Shri Puneet Jain, Meerut V. ITO, Meerut

ITA 1569/DEL/2012

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9667 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 22-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 03-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SULEKA VERMA
• Assessee Lawyers: K SAMPAT ADV SHRI V RAJA KUMAR
• Keywords: Bogus purchase; Unexplained cash credit; Rejection of books of accounts; Gift; Business income; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Question of law; Assessment record; Set aside; Audi alteram partem
• Section: 143(3); 142(1); 234B; 133(6); 250; 201; 143(2); 64; 68; 12

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI F BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL M EMBER ITA NO. 1569/DEL/2012 [A.Y 2008-09] SHRI PUNEET JAIN VS. THE INCOME TA X OFFICER S/O SHRI PRAVEEN KUMAR JAIN WARD 2(1) PROP. M/S PARAS PAPER CENTER MEERUT 517/2, MAHAVIRJI NAGAR, MEERUT PAN: AANPJ 4604 J (APPLICANT) ( RESPONDENT) ASSESSEE BY : SHRI K. SAMPAT , ADV SHRI V. RAJA KUMAR, ADV DEPARTMENT BY : SMT. SULEKA VERMA, CIT-DR DATE OF HEARING : 19.09.2019 DATE OF PRONOUNCEMENT : 27 .09.2019 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE CIT(A), MEERUT DATED 24.01.2012 PE RTAINING TO A.Y 2008-09. 2 2. THE GRIEVANCES RAISED BY THE ASSESSEE READ AS UN DER: 1. THAT THE ASSESSMENT COMPLETED U/S 143(3) OF THE L.T. ACT 1961 IS ARBITRARY, UNJUST AND ILLEGAL BECAUSE NOTIC E U/S 143(2), 142(1) AND 131 WERE NOT PROPERLY SERVED UPON THE AS SESSEE AND ORDER PASSED ON 04-07-2010 IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND CONFIRMATION OF ORDER PASSED BY A.O. BY LD. C1T(A) IS ERRONEOUS AND BAD IN LAW. 2. THAT THE A.O. IS NOT JUSTIFIED IN DISALLOWING TH E SUNDRY CREDITORS OF RS. 17,31,25,389/- AND ADDED IN THE TO TAL INCOME OF THE ASSESSEE AND CONFIRMATION OF ORDER PASSED BY A. O. BY C1T(A) IS ERRONEOUS AND BAD IN LAW. 3. THAT THE A.O. IS NOT JUSTIFYING IN DISALLOWING T HE SUNDRY DEBTORS OF RS. 8,58,44,005/- AND ADDED IN THE TOTAL INCOME OF THE ASSESSEE AND CONFIRMATION OF THE ORDER PASSED BY A. O. BY LD. CIT(A) S ERRONEOUS AND BAD IN LAW. 4. THAT THE TOTAL ASSESSMENT MADE BY LD. A.O. OF RS . 25,94,15,964/- IS ARBITRARY, UNJUST AND ILLEGAL ON THE VARIOUS LEGAL FACTS AND CIRCUMSTANCES AND ACTION OF LD. A.O. CANN OT BE SAID JUSTIFIED AND HE HAS NOT REJECT THE BOOKS OF ACCOUN T, WHICH WAS DULY AUDITED AS REQUIRED U/S 44AB. LD. CIT(A) IGNOR ED THE FACT THAT TRADING RESULT ARE ACCEPTED BY THE TRADE TAX A UTHORITY AND 3 POLICE AUTHORITY HOWEVER, HE TOOK ACTION AGAINST RA DHEY SHYAM MITTAL THEREFORE, THE ASSESSMENT FRAMED BY LD. A.O. AND CONFIRMED BY CIT(A) IS ERRONEOUS AND AGAINST THE FA CTS AND LAW. 5. THAT WITHOUT PREJUDICE TO GROUND NO. 1, 2, 3 & 4 THE ASSESSMENT COMPLETED U/S 143(3) FOR THE A.Y. 2009-1 0 ON THE SIMILAR FACTS AND CIRCUMSTANCES @ 1% SO CALLED BOGU S RECEIPT OF SH. RADHEY SHYAM MITTAL. AO ASSESSED INCOME @ 1% AN D LD. CIT(A) TOTALLY IGNORED THIS FACT HENCE ORDER PASSED BY LD. CIT(A) WITHOUT CONSIDERING THE ASSESSMENT FOR THE A.Y. 200 9-10 IS BAD IN LAW. 6. THAT THE PENALTY PROCEEDING INITIATED U/S 271(1) (C) AND INTEREST CHARGED U/S 234A, 234B & 234C IS NOT ACCOR DING TO LAW. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE APPELLANT IS PROPRIETOR OF M/S PARAS PAPER CENTER AND FILED HIS RETURN OF INCOME ON 30.09.2008 RETURNING INCOME OF RS. 44,65,570/-. TH E RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND, ACCORDINGLY, STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, AND ON PERUSAL OF THE DOCUMENTS FURNISHED BY THE ASSESSEE, THE ASSESSING 4 OFFICER ASKED THE ASSESSEE TO FURNISH DETAILS OF SU NDRY CREDITORS AND SUNDRY DEBTORS. ON PERUSAL OF THE DETAILS FURNISHE D BY THE ASSESSEE, THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) OF T HE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'] TO ONE OF THE CREDITORS M/S MITTAL PAPER MART AS HE WAS NOT CONVINCED WITH THE AUTHENTICITY OF THE CONFIRMATION FILED BY THE ASSESSEE. SUMMONS U/S 13 1 OF THE ACT WAS ALSO ISSUED TO SHRI RADHEY SHYAM MITTAL OF M/S MITT AL PAPER MART. BUT THE SUMMONS WAS RETURNED WITH THE REMARKS ADDRESSE E WAS NOT AVAILABLE ON THE GIVEN ADDRESS. 5. SUBSEQUENTLY, ANOTHER SUMMON WAS ISSUED TO THE A PPELLANT ASKING HIM TO ATTEND THE PROCEEDINGS ALONGWITH CASH BOOK/LEDGER/BILLS/VOUCHERS AND BANK STATEMENTS. NO COMPLIANCE WAS MADE BY SHRI PUNEET JAIN. 6. DURING THE COURSE OF PROCEEDINGS, SHRI RADHEY SH YAM MITTAL P/O MITTAL PAPER MART APPEARED BEFORE THE ASSESSING OFF ICER ALONG WITH HIS SON ON 16.04.2010. STATEMENT OF SHRI RADHEY SHYAM MITTAL WAS RECORDED BY THE ASSESSING OFFICER AND THE SAME READ S AS UNDER: 5 6 7 8 9 10 7. PURSUANT TO THE STATEMENTS AND AFFIDAVIT OF SHRI RADHEY SHYAM MITTAL, SUMMONS U/S 131 OF THE ACT ALONGWITH NOTICE U/S 142(1) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE GIVING HIM AN OPPORTUNITY TO EXPLAIN HIS CASE IN LIGHT OF THE STATEMENT OF SH RI RADHEY SHYAM MITTAL. THE ASSESSEE NEITHER RESPONDED TO THE SUMM ONS NOR TO THE NOTICE. 8. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF TH AT THE APPELLANT DOES NOT WANT TO SAY ANYTHING ON THIS MATTER AND IS SIMPLY RELYING UPON THE CONFIRMATION OF MITTAL PAPER MART. THE ASSESSI NG OFFICER FOUND THAT THE SIGNATURE ON THE CONFIRMATION DOES NOT MAT CH WITH THE SIGNATURE OF SHRI RADHEY SHYAM MITTAL AS GIVEN IN H IS STATEMENT BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS C ONVINCED THAT THE CREDIT ENTRIES APPEARING IN THE NAME OF MITTAL PAPE R MART AMOUNTING TO RS. 1,73,12,52,389/- IS BOGUS AND, ACCORDINGLY, MAD E ADDITION OF RS. 17.31 CRORES AS UNEXPLAINED CREDIT. 9. WHILE MAKING THE ADDITION, THE ASSESSING OFFICER DREW SUPPORT FROM: 11 10. PROCEEDING FURTHER, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS SHOWN TOTAL SUNDRY DEBTORS OF RS. 17,4 1,65,793/-. 12 NOTICES U/S 133(6) WERE ISSUED TO THE DEBTORS AND T HE STATUS OF THE NOTICES IS AS UNDER: 1. M/S ARSHIA ENTERPRISES. 514, KAMLA NAGAR, MEERU RS. 7,91,5 45 NOT KNOWN 6.5.10 2. M/S GYAN INDUSTRIES T.P. NAGAR, MEERUT RS. 70,000 NOT KNOWN 6.5.10 3. M/S SHREE ADINATH ENTERPRISES MAHAVEER JI NAGAR, BAGHPAT ROAD, MEERUT RS. 2,65,000 5.5.10 4. M/S AARU ENTERPRISES BHOPA ROAD, MUZAFLAR NAGAR RS. 28,54,908 5.5.10 5. M/S ADINATH ENTERPEISES 16, DWARIKAPURI, MZF RS. 5,84,900 5.5.10 6. M/S S.S. MARKETING NANDAN GARDEN W.K. ROAD, MEERUT RS. 73,02 .781 5.5.10 7. M/S GOKUL ENTERPRISES 160/51 MARK GANJ, LUCKNOW RS. 6,95,87,579 5.5.10 8. M/S SINCERE MARKETING CO. SECT. 8, NOIDA RS. 5,5 5,580 5 .5.10 9. CORRUPACK INDIA C -97, A, HORIARY COMPLEX PH II, NOIDA RS. 19, 85,663 10.5.10 10. ARYAN PRINT & PACK C -74, SECTOR 63, NOIDA RS. 1 8,46,049 10.05.10 11. THE ASSESSING OFFICER WAS OF THE OPINION THAT T HE DEBTORS AMOUNTING TO RS. 8,58,44,005/- ARE NOT GENUINE AS T HE ADDRESSEES WERE 13 NOT FOUND ON THE GIVEN ADDRESSES. THE ASSESSING OF FICER, ACCORDINGLY, ADDED RS. 8,58,44,005/- TO THE RETURNED INCOME OF T HE ASSESSEE. 12. THE ASSESSEE ASSAILED THE ASSESSMENT BEFORE THE LD. CIT(A) AND VEHEMENTLY CONTENDED THAT NO PROPER NOTICE U/S 143( 2) OF THE ACT WAS SERVED UPON THE ASSESSEE AND PROPER OPPORTUNITY OF BEING HEARD WAS NOT GIVEN BY THE ASSESSING OFFICER. 13. THE LD. CIT(A) CALLED FOR REMAND REPORT FROM TH E ASSESSING OFFICER IN RESPECT OF THE OBJECTIONS RAISED BY THE ASSESSEE. THE ASSESSING OFFICER SUBMITTED REMAND REPORT WHICH IS AS UNDER: FROM THE INCOME TAX OFFICER, WARD-2(1). MEERUT TO THE COMMISSIONER OF INCOME TAX (APPEALS), MEERUT. F.NO.SCY./ITOAV-2(L)/MRT/2011-12 SIR, SUB: SHRI PUNEET JAIN S/O SHRI PRAVEEN KUMAR JAIN, PROP. M/S PARAS PAPER CENTRE, MEERUT - A.Y. 2008-09 - DATED: 28.12.2011 14 KINDLY REFER TO YOUR LETTER F.NO.125/10-11/165 DATE D 17.10.2011 ON THE SUBJECT NOTED ABOVE. 2. AFTER MAKING NECESSARY ENQUIRIES AND VERIFICATIO NS, I AM SUBMITTING MY REMAND REPORT AS UNDER: ASSESSMENT IN THIS CASE WAS MADE ON TOTAL INCOME OF RS.25,94,15,964/- UNDER SECTION 143(3) OF THE INCOM E TAX ACT, 1961 VIDE ORDER DATED 04.06.2010 AS AGAINST RE TURNED INCOME OF RS. 4,46,570/-. THE ADDITIONS MADE WERE A S UNDER: BOGUS SUNDRY CREDITORS. RS. 17,31,25,389 UNDISCLOSED INCOME/ SUNDRY DEBTORS. RS. 8,58. 44.005 RS. 25,89,69,394 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE FILED THE CONFIRMATION FROM SUNDRY CREDITOR M/S MIT TAL PAPER MART ON 26.02.2010. AS THE CONFIRMATION FILED BY TH E ASSESSEE WAS DOUBTFUL, THE A.O. ISSUED SUMMONS TO S H. RADHEY SHYAM MITTAL, PROP, OF M/S MITTAL PAPER MART FIXING THE DATE FOR COMPLIANCE FOR REQUIRING HIM TO PRODUC E COPY OF BANK ACCOUNT, AND ALL THE BOOKS OF ACCOUNTS RELATIN G TO A.V. 2008-09. THE SUMMONS WERE RECEIVED BACK IN THIS OFF ICE ON WITH THE REMARKS OF POSTAL AUTHORITIES THE TENANT TOLD THAT THE RECIPIENT IS OUTSIDE FOR HIS TREATED AND NOT KN OW WHEN HE WILL BE BACK. AFTER IT SUMMONS WERE SSUED TO SH. P UNEET JAIN ON 19.03.2010 REQUIRING TO FURNISH CASH BOOK, LEDGE R AND ALL 15 THE BILLS AND VOUCHERS/COPY OF BANK ACCOUNT IN THIS OFFICE ON 25.03.2010. NO COMPLIANCE WAS MADE OF THIS SUMMON A ND AGAIN SUMMON U/S 131 WAS ISSUED AND SERVED UPON SH. PUNEE T JAIN TO FURNISH ALL THE DETAILS AS ASKED IN EARLIER SUMMONS . BUT THE ASSESSEE DID NOT COMPLY TO THESE SUMMONS ALSO. HOWEVER, DURING THE COURSE OF HEARING, IN RESPONSE TO SUMMONS U/S 131, THE SUNDRY CREDITOR SH. RADHY SHYA M MITTAL PROP. M/S MITTAL PAPER MART ATTENDED ON ALONG WITH HIS SON SH. RAJNISH MITTAL AND GOT HIS STATEMENT ON OATH RE CORDED. STATEMENT ON OATH AND AFFIDAVIT OF SH. RADHEY SHYAM MITTAL IS PART OF ASSESSMENT ORDER. ON THE BASIS OF STATEM ENT GIVEN, THE ASSESSING OFFICER TREATED THE SUNDRY CREDITOR O F RS. 17,31,25,389/- AS BOGUS. THE TRADE TAX DEPARTMENT A ND POLICE DEPARTMENT HAVE CONFIRMED THAT THE PURCHASES MADE BY SHRI RADHEY SHYAM MITTAL M/S MITTAL PAPER MART F ROM M/S SAIFALI PAPER MART WERE BOGUS AS THE SAID COMPA NY HAD CLOSED AND STOPPED MANUFACTURING AND FROM 1999-2000 IS NOT MANUFACTURING, PURCHASING AND SALES, WHICH STANDS C ONFIRMED ALSO BY TRADE TAX AUTHORITIES. AS