HERALDS TRADING P. LTD, MUMBAI V. DCIT 8(2), MUMBAI

ITA 2920/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49210 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 01-06-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 13-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K GOPAL
• Keywords: Principle of natural justice; Opportunity of cross examination

Judgement Text

1 ITA NOS. 2919 & 2920/MUM/2010 (ASST YEARS 2000-01 & 01-02) IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI H BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI J SUDHAKAR REDDY, AM & SHRI VIJAY PAL RAO, JM ITA NOS. 2919 & 2920/MUM/2010 (ASST YEARS 2000-01 & 01-02) M/S HERALDS TRADING P LTD 502 SUNIL ENCLAVE 307 PERIERA HILL ROAD OFF ANDHERI KURLA ROAD ANDHERI (E) MUMBAI 99 VS THE DY COMMR OF INCOME TAX 8(2), MUMBAK ( APPELLANT ) (RESPONDENT) PAN NO.AAACH3537L A SSESSEE BY SHRI K GOPAL REVENUE BY SHRI GOLI SRINIWAS RAO PER PER PER PER VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO, , , , JM JMJM JM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMPOSITE ORDER DATED 27.1.2010 OF THE CIT(A) FOR THE AYS 2000-01 AND 200 1-02. 2 THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS IN THESE APPEALS: 1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D CIT(A)HAS ERRED IN CONCURRING WITH THE ASSESSING OFFICERS ACTION IN REJECTING TH E DOCUMENTARY EVIDENCES FURNISHED BY THE APPELLANT WITHOUT AFFORDING REASONABLE OPPOR TUNITY FOR CROSS EXAMINATION OF MR GAENDRA PORWAL AND RELYING SOLELY ON CONFESSION/ ADMISSION MADE BY HIM BEFORE THE INVESTIGATING AUTHORITIES. II) THE LD CIT(A) HAS ERRED IN CONFIRMING THAT COMM ISSION PAYMENT OF RS. 6,82,812/- WAS BOGUS WITHOUT CONSIDERING THE DOCUMENTARY EVIDE NCES PLACED BEFORE HER IN APPELLATE PROCEEDINGS AGAINST THE FACTS AND CIRCUMS TANCES OF THE CASE. THE OTHER GROUNDS ARE ONLY ARGUMENTATIVE IN NATURE AND IN SUPPORT OF THE MAIN GROUNDS. 2 ITA NOS. 2919 & 2920/MUM/2010 (ASST YEARS 2000-01 & 01-02) 3 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR HAS POINTED OUT THAT THE ASSESSING OFFICER MADE THE ADDITION ON ACCOUNT OF BOGUS COMMISSION ON THE BASI S OF THE STATEMENT OF ONE SHRI GAJENDRA PORWAL, RECORDED DURING THE COURSE OF SEARCH AND SE IZURE ACTION. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS DEMANDED A COPY OF THE STATEM ENT AND ALSO OPPORTUNITY FOR CROSS EXAMINATION OF THE THIRD PERSON; BUT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS EXAMINE MR GAJENDRA PORWAL. THEREFORE, IN VIEW O F THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF KISHANCHAND CHELLARAM VS CIT REPORTED IN 125 ITR 713. THUS, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE WAS DEPRIVED FROM CROSS EXAMINATION OF THE THIRD PARTY, WHOSE STATEMENT WAS RELIED UPON BY THE ASSESSING OFFICER. 3.1 ON THE OTHER HAND, THE LD DR HAS RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 4 AFTER CONSIDERING THE RIVAL CONTENTIONS AND RELEV ANT MATERIAL ON RECORD, WE NOTE THAT IN PARA. 4.4 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS RECORDED HIS FINDINGS AS UNDER: FURTHER, THE ASSESSEE HAS REQUESTED TO PROVIDE THE COPY OF STATEMENT RECORDED OF SHRI GAJENDRA PORWAL AND PROVIDE OPPORTUNITY FOR CR OSS EXAMINATION OF THE SAID PERSON. ACCORDINGLY, THE ASSESSEE AHS BEEN PROVIDED WITH THE COPY OF STATEMENT RECORDED U/S 131/132(4 OF THE I T ACT, 1961 OF SHRI GAENDRA PORWAL AND THE ASSESSEE WAS REQUESTED TO PRODUCE THE PARTY, TO EST ABLISH THE GENUINENESS OF THE TRANSACTIONS HELD WITHIN IN THE LIGHT OF THE STATE MENT OF SHRI GAJENDRA PORWAL 4.1 IT IS CLEAR FROM THE ABOVE FINDINGS OF THE ASS ESSING OFFICER IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAD DEMANDED OPPORTUNITY FOR CRO SS EXAMINATION OF SHRI GAJENDRA PORWAL, WHOSE STATEMENT WAS RECORDED IN THE SEARCH ACTION AND RELIED UPON BY THE ASSESSING OFFICER . THE ASSESSING OFFICER, INSTEAD OF GRANTING OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE THIRD PARTY, HAS ASKED THE ASS ESSEE ITSELF TO PRODUCE THE PARTY. THIS ACTION OF THE ASSESSING OFFICER IS NEITHER PROPER N OR JUSTIFIED AND AMOUNTS TO DENIAL OF THE 3 ITA NOS. 2919 & 2920/MUM/2010 (ASST YEARS 2000-01 & 01-02) OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. THEREFORE, IT IS A CLEAR CASE OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND THE ADDITION MADE ON THE BASIS OF THE STATEMENT OF THIRD PARTY WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSE E TO CROSS EXAMINE THE SAID PARTY, IS NOT JUSTIFIED. ACCORDINGLY, IN THE FACTS AND CIRCUMSTAN CES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHO RITIES AND REMAND THE MATTER BACK TO THE RECORD OF THE ASSESSING OFFICER TO ADJUDICATE THE I SSUE AFRESH IN ACCORDANCE WITH LAW AND AFTER GIVING PROPER OPPORTUNITY FOR CROSS EXAMINAT ION OF SHRI GAJENDRA PORWAL TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 5 IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 29 TH , DAY OF JUNE 2011. SD/- SD/- ( (( ( J SUDHAKAR REDDY J SUDHAKAR REDDY J SUDHAKAR REDDY J SUDHAKAR REDDY ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 29 TH , JUNE 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI