TaxTMI 
TaxTMI 
2019 (9) TMI 825
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....n the bank accounts of M/s. Nupur Management and Consultancy Pvt. Ltd., which were maintained with ICICI Bank and ABN-Amro Bank at Mumbai. On the basis of this information, the Directorate of Investigation, Mumbai conducted survey u/s.133A of the Income-tax Act, 1961 (hereinafter called 'the Act') on Nupur Management and Consultancy Pvt. Ltd. During the course of such survey, it turned out that two persons, namely, Sh. Dinanath Yadav and Sh. Pradeep Prajapati, shown as directors of the company, were residing in a chawl. When their statements were recorded, they deposed that they were being paid Rs. 5,000/- and Rs. 3,000/- per month by one Chartered Accountant, Sh. Sandeep Sitlani, for their signing the documents and cheques. Thereafter, a search was conducted at the residential and office premises of Sh. Sandeep Sitlani u/s.132 of the Act in which it was found that Sh. Sandeep Sitlani was controlling a hawala racket that was run through 26 companies tabulated on page 4 of the assessment order, including NCS to whom the. These companies with the same two directors, namely, Sh. Dinanath Yadav and Sh. Pradeep Prajapati referred to hereinabove, were having 54 bank accounts. The assesse....
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....om the 30% disallowance of the remaining commission, the ld. CIT(A) confirmed the addition at 10%. Both the sides are in appeal on their respective stands. 4. Before espousing the issue of commission on merits, we want to record the non co-operative attitude adopted by the assessee during the course of assessment proceedings. It can be seen from the order sheet of the AO, which has been marked as Annexure-B, that on 26-10-2009, being the first effective date of hearing after the receipt of order of the Transfer Pricing Officer, the assessee did not produce the books of account. Only part of the information was furnished. The case was adjourned to 13-11-2009. On that date again, the assessee attended but without the books of account and bills of expenses. The information called for by the AO was given in a format different from that requested by the AO. Sh. Sanjay Bhave, Manager Taxation and Sh. Avinash Ambe appeared on behalf of the assessee before the AO on 13-11-2009 and stated that because of huge number of purchase and sales bills and closing stock, the quantitative details could not be prepared as was asked for in the questionnaire. The case was adjourned. Again on 25-11-20....
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....g such companies only for hawala racket providing accommodation entries. When the AO required the assessee to produce the books of account so that he may verify the correctness of the transactions including the alleged payment of commission, the assessee turned away and did not produce the same despite repeated requests. 7. Now, the argument on behalf of the assessee before the Tribunal is that the AO failed to provide opportunity of cross examination and confront the assessee with the statement of Sh. Sandeep Sitlani etc. who had floated NCS along with other 25 companies for alleged hawala transactions. The ld. AR put forth that in the absence of the AO following the principles of natural justice, the addition was liable to be deleted. In support of such a contention, he relied on the judgment dated 02-09-2015 of the Hon'ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise, Kolkata-II (2015) 62 taxmann.com 3 (SC) and certain other decisions. 8. We have gone through this judgment, whose copy has been placed at page 1 onwards of the paper book. The factual matrix of that case rendered in the content of Central Excise is that some of ....
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....n for once despite the AO repeatedly requiring it to produce the same. Under such circumstances, it is clear that the ratio decidendi in the case of Andaman Timber Industries (supra) is not applicable to the facts of the instant case. 10. The Hon'ble Supreme Court in ITO Vs. M. Pirai Choodi (2011) 334 ITR 262 (SC) through the judgment rendered by three Hon'ble Judges and that too in the context of Income-tax, as against the judgment rendered in the case of Andaman Timber Industries (supra) delivered by two Hon'ble Judges in the context of Central Excise, was confronted with a situation in which the Hon'ble High Court set-aside the order of assessment on the ground that no opportunity of cross-examination was granted. Overturning the view of the Hon'ble High Court, the Hon'ble Supreme Court held that: "At the highest the High Court should have directed the AO to grant an opportunity to the assessee to cross-examine the concerned witness". As a consequence of that, the Hon'ble Supreme Court setaside the judgment of the Hon'ble High Court by holding that : `In the circumstances, we are of the view that the High Court should not have quashed the assessment proceedings vide impugned ....
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....s made without granting opportunity to the assessee to cross-examine the deponents who had deposed against the assessee. The Tribunal held that no cross-examination was called for in the facts as were obtaining in the case. The Hon'ble High Court, noting that there was a breach of principles of natural justice, held that : `In view of the above, we set aside the order of the Tribunal and restore the issue to the Assessing Officer for fresh disposal after following the principles of natural justice.' 17. Adverting to the facts of the instant case, it is found that the AO relied on the statements of certain persons recorded during the course of survey and search on M/s. Nupur Management and Consultancy Pvt. Ltd. and Sh. Sandeep Sitlani, for making the addition of Rs. 45,18,200/-, for which cross-examination was not afforded to the assessee. It is not a case that the AO lacked jurisdiction to proceed with the assessment. It is further not a case that the AO made the addition on his whims and fancies and without there being any material to substantiate the same. Per contra, it is a case of making the addition on the basis of relevant evidence but simply using the same without gra....
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.... on record, it is found as an admitted position that similar issue has been decided in favour of the assessee by the Tribunal in the assessee's own case for the immediately preceding assessment year 2005-06 vide order dated 31-07-2019 in ITA No. 1033 & 1289/PUN/2013. Both the sides are in agreement that the facts and circumstances of this ground are mutatis mutandis similar to those of the preceding year. Respectfully following the precedent, we decide this issue in the assessee's favour. This ground is allowed. 22. Ground No.3 of the assessee's appeal is against the denial of deduction of Rs. 70,82,836/- on account of prior period expenses. Here again, both the sides are in agreement that the facts and circumstances of this ground are similar to the Ground No.2 for the A.Y. 2005-06, for which the Tribunal has decided such issue against the assessee. Following the same view, we dismiss this ground of the appeal. 23. Ground No.4 of the assessee's appeal is against the denial of deduction on account of liquidated damages. Ground Nos. 4 and 5 of the Departmental appeal are also on the same issue. Both the sides are in agreement that the Tribunal has decided similar issue in f....
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....tained the above additions on the ground that the assessee could not produce any document to substantiate such claim. The ld. AR fairly conceded that no such document was still available with the assessee. In the absence of any substantiation of the claim of deduction for such expenses, we uphold the impugned order. Thus, the two grounds stand dismissed. 29. Ground No.2 of the Revenue's appeal is against allowing deduction on account of bad debts. The facts apropos this issue are that the assessee claimed deduction for bad debts to the tune of Rs. 9,94,36,177/-. The AO did not allow such claim as in his opinion the assessee could not prove that the debts had become bad. The ld. CIT(A) deleted the addition. 30. Having heard both the sides and gone through the relevant material on record, it is found as an admitted position that the assessee, in fact, wrote off the amount of bad debts in its books of account. The Hon'ble Supreme Court in TRF Ltd. Vs. CIT (2010) 323 ITR 397 (SC) has held that after 01-04-1989, the assessee is not required to establish that the debt had became bad in the previous year. It was further held that the deduction has to be allowed on a mere write of....