on account of non-application of mind to the specific observations made by the Assessing Officer in the order of assessment with regard to the evidence/material furnished by the assessee?" 7. It was contended by Mr. Sahni, learned counsel for the revenue that assessee failed to comply with the notice of the ....
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....is argued that the analogy/reasoning of not allowing cross-examination as applied by the ITAT in favour of assessee is also available to the Assessing Officer since the ITAT has relied on a confirmation, the contents of which remained unverified as the assessee did not reduce the creditor. Challenging the plea of denial of natural justice, he submitted that law is well-settled by the Hon'ble Apex Court in the case of Gudhutur Bros. v. ITO [1960] 40 ITR 298 wherein it has been held that denial of natural is only a irregularity and the proceedings would start from the stage at which the irregularity intervened. Further, in the proceedings before the ITAT, DR had even suggested remanding the case to the Assessing Officer to meet natural justice but this suggestion was opposed by the assessee. The ITAT being the final fact finding authority could have remanded the matter back to the Assessing Officer if it was of the view that proper opportunity was not afforded to the assessee. 8. Mr. Vohra, learned counsel for the assessee refuted the aforesaid arguments. He highlighted the facts recorded by the CIT(A) as well as ITAT on the basis on which the addition was deleted. His submission ....
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....n done insofar as the present case is concerned and that has been noted by the Tribunal also." His plea was that in this case, the respondent-assessee had discharged the initial burden cast upon the respondent-assessee. 9. After considering the arguments of both the sides, we find ourselves in favour of the submission made by learned counsel for the respondent. As mentioned above, the assessee had produced the following which would clearly demonstrate it has discharged its initial burden : (a)The identity of M/s. Yadav and Company, by filing their confirmation and their assessment particulars; (b)Genuineness of the transaction by pointing out that the assessee had sold shares to M/s. Yadav and Company in the immediately preceding year (which has been accepted by the Department) and that the payment received during the relevant previous year was against the debt due from M/s. Yadav and Company. (c)Creditworthiness of the creditor by pointing out that the amount was received by way of cheques drawn on the bank account of M/s. Yadav and Company maintained with Union Bank of India, Moti Bagh Branch, New Delhi, which, despite denial by the Yadavs, was, a....
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....f the assessee or the Assessing Officer to produce Sh. O.P. Yadav and Sh. Mohinder Singh Yadav. Therefore, in the interest of justice matter needs to be remitted back to the Assessing Officer to enable him to produce the Yadavs for cross-examination by the assessee. The Assessing Officer shall undertake fresh exercise as per the observations contained in the order of ITAT and this order and addition would be made only if those conditions are satisfied. 13. Thus, the matter is remitted back to the Assessing Officer for the aforesaid purpose. ITA 633/2008 14. In this case also addition of Rs. 35,00,000 was made in the income of the assessee for the assessment year 2000-01 on the basis of statement of Sh. Mohinder Singh Yadav of M/s. Yadav and Company. Following the order passed by the Tribunal in the case of assessee Kishori Lal Construction Ltd., the Tribunal deleted the said addition. Against the judgment of the Tribunal in Kishori Lal Construction Ltd. ITA 783/2007 appeal has been filed by the revenue which is dismissed above. 15. Learned counsel for the appellant however, argues that the case of Kishori Lal Construction Ltd. was distinguishable on facts. 16. It is ....