Shri Arup Kumar Bhowmick, Burdwan V. ACIT, Circle-I, Burdwan, Burdwan

ITA 1883/KOL/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3306 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Opportunity of cross examination; Additional evidence; Onus to prove
• Section: 131; 68

Judgement Text

ITA NO.1883/KOL/2014 [ASSESSMENT YEAR: 2010-11] PAGE | 2 CONFIRMATION LETTERS AND CITED PERSONS REASONS FOR NOT APPEARING BEFORE THE AO. AS FAR AS THE OTHER PERSONS ARE CONCERNED, THE SUMMONS ISSUED U/S 131 OF THE ACT WERE EITHER RETURNED BACK UNSERVED OR WHEREVER THEY WERE SERVED, THE PARTIES DID NOT APPEAR. THE AO GAVE A SHOW-CAUSE NOTICE TO THE ASSESSEE AND THEREAFTER, CAME INTO CONCLUSION THAT THE ASSESSEE HAD NOT DISCHARGED THE BURDEN OF PROOF THAT LAY OF HIM TO PROVE THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. 4. LD.CIT(A) UPHELD THE ORDER OF THE AO ON THIS ISSUE OF ADDITION U/S 68 OF THE ACT. AGGRIEVED THE ASSESSEE IS BEFORE US ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.3,41,05,000/- MADE BY THE LD. A.O. ON ACCOUNT OF ADVANCES MADE BY PARTIES, BEING IN THE NATURE OF TRADE ADVANCES TOWARDS SUPPLY OF GUR. 2. THAT THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE STATEMENT OF THE PARTIES WAS TAKEN BEHIND THE BACK OF THE ASSESSEE WITHOUT GIVING ANY OPPORTUNITY OF CROSS EXAMINATION IN GROSS VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. 3. THAT THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE SETTLED POSITION OF LAW THAT RIGOURS OF THE PROVISION OF SECTION 68 DO NOT APPLY TO TRADE ADVANCES. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD ALTER OR DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 5. LD. COUNSEL FOR THE ASSESSEE FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES. THE ADDITIONAL EVIDENCE AS IN THE FORM OF AFFIDAVITS AND THE COPIES OF THE BILLS RAISED BY THE ASSESSEE TO THESE PARTIES IN SUBSEQUENT YEARS. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ONLY ONE SINGLE OPPORTUNITY WAS GIVEN TO THE ASSESSEE BY THE AO TO SUBSTANTIATE HIS CASE. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY CONTENDED THAT NO OPPORTUNITY OF CROSS-EXAMINATION WAS PROVIDED TO ITA NO.1883/KOL/2014 [ASSESSMENT YEAR: 2010-11] PAGE | 4 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 DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY 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 GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR 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. 8. SIMILARLY JURISDICTION OF HONBLE HIGH COURT IN THE CASE OF S.K.BOTHRA & SONS (HUF)(SUPRA) AS HELD AS UNDER:- IN OUR VIEW, EQUITY AND JUSTICE DEMAND THAT THE FULL TEXT OF THE INFORMATION GIVEN BY THE INSPECTOR TO THE AO WHICH IS THE BASIS OF THE CONCLUSION OF THE ASSESSMENT SHOULD BE MADE KNOWN TO THE ASSESSEE BEFORE THE SAME IS USED AGAINST HIM SO THAT THE GENUINENESS OF THE SAID INFORMATION CAN BE REBUTTED BY THE APPELLANT-ASSESSEE OR AT LEAST, THE ASSESSEE CAN GET AN OPPORTUNITY TO EXPLAIN THE SAID INFORMATION. WE THUS FIND THAT IN THE FACTS OF THE PRESENT CASE THE ORDER OF ASSESSMENT WAS MADE WITHOUT GIVING ADEQUATE OPPORTUNITY TO THE APPELLANT TO EXPLAIN THE UNDISCLOSED INFORMATION RECEIVED BY THE AO FROM HIS INSPECTOR. WE, THEREFORE, SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE AO FOR COMMUNICATING THE REPORT OF THE INSPECTOR TO THE APPELLANT WITH FURTHER LIBERTY TO THE AO TO ENQUIRE.FROM THE ASSESSEE ANY OTHER INFORMATION HE DESIRES. SIMILARLY, THE ASSESSEE WILL BE ENTITLED TO EXPLAIN THE REPORT SUBMITTED BY THE INSPECTOR AND AFTER CONSIDERATION OF SUCH EXPLANATION, THE AO WILL COME TO A FINAL DECISION WHETHER THE TRANSACTIONS WERE GENUINE OR NOT.