Hiren Pharma & Surgicals , CHENNAI V. ACIT Non Corporate Circle 4(1) , CHENNAI

ITA 2007/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5900 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 18-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: S SRIDHAR
• Keywords: Opportunity of cross examination; Corroborative evidences; Accommodation entries

Judgement Text

, C/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL C/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.2007 /MDS./2017 ( ASSESSMENT YEAR : 2013-14 ) M/S.HIREN PHARMA & SURGICALS, 9,KESAVA IYER STREET, PARK TOWN,CHENNAI-3 VS. THE ACIT, NON-CORPORATE CIRCLE 4(1), CHENNAI-34. PAN AAAFH 0396 J ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 07.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 07.11.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-5, CHENNA I DATED 27.06.2017 PERTAINING TO ASSESSMENT YEAR 2013-14. ITA NO. 2007/MDS/2017 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS F OR ADJUDICATION. 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN SUSTAINING THE ORDER OF THE ASSESSING OFFICER IN DISALLOWING THE A PPELLANTS CLAIM OF DEDUCTION UNDER SECTION 35(1 )(II) ON THE DONATION MADE TO A SCIENTIFIC RES EARCH ASSOCIATION. 2. THE APPELLANT SUBMITS THAT IT HAS PAID A DONATIO N OF RS. 7,50,000 TO M/S HERBICURE HEALTHCARE BI-HERBAL RESEARCH FOUNDATION, KOLKATTA, WHICH IS AN APPROVED SCIENTIFIC RESEARCH ASSOCIATION DULY AP PROVED BY THE CENTRAL BOARD OF DIRECT TAXES UIS 35(1)(II) BY CHEQUE DULY SUPPORTED BY THE CERTIFICATE ISSUED BY THE INSTITUTION AND HAS SATIS FIED ALL THE CONDITIONS LAID DOWN IN SECTION 35(1)(II) FOR ITS CLAIM OF WEIGHTED DEDUCTION U/S 35(1)(II). 3. THE ASSESSING OFFICER DENIED THE EXEMPTION BASED ON THE ALLEGED INSPECTION REPORT CONDUCTED IN THE HANDS OF THE INS TITUTION TO DENY THE EXEMPTION IN THE HANDS OF THE DONOR WHICH IS CONTRA RY TO THE PROVISIONS OF THE ACT. 4. THE APPELLANT SUBMITS THAT ALL THE ALLEGED ENQUI RIES CONDUCTED BY THE DEPARTMENT WERE BEHIND THE BACK OF THE APPELLANT AN D THE APPELLANT WAS NOT PROVIDED WITH ANY SPECIFIC DOCUMENT OR MATERIAL TO SUGGEST THAT THE DONATION MADE BY IT WAS ) BOGUS AND THUS THE ENTIRE ASSESSMENT IS DEVOID OF MERIT AND WITHOUT AFFORDING REASONABLE OP PORTUNITY AND FAIR PLAY. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO CONSIDER THE EXPLANATION TO SECTION 35(1 )(II) WHICH CLEARLY STI PULATES THAT THE DEDUCTION TO WHICH AN ASSESSEE IS ENTITLED IN RESPECT OF ANY SUM PAID TO A RESEARCH ASSOCIATION SHALL NOT BE DENIED MERELY ON THE GROUN D THAT SUBSEQUENT TO THE PAYMENT OF SUCH SUM BY THE ASSESSEE, THE APPROV AL OF SUCH ASSOCIATION HAS BEEN WITHDRAWN. 