TaxTMI 
TaxTMI 
2016 (5) TMI 1082
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....ts and circumstances, the learned CIT(A) erred in confirming the alleged addition of Rs. 45,50,000/- u/s. 68 without appreciating that- (i) the learned AO. had totally ignored the relevant details, documents/confirmations, and necessary explanation, AND (ii) that the learned AO. had clearly violated the principles of natural justice by not affording any opportunity to crossexamine Mr. Surendra Khandar [Mr. Khandar]. (2) The learned CIT(A) erred in confirming the erroneous finding that no confirmations were filed which was contrary to the facts available on record. (3) The learned CIT(A) failed to appreciate that the learned AO. was duty bound to provide an opportunity to cross-examine Mr. Khandar as his statement was recorded behind the back of Your Appellant that too during the search and seizure action at his place and not during any assessment proceedings of Your Appellant. (4) Without prejudice to the above, learned CIT(A) failed to appreciate that the learned AO completely failed to follow the specific direction of the Hon'ble Tribunal and failed to verify the income tax record of the lenders despite of the fact that the PAN of the respective parties was alr....
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....ee's own case for the said preceding year in which matter has been restored to the file of the assessing officer. The learned D.R. has gone through the said order and conceded that the facts and circumstances of this year are similar to those of the preceding year. Respectfully following the precedent we set aside the impugned order and restore the matter to the file of the assessing officer for a fresh decision as per law after allowing a reasonable opportunity of being heard to the assessee. Needless to say, directions contained in the Tribunal order for the preceding year would be taken into consideration by the assessing officer while dealing with this issue in the de novo proceeding." The A.O. based on the observation of the Tribunal started the proceedings again by issue of letter to Shri Surendra Khandhar fixing the hearing on 12- 10-2009. The letter was returned un-served for the reason "refused" as mentioned by the postal authorities. Further efforts were made by the A.O. by issuing summon u/s 131 of the Act to said Mr Surendra Khandhar which was also returned un-served. Inspector was deputed who served the summon on the office of Suman Motels Limited but there were....
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....00,000 6 Gayatri Entrp. 7.6.1997 2,50,000 7 Vipco Sales Corpn. 7.6.1997 5,00,000 8 Ray Engineering Co. 24.6.1997 4,00,000 9 Gayatri Entrp. 24.6.1997 4,00,000 10 Raj Enterprises 4.8.1997 2,50,000 11 Kartiki Trading Co. 8.8.1997 2,50,000 12 Gayatri Entrp. 8.8.1997 2,50,000 Total 45,50,000 As the assessee failed to produce loan confirmation u/s 68 of the Act and relying on the statement on oath provided by lender of the loan Mr. Surendra Khandhar that these loans are merely accommodation entries , it was held by the AO that there is no iota of doubt that the assessee has introduced his undisclosed cash under the garb of accommodation loan and accordingly a sum of Rs. 45,50,000/- plus interest Rs. 4,00,000 totaling to Rs. 49,50,000/- is treated as undisclosed income and added to the income of the assessee after rejecting the submissions of the assessee by the AO vide assessment orders dated 31.12.2009 u/s. 143(3) read with section 254 of the Act. 4. Aggrieved by the assessment order dated 31.12.2009 passed by the A.O. u/s. 143(3) read with Section 254 of the Act, the asse....
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....s. 45,50,000/- by the assessee during the instant assessment year and merely confirmed the addition u/s 68 of the Act as was made in the first round of litigation, hence the direction of the Tribunal has not been complied by the A.O. The assessee has received loans of Rs. 45,50,000/- from various parties as per the details given and the loans have been duly repaid through banking channels. The ld. Counsel submitted that as per the statement given by Shri Surendra Khandhar whereby he admitted that he has floated various firms to give accommodation loan entries to various persons which included the assessee also , the said statement of Sh Surender Khandhar was recorded by the Revenue at the back of the assessee and hence the same cannot be used against the assessee until it has stood scrutiny by way of cross examination of said Sh Surender Khandhar by the assessee. The cross examination of Shri Surendra Khandhar by the assessee has not taken place. Summons u/s 131 of the Act and show cause notices were issued by the Revenue to Shri Surendra Khandhar but he did not comply with the said summons/show cause notices. The confirmations were filed before the A.O. in the form of Hundi/Promis....
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....o various persons which also included the assessee . The said statement of Sh.Surender Khandhar was recorded by the Revenue at the back of the assessee. The said Shri Surendra Khandhar has not been subjected to cross examination by the assessee and hence the statement of Shri Surendra Khandhar cannot be used against the assessee until and unless the cross examination of the said Shri Surendra Khandhar by the assessee takes place. We find that the Tribunal in the first round of litigation, set aside the matter to the file of A.O. with a direction to re-verify the loan transactions as per provisions of the Act after affording opportunity to the assessee, the Tribunal also holding that since Sh Surender Khandhar could not be offered for cross examination by the assessee , his statement cannot be used against the assessee. The said Shri Surendra Khandhar did not appear before the Revenue also. The A.O. also failed to make verification and enquiries on merits with respect to the loan raised by the assessee. The assessee, on the other hand, produced the copies of promissory note/hundi as loan confirmations. In the immediately preceding assessment year 1997- 98, the Tribunal in the second....
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....of the AO to pass a fresh order as per our above observations. 7. It is clear from the order of this Tribunal that the addition made on the basis of the statement of Mr. Surendra Khandhar without giving an opportunity of cross-examination was held to be not proper and accordingly it was observed that the statement of Mr. Surendra Khandhar cannot be used against the assessee: The AO was directed to decide the issue on merits after affording an opportunity to the assessee to file necessary details in respect of respective loans taken by the assessee. We note that in the assessment order passed in pursuant to the directions of this Tribunal, the AO has repeated the addition in para 10-12 as under: "10. In view of the above, it can be seen that there is no change in the facts and circumstances of the case. Under the circumstances, there is no alternative than to pass the order with the materials available on record. The details and facts of the case are elaborately discussed in the original order passed on 31.3.2005 by the erstwhile Assessing Officer. Hence they are not repeated here again. 11. I do not find that the submission made by the authorised representative....