K.G. Chains Private Ltd, Ahmedabad V. DCIT, Circle-2(1)(2), Ahmedabad

ITA 1311/AHD/2018

AI Insights

The case involves K.G. Chains Private Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) - 2, Ahmedabad, concerning an assessment order for the assessment year 2010-2011. The primary issue was the addition of Rs. 2.5 crore as unexplained credit under section 68 of the Income Tax Act, 1961, due to share application money received from three companies. The Assessing Officer (AO) treated these entries as bogus based on information from a third party, Shri Praveenkumar Jain, an entry provider. The Tribunal found that the assessee had provided sufficient documentary evidence to substantiate the genuineness of the transactions, and the addition was made without conducting an independent inquiry or providing an opportunity for cross-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135824 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-07-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 20-05-2018
• Other Referred Cases: Pavankumar M. Sanghvi vs. Wd.3(1)(2), Baroda, PCIT vs. Nageshwar Enterprise, Reach Cable Network Ltd vs. DDIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIASHOKKUMARSUTHAR; FORTHEASSESSEEBEFOREUS; FORTHEASSESSEEHOWEVERVEHEMENTLYCONTENDEDTHATTHE
• Assessee Lawyers: SHRIANILKSHTRIYA; TAKINGTHEBOGUSENTRYREDUCEDTHEPROFITTOTHEEXTENT

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’C’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRIT.RSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं ./ITANo.1311/AHD/2018 धििाधरणवरध/Asstt.Year:2010-2011 K.G.ChainsPrivateLimited, 2,SwagatGreenVilla-2, 100Ft.RingRoad,Thaltej, Ahmedabad-380054. PAN:AADCK7797G Vs. DeputyCommissionerof IncomeTax, Circle-2(1)(2), Ahmedabad. (Applicant)(Respondent) Assesseeby:ShriAnilKshtriya,A.R Revenueby:ShriAshokKumarSuthar,Sr.D.R सुिवाईकीतारीख /DateofHearing:24/07/2023 घोरणाकीतारीख /DateofPronouncement:27/09/2023 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssesseeagainst theorderoftheLearnedCommissionerofIncomeTax(Appeals)-2,Ahmedabad, arisinginthematterofassessmentorderpassedunders.143r.w.s.147ofthe IncomeTaxAct,1961(here-in-afterreferredtoas"theAct")relevanttothe AssessmentYear2010-2011. ITAno.1311/AHD/2018 A.Y.2010-11 2 2.Theassesseehasraisedfollowinggroundsofappeal: 1.Onthefactsandcircumstancesofthecaseandinlaw,theLd.CIT(A),haserredin notadjudicatinganddecidingspecificgroundonlegalitythattheimpugnedassessment hasbeenreopnedonthebasisofstatementofthirdpartywithoutaffordinganopportunity ofcrossexaminationofShriPravinkumarK.Jain,theproceedingsareab-initio-voidand therefore,theorderofLd.CIT(A)isperverseonthiscountalone,assuchitisliabletobe quashedandsetaside. 2.Withoutprejudicetothegroundno.1abovetheLd.CIT9A),haserredinnot adjudicatinganddeletingappellant’sspecificplearaisedbeforehimofallowingcross examinationofShriPravinkumarK.Jaininthecourseofappellateproceedings,under appellant’sspecificrequestmadethroughwrittensubmissionbywayofbriefnotesfiledon 09/11/2017,muchpriortopassingoftheimpugedorder.Thus,theorderisperverseto thatextentanditmaybeheldso.Consequently,theadditionmadeonsuchstatementbe deletedinfull. 3.Onfactsandinlawaswellasinthecircumstancesofthecaseoftheappellantthe Ld.CIT(A)hasgrosslyerredinconfirmingtheimpugnedadditionofRs.2,50,00,000/-on accountofcreditentryinbooksofaccount,whenthereisabsolutelynojustificationfor makingsuchaddition.Thus,theorderisarbitrary,unreasonableandperversehavingbeen arrivedatbyignoringthematerialsfactsanddocumentsplacedonrecord. Theappellantcravesleavetoadd,alter,amendand/orwithdrawanyofthegroundsor groundofappealeitherbeforeoratthetimeofappealhearing. 