6. THE APPELLANT SUBMITS THAT IT IS NOT EVEN THE CA SE OF THE DEPARTMENT THAT THE APPROVAL OF THE SCIENTIFIC ASSOCIATION TO WHICH DONATION WAS MADE BY ITA NO. 2007/MDS/2017 3 THE APPELLANT WAS WITHDRAWN SUBSEQUENTLY AND EVEN I F IT IS SO, THE DEDUCTION CLAIMED BY THE APPELLANT CANNOT BE DENIED AT ALL. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT THE APPELLANT DID NOT FURNISH ANY MATERIAL TO ESTAB LISH THAT THE INSTITUTION WAS APPROVED AND WAS SPECIFIED IN THE NOTIFICATION WHEN THE APPROVAL OF THE CBDT APPROVING THE INSTITUTION AS A SCIENTIFIC ASSOCIATION U/S.35(1 )(II) WAS SUBMITTED BEFORE HIM. 8. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN HOLDING THAT THERE WAS NO EVIDENCE PRODUCED BY THE APPELLANTS TH AT IT HAD REQUESTED THE ASSESSING OFFICER TO PROVIDE AN OPPORTUNITY TO CROSS EXAMINE THE DONOR. IT IS WELL SETTLED RULE OF TAXATION THAT WHE N ANEVIDENCE IS RELIED ON AGAINST THE ASSESSEE, IT IS THE BOUNDEN DUTY OF THE ASSESSING OFFICER TO PROVIDE SUCH EVIDENCE TO THE ASSESSEE FOR REBUTTAL WITHOUT ANY REQUEST BY THE ASSESSEE. IN FACT ACCORDING TO THE ASSESSEMENT ORDER THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY WITH THE TRUST AND RELIED ONLY ON THE INFORMATION RECEIVED FROM SOME SOURCE WHICH IS NOT ACCEPTABLE AS PER DELHI HIGH COURT JUDGEMENT IN THE CASE OF PNNICIPAL COMMISSIONER OF INCOME TAX V RMG POLYVINYL (I) LTD, S MURLIDHAR AND MS PRATIBA M SINGH (2017) 83 TAXMANN 348(DELHI) 9. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ALSO ERRED IN HOLDING THAT THE APPELLANT DID NOT FILE ANY CONFIRMATION FR OM THE DONEE . THE RECEIPT ISSUED BY THE INSTITUTION ACKNOWLEDGING THE RECEIPT OF THE DONATION THROUGH BANKING CHANNEL WOULD ITSELF TANTAMOUNT TO CONFIRMATION OF THE RECEIPT OF THE DONATION. 10. THE APPELLANT SUBMITS THAT THE COMMISSIONER OF LNCOME-TAX(APPEALS) DISMISSED THE APPEAL ON IRRELEVANT GROUNDS AND THE DEDUCTION DAIMED BY THE APPELLANT UNDER SECTION 35(1 XII) IS FULLY SUPP ORTED WITH ALL DOCUMENTS REQUIRED TO CLAIM THE DEDUCTION. ITA NO. 2007/MDS/2017 4 11. THE APPELLANT THEREFORE PRAYS THAT THE HONBLE INCOME-TAX APPELLATE TRIBUNAL MAY BE PLEASED TO GRANT WEIGHTED DEDUCTION U/S 35(1 )(II) OF THE ACT ON THE DONATION MADE TO M/S HERBICURE BIO-HERBA L RESEARCH FOUNDATION AND RENDER JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A FIRM CARRYING ON BUSINESS IN DEALERS OF PHARMACEUTICALS AND SURGICAL EQUIPMENTS. FOR THE ASSESSMENT YEAR 2013-14, IT FIL ED A RETURN OF INCOME ON 29/9/2013 ADMITTING AN INCOME OF RS, 27,4 5,690/-. THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY AND THE SCRUTI NY ASSESSMENT WAS COMPLETED UNDER SECTION L43(3) ON 21/03/2016 DE TERMINING THE TOTAL INCOME AT RS.44,85,730/- AFTER MAKING THE CER TAIN ADDITIONS TO THE INCOME RETURNED. 