TaxTMI 
TaxTMI 
2024 (1) TMI 649
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....aw, the Ld. CIT(A) erred in deleting the addition of Rs. 16,67,41,120/- made by the AO on account of cash loan and interest income earned on such cash loan, only on the ground that no opportunity of cross examination was provided to the assessee during the course of assessment proceedings when the reliable and sufficient material was available on record and alternatively the CIT(A) himself could have provided the opportunity of cross examination to the assessee as per the ratio laid down by the Hon'ble Apex Court in the case of Kanpur Coal Syndicate 1965 AIR 325,1964 SCR (6) 85. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the facts that the information regarding cash loan and interest thereon was received from the Hon'ble Income Tax Settlement Commission, which has accepted the content of the information. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact that the AO had all the materials on record and the same were corroborated with the financials of the assessee for the corresponding year and made the addition on merit. 4. The appellant prays th....
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....e of Rs. 1,86,41,120/-. 4.1 On further appeal, the Ld. CIT(A) deleted both the additions. Aggrieved, the Revenue is in appeal challenging the deletion of the addition on merit whereas assessee is aggrieved for not adjudicating the grounds of appeal challenging the validity of the reassessment. 5. Before us, the Ld. Counsel of the assessee has filed a Paper Book containing pages 1 to 68. 6. Before us, the Ld. Departmental Representative (DR) relied on the order of the Assessing Officer and submitted that the Ld. CIT(A) is not justified in deleting the addition for the reason that no opportunity for cross-examination was provided by the Assessing Officer. He submitted that the Assessing Officer has clearly mentioned in the order that he had relied on the circumstances evidences and therefore, providing cross-examination was not mandatory in the case of the assessee. 7. On the contrary, the Ld. Counsel for the assessee relied on the finding of the Ld. CIT(A) and also submitted that no addition could be made on the basis of the third party evidence unless copy of the same is provided to the assessee. In support of contention, he relied on the decision of the Hon'ble Delhi H....
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....e on the basis of circumstantial evidence against the assessee and not on the basis of submissions of third-party, the contention raised by the assessee is not accepted. The assessee has material and requested to provide him a copy of seized exact submissions made by Wadhwa Group. However, it is again reiterated that the assessee has relied upon in number of the case laws to contend that no addition can be made on the basis of seized material found from the premises of the third party. In this regard it is reiterated that the additions are not being made on the basis of material seized from the third party but on the basis of circumstantial evidence against the assessee as discussed above. Therefore, all the contentions made by the assessee as discussed above are not justified and are accordingly rejected." 5.3 Having regard to the contention of AO that he has passed the order based on circumstantial evidences without disclosing such evidences is very much against the principle of natural justice. In this regard reliance can be placed on the following judicial pronouncements Hon'ble Supreme Court in case of Anadaman Timber industries vs. Commissioner ....
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....Officer has referred that he has relied on the circumstances evidences. The Assessing Officer has analyzed the financial statement of the assessee and concluded that assessee was engaged in the extending loans to various parties for earning interest. After analysis of the financial statement, the Assessing Officer was of the view that the household withdrawal shown by the assessee of Rs. 60,000/- was not sufficient to meet the house hold expenditure of family of assessee and the assessee accumulated his capital balance and earned interest on advancing cash loan. In response, the assessee explained that the total house withdrawals of his family were of the tune of Rs. 14.35 crores for the assessment year. The relevant explanation of the assessee, reproduced by the Assessing Officer, is extracted as under: "The next contention raised is that low amount of cash withdrawals by the assessee is not a valid basis for making the addition since other family members have also contributed towards household expenses. To support his contentions, the assessee has furnished a simple chart showing total withdrawals by the family for the year at Rs. 14.35 lakhs. However, this submission is....