THE ADDITION WAS MADE ON THE BASIS OF STATEMENT OF SHRI RADEHY SHYAM MITTAL AND SH. RADEHY SHYAM MITTAL WAS NOT GOT CROSS EXAMINED, DURING THE COURSE OF REMAND PRO CEEDINGS, TO VERIFY THE STATEMENT OF SHRI RADHEY SHYAM MITTAL (ANSWER TO Q.NO.7), THAT THE CASH WITHDRAWALS WERE MADE BY SH. PUNEET JAIN AND HIS FATHER, VIDE THIS OFFICE NOTICE DATED 08.11.2011 THE ASSESSEE WAS REQUIRED TO ATTEND THIS OFFICE 16 ALONG WITH HIS FATHER ON 16.11.2011 AND TO FURNISH OTHER RELEVANT DETAILS (COPY ENCLOSED). HOWEVER, ON 18.11 .2011, THE COUNSEL OF THE ASSESSEE FILED A WRITTEN REPLY ENCLO SING THEREWITH COPY OF R. OF TRANSPORT, TRUCK NOS. BILTY NO., TAX CHALLAN OF ENTRY TAX, COPY OF ASSESSMENT ORDER OF T RADE TAX, COPY OF ACCOUNT OF UNLOADING AND LOADING EXPENSES, LIST OF SALARY PAID WITH NAME AND ADDRESS, COPY OF CREDIT N OTE. IN THIS REPLY, THE ASSESSEE AGAIN STATED THAT HE HAS NOT MA DE WITHDRAWALS/DEPOSIT ANY AMOUNT IN THE BANK ACCOUNT OF RADHEY SHYAM MITTAL AND ASSESSEE DID NOT DEPOSIT AN Y CHEQUE BY FILLING THE DEPOSIT SLIP IN THE BANK ACCOUNT OF SHRI RADHEY SHYAM MITTAL. SH. PUNEET JAIN AND SHRI PRAVEEN KUMA R JAIN, HIS FATHER WERE NOT PRODUCED FOR EXAMINATION. THOUG H IN THE REPLY IT WAS MENTIONED THAT ALL THE BOOKS OF ACCOUN TS ARE PRODUCED, BUT THE SAME WERE NOT PRODUCED. TO VERIFY THE CONTENTION OF THE ASSESSEE, THE BRANC H MANAGER, PUNJAB NATIONAL BANK, BAGHPAT ROAD, MEERUT WAS REQUIRED TO FURNISH THIS OFFICE THE NAME OF THE PER SON WHO HAD ACTUALLY PRESENTED THE BEARER CHEQUE TO YOUR BR ANCH AND MADE THE WITHDRAWALS. HE WAS ALSO REQUIRED TO FURNI SH THE PHOTOCOPY OF SUCH CHEQUES BOTH SIDE AND DOCUMENTARY EVIDENCE WITH REGARD TO IDENTITY OF THE PERSON WHO WITHDREW THE CASH. THE BRANCH MANGER SUPPLIED SOME PHOTOCOPI ES OF 17 THE BEARER CHEQUES THROUGH WHICH THE CASH WITHDRAWA LS WERE MADE FROM THE BANK ACCOUNT OF SHRI RADHEY SHYAM MIT TAL, PROP. M/S MITTAL PAPER MART. 5. IN BETWEEN LETTER DATED 14.12.2011 WAS AGAIN ISSUED TO SHRI PUNEET JAIN WITH REGARD TO FURNISH CERTAIN INF ORMATION (COPY OF LETTER ENCLOSED). VIDE THIS LETTER, THE AS SESSEE WAS INFORMED THAT HE HAS ONLY FILED THE G.R.OF TRANSPOR TS, TRUCK NOS. BILTY NOT. ETC. WHICH RELATE TO PURCHASES MADE FROM THE PARTIES OTHER THAN M/S MITTAL PAPER MART. HE WAS AL SO REQUIRED TO FURNISH REPLY TO PARA-3 OF NOTICE DATED 08.11.2011 TO EXPLAIN AS TO WHETHER THE GOODS WERE SOLD BY YOU ON FOR BASIS OR THE PURCHASER HAD MADE ITS OWN ARRANGEMENT FOR CARRYING THE GOODS. HE WAS AGAIN REQUIRED TO PRODUC E THE SALE BILLS IN ORIGINAL AND EVIDENCE OF TRANSPORTATION OF THE GOODS FROM HIS PREMISES TO THE PARTIES TO WHOM GOODS WERE SOLD. HE WAS AGAIN REMINDED THAT YOU AND YOUR FATHER HAVE NO T ATTENDED IN PERSON FOR EXAMINATION. HE WAS ALSO INF ORMED THAT IN THE MONTH OF DECEMBER ON 21.12.2007, YOU HA VE PURCHASED GOODS 42 TIMES IN A DAY, ON 24.12.2007- 2 2 TIMES, ON 25.12.2007- 44 TIMES, ON 26.12.2007- 42 TIMES, O N 27.12.2007 -13 TIMES, ON 28.12.2007 15 TIMES AND ON 29.12.2007- 14 TIMES AND AFTER THAT NO PURCHASES WE RE MADE. HE WAS REQUIRED TO FURNISH THE NAME AND COMPLETE AD DRESSES OF THE PARTIES TO WHOM CORRESPONDING SALES WERE MAD E BY HIM ON THESE DATES. THE COUNSEL OF THE ASSESSEE VIDE LE TTER DATED 18 09.12.2011 RECEIVED IN THIS OFFICE ON 16.12.2011 ST ATED THAT PUNIT JAIN WAS SERIOUSLY INJURED IN AN ACCIDENT BET WEEN CAR AND TRACTOR-TROLLY ON 02.12.2011 AT NAWAB GANJ DIST TL. GAUNDA, FAIZABAD AND HE HAS MULTIPLE FRACTURES IN HIS BOTH ARMS AND HAVE AN INJURY IN HIS HEAD. HE IS ON COMPLETE REST. SO HE IS UNABLE TO ATTEND THE OFFICE. AS REGARDS THE PURCHAS ES MADE FROM M/S MITTAL PAPER MART, THE COUNSEL STATED THAT THE PURCHASES WERE MADE ON FOR BASIS SO HE COULD NOT PR ODUCE TRANSPORT DOCUMENTS BECAUSE THAT RECORD WOULD BE KE PT BY M/S MITTAL PAPER MART FOR CLAIMING THE EXPENSES IN HIS BOOKS OF ACCOUNTS. ON 16.12.2001 ALSO THE ASSESSEE DID NO T FURNISH THE NAME AND COMPLETE ADDRESS OF THE PARTIES TO WHO M CORRESPONDING SALES WERE MADE. AS HIS FATHER, SHRI PRAVEEN KUMAR JAIN ATTENDED THE OFFICE, HIS STATEMENT ON OA TH WAS RECORDS, THE COPY OF WHICH IS BEING ENCLOSED HEREWI TH. 6. IN REPLY TO QUESTION NO.6, SH. PRAVEEN KUMAR JAIN STATED THAT HE WAS DEALING WITH THE WORK OF SUPERVI SION ONLY AND NO WRITING WORK WAS DONE BY HIM. HE ALSO STATED THAT IN M/S PARAS PAPER CENTRE 10-12 EMPLOYEES WERE WORKING AND SOME OF THE NAME TOLD BY HIM WERE TARUN, BIJENDER, SCHIN, RAHUL, DEEPAK, BALBIR ETC. IN REPLY TO A SPECIFIC Q UESTION NO.8, HE REVERTED FROM HIS ANSWER GIVEN IN QUESTION NO.6 AND STATED THAT SOMETIMES HE USED TO DEPOSIT THE CHEQUES BY FI LLING HIS OWN HAND WRITING RELATING TO M/S PARAS PAPER CENTRE . IN A SPECIFIC QUESTION NO. 12, HE WAS ASKED AS TO WHETHE R CHEQUE 19 BOOK SIGNED BY SH. RADHEY SHYUAM MITTAL WAS EVER RE MAINED WITH YOU AND AFTER FILING THE CHEQUE YOU USED TO MA KE WITHDRAWALS FROM HIS ACCOUNT, SHRI PRAVEEN KUMAR JA IN STATED THAT IT IS NOT IN HIS KNOWLEDGE THAT ANY SUCH CHEQU E BOOK WAS THERE. I HAD NEVER WITHDRAWN ANY AMOUNT BY FILLING THE CHEQUE. IN Q..NO. 13, HE WAS APPRISED OF THE FACT T HAT THE WITHDRAWALS WERE MADE BY YOUR EMPLOYEES FROM THE AC COUNT OF SH. RADHEY SHYAM MITTAL AND HOW IT WAS POSSIBLE THAT THE CHEQUES OF SHRI RADHEY SHYAM MITTAL WERE BEING WITH DRAWN BY YOUR EMPLOYEES. HE STATED THAT THIS IS NOT IN HI S KNOWLEDGE. IN THE LAST QUESTION NO. 14, HE WAS ASKED TO WRITE DOWN FIVE WORDS/SENTENCES FOR MATCHING HIS HAND WRITING. THE WORD WRITTEN BY HIM MATCH WITH THE WORDS WRITTEN ON THE SELF CHEQUES, THE SELF WITHDRAWALS THROUGH WHICH WERE MA DE FROM THE ACCOUNT OF SHRI RADHEY SHYAM MITTAL. HE WAS SHO WN CHEQUE NO.943305 DATED 08.08.2007 FOR RS. 4,00,000/ - AND WAS MAD6 AWARE THAT THE HAND WRITING ON THIS CHEQUE MATCHES WITH HIS HANDWRITING WHEREAS IN HIS REPLY TO A QUES TION MENTIONED ABOVE, HE HAD STATED THAT NO SUCH CHEQUE BOOKS WAS IN HIS KNOWLEDGE. HE WAS ASKED TO EXPLAIN AS TO HOW HE FILLED UP THIS CHEQUE. HE STATED THAT THIS CHEQUE I S NOT IN HIS HANDWRITING. 7. IN ORDER TO VERIFY THE CORRECTNESS AND MATCHING OF HIS 20 HANDWRITING, COPY OF 54 SUCH CHEQUES WAS GIVEN TO H AND WRITING EXPERT. SH. SANJEEV TOMAR, 77-OLD PREMPURI, RAILWAY ROAD, MEERUT WHO CONFIRMED THAT THESE CHEQUES HAVE BEEN WRITTEN IN THE HANDWRITING OF SHRI PRAVEEN KUMAR JA IN. A COPY OF HAND WRITING EXPERTS REPORT IS BEING ENCLOSED H EREWITH. THE HANDWRITING OF SHRI PRAVEEN KUMAR JAIN, FATHER OF THE ASSESSEE ON THE AVAILABLE 54 BEARER CHEQUES OF SHRI RADHEY SHYAM MITTAL FROM WHICH THE CASH WITHDRAWALS WERE M ADE, CONFIRMS THE STATEMENT OF SHRI RADHEY SHYAM MITTAL BANK ACCOUNT WAS GOT OPENED AND INTRODUCED BY THE ASSESS EE AND CASH WITHDRAWALS FROM HIS BANK ACCOUNT WERE MADE BY SH. PUNEET JAIN AND HIS FATHER SHRI PRAVEEN KUMAR JAIN. HANDWRITING OF SHRI PUNEET JAIN COULD NOT BE VERIFI ED AS HE HAS NOT BEEN PRODUCED FOR EXAMINATION. THE HANDWRIT ING ON THE SALE BILLS OF M/S MITTAL PAPER MART ISSUED TO M /S PARAS PAPER CENTRE COULD NOT BE VERIFIED IN ABSENCE OF TH E EXAMINATION OF SHRI PRAVEEN KUMAR, PROP. M/S PARAS PAPER CENTRE. FURTHER, AS REGARDS ADDITION OF RS. 8,58,55,005/- O N ACCOUNT OF UNEXPLAINED DEBTORS, VIDE LETTER DATED 08.11.201 1, THE ASSESSEE WAS REQUIRED AS UNDER: IN THE WRITTEN SUBMISSION BEFORE THE CIT(APPEALS) YOU HAVE TAKEN A GROUND THAT YOU WERE NOT PROVIDED PROPER AN D REASONABLE OPPORTUNITY. THE A.O. WHILE MAKING THE A SSESSMENT HAD MADE AN ADDITION OF RS. 8,58,55,005/- TOWARDS S UNDRY 21 DEBTORS BEING UNEXPLAINED AS THE LETTER ISSUED TO T HEM WERE RETURNED BACK. SINCE, THE DEBTORS WERE NOT AVAILABL E ON THE GIVEN ADDRESS, YOU ARE REQUIRED TO EXPLAIN THE GENU INENESS OF THESE DEBTORS AND PRODUCE THEM FOR EXAMINATION. ALS O FURNISH COPY OF THEIR ACCOUNTS AS ON 31.03.2009 AND 31.03.2 010. BUT, TILL DATE NEITHER THE ASSESSEE HAS FURNISHED T HE COPY OF SUCH SUNDRY DEBTORS NOR PRODUCED THEM FOR EXAMINATI ON. THEREFORE, THE DEBTORS COULD NOT BE VERIFIED. 8. THE FIR LODGED WITH THE POLICE AUTHORITIES AGAINST M/S MITTAL PAPER MART AND M/S PARAS PAPER CENTRE BY SH. SHARAD KUMAR SHUKLA S/O SHRI RADHEY SHYAM SHUYKLA, R/O 4/1 60, RAKSHAPURAM, MAWAN ROAD, MEERUT, ASSTT. COMMISSIONE R OF TRADE TAX KHAND-10 MAKES IT CLEAR THAT M/S MITTAL P APER MART AND M/S PARAS PAPER CENTRE TOGETHER HAVE CAUSE REVE NUE LOSS TO THE STATE GOVERNMENT. THE ASSESSEE HAS ALSO FILE D A COPY OF FINAL REPORT OF POLICE DEPARTMENT IN WHICH THEY HAV E CONFIRMED THAT SHRI RADHEY SHYAM MITTAL HAS COMMITTED A CRIME OF FAKE PURCHASES FROM M/S SAIFALI PAPER PVT. LTD., SAHARAN PUR AND M/S PARAS PAPER CENTRE HAS NOT BEEN FOUND INVOLVED IN THIS ACTION AND NO EVIDENCES ARE THEIR AGAINST IT. THE F INAL REPORT FROM POLICE DEPARTMENT DOES NOT EXONERATE SHRI PUNE ET JAIN FOR HIS INVOLVEMENT IN FAKE/BOGUS PURCHASE AND SALE S IN VIEW OF ABOVE MENTIONED DISCUSSIONS. 