TaxTMI 
TaxTMI 
2024 (7) TMI 958
X X X X Extracts X X X X
X X X X Extracts X X X X
....nces which is void, unjustified and unlawful under the Indian Evidence Act. 2.1 Apropos Ground Nos. 1 & 2 of the assessee, the facts as emerges from the order of the ld. CIT(A) has dismissed the appeal of the assessee by observing as under:- 5.4 After considering all the facts, the undersigned has come to conclusion that:- a) It is admitted fact that there was credit of alleged amount of Rs 17,00,000/ to the account of the appellant through RTGS b) The appellant during the assessment proceedings failed to provide any documentary evidences iro advance receipt of the said amount for the purpose of Dhaniya purchase. c) Further, as per the records M/s Bright Corporation deals in business of Gold sales, then how will the agricultural commodity (i.e. Dhaniya) will be of any use for it d) No Prudent business entity will enter into such huge amount of transaction without executing any document in this regard. e) Moreover, during the investigation made on Bright Corporation, the Investigation wing based on the Statement recorded u/s 131 of Shri Samsun Paul Gohil, has conclusively established that the entity was dummy concern not Involved in making any actual sales, rather was o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....response to notice dated 13.11.2019 is being reproduced as under:- "M/s Bright Corporation has transferred a sum of Rs. 17,00,000/- in our bank account through bank RTGS on 13th November 2016 for the purpose of procuring good quality of Dhaniya commodity on their behalf. Due to sharp decrease in market price and non- availability of good quality of Dhaniya commodity in the surrounding market the contract for which the said amount was received could not be executed hence the said amount so received was revert back through bank RTGS 1.0. Rs. 9,80,000/- on 20th January 2017 and Rs. 7,20,000/- on 21st January 2017 in two installments which can be verified from the bank statement of HDFC CC Account (Account No. 07808660000037)". c) Accordingly, I find that the contention raised by the appellant in this regard in not tenable hence rejected. d) In these facts and circumstances, I am constrained to be in agreement with the finding of the Assessing Officer and hold that the appellant is unable to substantiate its claims and is not able to controvert the assessment order. The addition made by the Assessing Officer is therefore confirmed. 5.8 The appellant has not been able to defend ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed deposit being an accommodation entry. The AO completed the assessment on 09.12.2019 determining total income of Rs. 29,00,750/- which included the addition of Rs. 17,00,000/- as discussed above. 2.3 Aggrieved with the order of the AO, the assessee went in appeal before the ld CIT(A) who dismissed the appeal of the assessee without considering the reply of the assessee in proper perspective. The ld. AR of the assessee, before the ld. CIT(A) vehemently argued that addition cannot be made in the hands of the assessee on the basis of third party statement i.e. statement of Shri Samsun Paul Gohil without providing the copy of statement to the assessee and allowing opportunity of cross examination of Shri Samsun Paul Gohil. The ld. CIT(A) has not considered the plea of the assessee and confirmed the action of the AO 2.4 Now Aggrieved with the order of the ld. CIT(A) the assessee is in appeal before the Tribunal with the prayer that it is a genuine transaction through banking channel and this amount was remitted in the account of the assessee through RTGS. He further submitted that the lower authorities have erred in making addition in the hands of the assessee as there is no case fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... To, The Income Tax Officer, Ward 1(3), Kota - Rajasthan Ref: DEEPAK KUMAR SHAH PAN: ADDPK1529N Subject: Reply to Notice u/s 142(1) of the Income Tax Act, 1961 for the Assessment Year 2017-2018. Dear Sir, In response to your notice dated 30.11.2019 your goodself asked the reasons of receipt of Rs. 17,00,000 received from M/s. M/s Bright corporation, Ahmedabad along with documentary evidences. As mentioned in your letter" you did not clarify as to for what reason the said amount was deposited in your account & why not deposited in other person's account." In response to above we informed your goodself that M/s Bright corporation having PAN AAPFB7686Q and assessed by the Income Tax Department, Ahmedabad. M/s Bright corporation has transferred a sum of Rs. 17,00,000 in our bank account through bank RTGS on 13th November 2016 for the purpose of procuring good quality of Dhaniya commodity on their behalf. Due to sharp decrease in market price and non-availability of good quality of Dhaniya commodity in the surrounding market the contract for which the said amount was received could not be executed hence the said amount so received was