3.ThefirstissueraisedbytheassesseeisthatthelearnedCIT(A)erredin notadjudicatingthespecificgroundraisedagainstthevalidityofreopening assessment. 4.Attheoutset,wenotethatthelearnedARfortheassesseebeforeus submittedthathewasinstructedbytheassesseenottopresstheissueraisedin captionedgroundofappeal.Hence,thegroundofappealraisedbytheassesseeis herebydismissedasnotpressed. 5.Thenextandlasteffectiveissueraisedbytheassesseeisthatthelearned CIT(A)erredinadditionofRs.2.5crorebytreatingthecreditofshareapplication moneyasunexplainedcreditundersection68oftheAct. 6.Thefactsinbriefarethattheassessee,aprivatelimitedcompany,is engagedinthebusinessoftradingingoldandgoldornaments.Theassessee duringtheyearissuedfreshsharesto3partiesandinconsequence,thebooksof ITAno.1311/AHD/2018 A.Y.2010-11 3 accountsofassesseewerecreditedforRs.2.5crores.Thenameoftheparties fromwhomsharecapitalmoneyreceivedareasunder: 1.KushHindustanEnt.Ltd. 2.OliveOverseasPvtLtd(RealgoldTradingCo.PvtLtd.) 3.TriangularInfocomLtd(LexusInfotechLtd.) 6.1Duringtheassessmentproceedings,theassesseeinsupporton genuinenessofcreditofsharecapitalfurnishedledgercopyofthepartiesinits books,bankstatementshowingamountcreditedthroughbankingchannel,copies ofMCAfillingshowingtherequestofincreaseinauthorizecapitalaswellas allotmentofshares,certificateissuedtoabovementionedshareallotteeandshare applicationletterfromabovementionedparties.Theassesseeaccordingly contendedthatsharecapitalcreditedforRs.2.5croresaregenuineandbeyond doubt. 6.2However,theAOfoundthattherewassearchproceedingcarriedoutatthe premisesofShriPraveenKumarJainwhoisanentryprovider.The parties/companiesfromwhomtheassesseereceivedamountofRs.2.5crorein formofsharecapitalarebenamiconcernofentryproviderShriPraveenkumarJain. Theassesseefailedtoestablishthatithadnottakenanyaccommodationentry fromShriPraveenkumarJainthroughhisbogusconcerns.Accordingly,theAO heldthattheassesseebytakingthebogusentryreducedtheprofittotheextent ofRs.2.5crores.Hence,theAOaddedthesametothetotalincomeofthe assessee. 7.Aggrieved,assesseepreferredanappealbeforethelearnedCIT(A).The assesseebeforethelearnedCIT(A)submittedthatduringtheassessment proceedings,itproducedmaximumavailabledocuments,suchasshareapplication letter,allotmentletter,concernedROCfilingforms,sharessubscriberledgercopy andbankstatementetc.andcopyofITRalongwithauditreportofimpugned ITAno.1311/AHD/2018 A.Y.2010-11 4 sharesubscriberspertainingtoAY2009-10thoughthetransactionbelongstoA.Y. 2010-11.ItwasalsorequestedtotheAOtodirectlycollecttheotherevidencefor A.Y.2010-11fromtheparties.Astheassesseewasnothavinggoodtermswith theparties.ButtheAOwithoutconsideringthedocumentaryevidenceavailable beforehimandwithoutmakingindependentenquiriesorinvestigationof whatsoeverheldtheamountcreditedassharecapitalasbogusmerelybasedon DDITinformationthatoneshriPraveenkumarJain,anentryprovider,has providedaccommodationentry.Theassesseefurthersubmittedthatthecontra ledgerconformationcopy,copyofITRfortheyearunderdisputeandbank statementsoftheimpugnedsharesubscriberpartieswerecollectedonalater stageanddulysubmittedbeforetheAOason22-09-2016.However,onthesame day,theassessmentorderwaspassed.Hence,thesedocumentswerenot consideredinassessmentorder.Therefore,thesameshouldbeacceptedunder rule46AoftheIncomeTaxRule. 