9. A COPY OF TAX AUDIT REPORT OF SH. RADHEY SHYAM MIT TAL, 22 PROP. M/S MITTAL PAPER MART WAS OBTAINED FROM THE I TO, WARD-2(2), MEERUT WHICH REVEALS THAT M/S MITTAL PAP ER MART HAD NOT SHOWN ANY DEBIT BALANCE OF RS. 17,31,25,389 /- IN HIS BOOKS, THOUGH DURING THE COURSE OF ASSESSMENT PROCE EDINGS FOR THE A.Y. 2009-10 OF M/S PARAS PAPER CENTRE IT IS NO TICED THAT PAYMENT THROUGH CHEQUES OF RS.9,80,80,000/- HAVE BE EN ISSUED BY M/S PARAS PAPER CENTRE TO M/S MITTAL PAPER MART DURING THE PERIOD 1.4.08 TO 31.3.2009 WHEREAS M/S MITTAL P APER MART HAD NOT SHOWN ANY CREDITOR IN HIS BALANCE SHEET FOR THE A.Y. 2008-09 AND HAS ALSO NOT MADE ANY SALES DURING THE PERIOD 1.4.08 TO 31.3.09. IT IS ALSO NOTICED THAT DURING T HE FINANCIAL YEAR 2008-09, M/S PARAS PAPER CENTRE HAS DEBITED TH E ACCOUNT OF M/S MITTAL PAPER AMOUNT FOR RS. 8,97,000/- AND C REDITED THE AMOUNT OF M/S ARYAN PRINT AND PACK AND FURTHER DEBITED THE ACCOUNT OF M/S MITTAL PAPER MART BY RS. 15,87,5 79/- AND CREDITED THE ACCOUNT OF M/S GOKUL ENTERPRISES BY TR ANSFER ENTRIES. IN SUPPORT OF ITS CONTENTION, IN THE PAPER BOOK FIL ED BY SH. PUNEET JAIN PROP. M/S PARAS PAPER CENTRE HAS TAKEN THE FOLLOWING GROUNDS: A) THE HE IS REGISTERED UNDER BOTH UP. VAT ACT AS WELL AS CENTRAL SALES TAX ACT AND M/S MITTAL PAPER MART IS DULY REGISTERED UNDER UPTT-MF0055531 DATED 01.10.2005 CS T NO. MF 5044141 DATED 28.10.2006 FROM WHOM HE HAS MADE PURCHASES OF RS.41,76,22,254/- 23 B) THAT BECAUSE OF THE REASON THAT FIR WAS MADE BY COM MERCIAL TAX DEPARTMENT, THE ASSESSEE SUFFERED SHOCK AND MEN TAL AGONY AND HE WAS UNABLE TO GIVE ANY REPLY TO THE NOTICES, ISSUED BY THE A.O. C) THAT THE STATEMENT OF SH. RADHEY SHYAM MITTAL AND A FFIDAVIT IS CONTRADICTORY TO THE FACT THAT THE RETURN FILED BY HIM AFTER AUDITING HIS BOOKS OF ACCOUNTS BY A C.A. VOLUNTARY AND IF ANY WRONG COMMITTED BY RADHEY SHYAM MITTAL THEN HE SHOU LD BE PUNISHED IF HIS STATEMENT IS FOUND TRUE BUT ASSESSE E CANNOT BE PENALIZED UNTIL THE ASSESSEE CROSS EXAMINE THE WITN ESS. D) THAT THE ASSESSEE WAS NOT ALLOWED SUFFICIENT OPPORT UNITY EVEN THE REQUEST OF THE ASSESSSS COUNSEL WAS TURND OWN IN WHICH HE WANTED TO INSPECT THE RECORD AND REQUIRED THE CE RTIFIED COPIES TO PROCEED THE CASE BUT THE A.O. REFUSED TO RECEIVE THE LETTER AND THE PERSON ON THE DAK COUNTER ALSO REFUS ED TO RECEIVE IT WHICH SHOWS THAT THE A.O. WAS PREJUDICED AGAINST THE ASSESSEE TO COMPLETE THE ASSESSMENT U/S 143(3) AND NOT UNDER SECTION 144. E) THAT THE ASSESSMENT ORDER WAS FRAMED TREATING THE S UNDRY CREDITORS OF RS. 17,54,46,941/- AS BOGUS HOWEVER TH E TOTAL SALES AND CLOSING STOCK WAS RS. 45,05,86,546/- WAS CONFIR MED. THE HOW THE TOTAL CREDITORS OF RS. 17,54,46,941/- BECAME BO GUS WHEN PROPRIETORS CAPITAL AND SECURED LOAN ARE GENUINE. F) THAT THE A.O. HAD NOT REJECTED THE BOOKS OF ACCOUNT S WHICH WAS DULY AUDITED BY THE AUDITOR U/S 44AB. 24 PARA NO. 10(A) TO 10(C) ARE COVERED BY MY COMMENTS GIVEN ABOVE. IN PARA-10(D), THE ASSESSEE HAS STATED THAT HE WAS NOT ALLOWED SUFFICIENT OPPORTUNITIES TO EXPLAIN ITS CAS E WHICH IS NOT CORRECT AS LETTER DATED 26.05.2010 OF THE ASSES SEE FORMING PART OF THE PAPER BOOKS ITSELF REFLECTS THA T DUE TO ABNORMAL CONDITIONS, HE FAILED TO FURNISHED THE DET AILS BEFORE THE A.O. IT HAS ALSO BEEN MENTIONED IN THAT LETTER THAT THE ASSESSEE CAME TO KNOW THAT THE A.O. HAS BEEN TRANSF ERRED TO OTHER PLACE AND TO KEEP THE ASSESSMENT PENDING FOR ANOTHER ASSESSING OFFICER SO THAT THE ASSESSEE COULD COLLEC T ALL THE DETAILS. A PERUSAL OF ASSESSEES LETTER REVEALS THAT THE ASS ESSEE HAD CHANGED HIS COUNSEL AND NEW ENGAGED WANTED WHICH WAS NOT ALLOWED. THE ASSESSEE IN HIS LETTER DATED 26.05 .2010 WHICH NOT ALLEGED RECEIVED AT DAK COUNTER ITSELF PR OVES THAT THE ASSESSEE WAS ALLOWED SUFFICIENT OPPORTUNITIES A ND THE ASSESSEE HIMSELF WANTED TO ESCAPE FROM THE ASSESSME NT PROCEEDINGS BEFORE THE THEN A.O. BUT FROM THE ANOTH ER A.O. FOR THE REASONS BEST KNOWN TO HIM. FIRST NOTICE U/S 143(2) DATED 18.09.2009 WAS SERVED UPON THE ASSESSEE ON 22.02.2009 AND DURING THE PERIOD OF ALMOST 9 MONTHS , THE ASSESSEE DID NOT CHANGE HIS COUNSEL AND FURNISHED T HE DETAILS FROM TIME TO TIME AND ON ONE GROUND OR OTHER LINGER ED THE ASSESSMENT, HENCE THE A.O. COMPLETED THE ASSESSMENT . 25 PARA-10(E) IS ALSO COVERED WITH THE COMMENTS GIVEN ABOVE. SINCE, THE PARTY WHO HAD MADE PURCHASES ONLY THROUGH FAKE BILLS FROM M/S SAIFALI PAPER LTD. HOW COULD IT MAKE THE SALES TO THE ASSESSEE. PARA-10(E) IS CONCERNED WITH REJECTION OF BOOKS OF ACCOUNTS AS THE CREDITOR WAS NOT FOUND GENUINE. SIN CE, THE CREDITOR HAD NOT SHOWN DEBIT BALANCE OF THE ASSESSE E IN ITS BOOKS OF ACCOUNT, THE CREDIT BALANCE REMAINED UNVER IFIABLE AND THE A.O. MADE THE ADDITION ACCORDINGLY. THE ASSESSEE HAS CHALLENGED THE SERVICE OF NOTICE U NDER SECTION 143(2) WHICH WAS MADE ON THE MOTHER OF THE ASSESSEE AS THE ASSESSEE IN THE RECORDS HAD GIVEN HIS RESIDE NTIAL ADDRESS. BUT, SINCE THE ASSESSEE HAD COMPLIED THE S AID NOTICE, IT CANNOT BE CHALLENGED AT THIS STAGE AND THE SERVI CE OF THIS NOTICE IS HELD TO BE PROPER SERVICE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS PROVED THAT FAKE/BOGUS PUR CHASES AND SALES THROUGH FAKE BILLS WERE MADE BY M/S MITTA L PAPER MART AND M/S PARAS PAPER CENTRE IN CONNIVANCE WITH EACH OTHER THROUGH THE FIRM M/S MITTAL PAPER MART. IN VIEW OF MY ABOVE COMMENTS, THE APPEAL PROCEEDING S MAY KINDLY BE DECIDED ON MERITS. 26 14. AFTER CONSIDERING THE FACTS AND REMAND REPORT O F THE ASSESSING OFFICER, THE LD. CIT(A) CONFIRMED THE ADDITIONS MAD E BY THE ASSESSING OFFICER. 15. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REI TERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. IT IS TH E SAY OF THE LD. COUNSEL FOR THE ASSESSEE THAT BY NOT ALLOWING ANY O PPORTUNITY TO CROSS EXAMINE SHRI RADHEY SHYAM MITTAL, THE LOWER AUTHORI TIES HAVE VIOLATED THE PRINCIPLES OF NATURAL JUSTICE, WHICH IS AGAINST THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF ANDAMAN TI MBER INDUSTRIES VS. CIT CIVIL APPEAL NO. 4228 OF 2006. 16. THE LD. COUNSEL FOR THE ASSESSEE ONCE AGAIN STA TED THAT THERE WAS NO PROPER SERVICE OF NOTICE U/S 143(2) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED UPON THE DECISION OF TH E CO-ORDINATE BENCHES FOR ASSESSMENT YEARS 2009-10 AND 2010-11 IN ITA NO. 4922/DEL/2014 AND 4152/DEL/2015. IT IS THE SAY OF THE LD. COUNSEL FOR THE ASSESSEE THAT ON SIMILAR FACTS IN ASSESSMENT YE AR 2009-10, THE TRIBUNAL HAS HELD THAT THE ADDITIONS BASED ON THE S TATEMENTS OF SHRI RADHEY SHYAM MITTAL MADE BY THE ASSESSING OFFICER A RE NOT SUSTAINABLE. SIMILAR VIEW WAS TAKEN IN ASSESSMENT YEAR 2010-11. 27 17. THE LD. COUNSEL FOR THE ASSESSEE FURTHER POINTE D OUT THAT IN ASSESSMENT YEAR 2009-10, THE ASSESSING OFFICER HAD MADE ADDITION BY ESTIMATING THE PROFIT BEING ADDITION ON ACCOUNT OF COMMISSION ON FAKE/BOGUS BILLS. THE LD. COUNSEL FOR THE ASSESSEE FURTHER DREW OUR ATTENTION TO THE DECISION OF THE ADDITIONAL COMMISS IONER GRADE 2, [APPEAL 2] COMMERCIAL TAXES, MEERUT AND POINTED O UT THAT THE COMMERCIAL TAXES DEPARTMENT HAS ACCEPTED THE TRADIN G RESULTS OF THE APPELLANT. 18. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE F INDINGS OF THE LOWER AUTHORITIES. IT IS THE SAY OF THE LD. DR THA T IN RESPECT OF SERVICE OF NOTICE U/S 143(2) OF THE ACT, THE LD. CIT(A) HAS CATEGORICALLY MENTIONED THAT THE LD. COUNSEL FOR THE ASSESSEE DUR ING THE APPELLATE PROCEEDINGS HAS MADE NO SUBMISSIONS IN THIS REGARD AND THEREAFTER, DISMISSED THIS GRIEVANCE OF THE ASSESSEE. 19. THE LD. DR VEHEMENTLY STATED THAT THERE SHOULD BE NO GRIEVANCE CAUSED TO THE ASSESSEE ONCE THE MATTER IS NOT PRESS ED BEFORE THE LD. CIT(A). ON MERITS OF THE ADDITIONS, THE LD. DR DRE W OUR ATTENTION TO THE RELEVANT OBSERVATIONS MADE BY THE ASSESSING OFF ICER IN THE ASSESSMENT ORDER AND THE LD. CIT(A) IN HIS APPELLAT E ORDER, AND STATED THAT THE ASSESSING OFFICER HAS DEMONSTRATED BY BRIN GING CLINCHING 28 EVIDENCES IN SUPPORT OF HIS ADDITIONS AND HAS NOT S IMPLY MADE THE ADDITIONS BASED UPON THE STATEMENTS OF SHRI RADHEY SHYAM MITTAL. 20. REBUTTING TO THE OPPORTUNITY OF CROSS EXAMINATI ON, THE LD. DR STATED THAT TECHNICAL RULES OF EVIDENCE DO NOT APPL Y TO THE INCOME TAX PROCEEDINGS AND INCOME TAX AUTHORITIES ARE NOT BOUN D BY TECHNICAL RULES OF EVIDENCE THOUGH THE GENERAL PRINCIPLES OF EVIDENCE ACT DO APPLY. 21. THE LD. DR REFERRED TO VARIOUS JUDICIAL DECISIO NS IN SUPPORT OF HER SUBMISSIONS IN HER WRITTEN SUBMISSIONS AND FOR THE SAKE OF CONVENIENCE, THE SAME IS EXTRACTED HEREUNDER: HONBLE SUPREME COURT IN THE CASE OF INDIAN & EASTE RN NEWSPAPER SOCIETY V. CIT 119 ITR 996 HAS HELD THAT THE PROCEEDINGS FOR ASSESSMENT BEFORE THE ASSESSING OFF ICER HAVE BEEN DESCRIBED AS QUASI-JUDICIAL IN CHARACTER. THE HONBLE SUPREME COURT IN S.S. GADGIL V. LAL & CO. 53 ITR 231 HAS HELD THAT A PROCEEDING FOR ASSESSMENT IS NOT A SUIT FOR ADJUDICATION OF A CIVIL DISPUTE. THAT AN INCOME -TAX PROCEEDING IS IN THE NATURE OF A JUDICIAL PROCEEDIN G BETWEEN CONTESTING PARTIES, IS A MATTER WHICH IS NOT CAPABL E OF EVEN A 29 PLAUSIBLE ARGUMENT. THE INCOME-TAX AUTHORITIES WHO HAVE POWER TO ASSESS AND RECOVER TAX ARE NOT ACTING AS J UDGES DECIDING A LITIGATION BETWEEN THE CITIZEN AND THE S TATE: THEY ARE ADMINISTRATIVE AUTHORITIES WHOSE PROCEEDINGS AR E REGULATED BY STATUTE, BUT WHOSE FUNCTION IS TO ESTI MATE THE INCOME OF THE TAXPAYER AND TO ASSESS HIM TO TAX ON THE BASIS OF THAT ESTIMATE. TAX LEGISLATION NECESSITATES THE SETTING UP OF MACHINERY TO ASCERTAIN THE TAXABLE INCOME, AND T O ASSESS TAX ON THE INCOME, BUT THAT DOES NOT IMPRESS THE PR OCEEDING WITH THE CHARACTER OF AN ACTION BETWEEN THE CITIZEN AND THE STATE. DHAKESWARI COTTON MILLS LTD. V. CIT 26 ITR 775 (SC) - AS REGARDS THE SECOND CONTENTION, ALTHOUGH ITO IS NOT FETTERED BY TECHNICAL RULES OF EVIDENCE AND PLEADINGS, AND T HAT HE IS ENTITLED TO ACT ON MATERIAL WHICH MAY NOT BE ACCEPT ED AS EVIDENCE IN A COURT OF LAW, BUT THERE THE AGREEMENT ENDS; BECAUSE IT IS EQUALLY CLEAR THAT IN MAKING THE ASSE SSMENT UNDER SECTION 23(3) HE IS NOT ENTITLED TO MAKE A PU RE GUESS AND MAKE AN ASSESSMENT WITHOUT REFERENCE TO ANY EVI DENCE OR ANY MATERIAL AT ALL AND THERE MUST BE SOMETHING MOR E THAN BARE SUSPICION TO SUPPORT THE ASSESSMENT UNDER SECT ION 23(3).... IN THIS CASE WE ARE OF THE OPINION THAT T HE TRIBUNAL VIOLATED CERTAIN FUNDAMENTAL RULES OF JUSTICE IN RE ACHING ITS CONCLUSIONS. FIRSTLY, IT DID NOT DISCLOSE TO THE AS SESSEE WHAT INFORMATION HAD BEEN SUPPLIED TO IT BY THE DEPARTME NTAL 30 REPRESENTATIVE. NEXT, IT DID NOT GIVE ANY OPPORTUNI TY TO THE COMPANY TO REBUT THE MATERIAL FURNISHED TO IT BY HI M, AND LASTLY, IT DECLINED TO TAKE ALL THE MATERIAL THAT T HE ASSESSEE WANTED TO PRODUCE IN SUPPORT OF ITS CASE. THE RESUL T IS THAT THE ASSESSEE HAD NOT HAD A FAIR HEARING. CIT V. EAST COAST COMMERCIAL CO. LTD. 63 ITR 449 - WE MAY OBSERVE THAT THE HIGH COURT APPEARS TO HAVE FELT SO ME DOUBT AS TO THE ADMISSIBILITY OF THE REPORT OF THE INCOME -TAX INVESTIGATION COMMISSION. BUT THE INCOME-TAX AUTHOR ITIES ARE NOT STRICTLY BOUND BY THE RULES OF EVIDENCE, AND TH E MERE FACT THAT CERTAIN PROVISIONS OF THE TAXATION OF INCOME (INVESTIGATION COMMISSION) ACT RELATING TO THE INQU IRIES TO BE HELD WERE DECLARED TO BE ULTRA VIRES BY THIS COURT DID NOT RENDER THE COMMISSION AN UNLAWFUL BODY ; AND IN ANY EVENT THE ADMISSIONS WHICH ARE RECORDED BY THE COMMISSION, AS HAVING BEEN MADE BEFORE THEM, CANNOT BE IGNORED. THE REPOR T HAD EVIDENTIARY VALUE AND COULD BE TAKEN INTO ACCOUNT. UNDOUBTEDLY THE REPORT HAD TO BE BROUGHT TO THE NOT ICE OF THE COMPANY, AND THE COMPANY HAD TO BE GIVEN AN OPP ORTUNITY TO MAKE ITS REPRESENTATION AGAINST THE REPORT AND T O TENDER EVIDENCE AGAINST THE TRUTH OF THE RECITALS CONTAINE D THEREIN. THE HONBLE SUPREME COURT IN THE CASE OF CHUHARMAL V. CIT [1988] 172 ITR 250 HAS HELD THAT WHAT IS MEANT BY SAYING THAT THE EVIDENCE ACT DOES NOT APPLY TO PROCEEDINGS UNDER 31 THE INCOME-TAX ACT IS THAT THE RIGOR OF THE RULES O F EVIDENCE CONTAINED IN THE EVIDENCE ACT ARE NOT APPLICABLE, B UT THAT DOES NOT MEAN THAT WHEN THE TAXING AUTHORITIES ARE DESIROUS OF INVOKING THE PRINCIPLES OF THE ACT IN PROCEEDING S BEFORE THEM, THEY ARE PREVENTED FROM DOING SO. ALL THAT IS REQUIRED IS THAT IF THEY WANT TO USE ANY MATERIAL COLLECTED BY THEM WHICH IS ADVERSE TO THE ASSESSEE, THEN THE ASSESSEE MUST BE GIVEN A CHANCE TO MAKE HIS SUBMISSIONS THEREON. THE PRINCIP LES OF NATURAL JUSTICE ARE VIOLATED IF AN ADVERSE ORDER IS MADE ON AN ASSESSEE ON THE BASIS OF THE MATERIAL NOT BROUGHT T O HIS NOTICE. SURROUNDING CIRCUMSTANCES MUST BE CONSIDERED WHILE SCRUTINIZING THE DOCUMENTS AS HONBLE SUPREME COURT HAS SAID IN THE CASE OF DURGA PRASAD AND THAT THE TAXING AUTHORITIES ARE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BE FORE THEM. THEY ARE ENTITLED TO LOOK INTO THE SURROUNDIN G CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITA LS MADE IN THOSE DOCUMENTS. POWERS OF AO UNDER INCOME TAX ACT - UNDER THE INCOME TAX ACT THE ASSESSING OFFICER ARE EMPOWERED TO GIVE NOT ICE TO THE ASSESSEE TO SUBSTANTIATE ITS RETURN OF INCOME B Y PRODUCING THE NECESSARY MATERIALS AS UNDER SECTION 143(2) THE 32 CLAIMS MADE IN THE RETURN HAS TO BE JUSTIFIED BY TH E ASSESSEE. IF THE ASSESSING OFFICER WANTS TO MAKE ADDITION ON ANY NEW FACT OUTSIDE THE RECORD, THEN IN SUCH CASES AO MUST BRING THESE FACTS TO THE KNOWLEDGE OF THE ASSESSEE FOR RE BUTTAL. IN ORDER TO ASSESS THE CORRECT INCOME, THE AO MAY MAKE NECESSARY ENQUIRIES U/S 142(2) OF THE ACT AND GATHE R EVIDENCES TO MAKE AN ASSESSMENT BY ADDING THE INCOM E NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. HOWEVER, THESE EVIDENCES MUST BE PLACED BEFORE THE ASSESSEE BUT THE AO IS NOT REQUIRED UNDER INCOME TAX LAW TO GIVE THE ASSESSEE THE RIGHT TO CROSS EXAMINE THE PARTIES FRO M WHOM THE EVIDENCE WAS GATHERED DUE TO CONFIDENTIALITY OF THE MATTER UNDER WHICH THE NAMES OF THE PARTIES MAY NOT BE DISCLOSED. HOWEVER, THE ASSESSEE MUST BE CONFRONTED WITH THE EVIDENCES GATHERED FROM ANY CONFIDENTIAL SOURCE AND THE OPPORTUNITY TO THE ASSESSEE MUST BE OFFERED. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF MOTILAL PADAMPAT UDYOG LTD. VS CIT 293 ITR 565 AFTER CONSIDERING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF KR ISHNA CHAND CHELA RAM VS. CIT HAS HELD THAT RIGHT OF CROS S EXAMINATION FROM WHOM THE AO HAS COLLECTED THE EVID ENCE IS NOT REQUIRED UNDER THE INCOME TAX LAW AND SUCH ASSE SSMENT WAS VALID UNDER THE ACT. IN THE INSTANT CASE, THE COPIES OF THE ROUGH CASH BOOKS AND THE STATEMENTS OF THE PARTNERS OF V 33 WHICH WERE RECORDED, HAD BEEN PROVIDED TO THE ASSES SEE AND, IN FACT, THE ASSESSEE HAD ALSO SUBMITTED ITS REPLY. IN THE LETTER AN OPPORTUNITY TO CROSS-EXAMINE WAS ASKED FOR ONLY IN CASE THE STATEMENTS HAD NOT BEEN RECORDED. AS, IN T HE INSTANT CASE, THE ASSESSEE HAD PROPER OPPORTUNITY TO CONTRO VERT THE MATERIAL GATHERED BY THE ASSESSING AUTHORITY AND US ED AGAINST IT, THERE HAD BEEN COMPLIANCE OF THE PRINCIPLE OF N ATURAL JUSTICE. IN THE CASE OF CIT V. JAY ENGINEERING WORKS LTD. 11 3 ITR 389 HONBLE DELHI HIGH COURT HAS HELD THAT THE ITO AND CERTAIN OTHER AUTHORITY FUNCTIONING UNDER THE ACT HAVE A DU AL CHARACTER. THEY ARE BOTH AGENCIES OF INVESTIGATION MADE INTO THE INCOMES OF ASSESSEES AND THEY ARE ALSO QUASI-JU DICIAL AUTHORITIES ASSESSING THE LIABILITIES OF THE ASSESS EES TO PAYMENT OF INCOME-TAX. UNDER SECTION 142(2), THE IT O MAY MAKE SUCH ENQUIRY AS HE CONSIDERS NECESSARY FOR THE PURPOSE OF OBTAINING FULL INFORMATION IN RESPECT OF THE INC OME OR LOSS OF AN ASSESSEE. UNDER SECTION 143(3), THE ITO DOES NOT ONLY HEAR SUCH EVIDENCE AS THE ASSESSEE MAY PRODUCE OR A S HE MAY REQUIRE TO BE PRODUCED, BUT ALSO TAKES INTO CONSIDE RATION 'ALL RELEVANT MATERIAL WHICH HE HAS GATHERED' FOR THE PU RPOSE OF MAKING AN ASSESSMENT. WHILE THE WORD 'EVIDENCE' MAY RECALL THE ORAL AND DOCUMENTARY EVIDENCE AS MAY BE ADMISSI BLE UNDER THE INDIAN EVIDENCE ACT, THE USE OF THE WORD 'MATER IAL' SHOWS THAT THE ITO NOT BEING A COURT CAN RELY UPON MATERIAL 34 WHICH MAY NOT BE STRICTLY EVIDENCE ADMISSIBLE UNDER THE INDIAN EVIDENCE ACT FOR THE PURPOSE OF MAKING AN OR DER OF ASSESSMENT. THE COURTS OFTEN TAKE JUDICIAL NOTICE O F CERTAIN FACTS WHICH NEED NOT BE PROVED, WHILE ADMINISTRATIV E AND QUASI-JUDICIAL AUTHORITIES CAN TAKE 'OFFICIAL NOTIC E' OF WIDER VARIETIES OF FACTS WHICH NEED NOT BE PROVED BEFORE THEM. THUS, NOT ONLY IN RESPECT OF THE RELEVANCY BUT ALSO IN RESPECT OF PROOF THE MATERIAL WHICH CAN BE TAKEN INTO CONSI DERATION BY THE ITO AND OTHER AUTHORITIES UNDER THE ACT IS FAR WIDER THAN THE EVIDENCE WHICH IS STRICTLY RELEVANT AND AD MISSIBLE UNDER THE EVIDENCE ACT. IN THE CASE OF HERSH WIN CHADHA VS DCIT 135 TTJ 513 HONBLE ITAT DELHI HAS ANALYSED THE NATURE OF INCOM E-TAX PROCEEDINGS AND POWERS OF ASSESSING OFFICER AND HEL D THAT THE DISPUTE CONCERNED THE DETERMINATION OF THE INCOME-T AX LIABILITY OF THE ASSESSEE RATHER THAN FIXING ANY CR IMINAL LIABILITY OR ACCOUNTABILITY OF THE ASSESSEE FOR ANY OTHER LAW OR OBLIGATION. THE ADMISSIBILITY OF DOCUMENTS, EVIDENC E OR MATERIAL DIFFERS GREATLY IN INCOME-TAX PROCEEDINGS AND CRIMINAL PROCEEDINGS RESPECTIVELY. IN CRIMINAL PROC EEDINGS, THE CHARGE IS TO BE PROVED BY THE STATE AGAINST THE ACC USED, ESTABLISHING IT BEYOND DOUBT, WHEREAS AS PER THE SE TTLED PROPOSITION OF LAW, THE INCOME-TAX LIABILITY IS ASC ERTAINED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD, THE SURROUNDING 35 CIRCUMSTANCES, HUMAN CONDUCT AND PREPONDERANCE OF PROBABILITIES. [PARA 6.1] RULES OF EVIDENCE DO NOT GOVERN THE INCOME-TAX PROC EEDINGS, AS THE PROCEEDINGS UNDER THE INCOME-TAX ACT ARE NOT JUDICIAL PROCEEDINGS IN THE SENSE IN WHICH THE PHRASE JUDICI AL PROCEEDINGS IS ORDINARILY USED. THE ASSESSING OFFI CER IS NOT FETTERED OR BOUND BY TECHNICAL RULES ABOUT EVIDENCE CONTAINED IN THE INDIAN EVIDENCE ACT, AND HE IS ENTITLED TO A CT ON MATERIAL WHICH MAY NOT BE ACCEPTED AS EVIDENCE IN A COURT OF LAW. [PARA 6.3] IN THE CASE OF CIT V. METAL PRODUCTS OF INDIA 150 ITR 714 HONBLE PUNJAB & HARYANA HIGH COURT HAS HELD THAT THE WORD 'EVIDENCE' AS A TERM OF LAW IS NOT AN ARRESTED ONE. IN THE CONTEXT OF THE INDIAN EVIDENCE ACT, 'EVIDENCE' MEAN S AND INCLUDES ALL STATEMENTS MADE BEFORE THE COURT WHICH ARE CALLED 'ORAL EVIDENCE' AND ALL DOCUMENTS PRODUCED B EFORE IT FOR INSPECTION WHICH ARE CALLED 'DOCUMENTARY EVIDEN CE'. THAT IS A CONTROLLED MEANING OF THE WORD FOR THAT ACT. Y ET, IN CERTAIN CIRCUMSTANCES, EVIDENCE IN THE FORM OF AFFI DAVITS, DECLARATIONS AND OTHER MEANS OF THE SAME KIND ARE A LLOWED TO BE ADDUCED. BUT ALL SUCH EXERCISE IS MADE BEFORE A COURT OR A QUASI-JUDICIAL TRIBUNAL TO MAKE THINGS OBVIOUS OR M ANIFEST. IN OTHER WORDS, THE EFFORT IS TO MAKE THINGS PLAINLY V ISIBLE OR CONSPICUOUS. THE OBJECT CAN ALSO BE ACHIEVED BY A P OSITIVE 36 SUGGESTION INDICATING AN INFERENCE WHICH ADDS TO TH E PLAIN VISIBILITY OR MANIFESTATION. THE COURT OR THE TRIBU NAL MUST HAVE BEFORE IT, IN ALL EVENTS, THE CORRECT PERSPECT IVE OF THINGS AND WHAT IS HELPFUL OR VALUABLE IN THAT DIRECTION I S 'EVIDENCE' IN THE LARGER CONTEXT OR IN THE GENERIC SENSE. AS I S WELL KNOWN, STRICT RULES OF EVIDENCE, AS ARE KNOWN TO THE INDIA N EVIDENCE ACT, ARE NOT APPLICABLE TO INCOME-TAX PROCEEDINGS A ND THUS THE WORD 'EVIDENCE' IN THE INCOME-TAX PROCEEDINGS H AS TO BE UNDERSTOOD IN THE GENERIC SENSE. IN THE CASE OF NOKIA INDIA (P.) LTD. V. DDIT 59 TAXMANN.COM 212 HONBLE ITAT DELHI BENCH HAS RELIED UPON THE DE CISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF KISAN LAL AGARWALLA V. COLLECTOR OF LAND CUSTOMS AIR 1967 & C AL. 80 WHERE THE HONBLE COURT HAS HELD THE FOLLOWING IN P ARA 28 - 28. THERE IS A GOOD DEAL OF MISCONCEPTION ON THIS QUESTION OF THE RIGHT OF CROSS- EXAMINATION AS PART OF NATURAL JUSTICE NATURAL JUSTICE IS FAST BECOMING THE MOST UNNATURAL AND ARTIFICIAL JUSTICE AND FOR THAT CONFUSION THE COURT S ARE NO LESS RESPONSIBLE THAN THE LITIGANTS. ORDINARILY THE PRIN CIPLE OF NATURAL JUSTICE IS THAT NO MAN SHALL BE A JUDGE IN HIS OWN CAUSE AND THAT NO MAN SHOULD BE CONDEMNED UNHEARD. THIS L ATTER DOCTRINE IS KNOWN AS AUDI ALTERAM PARLEM. IT IS ON THIS PRINCIPLE THAT NATURAL JUSTICE ENSURES THAT BOTH SI DES SHOULD BE HEARD FAIRLY AND REASONABLY. A PART OF THIS PRIN CIPLE IS THAT 37 IF ANY RELIANCE IS PLATED ON EVIDENCE OR RECORD AGA INST A PERSON THEN THAT EVIDENCE OR RECORD MUST BE PLACED BEFORE HIM FOR HIS INFORMATION, COMMENT AND CRITICISM. THAT IS ALL THAT IS MEANT BY THE DOCTRINE OF AUDI ALTERAM PARTEM, THAT NO PARTY SHOULD BE CONDEMNED UNHEARD. NO NATURAL JUSTICE REQ UIRES THAT THERE SHOULD BE A KIND OF A FORMAL CROSS-EXAMI NATION. FORMAL CROSS- EXAMINATION IS PROCEDURAL JUSTICE. IT IS GOVERNED BY RULES OF EVIDENCE. IT IS THE CREATION O F COURTS AND NOT A PART OF NATURAL JUSTICE BUT OF LEGAL AND STATUTORY JUSTICE. NATURAL JUSTICE CERTAINLY INCLUDES THAT AN Y STATEMENT OF A PERSON BEFORE IT IS ACCEPTED AGAINST SOMEBODY ELSE, THAT SOMEBODY ELSE SHOULD HAVE AN OPPORTUNITY OF MEETING IT WHETHER IT (SIC), BY WAY OF INTERROGATION OR BY WAY OF COMMENT DOES NOT MATTER SO LONG AS THE PARTY CHARGE D HAS A FAIR AND REASONABLE OPPORTUNITY TO SEE. COMMENT AM CRITICISE THE EVIDENCE, STATEMENT OR RECORD ON WHICH THE CHAR GE IS BEING MADE AGAINST HIM THE DEMANDS AND THE TEST OF NATURAL JUSTICE ARE SATISFIED. CROSS-EXAMINATION IN THAT SE NSE IS NOT THE