revert back through Ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of statement of Shri Samsun Paul Gohil should have been supplied to the assessee who is alleged to have admitted the transactions as accommodation entry. C. Opportunity should have been allowed to cross examine Shri Samsun Paul Gohil. It is noted that it is settled principles of law that material/statement gathered at the back of the assessee cannot be used against the assessee unless the same are tested by cross examination. Thus it is case where principles of equity and justice have not been followed. The assessee was unable to furnish defense in the absence of non-furnishing of the material and statement by the AO. The following case laws are quoted in support :- 1. The Apex Court has observed that not allowing cross examination is a serious flaw and makes the order nullity. Andman Timber Ind. Vs. Commission of Central Excise (2015) 281 CTR 211 (SC). "not allowing the assessee to cross examine the witness by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order, is a serious flaw which makes the order nullity in as much as it amounted to violation of principle of natural justice because of which the assessee was adver....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the said silver items were purchased from one R & Co.-AO made addition to the income of the assessee after recording the statement of M, proprietor of R & Co., behind the back of the assessee-Not justified-AO has heavily relied upon the statement of M and has ignored the subsequent affidavit filed by M which is in variance of his original statement-Since the statement of M was used against the assessee and an affidavit was filed controverting the same, it was obligatory on the part of the AO to allow the prayer of assessee for cross-examination of M-AO having not summoned M under s. 131 in spite of the request of the assessee, evidence of M could not have been used against the assessee-Therefore, the assessment order is vitiated 4. HEIRS AND LRS OF LATE LAXMANBHAI S. PATEL vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF GUJARAT ) (2010) 327 ITR 0290 Opportunity of being heard-During search of one R, key of bank locker along with two packets containing six promissory notes were recovered-Out of those six promissory notes, one was in the sum of Rs. 8,78,358 executed by one K in the capacity of partner of firm DCI-In his statement recorded during search, R stated that the key of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rawn against a party unless that party is put on notice of the case made out against him-Matter remanded for cross-examination of S with opportunity to assessee to furnish evidence to rebut the evidence of S. 6. KALRA GLUE FACTORY. vs. SALES TAX TRIBUNAL & ORS. (SUPREME COURT OF INDIA) 167 ITR 0498 Statement which was not tested by cross examination is not good evidence. From the above, it is felt that there is no accommodation entry in the hands of the assessee. The amount of Rs. 17,00,000/- was received on 13.11.2016 through RTGS in the bank account of the assessee maintained with HDFC Bank A/c no. 07808660000037 at Ramganj Mandi - 326519, Kota. Copy of the relevant bank a/c is available on paper book page no. 49-109. The amount was received as a trade advance for purchase of Dhaniya which could not materialized due to poor quality of commodity and rate thereof. In view of this the amount was return back within a short period of two months. The amount was return back on 20.11.2017 and 21.11.2017 as is also reflected in the bank account. The amount was return back through RTGS. Thus by no stretch of imagination, the deposit of Rs. 17,00,000/- can be termed as accommodation en....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in correct perspective. The main issue of source of Rs. 17,00,000/- being Bright corporation/Samsun Paul Gohil was lost site off and uncalled for attention was centered on the trade deal of Dhaniya. It is noted that the information provided to the AO vide the DDIT wing itself disclosed the source of the deposit in the hands of the assessee, hence the same could not be treated as unexplained u/s 68 of the IT Act. Hence, the Bench draws strength from the following case laws. ''1. CIT vs. Ayachi Chandrasekhar Narsangji, 42 Taxmann.com 251,69,52,894/- (Guj) :- When the department has accepted the factum of repayment, the addition u/s 68 is not sustainable in law. 2. SMT. PANNA DEVI CHOWDHARY vs. COMMISSIONER OF INCOME TAX Mar 22, 1994(1994) 62 CCH 0233 MumHC (1994) 119 CTR 0394, (1994) 208 ITR 0849, (1994) 75 TAXMAN 0507:- Income from undisclosed sources-Unexplained money-Whatever money received by a person cannot be regarded as his taxable income without there being anything on record to show that such receipt or any part thereof remained with him and that it is within the taxing provision-In the present case, Calcutta company remitted the money to assessee in Bombay for paymen....