3.1 THE ISSUE IN DISPUTE RAISED IN ITS APPEAL RELA TING TO A DONATION OF RS 7,50,000/- WAS PAID BY ASSESSEE-FIRM THROUGH CHEQUE NO 935492 DATED 08.02.2013 DRAWN ON INDIAN BANK, SOWCA RPET BRANCH, CHENNAI IN FAVOUR OF HERBICURE HEALTHCARE BIO-HERB AL RESEARCH FOUNDATION (HITHERTO REFERRED TO AS DONATION) AND C LAIMED WEIGHTED DEDUCTION ON THE SAID DONATION AT 175% UNDER SECTIO N 35(1)(II) AMOUNTING TO RS. 13,12.500/-. THE DONATIONS WERE MA DE THROUGH CHEQUES AND DEPOSITED IN THE BANK ACCOUNT OF THE AB OVE TRUST. THE ITA NO. 2007/MDS/2017 5 TRUST WAS APPROVED BY INCOME TAX DEPARTMENT VIDE NO TIFICATION (S.O798) 35/2008 PUBLISHED IN PART II DT.14.03.2008 SECTION 3 SUB SECTION (I) BY CSDT MOF, GOVERNMENT OF INDIA GAZET TE COPY OF IT NOTIFICATION ALREADY SUBMITTED. THE CERTIFICATE ISS UED TO THE TRUST AS AN APPROVED INSTITUTION UNDER SECTION 35(1)(II WAS ALSO SUBMITTED. BASED ON THE SAID DOCUMENTARY EVIDENCE THE ASSESSEE CLAIMED THE WEIGHTED DEDUCTION. THE ASSESSING OFFICER MADE ENQU IRIES ABOUT THE PAYMENT AND WAS CONFIRMED BY THE TRUST AND SUBSEQUE NTLY DUE TO COMMUNICATIONS FROM DGIT(LNVESTIGATION) WING THE DO NATIONS TO THIS TRUST WAS TERMED AS BOGUS AND DENIED THE EXEMPTION CLAIMED. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, TH E ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). 3.2 BEFORE LD.CIT(A), THE SUBMISSION OF THE ASSESS EE WAS THAT ALL THE ENQUIRIES WERE MADE BY THE ASSESSING OFFICER BE HIND THE BACK OF THE ASSESSEE, WHICH CANNOT BE FORMED THE BASIS OF AN ASSESSMENT. THE ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY TO CROSS EXAMINE THE PERSONS CONCERNED. ACCORDING TO LD.CIT(A), THE AO H AD ADMITTED THAT THE DONATIONS WERE MADE AND RECEIVED BY A TRUS T CALLED ITA NO. 2007/MDS/2017 6 HERBICURE HEALTHCARE BIO-HERBAL RESEARCH FOUNDATION AND THE AMOUNT WAS ALSO RECEIVED IN THE BANK ACCOUNT OF THE SAID TRUST. LD.CIT(A) FURTHER OBSERVED THAT THE ASSESSING OFFIC ER HAS GOT CONFIRMATION FROM THE TRUST, CERTIFICATE IN THE NAM E OF THE TRUST UNDER SECTION 35(1)(II) WAS ALSO FILED. IT WAS SUBMITTED BY THE ASSESSEE THAT ITS CLAIM FOR WEIGHTED DEDUCTION UNDER SECTION 35(1 )(II) WAS FULLY SUPPORTED BY DOCUMENTARY EVIDENCE A DONOR COULD PRO DUCE AND THEREFORE, THE AO MAY HAVE GRANTED THE DEDUCTION CL AIMED. ACCORDING TO LD.A.R, THE PROVISIONS OF SECTION 35(1 )(II) CLEARLY PROTECT THE DONORS AND ALLOW THE DEDUCTION EVEN IN CASES WH ERE THE APPROVAL IS WITHDRAWN TO THE SCIENTIFIC ASSOCIATION. WHEN SU CH BEING THE LEGAL PROVISIONS, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DENYING THE DEDUCTION CLAIMED UNDER SECTION 35(1 )(II) OF THE A CT. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE APPROVAL GRANTED TO THE TRUST WAS WITHDRAWN BY THE GOVERNMENT. THE DONATIONS HAVING B EEN MADE TO THE TRUST BY CHEQUE AS PER THE DIRECTIONS GIVEN AND DULY SUPPORTED BY THE RECEIPT AND THE APPROVAL GRANTED, THE DENIAL OF DEDUCTION IS NOT JUSTIFIED. ITA NO. 2007/MDS/2017 7 3.3. THE LD.CIT(A) OBSERVED THAT AS A RESULT OF SU RVEY THAT THE TRANSACTIONS WERE GIVEN THE COLOUR OF LEGITIMACY BY ROUGING IT THROUGH THE BANKING CHANNELS. IT IS PROVED IN THE SURVEY U/ S.133A CONDUCTED BY DGIT(INV.) WING KOKOTTA THAT THE TRANSACTIONS W ERE NOT GENUINE AS THE FUNDS RECEIVED IN THE BANKING CHANNELS WERE ROUTED BACK TO THE DONORS THROUGH BOGUS BILLS, ACCOMMODATION ENTRI ES AND IN THE FORM OF CASH INVOLVING MULTIPLE LAYERS. HENCE, LD.C IT(A) ENDORSED THE VIEW OF THE LD. ASSESSING OFFICER. AGAINST THE ORD ER OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, AT THE OUTSET, THE LD.A.R ARGUED THA T NO OPPORTUNITY OF CROSS EXAMINATION OF THIRD PARTIES HAS BEEN GIVE N TO THE ASSESSEE AND THE ASSESSEE WAS NOT PROVIDED WITH ANY SPECIFIC DOCUMENT OR MATERIAL TO SUGGEST THAT THE DONATIONS MADE BY IT F OR BOGUS AND JUST ENTIRE ASSESSMENT TO BE SCRAPPED. ADMITTEDLY, IN T HIS CASE, THE AO RELIED THE FOLLOWING DOCUMENTS WHILE FRAMING THE AS SESSEE. ITA NO. 2007/MDS/2017 8 SL. NO. NAME & DETAILS OF THE PERSONS WHOSE STATEMENT WAS RECORDED & DATE RELEVANT NO,. OF THE QUESTIONS AND ANSWERS REMARKS 1 MR.SWAPAN RAJAN DAS GUPTA DT.27.1.15. FOUNDER DIRECTOR AND OVERALL CONTROL AND SUPERVISION OF THE FOUNDATION WHICH ACCEPTS THE DONATION ANSWERS TO QUESTION NO.22 & 23 HE ADMITTED TO HAVING RECEIVED DONATION INCHEQUES FROM VARIOUS PERSONS INCLUDING YOURSELF AND THEREAFTER RETURNING THE AMOUNT IN CASH THROUGH VARIOUS INTERMEDIARIES. THE MODUS OPERANDI OF VARIOUS TRANSACTIONS WAS ALSO DISCUSSED. HE ALSO ACCEPTED THAT THE ENTIRE ACCOMMODATION ENTRIES OF BOGUS DONATIONS WERE FACILITATED BY MR.KISHAN BHAWA SINGKA WHO IN TURN HAD CHARGED COMMISSION TO THE EXTENT 5 TO 8% FOR FACILITATING THE SAID ACCOMMODATION ENTIRES. 2 MR.SANKAR KUMAR KHETAN OF KOLKATA- ENTRY OPERATOR STATEMENT RECORDED ON 16.5.15 ANSWERS TO Q.NO. 12,13,14,17 HAS DEPOSED THAT HE WAS CLOSE TO MR.DAS GUPTA, DIRECTOR-HHBRF AND USED TO TAKE CHEQUES FROM HHBRF AND RETURN BACK THE SAME AMOUNT IN CASH FOR COMMISSION @ .08%. THESE SUMS RECEIVED INCHEQUE WERE LATER PASSED ON FOR ANOTHER ACCOMMODATION ENTRY TO BENEFIT PEOPLE WHO WANTED SHARE CAPITAL, LTGG, UNSECURED LOAN ETC. THUS HE GOT COMMISSION FROM TWO PARTIES VIZ. THE FOUNDATION AS WELL AS BENEFICIARIES WHO HAVE TAKEN BOGUS. 3 MR.KISHAN BHAWA ANSWERS TO QUESTION DEPSOSED THAT HE USED ITA NO. 2007/MDS/2017 9 SINGKA OF KOLKATA, BROKER CUM OPERATOR, STATEMENT RECORDED ON 17.04.2015 NO.7,10,11 TO WORK DIRECTLYUNDER MR.SWAPAN RANJAN DAS GUPTA, FOUNDER DIRECTOR, HHBRF AND THAT HIS MAIN SORUCE OF INCOME WAS FROM ARRANGING ACCOMMODATION ENTRY/JAMAKHARCHIWORK, RAISING BOGUS BILLS FOR VARIOUS BENEFICIARIES/PARTIES. EVIDENCE OF MORE THAN RS.40 CRORE BILLING UNDER HIS NAME WAS FOUND FROM THE DATA BACKUP OF HHBRF. 4 MR.MAHESH KUMAR SINGHANIA, ENTRY OPERATOR/BOGUS BILLER STATEMENT RECORDED ON 29.05.2015 ANSWERS TO Q.NO. 14,15,1,6,17,18 WHEN CONFRONTED WITH THE VARIOUS EVIDENCES HE HAS DEPOSED UNDER OATH ALL THE TRANSACTIONS MADE BYHIS PROPRIETORSHIP CONCERNS AND THE NAME AND STYLE SWANTANA SYNDICATE, SUPREME TRADERS, SREEMA ENTERPRISE, MAHESH SINGHANIA WITH HHBRF ARE BOGUS TRANSACTION MADE FOR PROVIDING ACCOMMODATION ENTRIES WITH THE HELP OF PEOPLE LIKE SANJAYBAJORIA A WELL KNOWN MARKET BROKER FOR ACCOMMODATION ENTRY AND JAMAKHARACHIWORKS. HE ALSO CONFIRMED THAT HE WAS ASSISTED BY HIS SON IN LAW SHRI JITENDRA SINGH WAS A DUMMYPROPRIETOR OF MANNAT TRADERS, HE ALSO EXPLAINED MODUS OPERANDI ALSO. 5 MR.RAMA KANTH PANSARI DIRECTOR OF M.S.SHREE SHYAM ANSWERS TO Q.NO. 14 ACCEPTED THAT HE HAS CREATED BOGUS SUPPLY TO HHBRF WITHOUT ANY ITA NO. 2007/MDS/2017 10 IN ORGANICS PVT LTD., BOGUS BILLER STATEMENT RECORDED ON 23.2.15 PHYSICAL DELIVERY OF CHEMICALS. SINCE NO CHEMICALS WERE ACTUALLY PURCHASED BY HHBRF THERE WAS NO RESEARCH CARRIED ON BY IT. 6 MR.KAILASH KUMAR RUNGTA, BOGUS BILLER STATEMENT RECORDED ON 17.8.15 ANSWERS TO Q.NO..6,10,13,14,1,5,16,17,20 HE DEPOSED THAT THROUGH THE SEVEN COMPANIES HE CONTROLLED HE HAD PROVIDED BOGUS BILLS IN VIEW OF COMMISSION TO HHBRF. HE HAD EXPLAINED IN DETAILS THE MODUS OPERANDI HAS TO HOW THE SUMS RECEIVED BY RTGS/CHEQUE FROM HHBRF WERE LAYER AND ACCOMMODATION ENTIRES WERE PROVIDED AND PARALLYAND BOGUS BILLS WERE ISSUED TO HHBRF 7 MR.ANAND KRISHNA MAITIN PAST DIRECTOR OF HHBRF ANSWERS TO Q.NO.10,12,13 HE HAD DEPOSED THAT HE RESIGNED FROM HHBRF AS ITS DIRECTOR ON ACCOUNT OF UNETHICAL PRACTICES CARRIED BY ON HHBRF AND MOVEMENT OF SUSPICIOUS FUNDS. HE CATEGORICALLY ADMITTED THAT HHBRF WAS TAKING DONATIONS IN VIEW OF COMMISSION AND ROUTED BACK THE MONEY TO THE DONORS. 8 MR.KALIPADI BHATTACHARYA, AUDITOR OF HHBRF STATEMENT RECORDED ON DT 24.2.15 ANSWERS TO Q.NO.16,17 HAS DEPOSED THAT HE HAD NEVER TAKEN ANY INDEPENDENT THIRD PARTY CONFIRMATION, MOST OF THE AUDIT WAS DONE FROM THE BANK STATEMENT ITSELF WITHOUT ANY VERIFICATION FOR GENUINENESS OF THE TRANSACTIONS AS SUCH AS NOT AUDITED V AS REQUIRED BY HIS AS AN AUDITOR. ITA NO. 2007/MDS/2017 11 9 SHRI DEBANJAN MUKHOPADYAY, EMPLOYEE OF HHBRF, STATEMENT RECORDED ON 27.1.15 ANSWERS TO Q.NO.9,12 HE DEPOSED THAT BOOKS OF ACCOUNTS WERE NOT MAINTAINED AT THE REGISTERED OFFICE PREMISES BY HHBRF 10 SMT.SUJATA GHOSH DASTIDAR, DIRECTOR HHBRF STATEMENT RECORDED ON 27.1.15 ANSWERS TO Q.NO.16,18 HE HAS CATEGORICALLY ADMITTED THAT SHE HAD SIGNED THE PAPERS AND DOCUMENTS AS ITS DIRECTOR, BASED ON THE DIRECTIONS OF SHRI SWAPAN RANJAN DAS GUPTA THE FOUNDER DIRECTOR. SHE WAS ALSO AWARE THAT THE DONATIONS FROM VARIOUS PARTIES WERE RETURN BACK TO THEM WITH THE HELP OF BROKERS THROUGH PAPER COMPANIES. 11 SMT.SHAHNAZ ALI, EMPLOYEE OF HHBRF STATEMENT RECORDED ON 27.1.15 ANSWERS TO Q.NO.11& 12 HAD ADMITTED THE BOOKS OF ACCOUNTS WERE NOT MAINTAINED BY HHBRF 12 SHRI VIKASH BAJPAYEE, EMPLOYEE OF THE OFFICE OF SHRI MANOJ KOTHARY & CO. STATEMENT RECORDED ON 27.1.15 ANSWERS TO Q.NO.5 HE DEPOSED THAT HE DOES NOT KNOW ANYTHING ABOUT HHBRF BUT MAINTAINED ENTRIES OF HHBRF IN TALLY SOFTWARE AS INSTRUCTED BY MR.MANOJ KOTHARY WITHOUT ANY SUPPORTING EVIDENCES. ITA NO. 2007/MDS/2017 12 WHENEVER THE AO PLACED RELIANCE ON THE ABOVE DOCUME NTS, AND WHEN HE HAS TAKEN ADVERSE VIEW ON THE BASIS OF SUCH STATEMENT OF THIRD PARTY, THE PERSON AFFECTED SHOULD BE AFFORDED A REASONABLE OPPORTUNITY OF CROSS EXAMINATION, IF REQUESTED FOR . IT WAS NOT AT ALL OFFERED TO THE ASSESSEE. I, THEREFORE BY PLACING RE LIANCE ON THE JUDGEMENT OF THE SUPREME COURT IN THE CASE OF KISHI NCHAND CHELLARAM VS. CIT IN [1980] 125 ITR 713 (SC) AND AL SO THE JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS . SMC SHARE BROKERS LTD. IN [2007] 288 ITR 345 (DEL) WHEREIN HE LD THAT THE LD. ASSESSING OFFICER CANNOT TAKE AN ADVERSE VIEW ON TH E BASIS OF THE STATEMENT OF THE THIRD PARTIES. IF THE STATEMENT OF THE THIRD PARTIES ARE DISCARDED OR IGNORED WHILE CONSIDERING THE EVIDENCE S ON RECORD, THERE IS NO OTHER MATERIAL BEFORE THE AO TO TAKE AN ADVER SE VIEW. FURTHER, THIS VIEW IS FORTIFIED BY THE JUDGEMENT OF DELHI HI GH COURT IN THE CASE OF CIT VS. ARUN MALHOTRA IN [2014] 363 ITR 195 (DEL ). BEING SO, IT IS AN APPROPRIATE TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO CROSS- EXAMINE THE PARTIES WHOSE STATEMENTS ARE RELIED UPO N, WHICH ARE NOT PROVIDED IN THIS CASE IN HAND. ACCORDINGLY, THE IS SUE IS REMITTED TO THE FILE OF LD. ASSESSING OFFICER TO GIVE AN OPPORT UNITY OF CROSS ITA NO. 2007/MDS/2017 13 EXAMINATION AND TO DECIDE THEREUPON. SINCE, I HAV E REMITTED THE ISSUE TO THE FILE OF LD. ASSESSING OFFICER FOR PROV IDING AN OPPORTUNITY TO CROSS EXAMINATION OF THE PARTIES, WHOSE STATEMENTS ARE RELIED UPON, I REFRAIN FROM GOING INTO OTHER GROUNDS RAISED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 07 TH NOVEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 07 TH NOVEMBER, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF