2017 (11) TMI 911

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....king addition of Rs. 31,06,521/- u/s. 68 of the Income Tax Act 1961. 2. The learned C.I.T.(A) erred in not accepting submission of the Appellant that reliance by Assessing Officer on statements of parties recorded behind the back of the Appellant and not made available to the Appellant and also not making the said parties available for cross examination by the Appellant was fatal to the proceedings initiated and addition made u/s 68 of Rs. 31,06,521/- 3. The learned C.I.T. (A) further erred in disregarding the fact that the lender had attended before the Assessing Officer in the course of reassessment proceedings and confirmed the loan of Rs. 30,00,000/- (Thirty Lakhs) advanced in November 2006 and repaid by the Appellants....

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....ated. 28.02.2015 filed reply enclosing copy of ledger account, bank statement, rate of interest and proof of repayment of loan on 23.09.2009. On 20.03.2015, the proprietor of M/s. Mayank Impex attended and statement was recorded u/s 131. Mr. Sanjay K. Choudhary in his statement stated that they import diamonds on a credit upto 180 days and these diamonds are sold locally and sale proceeds are utilized for the loan advances. Further, he also stated that during survey proceedings, statement was recorded forcibly. However, no documentary evidence was submitted. However, the AO made addition of Rs. 30,00,000/- to the total income of the assessee. 4. By the impugned order, CIT(A) confirmed the action of the AO. 5. It was contended by learn....

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....tion entries and which statement had been later retracted by him. Nowhere the assessee had been specifically named in such statements of the impugned lender party. The learned ACIT made the additions without having conclusively proved of any wrong doing by the assessee. The addition of the loan and the interest amount was based on..mere conjectures and surmises on statements recorded behind the backs of the assessee and which statements had been retracted by the impugned lender party. The assessee relied upon the judgment in the case of CIT vs Kader Khan (2008) 300 ITR 157 (Madras) wherein it was held that statement in Survey operations was not a conclusive proof of evidence. The assessee had proved the identity of the creditor as the conce....

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....recorded behind the backs of the assessee and further there was no conclusive proof of any parallel cash transactions or wrong doing by the assessee. 7. On the other hand, learned DR relied on the finding recorded by lower authorities with regard to the addition made u/s.68 of the IT Act. 8. I have considered rival contentions and carefully gone through the orders of the authorities below and found from record that to substantiate the loan transaction, assessee has filed confirmation with respect to the loan received through cheque. This loan was already repaid by cheque. I also found that AO has issued summon u/s.131 to the creditor who filed letter dated 28/02/2015 alongwith copy of ledger account, bank statement, rate of interest a....

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.... the assessee had disputed the correctness of the above statement and admittedly the assessee was not given any opportunity to cross examine the concerned Director of M/s. Thakkar Agro Industrial Chem Supplies P. Ltd. who had made the above statement. The appellate authority had sought remand report at that stage the genuineness of the statement has not been established by allowing cross examination of the person whose statement was relied upon by the revenue. In these circumstances, the decision of the Tribunal being based on the fact, no substantial question of law can be said to arise from the order of the Tribunal. The appeal is dismissed with no order as to costs." 10. Hon'ble Supreme Court in the case of Andaman Timber Industries 2....