8.Theassesseeaccordinglycontendedthatitdischargedtheprimaryonus aboutestablishmentofgenuinenessofcreditofsharecapitalandburdenshifted upontheAOtodisprovethesame.TheAO,withoutconductingenquiryand withoutassigningcogentreasons,rejectedthedocumentaryevidenceprovidedby theassesseeandreachedtheconclusionthatthetransactionisbogus.Theparties fromwhomthesharecapitalamountwasreceivedweregenuinepartiesexisting foralongperiodoftimeandcomplyingwithstatutoryrequirementsofrelevant Acts.TheassesseealsocontendedthattheAOtookcoercive/biasedactionagainst itmerelybasedoncertaininternalinformationgatheredduringsearch proceedingscarriedoutinthecaseofcertainthirdpartieswhereinsomething admittedorunearthedwithoutconductingindependentenquiryandproviding opportunityofcrossexamination.Theassesseeinsupportofitscontentions relied/referredtovariouscaselawswhichareincorporatedintheorderofthe learnedCIT(A). ITAno.1311/AHD/2018 A.Y.2010-11 5 9.ThelearnedCIT(A)forwardedthesubmissionoftheassesseetotheAOfor theremandreportwhichwassubmittedbytheAOvideletterdated13-06-2017. Theassesseefurnishedrebuttalagainsttheremandreportvideletterdated06- 10-2017.Finally,thelearnedCIT(A)afterconsideringsubmissionoftheassessee, remandreport,andrebuttalconfirmedthefindingoftheAObyobservingas under: 3.6Ihavecarefullyconsideredthedetailsfiledbytheappellant,thereportofthe A.Oandthecountercommentsfiledbytheappellant.TheAOhasmadetheaddition ofshareapplicationmoneyofRs.2,50,000/-receivedfromM/s.Triangularinfocom Limited,onthebasisofinvestigationcarriedoutinthecaseofShriPraveenKumar JainGroupwhereShriPravinKumarjainhasadmittedthathewasindulgedin providingentriestovariouscompaniesthroughtheabovepapercompany.The appellantduringtheremandproceedingshassubmittedcertainevidencestogive colourthataboveshareapplicationaregenuine. 37.ThedepartmenthascarriedoutInvestigationinthecaseofShriPraveenKumar Jainwhohasadmittedthathewasindulgedinprovidingaccommodationentry throughthevariouspapercompaniesincludingtheabovethreecompanies.Ithas beenestablishedthattheappellantcompanyhasreceivedaccommodationentryinthe formofshareapplicationmoneyofRs.2.50,00,000/-fromM/s.KhushHindustan EntertainmentLimited.M/s.OliveOverseasPvt.Ltd.andM/s.TriangularInfocom Limited,controlledandmanagedbyShriPraveenKumarJain.TheHonourabloITAT, AhmedabadInthecaseofPavankumarM.SanghvlVs.Wd.3(1)(2),Baroda(2017]81 Taxmann.com308onthesimilarcaseofaccommodationentryhasobservedas under:- AsIproceedtodealwithgenuinenessaspect,itisimportanttobearinmind thefactthatwhatisgenuineandwhatisnotgenuineisamatterofperception basedonfactsofthecasevis-à-visthegroundrealities.Thefactsofthecase cannotbeconsideredinisolationwiththegroundrealities.Itwill,therefore,be usefultounderstandastohowtheshellentries,whichtheloancreditorsare allegedtobe,typicallyfunction,andthencomparethesecharacteristicswith thefactsofthecaseandinthelightofwellsettledlegalprinciples.Ashell entityisgenerallyanentitywithoutanysignificanttrading,manufacturingor serviceactivity,orwithhighvolumelowmargintransactionstogiveitcolour ofanormalbusinessentityusedasavehicleforvariousfinancialmanoeuvers. Ashellentity,byitself,itnotanillegalentitybutitistheiractofabatement,of, andbeingpartof,financialmanoeuvringtolegitimizeillicitmoniesandevade taxes,thattakesitactionsbeyondwhatislegallypermissible.Theseentities haveeverysemblanceofagenuinebusiness-itslegalownershipbypersons inexistence,statutorydocumentationasnecessaryforalegitimatebusiness andadocumentationtrailasalegitimatetransactionwouldnormallyfollow. Theonlythingwhichsetsitsapartfromagenuinebusinessentityislackof genuinenessinitsactualoperations.Theoperationscarriedoutbythese entities,areonlytofacilitate,financialmanoeuvringforthebenefitofits clients,or,withthatpredominantunderlyingobjective,togivethecolourof genuinenesstotheseentities.Theseshellentities,whichareroutinelyusedto ITAno.1311/AHD/2018 A.Y.2010-11 6 launderunaccountedmonies,areafactoflife,andasmuchapartofthe underbellyofthefinancialworld,asmanyotherevils.Evenalayman,much lessaMemberofthisspecializedTribunal,cannotbeobliviousoftheseground realities." 