TECHNICAL CROSS-EXAMINATION IN A COURT OF LAW I N THE WITNESS-BOX. IN THE CASE OF CIT V. KUWER FIBERS (P.) LTD. 77 TAXMANN.COM 345 HONBLE HIGH COURT OF DELHI HAS HELD THAT THE STATEMENTS-RECORDED ON 20-3-1996 WERE CORROBORATED BY THE MATERIALS. AS FAR AS THE QUESTION RELATING TO CROSS EXAMINATION 38 IS CONCERNED, THE COURT NOTICES THAT THOUGH THE DOC UMENTS WERE FURNISHED TO THE ASSESSEE, IT HAD NOT SOUGHT O PPORTUNITY OF CROSS EXAMINATION; THIS WAS MADE AT THE FAG END, IN MARCH, 1997. THIS COURT FINDS NO JUSTIFICATION TO REJECT T HE STATEMENTS, WHICH MERELY EXPLAIN THE DOCUMENTS SEIZ ED; THE ASSESSEE COULD WELL HAVE GIVEN A FULL EXPLANATION I NSTEAD OF SEEKING REJECTION OF THE DOCUMENTS. IN THE CASE OF GTC INDUSTRIES LTD. VS. ACIT 65 ITD 380 HONBLE ITAT BOMBAY HAS HELD THAT AS REGARDS THE DICTUM AUDI ALTERAM PARTEM THE ASSESSEES BASIC CONTENTION WAS THAT THE STATEMENTS OF WITNESSES AND MATERIALS WHIC H WERE RELIED UPON BY THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER TO REACH THE CONCLUSIONS AND FINDINGS WHICH WERE AD VERSE TO THE ASSESSEE SHOULD HAVE BEEN DISCLOSED TO THE ASSE SSEE AND THE WITNESSES SHOULD HAVE BEEN OFFERED FOR CROSS- EXAMINATION. THE RIGHT TO CROSS-EXAMINE THE WITNESS WHO MADE ADVERSE REPORT IS NOT AN INVARIABLE ATTRIBUTE OF THE REQUIREMENT OF THE SAID DICTUM. THE PRINCIPLES OF N ATURAL JUSTICE DO NOT REQUIRE FORMAL CROSS- EXAMINATION. F ORMAL CROSS-EXAMINATION IS A PART OF PROCEDURAL JUSTICE. IT IS GOVERNED BY THE RULES OF EVIDENCE, AND IS THE CREAT ION OF COURT. IT IS PART OF LEGAL AND STATUTORY JUSTICE, A ND NOT A PART OF NATURAL JUSTICE, THEREFORE, IT CANNOT BE LAID DO WN AS A GENERAL PROPOSITION OF LAW THAT THE REVENUE COULD N OT RELY ON ANY EVIDENCE WHICH HAD NOT BEEN SUBJECTED TO CROSS- 39 EXAMINATION. HOWEVER, IF A WITNESS HAS GIVEN DIRECT LY INCRIMINATING STATEMENT AND THE ADDITION IN THE ASS ESSMENT IS BASED SOLELY OR MAINLY ON SUCH STATEMENT, IN THAT E VENTUALITY IT IS INCUMBENT ON THE ASSESSING OFFICER TO ALLOW C ROSS- EXAMINATION. ADVERSE EVIDENCE AND MATERIAL, RELIED UPON IN THE ORDER, TO REACH THE FINALITY, SHOULD BE DISCLOSED T O THE ASSESSEE. BUT THIS RULE IS NOT APPLICABLE WHERE THE MATERIAL OR EVIDENCE USED IS OF COLLATERAL NATURE. IN THE CASE OF SMT. KUSUM LATA THAKRAL V. CIT 150 I TR 714 HONBLE PUNJAB & HARYANA HIGH COURT HAS HELD THAT I T WAS CLEAR FROM THE FINDINGS RECORDED BY THE TRIBUNAL TH AT THERE WAS NO RELATIONSHIP BETWEEN THE DONORS AND THE ASSE SSEE AND THERE WAS NO NATURAL LOVE AND AFFECTION. THE TRIBUN AL HAD FOLLOWED THE JUDGMENT OF THE JURISDICTIONAL HIGH CO URT IN SHRI TIRATH RAM GUPTA V. CIT [20081 304 ITR 145/[20091 177 TAXMAN 294 (PUNJ. & HAR ), LAYING DOWN THAT IN THE ABSENCE OF NATURAL LOVE AND AFFECTION, THE GIFT COULD NOT BE A CCEPTED AS GENUINE. [PARA 6] THE QUESTION WHETHER DENIAL OF OPPORTUNITY OF CROSS - EXAMINATION RESULTS IN VIOLATION OF NATURAL JUSTICE DEPENDS UPON FACTS OF EACH CASE. THE OBJECT OF CROSS-EXAMIN ATION IS TO TEST THE VERACITY OF THE VERSION GIVEN IN EXAMIN ATION IN CHIEF. IN THE INSTANT CASE, EVEN IF CROSS-EXAMINATI ON WAS 40 ALLOWED AND THE DONORS WHO HAD DISOWNED THE MAKING OF GIFTS, WERE CONFRONTED AND SHOWN TO BE FACTUALLY WRONG, TH E SAME WOULD HAVE MADE NO DIFFERENCE, AS THERE WAS NO NATU RAL LOVE AND AFFECTION AND IN ITS ABSENCE, THE GIFTS WERE NO T GENUINE. [PARA 11] THEREFORE, NO SUBSTANTIAL QUESTION OF LAW AROSE. TH E APPEAL WAS TO BE DISMISSED. [PARA 12] IN THE CASE OF HINDUSTAN TABACCO COMPANY V. CIT 27 TAXMANN.COM 155 HONBLE CALCUTTA HIGH COURT HAS HELD THAT IF THE ASSESSEE FEELS THAT CROSS-EXAMINING OF ANY P ERSON IS NECESSARY FOR ESTABLISHING ITS CASE IT IS INCUMBENT UPON ASSESSEE TO MAKE SUCH PRAYER BEFORE ASSESSING OFFIC ER DURING THE ASSESSMENT PROCEEDING AND IF A PARTY FAILS TO A VAIL OF OPPORTUNITY TO CROSS-EXAMINE A PERSON AT APPROPRIAT E STAGE IN PROCEEDING, THE SAID PARTY WOULD BE PRECLUDED FROM RAISING SUCH ISSUE AT A LATER STAGE OF PROCEEDING. THEREFOR E, THE BELATED CLAIM OF ASSESSEE AT APPELLATE STAGE THAT I T IS DENIED THE OPPORTUNITY OF CROSS-EXAMINING WITNESSES IN ASS ESSMENT PROCEEDING IS WHOLLY UNTENABLE IN LAW. [PARA 34] PLEA OF VIOLATION OF NATURAL JUSTICE TAKEN AT THE A PPELLATE STAGE APPEARS TO BE BELATED AND CLEARLY AN AFTERTHO UGHT. IT APPEARS THAT NO PREJUDICE HAD BEEN SUFFERED BY THE APPELLANT 41 ASSESSEE IN THE MANNER THE PROCEEDING WAS CONDUCTED BY THE ASSESSING OFFICER AND THE ASSESSEE WAS NOT AGGRIEVE D AT THAT STAGE. ONLY WHEN THE ASSESSMENT ORDER WENT AGAINST IT, THE ASSESSEE CONVENIENTLY RAISED SUCH BELATED PLEA OF D ENIAL OF OPPORTUNITY OF FAIR HEARING AND BREACH OF PRINCIPLE S OF NATURAL JUSTICE. [PARA 35] IN THE CASE OF T. DEASAHAYA NADAR V. CIT 51 ITR 20 HONBLE MADRAS HIGH COURT HAS HELD THAT IT CANNOT BE SAID AS A GENERAL PROPOSITION OF LAW THAT ANY EVIDENCE UPON W HICH THE DEPARTMENT MIGHT RELY SHOULD HAVE BEEN SUBJECTED TO CROSS- EXAMINATION. THE PROCEDURE FOR ASSESSMENT IS INDICA TED IN SECTION 23(3) OF THE ACT. THE ITO IS NOT A COURT. H AVING REGARD TO THE NATURE OF THE PROCEEDINGS, HE OCCUPIE S THE POSITION OF A QUASI-JUDICIAL TRIBUNAL. HE IS NOT BO UND BY THE RULES OF EVIDENCE IN THE INDIAN EVIDENCE ACT. THE L IMIT OF THE ENQUIRY AND THE KIND OF MATERIALS OR EVIDENCE WHICH HE CAN ACT UPON CANNOT BE SPECIFIED AND THE STATUTE HAS NOT AT TEMPTED IT. WIDE THOUGH HIS POWERS BE, HE MUST ACT IN CONSO NANCE WITH RULES OF NATURAL JUSTICE. ONE SUCH RULE IS THAT HE SHALL NOT USE ANY MATERIAL AGAINST THE ASSESSEE WITHOUT GIVING HI M AN OPPORTUNITY TO MEET IT. IN THE CASE OF ITO V. M. PIRAI CHOODI 334 ITR 261 H ONBLE SUPREME COURT OF INDIA HAS HELD THAT I N THIS CASE, THE HIGH 42 COURT HAS SET ASIDE THE ORDER OF ASSESSMENT ON THE GROUND THAT NO OPPORTUNITY TO CROSS-EXAMINE WAS GRANTED, AS SOUGHT BY THE ASSESSEE. WE ARE OF THE VIEW THAT THE HIGH C OURT SHOULD NOT HAVE SET ASIDE THE ENTIRE ASSESSMENT ORD ER. AT THE HIGHEST, THE HIGH COURT SHOULD HAVE DIRECTED THE AS SESSING OFFICER TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO CROSS- EXAMINE THE CONCERNED WITNESS. BE THAT AS IT MAY, W E ARE OF THE VIEW THAT, EVEN ON THIS PARTICULAR ASPECT, THE ASSESSEE COULD HAVE GONE IN APPEAL TO THE COMMISSIONER OF IN COME-TAX (APPEALS). THE ASSESSEE HAS FAILED TO AVAIL OF THE STATUTORY REMEDY. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW TH AT THE HIGH COURT SHOULD NOT HAVE QUASHED THE ASSESSMENT PROCEEDINGS VIDE THE IMPUGNED ORDER. IN THE CASE OF DR. GAURI SHANKAR PRASAD V. ITO 393 ITR 635 HONBLE HIGH COURT OF PATNA HAS HELD THAT THE ASSESSEE HAD BEEN GIVEN SUFFICIENT OPPORTUNITY IN THE MATTER AND AT NO POINT OF TIME DID HE RAISE THE PLEA THAT COPIES OF THE STATEMENTS OF PERSONS RELIED UPON OR SUCH EVIDENCE OUGHT TO BE SUPPLIED TO HIM OR THAT HE INTENDED TO CROSS-EXA MINE THEM. THEREFORE, IT WAS NOT OPEN TO HIM TO TURN AROUND AND CLAIM THAT HE HAD BEEN DENIED THE OPPORTUNITY OF CROSS- EXAMINATION AND THE STATEMENTS IN QUESTION COULD NO T BE USED AGAINST HIM. CONSIDERING THE ENTIRETY OF THE EVIDEN CE AND MATERIALS WHICH HAD COME UP AGAINST THE ASSESSEE, I NCLUDING 43 THE HUGE AMOUNT OF ASSETS BOTH MOVABLE AND IMMOVABL E, INVESTMENTS MADE BY THE ASSESSEE, IT COULD NOT BE S AID THAT THE SAID STATEMENTS, WHICH HAD BEEN CONCURRENTLY AC CEPTED AS RELEVANT OR CORROBORATIVE EVIDENCE OR MATERIAL USED FOR THE PURPOSE OF ADDITION, COULD NOT HAVE BEEN TAKEN INTO CONSIDERATION. WHY THE DECISION OF HONBLE SUPREME COURT IN THE CA SE OF ANDAMAN TIMBER OF CENTRAL EXCISE IS NOT APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLAN T UNDER INCOME TAX PROCEEDINGS- RELIANCE HAS BEEN PLACED BY THE APPELLANT ON THE JU DGEMENT OF HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER OF CENTRAL EXCISE WHICH IS NOT APPLICABLE IN THE MATTE R OF INCOME TAX AS IN THE ADJUDICATING MANUAL OF CUSTOMS AND CE NTRAL EXCISE THERE IS A PROVISION OF CROSS EXAMINATION AN D THERE IS NO PARALLEL PROVISION IN THE INCOME TAX ACT FOR GIV ING THE OPPORTUNITY OF CROSS EXAMINATION WHILE GIVING THE O PPORTUNITY OF HEARING. THIS IS A THUMB RULE THAT DECISIONS/JUD GMENT OF ANY COURT IS GIVEN IN THE LIGHT OF THE RULES/ACTS/M ANUALS WHICH IS LEGISLATED WITH RESPECT TO THE SPECIFIC AU THORITIES AND CANNOT BE IMPORTED TO ANY AUTHORITY WHO ARE NOT COVERED UNDER THAT LEGISLATION. 44 FURTHER THE FACTS OF THE CASE OF ANDAMAN TIMBER IS ENTIRELY DIFFERENT WHERE HONBLE SUPREME COURT HAS CONSIDERE D THAT THERE WAS NO MATERIAL WITH THE DEPARTMENT ON THE BA SIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WHO WERE UNKNOWN TO THE APP ELLANT WAS THE ONLY BASIS OF ISSUING THE SHOW CAUSE NOTICE . HENCE, THIS JUDGMENT WILL NOT APPLY WHERE THERE IS SUFFICI ENT MATERIAL ON RECORD OF THE REVENUE AGAINST THE APPELLANT APAR T FROM THE STATEMENT OF THE WITNESSES. FURTHER THIS CASE WILL ALSO NOT APPLY WHERE THE APP ELLANT IS ASKING TO CROSS EXAMINE ITS/HIS OWN WITNESSES WHO A RE KNOWN TO THEM AND NOT REGARDED AS THIRD PARTY AS UNDER RU LE OF EVIDENCE THE RIGHT TO CROSS EXAMINE IS GIVEN FOR TH E WITNESS OF THE OPPOSITE PARTY. FOR EXAMPLE, IF THE ASSESSEE MAKES A CLAIM OF PURCHASE/INVESTMENT/TRANSACTION IN THE RET URN OF INCOME AND FILED THE NECESSARY DETAILS OF THE PARTI ES IN SUPPORT OF THE CLAIM AS WITNESS AND IF THE REVENUE HAS COLLECTED THE MATERIAL TO REBUT SUCH CLAIM WHICH MA Y BE IN THE FORM OF THE STATEMENT RECORDED, THE APPELLANT HAS T O DISCHARGE THE ONUS WHICH WAS CASTED UPON HIM AND IN SUCH CONDITION CANNOT TAKE THE PLEA OF CROSS EXAMINATION OF HIS OWN WITNESSES UNLESS HE CLAIMS / PROVES IN THE PROCEEDI NGS THAT THE WITNESSES ON WHICH HE RELIED UPON TURNED HOSTIL E. 45 FURTHER, THIS CASE WAS EARLIER SET ASIDE TO THE TRI BUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVIN G ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS OF THE APPELLANT FOR GIVING THE OPPORTUNITY OF CROSS EXAMI NATION AND IN THE SECOND ROUND ALSO THE TRIBUNAL HAS STATED TH AT CROSS- EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROU GHT OUT ANY MATERIAL WHICH WAS TAKEN BY HONBLE SUPREME COU RT ADVERSELY. RELEVANT