Assistant Commissioner of Income-tax, V. M/s. Mahalaxmi Electricals, Nashik

ITA 301/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7719 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-04-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Reopening of assessment; Bogus purchase; Principle of natural justice; Opportunity of cross examination
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.301/PUN/2016 / ASSESSMENT YEAR : 2009-10 ACIT, CIRCLE-2, NASHIK . /APPELLANT VS. M/S. MAHALAXMI ELECTRICALS, PROP. SHRI PRAMOD B. PATIL, PLOT NO.W-25, MIDC, SATPUR, NASHIK 422 007 PAN : AJYPP6915A . / RESPONDENT C.O.NO.103/PUN/2017 (ARISING OUT OF ITA NO.301/PUN/2016) ASSESSMENT YEAR : 2009-10 M/S. MAHALAXMI ELECTRICALS, PROP. SHRI PRAMOD B. PATIL, PLOT NO.W-25, MIDC, SATPUR, NASHIK 422 007 PAN : AJYPP6915A . CROSS OBJECTOR VS. ACIT, CIRCLE-2, NASHIK . APPELLANT IN THE APPEAL ASSESSEE BY : SHRI SANKET JOSHI REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 24.04.2018 / DATE OF PRONOUNCEMENT: 26.04.2018 / ORDER PER D. KARUNAKARA RAO, AM : THE REVENUE FILED THE MAIN APPEAL ITA NO.301/PUN/2016 AN D THE ASSESSEE FILED THE CROSS OBJECTION AGAINST THE ORDER OF CIT(A)-2, NASHIK, DATED 29-12-2015 FOR THE ASSESSMENT YEAR 2009-10. 2 2. BEFORE US, AT THE VERY OUTSET, LD. COUNSEL FOR THE ASS ESSEE THAT IF THE CO FILED BY THE ASSESSEE IS ALLOWED, ADJUDICATION OF APP EAL FILED BY THE REVENUE BECOMES ACADEMIC. WE PROCEED TO ADJUDICAT E THE CO FILED BY THE ASSESSEE FIRST. C.O.NO.103/PUN/2017 (ARISING OUT OF ITA NO.301/PUN/2016) A.Y. 2009-10 3. THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE EX TRACTED HERE AS UNDER : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE T O EACH OTHER - ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.6,11,847/- OUT OF THE TOTAL DISALLOWANCE OF RS.61,18,471/- MAD E BY THE A.O. IN RESPECT OF PURCHASES MADE FROM SIX ALLE GED HAWALA PARTIES ON THE BASIS OF INFORMATION OBTAINED FROM MAHARASHTRA SALES TAX DEPT. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT 10% OF THE PURCHASES MADE BY THE ASSESSEE FROM THE ABOVE PARTIES WERE TO BE DISALLOWED WITHOUT APPRECIATING THAT NO DISALLOWANCE WAS WARRA NTED ON FACTS OF THE CASE. 3] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E PURCHASES MADE BY THE ASSESSEE FROM THE SIX PARTIES WERE SUPPORTED BY DOCUMENTARY EVIDENCES AND IN THE ABSENCE OF ANY EVIDENCE BROUGH T ON RECORD TO SHOW THAT THE PAYMENTS MADE BY THE ASSESSEE TO THESE PAR TIES THROUGH BANKING CHANNEL WERE WITHDRAWN BY THEM AND RETURNED TO THE ASSESSEE IN CASH, THERE WAS NO REASON TO DOUBT THE GENUINENE SS OF THE PAYMENTS MADE BY THE ASSESSEE TO THESE PARTIES. 4] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT IN SPITE OF THE SPECIFIC WRITTEN REQUEST DATED 13.08.2013 MADE BY T HE ASSESSEE IN THE COURSE OF ASST. PROCEEDINGS, THE A.O. HAD NEITHER P ROVIDED THE COPIES OF STATEMENTS OF THE ALLEGED HAWALA PARTIES, NOR HAD THE ASSESSEE PROVIDED THE OPPORTUNITY OF CROSS EXAMINATION TO TH E ASSESSEE AND HENCE, THE ADDITION MADE BY THE A.O. SOLELY BY RELY ING UPON SUCH STATEMENTS OF HAWALA PARTIES WITHOUT EVEN CONFRONTI NG THE SAME TO THE ASSESSEE WAS NOT JUSTIFIED IN LAW. 5] WITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT TH E DISALLOWANCE MADE @ 10% ON ALLEGED HAWALA PURCHASES IS VERY HIG H CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE AND IF AT ALL, A NY ADDITION IS TO BE SUSTAINED, THE SAME MAY BE REDUCED SUBSTANTIALLY. 6]. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 4. EXPLAINING THE ABOVE OBJECTIONS, LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE CORE ISSUE IN THE ABOVE OBJECTIONS R ELATE TO FAILURE OF 3 THE AO IN GRANTING THE OPPORTUNITY TO THE ASSESSEE AND DENYING THE WRITTEN REQUEST OF THE ASSESSEE. BRINGING OUR ATTENTION TO THE LETTER OF THE ASSESSEE DATED 29-12-2014, LD. COUNSEL SUBMITTED TH AT THE SAME CONSTITUTES WRITTEN REQUEST AND READ OUT THE RELEVANT LINES FROM PARA NO.2 OF THE SAID LETTER. FOR THE SAKE OF COMPLETENESS, THE SAID PARA IS EXTRACTED HERE AS UNDER : AS PER THE DISCUSSION WITH YOU IT IS STATED THAT Y OU HAVE SOME OF THE PARTYS STATEMENT WITH YOU. WE HEREBY REQUEST YOU TO PLEASE ALLOW US TO CROSS EXAMINATION. SECONDLY PLEASE FURNISH US THE DETAILS OF THE LATEST ADDRESS OF THE PARTYS HENCE WE CAN BRING TH E LEDGER CONFIRMATIONS. THE DEPARTMENT MAY GIVE THIS OPPORTUNITY TO PROVE OUR GENUINENESS . WE HAVE SUBMITTED ALL THE DOCUMENTS, INFORMATION AN D DETAILS TO PROVE OUR GENUINE TRANSACTION. FURTHER, STATING THAT ON SIMILAR LEGAL ISSUE, THE TRIBUNAL IN THE CASE OF M/S. JOTO ABRASIVES PVT. LTD. VS. DCIT IN ITA NO.2902/PUN/2016, DATED 28-03-2018 FOR THE A.Y. 2009-10 HELD THE ORDER OF THE AO AS UNSUSTAINABLE. LD. COUNSEL ALSO RELIED O N THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ANITA SANJAY AGRAWAL VS. ITO AND OTHERS IN ITA NOS. 2622 TO 2624/ PUN/2016 AND OTHERS, DATED 28-03-2018 FOR THE A.YRS. 2009-10 TO 201 1-12. HE FILED THE COPIES OF THE ORDERS OF THE TRIBUNAL (SUPRA). 5. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF SUPPLY OF ALL TYPES OF I NDUSTRIAL ELECTRICAL, MECHANICAL INSTALLATION AND MAINTENANCE. ASSESSEE FILED THE RETURN OF INCOME ON 30-09-2009 DECLARING TOTAL INCOME OF RS. 44,49,070/-. IN THE RE-ASSESSMENT PROCEEDINGS, AO MA DE ADDITION OF RS.61,18,471/- ON ACCOUNT OF BOGUS PURCHASES AS PER T HE DISCUSSION GIVEN IN PARA NO.3.2 OF THE REASSESSMENT ORDER. ASSESSEE DEMONSTRATED THE TRAIL OF GOODS IN THIS CASE. HOWEVER, THE AO MADE TH E ENTIRE ADDITION OF BOGUS PURCHASES AMOUNTING TO RS.61,18,471/-. D URING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE RAISED THE ISSUE OF VALIDITY OF 4 REASSESSMENT APART FROM THE MERITS OF ADDITIONS. CIT(A) AD JUDICATED THE ISSUE AND HELD IN PARA NO.12.3 OF HIS ORDER THAT THE FAILURE TO GRANT THE BENEFIT OF CROSS EXAMINATION TO THE ASSESSEE MAKES THE O RDER ERRONEOUS. NOTWITHSTANDING THE SAID DECISION, THE CIT(A) CONFIRMED THE A DDITION TO THE EXTENT OF 10% OF THE BOGUS PURCHASES AMOUNTING TO RS.6,11,847/-. CONTENTS OF PARA NO. 12.3 AND 12.4 ARE RELEVANT IN THIS RE GARD. FOR THE SAKE OF COMPLETENESS, WE REPRODUCE THE SAID PARAS HERE AS UNDER : 12.3 FURTHER THE APPELLANT VIDE LETTER DATED 29-12 -2014 HAD REQUESTED THE A.O. TO FURNISH THE STATEMENT/S RECORDED BY SAL ES TAX DEPARTMENT AND TO ALLOW CROSS EXAMINATION OF THE DEPONENTS. H OWEVER, THE AO HAS NEITHER SUPPLIED THE SAID STATEMENTS NOR ALLOWED CR OSS EXAMINATION OF THE DEPONENTS. IN VIEW OF THE SETTLED LEGAL POSITI ON AND VARIOUS DECISIONS RELIED ON BY THE APPELLANT, THE ADDITION MADE BY THE AO WITHOUT SUPPLYING THE MATERIAL RELIED ON BY HIM AND WITHOUT ALLOWING CROSS EXAMINATION TO THE APPELLANT IS NOT JUSTIFIED . 