3Perusaloftheordersonrecordandinparticular,theabovequotedportion oftheorderoftheTribunalwouldmakeitclearthattheentireissueisbased onappreciationofevidenceonrecordandthusfactualinnature.TheTribunal hasgivenelaboratereasonstocometotheconclusionthattheentire transactionwasnotgenuine.Inabsenceofanyperversity,wedonotseeany reasontointerfere. Learnedcounselfortheassesseehowevervehementlycontendedthatthe assesseehadreceivedloansthroughchequesfromlenderswhohadconfirmed thesame.TheiraccountsareauditedandfiledbeforetheRevenueauthorities. Thus,thegenuinenessofthetransactions,thecapacityofthelenderandthe factumoflendingallhavebeenestablished.Additionundersection68ofthe Acttherecouldnothavebeenmade.However,asnoted,theTribunalhas minutelyexaminedthepositionofthelenders,thecircumstancesunderwhich, theamountswereallegedlyloanedtocometotheconclusionthatthe transactionswerenot.genuine." 3.9.Itis,therefore,heldthatM/s.KhushHindustanEntertainmentLimited,M/s.Olive Overseas-Pvt.Ltd.andM/s.TriangularInfocomLimited,havebeenengagedin providingaccommodationentryandhavebeenusedtoIqunderunaccountedmoney. Thesecompaniesareshellcompaniesandtheirnameshaverecentlybeenstruckoff fromRegisterofCompaniesinthecrackingdowntheshellcompaniesbygovernment. Inviewoftheabove,theadditionmadebytheAOisfoundtobecorrectandjustified andhence,thesameisconfirmed. 10.BeingaggrievedbytheorderoflearnedCIT(A)theassesseeisinappeal beforeus. 11.ThelearnedARbeforeusfiledapaperbookrunningfrompages1to388 andcontendedthattheallthedetailsaboutthesharesubscriberswerefurnished bytheassesseebeforetheauthoritiesbelowwhichisevidentfromthedetails furnishedinthepaperbook.However,thelearnedCIT-Awithoutpointingoutany defectinsuchdetailshasmerelyreliedbasedDDITinformationthattheshares wereissuedtotheboguscompanies.AspertheDDITreport,itwasdiscovered duringsearchatthepremisesofShriPraveenkumarJainthattheimpugned companieswerecontrolledandmanagedbyhim(ShriPraveenkumarJain)who wasengagedinaccommodationentriesprovider.However,theassesseewas ITAno.1311/AHD/2018 A.Y.2010-11 7 neitherprovidedwiththesearchmaterialforitsrebuttalnoropportunityofcross examination.Therevenuetimeofhearinghasnotbroughtanymaterialonrecord suggestingthatinadditionwasmadebasedonanysearchmaterialfoundduring thesearchatthepremisesofShriPraveenkumarJaindespitethefactthatthe Benchcategoricallydirectedtherevenuetofurnishsuchmaterialsincluding whethertheopportunityofcross-examinationwasaffordedtotheassessee.The learnedARreiteratedthesubmissionsasmadebeforetheauthoritiesbelow. 12.Ontheotherhand,thelearnedDRbeforeushasfiledthelettersas directedbytheBenchandreiteratedthefindingsofthelowerauthorities containedintherespectiveordersandvehementlysupportedtheordersofthe lowerauthorities. 13.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Inthepresentcasetheshareapplication/capital moneyforRs.2.5croresreceivedbytheassesseefromthepartiesnamelyM/s KushHindustanEntLtd,OliveOverseasPvtLtdandTriangularInfocomLtdhas beenconsideredasunexplainedcashcreditundersection68oftheAct.The reasonfortreatingtheshareapplicationmoneyasunexplainedcashcreditwas thattherewasinformationreceivedfromDDIT(investigation)Mumbaithatthe impugned3companieswerebenamiconcernofoneShriPraveenkumarJainwho isanentryproviderandprovidedaccommodationentriestovariousbeneficiaries includingtheappellantassesseecompany.TheviewtakenbytheAOwas subsequentlyupheldbythelearnedCIT-Ainhisorderdated22-03-2018. 13.1Theissueonhandhasbearingontheprovisionsofsection68oftheAct. Theprovisionofsection68oftheActsuggeststhatifthereisanysumcreditedin booksofaccount,thentheassesseeisrequiredtoofferproperandreasonable explanationaboutthenatureandsourcesofsuchcredittothesatisfactionofthe AO.Overtheperiod,theHon’bleCourtshaveimposedprimaryonusonthe ITAno.1311/AHD/2018 A.Y.2010-11 8 assesseetomakeanexplanationandprovideevidencewithrespecttoidentityof thecreditor,genuinenessoftransactionandcreditworthinessofthecreditor.If theassesseefailstodischargetheprimaryonuscastuponitandtheexplanation andevidencesubmittedbytheassesseenotfoundsatisfactorybytheAO,then thesumcreditedinthebooksshallbedeemedasincomeoftheassessee.The Hon’bleSupremeCourtinthecaseofCITvs.P.Mohanakalareportedin291ITR 278whiledealingwithscopeofprovisionsofthesection68oftheActheldthat “theopinionoftheAOthattheexplanationfurnishedbytheassesseeasnot satisfactoryisrequiredtobebasedonproperappreciationofmaterialandother attendingcircumstancesavailableonrecord.TheopinionoftheAssessingOfficer isrequiredtobeformedobjectivelywithreferencetothematerialavailableon record.Applicationofmindisthesinequanonforformingtheopinion.”Inother words,oncetheassesseesubmitsprimaryevidenceaboutidentityandcredit worthinessofcreditorandthegenuinenessofthetransaction,theonusshiftupon theAOtoconsiderthematerialprovided,makeindependentinquirytofindout anyinfirmityorbringmaterialcontrarytofactexplainedbytheassessee.TheAO cannotrejecttheprimaryevidencefurnishedbytheassesseewithoutappreciating thefactsandinformationavailableonrecordandwithoutbringingcontrary materialtoformthebeliefthatprimarydocumentorexplanationfurnishedbythe assesseeisnotsatisfactory. 13.2Undeniably,duringtheyearunderconsiderationthebooksofaccountof theassesseewerecreditedintheformofsharecapital.Theassesseeatthetime ofassessmentproceedingsinsupportofgenuinenessofcreditofsharecapitalhas furnishedcertaindocumentaryevidencewhichareillustratedasunder: 1.Ledgercopyofsharesubscriberinitsbooks. 2.ItsBankstatements. 3.ROCfillingforincreaseinAuthorizedcapital. 4.Shareapplicationlettersfromimpugnedparties. 5.ShareallotmentlettersandROCfilinginthisregard. ITAno.1311/AHD/2018 A.Y.2010-11 9 6.Sharecertificateissuedtoimpugnedparties. 13.3Likewise,theassesseehasalsofurnishedadditionaldocumentsinsupport ofgenuinenessofshareapplicationmoneyreceivedbyitintheyearunder considerationbeforethelearnedCIT(A)whichareclassifiedasunder: 1.Copyofcontraledgerconfirmation. 2.CopyofITRandauditedaccounts. 3.Copyoftheirbankstatement. 13.4Thereasonfornotfurnishingtheadditionalevidenceduringthe assessmentproceedingwasexplainedbytheassesseethatthesedocumentswere collectedfromthethirdpartieswhoarenotinitscontrol.Therefore,ithastaken timetocollectsuchdocuments. 13.5ThelearnedCIT(A)onreceiptofadditionaldocumentsfiledbytheassessee calledfortheremandreportvideletterdated19 th April2017fromtheAOwho submittedtheremandreport.However,wenotethattheAOneitherinthe assessmentordernorintheremandreportassignedanyreasonfornotaccepting theprimarydocumentsfurnishedbytheassesseeasrequiredundersection68of theAct.TheAOnowherementionedorgivenfindinghowtheprimaryevidence furnishedbytheassesseewerenotsatisfactory.Therewasnoindependent inquiryofinvestigationcarriedoutbytheAO.AssuchtheAOmerelyreliedonthe informationreceivedfromDDIT(investigation)thattherewassearchproceeding carriedoutatthepremisesofShriPraveenkumarJainwhoisengagedinthe activityofentryproviderthroughwebofcompaniesandthecompaniesincluding thecompaniesfromwhichtheassesseereceivedsharecapital.Thus,theassessee wasoneofthebeneficiarieswhoreceivedbogusaccommodationentry. Accordingly,theAObasedonsuchinformationtreatedtheamountcreditedin booksoftheassesseeasbogus.ThelearnedCIT(A)alsoconcurredwiththeview takenbytheAObyplacingrelianceoninformationreceivedfrom ITAno.1311/AHD/2018 A.Y.2010-11 10 DDIT(Investigation)Mumbai.Boththelowerauthoritiesdidnotdeemnecessaryto makeindependentinquirybasedoninformationreceivedfromDDIT(Inv)Mumbai andreachedtotheirownfinding.Theymerelyreachedaconclusionon informationofDDIT(Inv)Mumbaicollectedduringthesearchproceedingatthird