OBSERVATION OF HONBLE SUPREME COURT IS AS UNDER: ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROS S-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS O F THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE OR DER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DIS PUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-E XAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPOR TUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRAN TED AND 46 THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE AD JUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TR IBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DE ALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT B E IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN A S TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS NOT F OR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. AS MENTI ONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DIS CREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAI L THE OPPORTUNITY OF CROSS-EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS W ERE, IN FACT, SOLD TO THE SAID DEALERS/WITNESSES AT THE PRI CE WHICH IS MENTIONED IN THE PRICE LIST ITSELF COULD BE THE SUB JECT MATTER OF CROSS-EXAMINATION. THEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COU LD BE THE SUBJECT MATTER OF THE CROSS-EXAMINATION AND MAKE TH E REMARKS AS MENTIONED ABOVE. WE MAY ALSO POINT OUT T HAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS C OURT IN CIVIL APPEAL NO. 2216 OF 2000, ORDER DATED 17.03.20 05 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE 47 DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING IT S REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSE S IS DISCREDITED, THERE WAS NO MATERIAL WITH THE DEPARTM ENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ONLY BASIS O F ISSUING THE SHOW CAUSE NOTICE. 22. REPLYING TO THE WRITTEN SUBMISSIONS OF THE LD. DR, THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDER HAS STATED AS UND ER: SUMMONS U/S 131 OF THE ACT WERE NOT SERVED ON SRI R.S. MITTAL. THIS IS ACKNOWLEDGED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ITSELF; 2. SUDDENLY SRI R.S. MIFTAL IS STATED TO HAVE APPEARE D BEFORE THE ASSESSING OFFICER WITHOUT ANY NOTICE OR APPOINTMENT AND TENDERED A STATEMENT WHOSE SPONTANE ITY AND VERACITY IS HIGHLY DOUBTFUL. BESIDES COLLUSION CANN OT BE RULED OUT; 3. THE ASSESSING OFFICER HAS FRAMED THE ASSESSMENT WITHOUT NEITHER CONFRONTING THE STATEMENT NOR THE A FFIDAVIT OF SRI R.S. MITTAL TO THE APPELLANT FOR COMMENTS. E VIDENCE AS USED FOR MAKING THE ADDITIONS WAS CLEARLY INADMISSI BLE IN LAW. TO VERIFY THE AVERMENTS OF THE APPELLANTS FATHER FORENSIC HELP WAS SOUGHT BY THE ASSESSING OFFICER. NO OPPORTUNITY IS GIVEN TO THE APPELLANT TO VERIFY OR COMMENT ABOUT THE CORRECTNESS OF THE FORENSIC REPORT; 48 THE DIFFICULTIES IN THE APPELLANTS CASE ERUPTED AS A DIRECT CONSEQUENCE OF THE SALES-TAX DISPUTES OF SRI R.S. MITTAL. ALL THOSE WITH WHOM SRI R.S. MITTAL HAD TRA NSACTIONS WERE MADE A PART OF THOSE PROCEEDINGS. AFTER PROTRA CTED CONSIDERATION AT DIFFERENT HIERARCHICAL LEVELS THE APPELLANT WAS COMPLETELY EXONERATED BY THE DEPARTMENT IN TERM S OF THEIR ORDER DATED 30.07.2016. THE ENTRY TAX PAID ON PURCHASES BY THE APPELLANT WAS DIRECTED TO BE RETAI NED BY THE ADDL. COMMISSIONER OF SALES-TAX AND THE RETURNS FILED WERE HELD AS CORRECT AND VALID. THE ALLEGATIONS OF THE APPELLANT HAVING NOT MADE ANY PURCHASES FROM SRI R. S. MITTAL WERE FULLY REJECTED. THAT ORDER OF THE SALES-TAX AP PELLANT AUTHORITY HAS BECOME FINAL WITH NO APPEAL BEING FIL ED AGAINST THAT ORDER BY THE S.T. DEPARTMENT; 6. IN SUM, THEREFORE, THE UNVERIFIED, UNCORROBORATED AND UNTESTED STATEMENT OF SRI R.S. MITTAL WAS SET TO A NAUGHT BY THE AFORESAID SALES-TAX APPELLATE AUTHORITYS ORDER . THUS THE ONLY EVIDENCE WHICH THEREAFTER REMAINED IS THE ONE IN SUPPORT OF AUTHENTICITY OF TRANSACTIONS OF THE PURCHASES OF THE APPELLANT. ALL PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES WITH THERE BEING ABSOLUTELY NO EVIDENCE OF TEAMING AND LADING OR ANY OTHER FORM OF ABSTRACTION; 7. IN THE NOTE OF THE LD. CIT(DR) SEVERAL AVERMENTS W ITH SELECTIVE QUOTATIONS FROM AUTHORITIES, ARE MADE WIT H REGARD TO THE ROLE OF EVIDENCE IN TAX PROCEEDINGS. APPELLA NT SUFFICES BY STATING THAT THOUGH THE TECHNICAL RULES OF EVIDE NCE ARE NOT APPLICABLE TO TAX PROCEEDINGS YET THE FUNDAMENTAL P RINCIPLE IS THAT THE ASSESSING OFFICER MUST CONFRONT THE ASSESS EE WITH MATERIALS RELIED UPON BY HIM FOR ASSESSMENT. THIS S ACROSANCT PRINCIPLE HAS STOOD OVER THE YEARS. THE AUTHORITIES POSTULATING 49 THE DICTUM ARE 8. A) C. VASANT LAI & CO., VS. CIT (1962) 45 ITR 206 (SC ) B) KISHAN CHAND CHEIIA RAM VS. CIT (1980) 125 ITR 713 (SC) C) CHUHARMAL VS. CIT (1988) 172 ITR 250 D) CIT VS. SMC SHARE BROKERS LTD. (2007) 288 ITR 345 E) CIT VS. SUNIL AGGARWAI (2015) 379 ITR 367 (DEL) F) CIT VS. ANSAL PROPERTIES & INDUSTRIES (ORDER ANNEX ED) G) CIT VS. TRANS ASIA SECURITIES PVT. LTD. (ORDER ANN EXED) H) CIT VS. ANDAMAN TIMBER INDS LTD. (2015) 281 CTR 24 1 (SC) RELEVANT PORTIONS IN THE CITED JUDGEMENT ARE HIGHLI GHTED AND SUBMITTED. 9. THE LD. CIT(DR) SUBMITTED THAT SRI R.S. MITTAL WAS NOT THE DEPARTMENT'S WITNESS AND THAT, THEREFORE, DEPAR TMENT WAS NOT UNDER ANY OBLIGATION TO PRODUCE HIM FOR THE APPELLANT FOR CROSS EXAMINING HIM. THIS AVERMENT IS BLATANTLY WRONG. IT IS THE STATEMENT OF SRI R.S. MITTAL AND HIS AFFIDAV IT WHICH HAVE BEEN RELIED UPON ENTIRELY BY THE ASSESSING OFF ICER TO PROPOSE THE ADDITION IN THE APPELLANTS CASE. HAVIN G RELIED UPON SUCH MATERIAL WHICH EMANATED FROM SRI R.S. MIT TAL AND UTILIZED AS EVIDENCE AGAINST THE APPELLANT BY THE D EPARTMENT, IT CANNOT NOW BE PLEADED BY THE DEPARTMENT THAT SRI R.S. MITTAL WAS NOT ITS WITNESS. SRI R.S. MITTAL IN A WA Y WAS THE PERSON ON WHOSE ACCUSATIONS AND ALLEGATIONS THE ADV ERSE ACTION AGAINST THE APPELLANT HAS ORIGINATED AND CUL MINATED IN THE IMPUGNED ADDITIONS. IT IS, THEREFORE, INCONCEIV ABLE FOR SRI R.S. MITTAL TO BE DESIGNATED AS THE APPELLANT'S WIT NESS. THE CIT(DR)'S PLEA IS TOTALLY FALLACIOUS ON THIS POINT. 10. THE PROCEEDINGS FOR ASSESSMENT UNDER THE INCOME-TA X ACT AND THE CUSTOMS & EXCISE ACT ARE BASED ON THE S AME 50 FOUNDATIONS AS TO THE APPLICABILITY OF THE EVIDENCE ACT. IT WAS WRONGLY SUGGESTED ON BEHALF OF THE DEPARTMENT THAT THE LAW DIFFER IN APPLICATION TO THE TWO ACTS AND SO A DECI SION RENDERED UNDER THE CUSTOMS & EXCISE ACT WILL NOT AP PLY TO A CASE UNDER THE INCOME TAX ACT. A SHINNING ILLUSTRATION O F THIS PRINCIPLE IS DECISION ON CONCEALMENT PENALTY IN UOI VS. DHARMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277(SC). ON IDENTICAL FACTS THE INCOME-TAX APPELLATE TRIBUNA L HAS DELETED THE ADDITIONS FOR AY 2009-10 AND AY 201 0-11. COPIES OF THE TRIBUNAL ORDERS HAVE BEEN PLACED ON T HE RECORDS. AS TO THE NOTE DATED 26.03.2019:- 11. SUBMISSIONS MADE UNDER PARA (A) REGARDING GROUND N O.L ARE WRONG AND MISCONCEIVED. THE FACTUM OF THE ASSES SEE AGITATING THIS GROUND IS CLEARLY MENTIONED IN THE W RITTEN SUBMISSION FILED BY THE ASSESSEE BEFORE THE CIT(A). (PLEASE SEE PAGE-3 OF THE PAPER BOOK). IN FACT THE CIT(DR), DESPITE DENYING THE FACT THAT NO SUBMISSIONS WERE MADE ON T HIS GROUND, HAS UNWITTINGLY PRODUCED THE RELEVANT SUBMI SSIONS IN THE LATER PARA OF HIS IMPUGNED ORDER ON PAGES 8 AND 32. THE AVERMENTS MADE BY THE LD. CIT(A)-DR CITING SEVERAL CASE LAWS INCLUDING SECTION 292B OF THE ACT ON THIS GROUND AS CONTAINED IN PAGES 2-7 OF THE NOTE ARE ALL EXTRANEOUS AND SUP ERFLUOUS AND BEING DEVOID OF MERIT DESERVE TO BE COMPLETELY IGNORED. 12. SUBMISSIONS MADE ON GROUND NO. 2 ON PAGE 7 REGARDI NG FUNDAMENTAL PRINCIPLE GOVERNING CASH CREDITS HAS BE EN 51 POSTULATED WAY BACK BY THE CALCUTTA HIGH COURT IN S HANKAR INDUSTRIES (1978) 114 ITR 689. THE PRINCIPLE IS THA T THE ONUS IS P RIMO FACIE ON THE ASSESSEE TO SHOW THE IDENTITY, CREDIT- WORTHINESS AND GENUINENESS OF THE TRANSACTION. ONCE THAT IS DISCHARGED, THE ASSESSEE HAS PROVED THE NEEDFUL UNL ESS IT IS REVERTED BACK TO THE ASSESSEE WITH MATERIAL BY THE ASSESSING OFFICER. THAT POSITION REMAINS UNALTERED NOTWITHSTA NDING THE LATER OBSERVATIONS CONTEXTUALLY DIFFERENT IN CIT VS . DURGA PRASAD MORE (1971) 82 ITR 540 (SC), SUMATI DAYAL VS . CIT (1995) 214 ITR 801 (SC), ME DOWELL & CO. LTD (1985) 154 ITR 148 (SC). IN THE GIVEN CASE THE ASSESSING OFFICER H AS HIMSELF IDENTIFIED THE PARTY. ALL PAYMENTS WERE ADMITTEDLY THROUGH ACCOUNT PAYEE CHEQUES. THERE IS NO EVIDENCE OF ANY ABSTRACTION OR REPAYMENT OF THOSE IN CHEQUES, IN CA SH OR OTHERWISE BY THE ASSESSEE. IN SUCH CIRCUMSTANCES TH E INVOCATION OF SECTION 68 OF THE ACT IS AB INITIO FALLACIOUS AND UNTENABLE. NONE OF THE CASES AS CITED BY THE LD. CI T(DR) ARE RELEVANT TO THE ISSUE IN HAND. IN PARTICULAR PARA OF THE JUDGEMENT AND ORDER OF THE DELHI HIGH COURT IN NOVA PROMOTERS (2012) 342 ITR 169 (DEL) CASE IS OF CARDI NAL IMPORTANCE AND ONLY GOES TO ENDORSE THE ASSESSEES PLEA REGARDING SHIFTING OR ONUS U/S 68 OF THE ACT. 13. ON THE ASPECT OF NATURAL JUSTICE AND CROSS EXAM INATION CASES CITED AS NOKIA INDIA PVT. LTD. VS. DDIT (2015 ) 59 TAXMAN.COM 212 (DELHI.TRIB), CIT VS. KUBER FIBERS P VT. LTD. (2017) 77 TAXMAN.COM 345 (DELHI) AND GTC INDUSTRIES LTD. VS. ACIT (1998) 65 ITD 380 (BOM) ARE ALL DECIDED ON THE BASIS OF THE FACTS APPERTAINING TO THOSE CASES. EVEN WHILE D OING SO, THE FACTUM OF THE CROSS EXAMINATION BEING PART OF THE I NALIENABLE NORM OF NATURAL JUSTICE, HAS BEEN ASSERTED. BEING S O, THE 52 JUDGEMENTS AS CITED ARE ALL DISTINGUISHABLE AND INA PPLICABLE AND NEED NOT BE ELABORATELY COMMITTED UPON. AS TO NOTE DATED 19.09.2019 : 14.1 THE CASES CITED BY THE ID. CIT(DR) ARE ALL DISTINGUISHABLE FOR THE REASONS AS INDICATED AGAINST EACH OF THEM. 14.2 INDIAN & EASTERN NEWSPAPER SOCIETY VS. CIT FL 979) 119 ITR 996 (SC) : IT IS AN ACCEPTED PROPOSITION, ENDORSED BY DIFFEREN T COURTS AT ALL TIMES, THAT THE PROCEEDINGS FOR ASSESSMENT BEFO RE THE ASSESSING OFFICER ARE QUASI-JUDICIAL IN CHARACTER. ALL