12.4 THE APPELLANT HAS RAISED ALTERNATIVE CONTENTIO N THAT HE HAS DECLARED REASONABLE GROSS PROFIT AND HENCE THE ALLE GED BENEFIT ON ACCOUNT OF GOODS PURCHASED FROM GREY MARKET MAY BE ESTIMATE D @4% OF THE ALLEGED HAWALA PURCHASES AS WITHOUT THE SAID PURCHA SES GOODS CANNOT BE SOLD. IT HAS ALSO BEEN POINTED OUT BY THE LD. A R OF THE APPELLANT THAT THE ASSESSING OFFICERS IN VARIOUS CITIES LIKE BOMBA Y, PUNE, AURANGABAD ETC. HAVE ESTIMATED THE ADDITION ON ACCOUNT OF ALLE GED HAWALA PURCHASES TO THE EXTENT OF CERTAIN PERCENTAGE OF HAWALA PURCH ASES ON ACCOUNT OF THE BENEFIT OF PURCHASES MADE FROM GREY MARKET. CONSID ERING THE TOTALITY OF THE FACTS OF THE CASE UNDER APPEAL, THE SAID BENEFI T HAS BEEN ESTIMATED @10% OF THE HAWALA PURCHASES OF RS.61,18,471/- AND THE ADDITION IS RESTRICTED TO THAT EXTENT. THE ADDITION OF RS.61,1 8,471/- IS ACCORDINGLY RESTRICTED TO RS.6,11,847/- AND THE ADDITION TO THE EXTENT OF RS.55,06,624/- IS DELETED. 6. MENTIONING THAT THE RATIO OF THE JUDGMENT IN THE CASE OF M/S. ANDAMAN TIMBER INDUSTRIES VS. CIT - CIVIL APPEAL NO. 4228/2 006, DATED 02-09-2015 IS DISTINGUISHABLE ON FACTS, LD. DR FOR THE REVENUE MENTIONED THAT THE ASSESSEE FILED THE LETTER FOR WANT OF C ROSS EXAMINATION OF THE PARTIES ONLY ON 29-12-2014 WHERE THE ASSESSMENT IS GETTING TIME BARRED ON 31-12-2014. FURTHER, LD. DR HEAV ILY RELIED ON THE ORDERS OF THE AO AND CIT(A) AND SUGGESTED THE RE-A SSESSMENT MADE BY THE AO SURVIVES. HE FURTHER RELIED ON THE ARGUMENTS MADE BY HIM IN CONNECTION WITH THE APPEALS IN THE CASE OF ANITA SANJAY AGRAWAL VS. ITO AND OTHERS AND M/S. JOTO ABRASIVES PVT. LTD. VS. DCIT (SUPRA). 5 7. WE HEARD BOTH THE PARTIES ON THIS LEGAL ISSUE OF INVA LIDITY OF THE ADDITIONS FOR THE FAILURE OF THE AO TO PROVIDE CROSS EXAMINA TION TO THE ASSESSEE BEFORE MAKING ADDITIONS, WHEN THERE IS A WRITTEN REQUEST FROM THE ASSESSEE. WE HAVE PERUSED THE ORDERS OF THE REVE NUE AND THE DECISIONS OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE O F ANITA SANJAY AGRAWAL VS. ITO AND OTHERS AND M/S. JOTO ABRASIVES PVT. L TD. VS. DCIT (SUPRA). ON GOING THROUGH THE SAME, WE FIND THIS ISSUE STAN DS AGAINST THE REVENUE. WE FIND IN THE CASE OF M/S. JOTO ABRASIVES P VT. LTD. VS. DCIT, DATED 28-03-2018 (SUPRA), THE TRIBUNAL HELD AS UNDER : 7. WE HEARD BOTH THE SIDES ON THE LEGAL ASPECT OF THE ISSUE RELATING TO CORRECTNESS OF MAKING ADDITIONS AT THE BACK OF THE ASSESSEE BY THE ASSESSING OFFICER WITHOUT GRANTING BENEFIT OF CROSS EXAMINATION OF THE ASSESSEE. IN OUR VIEW, THIS ISSUE IS COVERED IN FAV OUR OF ASSESSEE BY VIRTUE OF DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ANITA SANJAY AGRAWAL VS. ITO AND OTHERS IN ITA NOS.2622 TO 2624/PUN/2016. FOR THE SAKE OF COMPLETENESS, RELEVANT PARA IS EXTR ACTED HEREIN BELOW: 25. THE FACTS AND ISSUES ARISING BEFORE US ARE SQU ARELY COVERED BY THE FACTS AND ISSUES BEFORE THE HON'BLE SUPREME COURT IN M/S. ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CENTR AL EXCISE (SUPRA) AND APPLYING THE SAID PRINCIPLE / RATIO TO THE FACTS OF THE PRESENT CASE, WE HOLD THAT WHERE THE ASSESSEE HAD S OUGHT CROSS- EXAMINATION OF THE WITNESSES AT THE EARLIEST STAGE I.E. WHILE OBJECTING TO THE REASONS RECORDED FOR REOPENING THE ASSESSMENT, WHICH DULY HAS BEEN ACKNOWLEDGED BY THE ASSESSING O FFICER IN HIS ORDER DISPOSING OF OBJECTIONS RAISED BY THE ASSESSE E AGAINST REOPENING OF ASSESSMENT. BUT THE ASSESSING OFFICER THOUGH ASKED THE ASSESSEE TO COLLECT THE STATEMENT BUT FAI LED TO ALLOW CROSS-EXAMINATION THOUGH HE ADMITTED THAT THE SAME WOULD BE ALLOWED IN DUE COURSE OF TIME. ON A LATER DATE, THE ASSESSING OFFICER CONCLUDES THAT THE LETTERS SE NT UNDER SECTION 133(6) OF THE ACT TO THE DEALER WERE RETURN ED BACK. BUT THE SAME CANNOT BE REASON FOR DENYING CROSS- EXAMINATION. IN THE ABSENCE OF ALLOWING CROSS-EXAM INATION OF WITNESSES USED AGAINST THE ASSESSEE, WHERE THE A DDITION WAS MADE IN THE HANDS OF ASSESSEE ON THE BASIS OF A FORESAID STATEMENTS RECORDED BY THE SALES TAX DEPARTMENT, WE HOLD THAT NO ADDITION ON ACCOUNT OF BOGUS PURCHASES CAN BE MADE IN THE HANDS OF ASSESSEE. THE ASSESSEE HAD ALSO ESTABLISHED FACTUM OF TRAIL OF GOODS. ACCORDINGLY, WE DELETE THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES. THE G ROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT T HE FACTS ARE COMPARABLE AND THUS THE DECISION OF THE TRIBUNAL AP PLY TO THE LEGAL ISSUE RAISED BY THE ASSESSEE IN GROUND NO.3(C) OF THE APP EAL. ON FACTS, IT IS EVIDENT THAT THE BENEFIT OF CROSS EXAMINATION WAS N OT GRANTED TO THE ASSESSEE BEFORE MAKING ADDITION. FURTHER, THE ORDE R OF THE AO/CIT(A) DO NOT INDICATE FURNISHING THE COPIES OF THE STATEMENT S OF THE SUPPLIERS TO THE 6 ASSESSEE BEFORE MAKING ASSESSMENT. NEVERTHELESS, T HE ASSESSEE FURNISHED EVIDENCES BY WAY OF PURCHASE BILLS, LAB T EST REPORTS SHOWING THE FACT RELATING TO MANUFACTURE OF GOODS . THEREFORE, THE ADDITION MADE BY AO WITHOUT GRANTING CROSS EXAMINATION IS UN SUSTAINABLE. RELIANCE IS PLACED ON THE RATIO OF HON'BLE APEX COU RT IN THE CASE OF M/S. ANDAMAN TIMBER INDUSTRIES VS. CIT (SUPRA) AND THE D ECISION OF THE TRIBUNAL IN THE CASE OF ANITA SANJAY AGRAWAL VS. IT O (SUPRA). ACCORDINGLY, THE GROUND NO.3(C) RAISED BY THE ASSES SEE IS ALLOWED. CONSIDERING OUR DECISION ABOVE, THE REMAINING GROUN DS RAISED BY THE ASSESSEE ON MERITS ARE DISMISSED AS BEING ACADE MIC. 8. IT IS SETTLED LEGAL PROPOSITION THAT THE FAILURE TO GRANT CROSS EXAMINATION BEFORE TAKING ADVERSE DECISION AGAINST THE ASS ESSEE MAKES THE ASSESSMENT ORDER ERRONEOUS. THIS FAILURE OF THE AO C ONSTITUTES A GRAVE ONE, MORESO, WHEN THE ASSESSEE REQUESTED THE S AME IN WRITING AND, IN EFFECT, THE SAME WAS DENIED SILENTLY. THE CIT(A) HA S ALREADY ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE AND THE REVENUE IS NOT IN APPEAL ON THIS FINDING OF THE CIT(A). RELEVANT LINES FROM P ARA NO.12.3 ARE ALREADY EXTRACTED IN THE PRECEDING PARAGRAPHS. THE REVENUES CONTENTION THAT THE REQUEST IS MADE ONLY ON 29-12-201 4 IS UNSUSTAINABLE FOR THE REASON THAT IT IS THE DUTY OF THE A O TO ADHERE TO THE SET PRINCIPLES OF NATURAL JUSTICE. SUPPLYING OF THE STA TEMENTS CONTAINING ADVERSE CONCLUSIONS/ASSERTIONS AND PROVIDING C ROSS- EXAMINATION IF ANY IS AN ESSENTIAL INGREDIENT OF THE SAID PRINC IPLES OF NATURAL JUSTICE. THE RATIO OF THE JUDGMENT OF HONBLE APE X COURT IN THE CASE OF M/S. ANDAMAN TIMBER INDUSTRIES VS. CIT - CIVIL APP EAL NO. 4228/2006, DATED 02-09-2015 IS RELEVANT ON THIS ISSUE. T HEREFORE, WE PROCEED TO EXTRACT THE RELEVANT LINES FROM THE SAID JUDG MENT HERE AS UNDER : ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUST ICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON T HE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-E XAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNI TY TO THE 7 ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFI CALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOW EVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS N OT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. T HE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS C OULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION O F THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PR ICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO F OR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. AS MENTIONED 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 AVAIL THE OPPORTUNITY OF CROSS- EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERM INE 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 PRICE WHICH IS ME NTIONED IN THE PRICE LIST ITSELF COULD BE THE SUBJECT MATTER OF CROSS-EX AMINATION. THEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOS E AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS-EXAMINATION AND MAK E THE REMARKS AS MENTIONED ABOVE. WE MAY ALSO POINT OUT THAT ON AN E ARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APPEAL N O. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MATERIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY I TS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ON LY BASIS OF ISSUING THE SHOW NOTICE. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THETRIBUNAL AND ALLOW THIS APPEAL. 9. FURTHER, WE ALSO FIND THE ORDER OF CIT(A) HAS GIVEN CO NFLICTING FINDINGS TO THE EXTENT THAT HOW THE ADDITION SHOULD BE R ESTRICTED TO 10% WHEN THE CROSS EXAMINATION ISSUE IS HELD UNJUSTIFIED BY TH E CIT(A) AS PER FINDING IN PARA NO.12.3 OF HIS ORDER. IN VIEW OF THE ABOVE DISCUSSION AND IN THE LIGHT OF THE JUDGMENT/DECISIONS (SUPRA) ON THIS LEGAL ISSUE, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE AO WITHO UT GRANTING CROSS EXAMINATION IS UNSUSTAINABLE. THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE IN THE CROSS OBJECTIONS ARE ALLOWED. 10. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 8 ITA NO.301/PUN/2016 A.Y. 2009-10 11. SINCE WE ALLOW THE CROSS OBJECTION IN FAVOUR OF THE ASS ESSEE, ADJUDICATION OF THE APPEAL OF THE REVENUE BECOMES AN ACA DEMIC. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 12. TO SUM UP, APPEAL OF THE CROSS OBJECTION OF THE ASSE SSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF APRIL, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 26 TH APRIL, 2018 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// SENIOR PRIVA TE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-2, NASHIK 4. CIT-2, NASHIK 5. , , B BENCH PUNE; 6. / GUARD FILE.