partybeingShriPraveenkumarJain.Further,fromtheorderoftheauthorities belowwenotethatthereisnomentionedaboutwhatdocumentfoundatthe premisesofShriPraveenkumarJain,whatwerethenatureofinformation collectedduringthesearchandhowitisconcludedthattheappellantassesseeis oneofthebeneficiariesofaccommodationentriesprovidedbyShriPraveenkumar Jain. 13.6Bethatasmaybe,inourconsideredopiniontheinformationreceivedfrom DDIT(Inv)canbeareasontoinvestigatebutsimplycannotberelieduponfor makingadditioninthehandoftheassesseeunlesstheAOcarriedout independentinquirytofindoutthenatureofthetransaction.Inholdingso,we findsupportandguidancefromthejudgmentofHon’bleGujaratHighCourtinthe caseofPCITvs.NageshwarEnterprisereportedin122taxmann.com41.Inthe above-mentionedcase,theAOreceivedinformationofDDIT(Inv)thatthe DirectorateofRevenueIntelligence(DRI)carriedsearchatthepremisesof assesseeatSuratwhereinoneofthepartnersadmittedtoundervaluationmetallic yarnandjari/kasab.TheAObasedonimpugnedinformationmadeadditiontothe totalincomeoftheassessee(Nageshwarenterprise).Onappealboththelearned CIT(A)andthelearnedbenchoftribunalfoundtheAOformakingadditionmerely reliedoninformationreceivedfromDDIT(Inv)/DRIwithoutconducting independentinquiryandreachingtotheindependentfinding.Therefore,insuch circumstances,theadditionmadebytheAOcannotbesustained.Onfurther appealbytheDepartment,theHon’bleHighCoutconfirmedthefindingofthe learnedCIT(A)andthetribunalbyobservingnoadditioncanbemadebasedon theadmissionmadeduringthesearchbyDRIunlessdepartmentbroughcertain corroborativematerialonrecordinsupportofsuchadmission.Inthecaseon ITAno.1311/AHD/2018 A.Y.2010-11 11 hand,asearchwascarriedoutatthirdpartywhateverinformationwascollected andstatementrecordedwasatthepremisesofthirdparty.Therefore,theAOwas requiredtoconductindependentinquiriesandbringcorroborativematerialbefore relyingonsuchinformationcollectedduringthesearchatthirdparty.Italso pertinenttonotethatifanyinformationcollectedorstatementrecordedatthe thirdpartythenitistritelawandprincipleofnaturaljusticetoprovideopportunity ofrebuttalandcrossexaminationshouldbeprovidedtotheassesseebeforeusing suchmaterialagainsttheassessee.Inholdingsowedrawsupportandguidance fromthejudgmentHon’bleDelhiHighCourtincaseofReachCablenetworkLtdvs. DDITreportedin167taxman161whereitwasheldasunder: 2.Asalreadyobserved,inresponsetothenoticeissuedtoitbythisCourt,the revenuehasproducedbeforethisCourttheaforementionedcopyoftheledger account,andhasalsohandedoveracopyofthesametothecounselforthe petitioner.Wefindnojustifiablereasonwhythiscouldnothavebeendoneduringthe reassessmentproceedingsitself.Thisinourviewvitiatesthereassessmentorder. 13.7Inthecaseonhand,theassesseehasspecificallyaskedforopportunityof crossexaminationofShriPraveenkumarJainwhichhasnotbeenprovidedtothe assesseewhichisthefundamentalrightoftheassessee.Assuchintheabsence ofgivingtheopportunityofcross-examinationtheadditionmadebytheAOisnot sustainable. 13.8Ontheotherhand,theassesseedulydischargedtheprimaryonuscast undersection68oftheActbyfurnishingthenecessarydocumentasmentionedin previousparagraphs.NeithertheAOnorthelearnedCIT(A)foundanyinfirmityin thoseprimarydocumentsbutmerelyrelyingoninformationsuppliedbythe DDIT(Inv)Mumbaiproceededtomakeadditioninthehandofassesseewhichin ouropinionisnotjustifiable. ITAno.1311/AHD/2018 A.Y.2010-11 12 13.9Therefore,inviewoftheabovedetaileddiscussion,weherebysetasidethe findingofthelearnedCIT(A)anddirecttheAOtodeletetheadditionmadeby him.Hence,thegroundofappealraisedbytheassesseeisherebyallowed. 14.Intheresult,theappealoftheassesseeisallowed. OrderpronouncedintheCourton27/09/2023atAhmedabad. Sd/-Sd/- (T.RSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated27/09/2023 Manish