PROCEEDINGS, WHETHER JUDICIAL OR QUASI-JUDICIAL ARE TO BE BASED ON EVIDENCE. BEING SO THE CITED AUTHORITY ONLY ENDO RSES THE APPELLANTS CONTENTION FOR THE ORDER TO BE PASSED O N VALID AND ADMISSIBLE EVIDENCE. EVIDENCE OF ANY ABSTRACTION OR REPAYMENT OF THOSE IN CHEQUES, IN CASH OR OTHERWISE BY THE AS SESSEE. IN SUCH CIRCUMSTANCES THE INVOCATION OF SECTION 68 OF THE ACT IS AB INITIO FALLACIOUS AND UNTENABLE. NONE OF THE CASES AS CIT ED BY THE LD. CIT(DR) ARE RELEVANT TO THE ISSUE IN HAN D. IN PARTICULAR PARA OF THE JUDGEMENT AND ORDER OF THE DELHI HIGH COURT IN NOVA PROMOTERS (2012) 342 ITR 169 (DEL) CASE IS OF CARDI NAL IMPORTANCE AND ONLY GOES TO ENDORSE THE ASSESSEES PLEA REGARDING SHIFTING OR ONUS U/S 68 OF THE ACT. 13. ON THE ASPECT OF NATURAL JUSTICE AND CROSS EXAMINAT ION CASES CITED AS NOKIA INDIA PVT. LTD. VS. DDIT (2015 ) 59 TAXMAN.COM 212 (DELHI.TRIB), CIT VS. KUBER FIBERS P VT. LTD. (2017) 77 TAXMAN.COM 345 (DELHI) AND GTC INDUSTRIES LTD. VS. 53 ACIT (1998) 65 ITD 380 (BOM) ARE ALL DECIDED ON THE BASIS OF THE FACTS APPERTAINING TO THOSE CASES. EVEN WHILE D OING SO, THE FACTUM OF THE CROSS EXAMINATION BEING PART OF THE I NALIENABLE NORM OF NATURAL JUSTICE, HAS BEEN ASSERTED. BEING S O, THE JUDGEMENTS AS CITED ARE ALL DISTINGUISHABLE AND INA PPLICABLE AND NEED NOT BE ELABORATELY COMMITTED UPON. AS TO NOTE DATED 19.09.2019 : 14.1 THE CASES CITED BY THE ID. CIT(DR) ARE ALL DISTINGUISHABLE FOR THE REASONS AS INDICATED AGAINST EACH OF THEM. 14.2 INDIAN & EASTERN NEWSPAPER SOCIETY VS. CIT (1979) 119 ITR 996 (SC) : IT IS AN ACCEPTED PROPOSITION, ENDORSED BY DIFFEREN T COURTS AT ALL TIMES, THAT THE PROCEEDINGS FOR ASSESSMENT BEFORE T HE ASSESSING OFFICER ARE QUASI-JUDICIAL IN CHARACTER. ALL PROCEE DINGS, WHETHER JUDICIAL OR QUASI-JUDICIAL ARE TO BE BASED ON EVIDE NCE. BEING SO THE CITED AUTHORITY ONLY ENDORSES THE APPELLANTS CONTE NTION FOR THE ORDER TO BE OOCCECI QKV MC ATA. CISXCK . 14.3 S. S. GADQIL VS. LAI & CO. (19641 53 ITR 231 (SC): AS STATED BY THE APEX COURT IN THE CITED JUDGEMENT, THE ASSESSMENT PROCEEDINGS ARE NOT IN THE NATURE OF A LES BETWEEN THE PARTIES; YET THEY ARE IN THE NATURE OF JUDICIAL PROCEEDINGS. BEI NG JUDICIAL PROCEEDINGS ANY FINDING OR INFERENCE IS ESSENTIALLY TO BE BASED ON COGENT EVIDENCE. THE CONTEST IN THE CASE AT HAND OF THE APPELLANT IS THAT THE EVIDENCE AS USED IN ASSESSMENT IS UNTES TED AND UNVERIFIED. THE CITED JUDGEMENT FORTIFIES THE ASSES SEES STANCE. THAT PRINCIPLES OF NATURAL JUSTICE ARE CONTRAVENED IF EVIDENCE USED BY THE ASSESSING OFFICER IS NOT CONFRONTED TO THE A SSESSEE FOR REBUTTAL. THIS CITATION AS PRESSED BY THE ID. CIT(D R) ONLY GOES TO 54 FORTIFY ASSESSEE'S SUBMISSIONS. 14.4 DHAKESWARI COTTON MILLS LTD. VS. VS. CIT (1954) 26 ITR 775 (SC) : THIS DECISION AS CITED BY THE ID. CIT(DR) IS CLEARL Y IN FAVOUR OF THE ASSESSEES CONTENTION THAT THE EVIDENCE AS UTILIZED IN ASSESSMENT IS REQUIRED TO BE TESTED BOTH FOR ITS AUTHENTICITY AND ITS RELEVANCE BEFORE ANY SUCH USE. THE CITATION SUPPORTS THE CONT ENTIONS OF THE ASSESSEE AND IS OF NO HELP TO THE DEPARTMENT. 14.5 CIT VS. EAST COAST COMMERCIAL CO. LTD. (1967) 63 IT R 449 : IN THIS DECISION TOO THE PRINCIPLE THAT INCOME TAX PROCEEDINGS ARE NOT STRICTLY BOUND BY THE TECHNICAL RULES OF EVIDEN CE IS STATED. THAT, HOWEVER, DOES NOT MEAN THAT THE RULES OF EVID ENCE ARE NOT APPLICABLE TO THE PROCEEDINGS AT ALL. THIS PROPOSIT ION HAS BEEN EXPLAINED IN GREATER DETAIL BY THE APEX COURT IN TH E LATER DECISION IN CHUHARMAL VS. CIT (1988) 172 ITR 250 (SC) WHICH THE ID. CIT(DR) HAS QUOTED IMMEDIATELY AFTER CITING THIS JUDGEMENT. THE QUOTATION AS EXTRACTED BY THE ID. CIT(DR) IS SELF-EXPLANATORY AND GOING AS IT DOES THE SUPPORT THE ASSESSEES CONTENTION NEEDS NO FURTHER ELUCIDATION. 14.6 ON S URROUNDING CIRCUMSTANCES AS DILATED IN THE NOTE - THE FACTUM OF SURROUNDING CIRCUMSTANCES AND ALSO TH E OTHER POINT AS TO HUMAN BEHAVIOR ARE FACTORS WHICH CAN BE MADE APPLICABLE TO SUBSTANTIVE PROVISIONS. IDEALLY THEY ARE IN-APPLICA BLE TO DEEMING PROVISIONS FOR THE DEEMING PROVISIONS THEMSELVES AR E BASED ON ASSUMPTIONS AND PRESUMPTIONS. LEGALLY NO ADDITION C AN BE MADE TO THE ASSUMPTIONS AND PRESUMPTIONS INCORPORATED THROU GH LAW BY THE LEGISLATURE. STILL HOWEVER, ANY ACT OF THE AUTHORIT Y, HAS TO BE STRICTLY EVIDENCE BASED. BOTH FOR SURROUNDING CIRCU MSTANCES OR HUMAN BEHAVIOR, THERE MUST BE PROPER EVIDENCE. ASSU MPTIONS AND PRESUMPTIONS ARE INADMISSIBLE AS VALID MATERIAL FOR ANY ACT. 55 14.7 MOTILAL PADAMPAT UDYOA LTD. VS. CIT (2007) 293 ITR 565 (ALL.) : THE CITATION AS EXTRACTED IS DONE CONTEXTUALLY. THE PRINCIPLE OF LAW AS STATED IN KISHNACHAND CHELARAM VS. CIT (1980) 12 5 ITR 713 (SC) HAS BEEN REFERRED TO BY THE HIGH COURT AND REFERENC E ANSWERED ACCORDINGLY. HONBLE SUPREME COURT FINALLY HAD RULE D THAT SINCETHE ASSESSEE HAD BEEN GIVEN AN OPPORTUNITY TO REBUT THE EVIDENCE GATHERED BY THE REVENUE THE PRINCIPLES OF NATURAL J USTICE HAD IN A WAY, BEEN COMPLIED WITH. IN EFFECT THE JUDGEMENT RE ITERATES THE PRINCIPLE THAT EVIDENCE RELIED UPON BY THE DEPARTME NT MUST BE CONFRONTED TO THE ASSESSEE. IN THE FACTUAL SETTING OF THE CASE, IN VIEW OF THE OTHER MATERIAL ON RECORD, THE FAILURE G AVE OPPORTUNITY TO CROSS- EXAMINE WAS HELD NOT TO BE FATAL. 14.8 CIT VS. JAY ENGINEERING WORKS LTD. (1978) 113 ITR 3 89 (DEL.) : THIS JUDGEMENT IS MITIGATIVE IN CHARACTER, IN AS MU CH AS, IN A CASE WHERE THE BOOKS OF ACCOUNTS BY THE ASSESSEE HAD BEE N DESTROYED BY FIRE THE ASSESSING OFFICER WAS DIRECTED TO COMPU TE THE INCOME IN TERMS OF THE AUDITED ACCOUNT AND AUDIT REPORT. I N THE CITED CASE, THE COURT ATTEMPTED TO DEFINE WHAT IS MATERIAL? T HIS CITATION, THEREFORE, CANNOT BE AN AUTHORITY FOR THE PROPOSITI ON ERRONEOUSLY ADVANCED BY THE ID. CIT(DR) THAT THE CROSS EXAMINAT ION OF SHRI R. K. MITTAL WAS IN-ESSENTIAL IN THE FACTS AND CIRCUMS TANCES OF THE CASE IN APPEAL. 14.9 HERSH WIN CHADHA VS. DCIT (2011) 135 TTJ 513 : (SIC) GTC INDUSTRIES LTD. VS. ACIT (1998) 65 ITD 380 : & NOKIA INDIA (P.) LTD. VS. DDIT 59 TAXMANN.COM 212 : THE PRINCIPLE OF LAW AS PROPOUNDED BY THE HONBLE H IGH COURTS AND THE APEX COURT HAVE BEEN ADOPTED BY THE HON'BLE TRI BUNAL IN THE 56 CITED ORDERS. BEING SO, THEY DO NOT REQUIRE ANY SEP ARATE COMMENT. 15.1 CIT VS. METAL PRODUCTS OF INDIA (1984) 150 ITR 714 (P &H) : THE HIGH COURT HAS ONLY GONE BY THE PRINCIPLE. THE ID. CIT(DR) HAS MISSED TO NOTICE AND QUOTE THE MORE RELEVANT PART O F THE JUDGEMENT WHICH READS ON PAGE 717 OF THE REPORT AS UNDER: 'NOW THE WORD EVIDENCE' AS A TERM OF LAW IS NOT AN ARRE STED ONE. IN THE CONTEXT OF THE INDIAN EVIDENCE ACT, EV IDENCE MEANS AND INCLUDES ALL STATEMENTS MADE BEFORE THE C OURT WHICH ARE CALLED ORAL EVIDENCE' AND ALL DOCUMENTS PRODUC ED BEFORE IT FOR INSPECTION WHICH ARE CALLED DOCUMENTARY EVIDEN CE. THAT IS A CONTROLLED MEANING OF THE WORD FOR THAT ACT. YET, I N CERTAIN PROCEEDINGS, EVIDENCE IN THE FORM OF AFFIDAVITS, DE CLARATIONS AND OTHER MEANS OF THE SAME KIND IS ALLOWED TO BE ADDUC ED. BUT ALL SUCH EXERCISE IS MADE BEFORE A COURT OR A QUASI-JUD ICIAL TRIBUNAL TO MAKE THINGS OBVIOUS OR MANIFEST. IN OTHER WORDS, THE EFFORT IS TO MAKE THINGS PLAINLY VISIBLE OR CONSPICUOUS. THE OBJECT CAN ALSO BE ACHIEVED BY A POSITIVE SUGGESTION INDICATING AN INFERENCE WHICH ADDS TO THE PLAIN VISIBILITY OR MANIFESTATION . FOR THE CAUSE BEFORE IT, THE COURT OR THE TRIBUNAL MUST HAVE BEFO RE IT, IN ALL EVENTS, THE CORRECT PERSPECTIVE OF THINGS, AND WHAT IS HELPFUL OR VALUABLE IN THAT DIRECTION IS EVIDENCE IN THE LAR GER CONTEXT OR IN THE GENERIC SENSE. AS IS WELL KNOWN, STRICT RULES OF EVIDENCE, AS ARE KNOWN TO THE INDIAN EVIDENCE ACT, ARE NOT APPLI CABLE TO INCOME-TAX PROCEEDINGS, AND THUS THE WORD EVIDENCE ' IN THE QUESTION UNDER REFERENCE HAS FO BE UNDERSTOOD IN TH E GENERIC 57 SENSE, AND NOT IN THE ARRESTED SENSE SO AS TO BE EI THER ORAL OR DOCUMENTARY EVIDENCE, OR BOTH.' THESE OBSERVATIONS ARE IN DIRECT CONTRADICTION TO T HE DEPARTMENT'S CONTENTION OF THE EVIDENCE ACT BEING NOT APPLICABLE IN THE FACTS OF THE APPELLANTS CASE. 15.2 CIT VS. KUWER FIBERS (P.) LTD. (2017) 77 TAXMANN.C OM 345 (DEL.) : IN THE CITED CASE CROSS-EXAMINATION WAS SOUGHT BY T HAT ASSESSEE AT THE FAG END OF THE PROCEEDINGS, IT ALSO APPEARED TO THE COURT THAT IN VIEW OF THE OTHER CORROBORATIVE MATERIAL MADE AVAIL ABLE TO THE ASSESSEE DURING THE PROCEEDINGS A CROSS-EXAMINATION WAS NOT INDISPENSABLE IN THE FACTS OF FHE CASE. THE RATIO W OULD HAVE TO BE STRICTLY READ IN THE CONTEXT OF THE CONSPECTUS OF F ACTS APPERTAINING TO THAT CASE. 15.3 SMT. KUSUM LATA THAKRAL VS. CIT 150 ITR 714 : THE CITATION IS ERRONEOUS BECAUSE THE ID. CIT(DR) A T 150 ITR 714 IN THE WRITTEN SUBMISSIONS HAS HERSELF CITED CIT VS . METAL PRODUCTS OF INDIA AT THAT REFERENCE. 15.4 HINDUSTHAN TABACCO COMPANY VS. CIT 27 TAXMANN.COM 155 (CAL.) : IN THIS CASE WHAT THE COURT HAS ADVISED IS THAT CRO SS-EXAMINATION SHOULD BE SOUGHT AT AN APPROPRIATE TIME AND NOT BEL ATEDLY. OBVIOUSLY THE RATIO IS BASED ON ITS OWN FACTS AND WOULD HAVE NO RELEVANCE OR APPLICATION TO THE APPELLANTS CASE AT HAND WHERE T HE CROSS- EXAMINATION WAS SOUGHT AT AN APPROPRIATE TIME. 15.5 T. DEASAHAYA NADAR VS. CIT 51 ITR 20 (MAD.) : AFTER THE LATER DECISIONS OF THE APEX COURT AS CITE D SUPRA (CHUHARMAL VS. CIT) THIS OLD DECISION OF THE MADRAS HIGH COURT LOSES ITS SIGNIFICANCE AND AUTHORITY. 58 16. ITO VS. M. PIRAI CHOODI (2011) 334 ITR 261 (SC) : THE CORRECT CITATION IS 334 ITR 262. THIS ORDER EMA NATES OUT OF A WRIT FILED BEFORE THE HIGH COURT AGAINST THE ASSESS MENT ORDER. IT IS IN THAT CONTEXT THAT THE QUOTED ADVISE HAS BEEN TEN DERED BY THE APEX COURT TO THE HIGH COURT. IT IS A WELL ESTABLIS HED PRINCIPLE OF LAW THAT A DECISION IN A WRIT DOES NOT CREATE A PRE CEDENT. DR. GAURI SHANKAR PRASAD VS. ITQ F2017) 393 ITR 635 (PAT.) : IN THE CITED CASE REQUEST FOR CROSS-EXAMINE WAS NEV ER EXPRESSED BY THE LITIGANT. IN THE SUBJECT CASE CROSS-EXAMINAT ION HAS BEEN SOUGHT AT THE FIRST AVAILABLE OPPORTUNITY DURING AS SESSMENT. FACTS BEING DIFFERENT AND DISTINGUISHABLE THE CITED RATIO HAS NO APPLICATION. 18. ANDAMAN TIMBER INDUSTRIES VS. CCE (2015) 281 CT R 241 (SC) : THE OBSERVATIONS OF THE APEX COURT AS EXTRACTED IN THE DEPARTMENTS WRITTEN SUBMISSIONS HAVE NOT BEEN FOLL OWED IN THE NARRATIVE OF THE ID. CIT (DR) IN THE EARLIER PART O F THE SUBMISSIONS. BEING SO, THE OBSERVATIONS AS MADE ARE ERRONEOUS AN D SO DO NOT MERIT ANY CONSIDERATION. 23. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE R IVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHOR ITIES BELOW AS WELL AS THE WRITTEN SUBMISSIONS BY THE RESPECTIVE REPRES ENTATIVES. ON PERUSAL OF THE FACTS ON RECORD, WE CAN SAFELY CONCL UDE THAT IT IS NOT A CASE OF NON ISSUE OF NOTICE U/S 143(2) OF THE ACT. THE ASSESSING OFFICER DID ISSUE NOTICE U/S 143(2) WHICH WAS SERVED AT THE RESIDENCE OF THE ASSESSEE. AS MENTIONED ELSEWHERE, THIS ISSUE WAS NO T SERIOUSLY 59 CONTESTED BEFORE THE LD. CIT(A). EVEN BEFORE US, T HE LD. COUNSEL FOR THE ASSESSEE DID MENTION A PASSING REFERENCE TO IMP ROPER SERVICE OF NOTICE. BUT THEREAFTER, HE DID NOT MAKE ANY SUBMIS SIONS AND WAS EMPHATICALLY RELYING UPON THE DECISIONS OF THE CO-O RDINATE BENCHES IN ASSESSMENT YEAR 2009-10 AND 2010-11. THEREFORE, TH IS GRIEVANCE IS DISMISSED AS IT WAS NOT SERIOUSLY CONTESTED. 24. AS MENTIONED HEREINABOVE, THE LD. COUNSEL FOR T HE ASSESSEE HAS PLACED HEAVY RELIANCE ON THE DECISION OF THE CO-ORD INATE BENCHES IN ASSESSMENT YEARS 2009-10 AND 2010-11. IN A.Y 2009- 10, THE ASSESSING OFFICER HIMSELF HAS TREATED THE BUSINESS OF THE ASS ESSEE AS FAKE BUSINESS AND ESTIMATED THE COMMISSION INCOME ON SAL E @ 1%. THE ASSESSING OFFICER DID NOT EVEN BOTHER TO LOOK INTO THE ASSESSMENT RECORDS FOR THE ASSESSMENT YEAR 2008-09. 25. THE CO-ORDINATE BENCH IN ITA NO. 4922/DEL/2014, IN ITS WISDOM AND WITHOUT LOOKING INTO THE ASSESSMENT HISTORY OF ASSESSMENT YEAR 2008-09, ALLOWED THE APPEAL OF THE ASSESSEE BY RELY ING UPON THE DECISION IN THE CASE OF ANDAMAN TIMBER INDUSTRIES [ SUPRA]. THE CO- ORDINATE BENCH DID NOT LOOK INTO THE FACT THAT IN A SSESSMENT YEAR 2008- 09, OPPORTUNITIES WERE GIVEN TO THE ASSESSEE FOR CR OSS EXAMINATION BUT HE CHOSE TO REMAIN ABSENT FROM THE PROCEEDINGS. IN ASSESSMENT YEAR 60 2010-11, THE CO-ORDINATE BENCH HAS SIMPLY FOLLOWED THE DECISION OF THE BENCH GIVEN IN ASSESSMENT YEAR 2009-10. IN OUR CON SIDERED OPINION, THESE DECISIONS OF THE CO-ORDINATE BENCHES WOULD NO T APPLY ON THE PLETHORA OF FACTS CONSIDERED IN THE YEAR UNDER CONS IDERATION WHICH REMAIN UNREBUTTED BY THE ASSESSEE. 26. THE STATEMENT OF SHRI RADHEY SHYAM MITTAL HAS B EEN EXHIBITED ELSEWHERE. A PERUSAL OF THE SAME REVEALS THAT THE BANK ACCOUNT OF M/S MITTAL PAPER MART WAS, IN FACT, OPERATED BY SHRI PU NEET JAIN. SHRI RADHEY SHYAM MITTAL HAS CATEGORICALLY STATED THAT I T WAS SHRI PUNEET JAIN WHO WAS DEPOSITING THE MONEY IN THE ACCOUNT OF MITTAL PAPER MART AND WAS WITHDRAWING THE MONEY FROM THE SAME ACCOUNT AS THE CHEQUE BOOK OF SHRI RADHEY SHYAM MITTAL WAS ALREADY WITH H IM OR WITH SHRI PRAVEEN KUMAR JAIN, FATHER OF SHRI PUNEET JAIN, BEA RING THE SIGNATURES OF SHRI RADHEY SHYAM MITTAL. 27. ANOTHER GLARING FACT COMING OUT OF THE STATEMEN T OF SHRI RADHEY SHYAM MITTAL IS THAT EVEN THE PAY-IN SLIPS OF THE B ANK WERE PREPARED BY SHRI PUNEET JAIN OR SHRI PRAVEEN KUMAR JAIN. 61 28. THE BANK MANAGER, WHERE MITTAL PAPER MART HAD I TS BANK ACCOUNT, WAS SUMMONED BY THE ASSESSING OFFICER ALONGWITH THE PAY IN SLIPS PREPARED BY SHRI PUNEET JAIN/SHRI PRAVEEN KUMAR JAI N. THOSE PAY IN SLIPS WERE REFERRED TO A FORENSIC EXPERT, REPORT IS EXHIBITED AT PAGES 58 TO 63 OF THE PAPER BOOK, IN WHICH THE FORENSIC EXPE RT HAS CATEGORICALLY GIVEN HIS CONCLUSION THAT IN ALL THE CHEQUES, HAND WRITING MATCHES WITH THAT OF SHRI PRAVEEN KUMAR JAIN. THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE THAT NO OPPORTUNITY TO CROSS EXAMINE SHRI RADHEY SHYAM MITTAL WAS GIVEN DOES NOT HOLD ANY WATER AS WE FIND THAT SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE BUT FOR RE ASONS BEST KNOWN TO HIM, HE KEPT HIMSELF ABSENT FROM THE PROCEEDINGS AN D DID NOT AVAIL ANY OPPORTUNITY TO CROSS EXAMINE SHRI RADHEY SHYAM MITT AL. 29. MOREOVER, AS SHRI RADHEY SHYAM MITTAL WAS DRAWI NG SALARY OF RS. 25,000/- FROM THE ASSESSEE HIMSELF, IT CANNOT BE SA ID THAT HE WAS A STRANGER TO THE ASSESSEE. THE REPORT OF THE FORENS IC EXPERT CLEARLY ESTABLISHES THE FACT THAT THE BANK ACCOUNT OF MITTA L PAPER MART WAS OPERATED BY SHRI PUNEET JAIN AND ALL THE DEPOSITS A ND WITHDRAWALS WERE MADE IN HIS OWN HANDWRITING OR HANDWRITING OF HIS FATHER SHRI PRAVEEN KUMAR JAIN. QUESTION NOS. 7 AND 8 OF THE S TATEMENT OF SHRI RADHEY SHYAM MITTAL CLEARLY ESTABLISH THESE FACTS. 62 30. CONSIDERING THE REPORT OF THE FORENSIC EXPERT, IT CAN BE SAFELY CONCLUDED THAT THE ADDITIONS ARE NOT SOLELY BASED U PON THE STATEMENT OF SHRI RADHEY SHYAM MITTAL BUT ON FACTS AND EVIDEN CES UNEARTHED DURING THE ASSESSMENT PROCEEDINGS. 31. THE FORENSIC EXPERTS REPORT REMAINS UNCHALLENG ED EVEN BEFORE US BECAUSE THE LD. COUNSEL FOR THE ASSESSEE HAS NEVER POINTED OUT ANY DEFECT IN THE SAID REPORT AND MOREOVER, THE SAID FO RENSIC REPORT IS PART OF THE PAPER BOOK SUBMITTED BY THE ASSESSEE HIMSELF . MOREOVER, WE FIND THAT THE ASSESSEE NEVER SOUGHT ANY OPPORTUNITY TO CROSS EXAMINE THE FORENSIC EXPERT NOR HE HAS POINTED OUT ANY DEFE CT IN THE REPORT OF THE FORENSIC EXPERT. 32. THE EVIDENCES ON RECORD CLEARLY SHOW THAT THE P URCHASES MADE FROM MITTAL PAPER MART ARE TOTAL BOGUS PURCHASES AS MITTAL PAPER MART ITSELF WAS A BOGUS FIRM. EVEN IN THE STATEMENT OF ACCOUNTS OF MITTAL PAPER MART, THERE IS NO RECEIVABLES FROM THE ASSESS EE. RELIANCE ON THE ORDER OF THE ADDITIONAL COMMISSIONER GRADE 2 (APP EAL 2) COMMERCIAL TAX DEPARTMENT WILL ALSO DO NOT GOOD TO THE ASSESSE E AS WE CANNOT QUESTION THE WISDOM OF THE ADDITIONAL COMMISSIONER [APPEAL], COMMERCIAL TAXES DEPARTMENT. THE DOCUMENTARY EVIDE NCES BROUGHT ON RECORD EMANATING FROM THE ASSESSMENT PROCEEDINGS SUPPORTED BY 63 THE REMAND REPORT ESTABLISHES ONLY ONE FACT THAT TH E CREDIT ENTRIES IN THE NAME OF MITTAL PAPER MART P/O SHRI RADHEY SHYAM MITTAL AMOUNTING TO RS. 17,31,25,389/- IS UNEXPLAINED CREDIT WHICH I S SUPPORTED BY EVIDENCES ON RECORD. ON THIS COUNT, RELIANCE PLACE D ON THE DECISION OF THE HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF S HANKAR INDUSTRIES 114 ITR 689 IS MISPLACED IN AS MUCH AS THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION. MERELY BECAUSE THE TRANSACTIONS HAVE BEEN DONE BY ACCOUNT PAYEE CHEQUES WOULD NOT S UFFICE WHEN THE FORENSIC EXPERTS REPORT CLEARLY PROVES THAT THE AC COUNT WAS OPERATED IN THE HANDWRITING OF SHRI PUNEET JAIN, AND ALL DEP OSITS AND WITHDRAWALS WERE MADE IN THE HANDWRITING OF SHRI PU NEET JAIN. 33. RELIANCE PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES [SUPRA] IS CL EARLY DISTINGUISHABLE ON FACTS AS IT CANNOT BE STATED THA T NO OPPORTUNITY OF CROSS EXAMINATION WAS GIVEN. FROM THE ASSESSMENT O RDER ITSELF, IT CAN BE SEEN THAT SEVERAL NOTICES WERE SERVED UPON THE A SSESSEE DURING THE ASSESSMENT PROCEEDINGS ITSELF BUT THE ASSESSEE CHOS E NOT TO RESPOND AND CAPTURE THE OPPORTUNITY TO CROSS EXAMINE SHRI R ADHEY SHYAM MITTAL. 64 34. MOREOVER, THE STATEMENT OF SHRI RADHEY SHYAM MI TTAL DID NOT SURPRISE THE ASSESSEE AS THE FACTS MENTIONED THEREI N IN RELATION TO OPERATION OF BANK ACCOUNT OF MITTAL PAPER MART BY S HRI PUNEET JAIN/SHRI PRAVEEN JAIN WERE KNOWN TO THE ASSESSEE. FURTHER, MITTAL PAPER MART WAS SHOWN AS A CREDITOR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THEREFORE, THE ONUS WAS UPON THE ASSESSE E TO EXPLAIN THE GENUINENESS OF THE CREDIT ENTRIES AND SINCE MITTAL PAPER MART WAS CREDITOR OF THE ASSESSEE, SHRI RADHEY SHYAM MITTAL APPEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO THE SUMMONS ISSUED U/S 131 OF THE ACT FOR AND BEHALF OF THE ASSESSEE. THEREFORE, TECHNIC ALLY, SHRI RADHEY SHYAM MITTAL WAS ASSESSEES OWN WITNESS. 35. IN OUR UNDERSTANDING OF THE LAW, ALL THAT IS ME ANT BY THE PRINCIPLE AUDI ALTERAM PARTEM IS THAT NO PARTY SHOULD BE CO NDEMNED UNHEARD. ONCE THE EVIDENCES ARE COLLECTED BY THE ASSESSING O FFICER HAVE BEEN PLACED BEFORE THE ASSESSEE FOR HIS INFORMATION, COM MENT AND CRITICISM, IT MEETS ALL THE REQUIREMENTS OF PRINCIPLES OF NATU RAL JUSTICE. NATURAL JUSTICE CERTAINLY INCLUDES THAT ANY STATEMENT OF A PERSON BEFORE IT IS ACCEPTED AGAINST SOMEBODY ELSE, THAT SOMEBODY ELSE SHOULD HAVE AN OPPORTUNITY OF MEETING IT BY WAY OF INTERROGATION O R BY WAY OF COMMENT DOES NOT MATTER SO LONG AS THE PARTY CHARGE D HAS A FAIR AND REASONABLE OPPORTUNITY TO SEE, COMMENT OR CRITICISE THE EVIDENCES. 65 36. AS MENTIONED ELSEWHERE, THE STATEMENT OF SHRI R ADHEY SHYAM MITTAL PROMPTED THE ASSESSING OFFICER TO MAKE FURTH ER ENQUIRY FROM THE BANK AND THE EVIDENCES COLLECTED FROM BANK WERE REF ERRED TO FORENSIC EXPERT FOR VERIFICATION OF HANDWRITING AND REPORT O F THE FORENSIC EXPERT WAS MADE AVAILABLE TO THE ASSESSEE ON WHICH THE ASS ESSEE DID NOT EVEN CARE TO MAKE ANY COMMENT. 37. CONSIDERING THE FACTS OF THE CASE IN TOTALITY, WE DO NOT FIND ANY MERITS IN THE SUBMISSIONS OF THE LD. COUNSEL FOR TH E ASSESSEE. ADDITION OF RS. 17,31,25,389/- IS SUSTAINED. 38. COMING TO THE NEXT ADDITION OF RS. 8,58,44,005/ -, BEING UNVERIFIED SUNDRY DEBTORS, WE ARE OF THE CONSIDERED VIEW THAT SUCH DEBIT ENTRIES CANNOT BECOME INCOME OF THE ASSESSEE. THE ASSESSEE WAS SHOWING BOGUS SALES OUT OF BOGUS PURCHASES AND WE H AVE CONFIRMED THE ADDITION ON ACCOUNT OF BOGUS PURCHASES TO THE EXTEN T OF RS. 17.31 CRORES. ANY ADDITION OUT OF THE SALES MADE OUT OF T HE AFORESAID PURCHASES WOULD RESULT INTO DOUBLE ADDITION. WE, T HEREFORE, DO NOT FIND ANY MERIT IN THIS ADDITION OF DEBIT ENTRY AND THE SAME IS DIRECTED TO BE DELETED. 66 39. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO. 1569/DEL/2013 IS PARTLY ALLOWED THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.09. 2019. SD/- SD/- [ SUCHITRA KAMBLE ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH SEPTEMBER, 2019 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 67 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER