Accumen Poly Pack Private Limited, Kanpur V. Deputy Commissioner of Income Tax, Central Circle=I, Kanpur

ITSSA 523/LKW/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4898 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 16-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BEING SIMILAR GROUNDS T AKEN A
• Keywords: Capital asset; Income from undisclosed sources; Search and seizure; Principle of natural justice; Opportunity of cross examination; Accommodation entries; Retraction; TDS; Set aside; Audi alteram partem
• Section: 133A; 153A; 133(6); 250; 201; 207; 64; 13; 22; 153C; 131; 68

Judgement Text

I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER IT(SS)A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 M/S ACCUMEN POLY PACK PVT. LTD. 53/7, 1 ST FLOOR, SRINIKETAN NAYAGANJ, KANPUR. PAN:AAHCA8861D VS. DY.C.I.T., CENTRAL CIRCLE, KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF LEARNED CIT(A)-IV, KANPUR DAT ED 22/07/2019 PERTAINING TO ASSESSMENT YEARS 2014-15 & 2015-16. THE ASSESSEE HAS TAKEN VARIOUS GROUNDS OF APPEALS HOWEVER, AT THE TI ME OF HEARING, GROUND NOS. 1,2 & 3, WHICH ARE ON LEGAL ISSUE, WERE NOT AR GUED AND GROUND NOS. 4 TO 9, WHICH ARE ON MERITS OF THE ADDITIONS, HAVE BE EN ARGUED. SIMILAR ISSUES ARE INVOLVED IN THESE APPEALS THEREFORE, FOR THE SA KE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. TH E GROUNDS OF APPEAL TAKEN BY THE ASSESSEE, BEING SIMILAR, THE GROUNDS T AKEN BY THE ASSESSEE IN I.T.A. NO.523/LKW/2019 ARE REPRODUCED BELOW: APPELLANT BY SHRI P. K. KAPOOR, C. A. RESPONDENT BY SMT. ABHA KALA CHANDA, CIT, D.R. DATE OF HEARING 12 / 08 /20 21 DATE OF PRONOUNCEMENT 28 / 09 /20 21 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 2 4. BECAUSE THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST PA ID ON OLD LOAN TAKEN FROM M/S SUCCESS VYAPAR LTD. AND M/S NEI L INDUSTRIES LTD.: SL NO. NAME OF LENDERS AMOUNT OF LOAN AMOUNT OF INTEREST TOTAL ADDITION 1. M/S SUCCESS VYAPAR LTD. 00 10,11,696.00 10,11,696.00 2. M/S NEIL INDUSTRIES LTD. 00 1,40,31,248.00 1,40, 31,248.00 TOTAL 1,50,42,944.00 1,50,42,944.00 WITHOUT APPRECIATING THE SUPPORTING DOCUMENTARY EVI DENCES & EXPLANATION OF THE APPELLANT PLACED ON RECORD AND I GNORING THE INFORMATION OBTAINED U/S 133(6) OF THE ACT FROM THE LOAN CREDITORS. 5. BECAUSE THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAD DULY DISCHARGED THE ONUS OF PROVING, A LL THE THREE INGREDIENTS OF SECTION 68 OF THE ACT NAMELY I DENTITY OF THE LENDERS OF UNSECURED LOAN, GENUINENESS OF THE TRANSACTIONS AND CREDIT WORTHINESS OF THE LENDERS A ND THAT SUCH LOANS IN THE CASE OF APPELLANT, VARIOUS FAMILY MEMBERS AND THEIR BUSINESS ASSOCIATES HAD BEEN ACCEPTED IN THE ORDERS PASSED EARLIER U/S 143(3)/153C OF THE ACT OF THE GR OUP OF CASES AND SUCH LOAN AMOUNTS WITH INTEREST WERE PAID TO THE RESPECTIVE PARTIES BEFORE THE DATE OF SEARCH. 6. BECAUSE THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE CROSS EXAMINATION OF CONC ERNED PERSONS WAS NOT REQUIRED. 7. BECAUSE IN THE ABSENCE OF OPPORTUNITY OF CROSS EXAMINATION OF THE PERSONS GIVING STATEMENT OF CULP ABLE NATURE, THE ASSESSMENT STOOD WHOLLY VITIATED AND CONSEQUENTLY THE ADDITION MADE DESERVED TO BE DELET ED AS HELD BY THE APEX COURT IN UMPTEEN NUMBER OF CASES. 8. BECAUSE THE ADDITION OF SUM OF RS 1,50,42,9447- MADE BY AO AND UPHELD BY CIT(A) IS BASED ON WHIMS, SURMI SES AND CONJECTURES AND THE CASES RELIED UPON BY THE AUTHOR ITIES BELOW ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT C ASE, WHICH RESULTED IN HIGH PITCHED ASSESSMENT. I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 3 9. BECAUSE THE LOWER AUTHORITIES HAVE FAILED TO CON SIDER VARIOUS CASE LAWS RELIED UPON BY THE APPELLANT & A LSO THE GUIDELINES ISSUED BY CBDT RELATING TO THE PROCEDUR E TO BE ADOPTED BY AO IN RESPECT OF ADDITION UNDER SECTION 68 OF THE ACT AND THE CASE LAWS RELIED UPON BY THE AUTHORITIE S BELOW ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE. 2. LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THESE CASES OF THE ASSESSEE WERE REOPENED DUE TO A SEARCH CARRIED OUT ON THE GROUP ON 31/08/2015 AND CONSEQUENTLY THE ASSESSEE H AD FILED RETURNS U/S 153A OF THE ACT. IT WAS SUBMITTED THAT UNDISPUTEDL Y NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH AND THE ASSESS ING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF INTEREST PAID BY THE ASS ESSEE ON CERTAIN UNSECURED LOANS WHICH WERE RAISED DURING EARLIER YE ARS ON THE BASIS THAT THE ASSESSING OFFICER HELD THE LOAN CREDITORS TO WHOM I NTEREST WAS PAID AS BOGUS BEING CARRYING ON THE ACTIVITY OF PROVIDING A CCOMMODATION ENTRIES ONLY. IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS ARRIVED AT THIS CONCLUSION ON THE BASIS OF STATEMENTS OF CERTAIN PE RSONS WHO HAD ADMITTED THAT SUCH COMPANIES WERE PROVIDING ACCOMMODATION EN TRIES ONLY. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FILED ALL THE RELEVANT DOCUMENTS I NCLUDING CONFIRMED COPY OF ACCOUNT, COPY OF BANK STATEMENT, COPY OF ITR AND COPY OF FINAL ACCOUNTS AND IN THIS RESPECT FILED A CHART SHOWING THEREIN T HE RELEVANT PAPER BOOK PAGES WHERE THE COPIES OF SUCH DOCUMENTS, SUBMITTED TO THE ASSESSING OFFICER, WERE PLACED. LEARNED COUNSEL FOR THE ASSE SSEE FURTHER SUBMITTED THAT EVEN THE ASSESSING OFFICER, BY ISSUING NOTICE U/S 133(6) OF THE ACT TO THE ABOVE LOAN CREDITORS, HAD OBTAINED THE INFORMAT ION DIRECTLY FROM SUCH LOAN CREDITORS AND NO DISCREPANCY WAS FOUND BETWEEN THE REPLIES FILED BY THE ASSESSEE AND IN THOSE FILED BY THE LOAN CREDITO RS DIRECTLY. IT WAS SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS WH EN THE ASSESSING I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 4 OFFICER SHOW CAUSED THE ASSESSEE AS TO WHY THE INTE REST PAID ON SUCH LOANS BE NOT DISALLOWED, THE ASSESSEE FILED VARIOUS REPLI ES VIDE LETTER DATED 08/07/2017 AND 27/09/2017 AND IT WAS SUBMITTED THAT THE ASSESSEE HAD PAID INTEREST ON GENUINE UNSECURED LOANS AND MOREOV ER, THE LOANS ALREADY STOOD REPAID AND PROPER TAX AT SOURCE HAS BEEN DEDU CTED FROM SUCH INTEREST PAYMENTS. LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT DURING ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICE R IT WAS REQUESTED THAT THE PERSONS ON WHOSE STATEMENTS THE DEPARTMENT WAS RELYING, SHOULD BE MADE AVAILABLE TO THE ASSESSEE FOR CROSS EXAMINATIO N BUT THOSE WERE NOT MADE AVAILABLE FOR THEIR CROSS EXAMINATION. LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHEN THIS ISSUE WAS TAKEN B EFORE LEARNED CIT(A), HE HELD THAT CROSS EXAMINATION WAS NOT REQUIRED AN D IT WAS SUFFICIENT THAT ASSESSEE WAS CONFRONTED WITH THE STATEMENTS. LEARN ED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN A RECENT JUDGMENT IN THE CASE OF SHRI BALAJI BETAL NUTS PVT. LTD. IN I.T.A. NOS. 105 TO 108/LKW/2019 A ND OTHERS, LUCKNOW BENCH OF THE TRIBUNAL, UNDER SIMILAR CIRCUMSTANCES, VIDE ORDER DATED 14/09/2021 HAS REITERATED THE IMPORTANCE OF CROSS E XAMINATION. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN A DETAIL ED ORDER, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND IT WAS PRAYED THAT FOLLOWING THE SAME, THE APPEALS OF THE ASSESSEE MAY ALSO BE A LLOWED. 3. LEARNED CIT, D. R., ON THE OTHER HAND, SUBMITTED THAT IT IS AN ESTABLISHED FACT THAT THE LOAN CREDITOR, TO WHOM IN TEREST HAS BEEN PAID, WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES AND THE REFORE, THE ASSESSEE HAS WRONGLY BOOKED THE EXPENDITURE AND THE AUTHORIT IES BELOW HAVE RIGHTLY MADE AND UPHELD THE DISALLOWANCE. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT DUE TO A SEARCH CON DUCTED ON THE ASSESSEE I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 5 AND ITS GROUP ON 31/08/2015, THE CASES OF THE ASSES SEE WERE REOPENED AND RETURNS WERE FILED U/S 153A OF THE ACT. ADMITTEDLY , THERE WAS NO INCRIMINATING MATERIAL ON THE BASIS OF WHICH THE AS SESSING OFFICER HAS MADE THE ADDITIONS. THE ASSESSING OFFICER HAS MADE THE ADDITIONS ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. I N THESE CASES, THE INTEREST PAID BY THE ASSESSEE DURING THESE YEARS, HAS BEEN D ISALLOWED ON THE BASIS THAT THE LOAN CREDITORS, TO WHOM INTEREST WAS PAID, WERE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES ONLY. THE ASSESSEE HAD FILED COMPLETE INFORMATION REGARDING THE CREDITWORTHINESS, GENUINE NESS AND IDENTITY OF THE LOAN CREDITOR AND HAD ALSO DEDUCTED TAX AT SOURCE F ROM SUCH INTEREST PAYMENTS. WE FURTHER FIND THAT THE ASSESSING OFFIC ER HAD ISSUED NOTICES U/S 133(6) OF THE ACT AND HAD ALSO OBTAINED INFORMATION DIRECTLY FROM THESE LOAN CREDITORS AND THESE LOAN CREDITORS HAVE FILED THE I NFORMATION AND DOCUMENTS DIRECTLY WITH THE ASSESSING OFFICER AND ASSESSING O FFICER DID NOT FIND ANY DISCREPANCY IN THE DOCUMENTS SUBMITTED BY THE ASSES SEE AS WELL AS IN THE DOCUMENTS SUBMITTED BY THE LOAN CREDITORS DIRECTLY. A COPY OF NOTICES ISSUED U/S 133(6) TO BOTH PARTIES IS PLACED IN PAPE R BOOK PAGES 41 & 42 AND THE RESPECTIVE REPLIES OF THE UNSECURED LOAN CREDIT ORS IS PLACED IN PAPER BOOK PAGES 104 & 231 RESPECTIVELY FOR ASSESSMENT YE AR 2015-16 AND FOR ASSESSMENT YEAR 2014-15 SUCH DOCUMENTS ARE PLACED I N PAPER BOOK PAGES 45,46,108 AND 236 RESPECTIVELY. WE FURTHER FIND THA T IN THE ASSESSMENT ORDERS OF THESE COMPANIES, INTEREST PAID BY THE ASS ESSEE HAS BEEN ACCEPTED TO BE THEIR INCOME, A COPY OF SUCH ASSESSMENT ORDER IN THE CASE OF LOAN CREDITOR, IS PLACED AT PAGES 60 TO 101 OF THE PAPER BOOK. THE VARIOUS DOCUMENTS FILED BY THE ASSESSEE TO SUPPORT ITS CLAI M HAVE BEEN SUMMARIZED IN FORM OF A CHART, WHICH FOR THE SAKE OF COMPLETEN ESS HAS BEEN MADE PART OF THE ORDER AND IS REPRODUCED BELOW: I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 6 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 7 4.1 WE FIND THAT THE ONLY REASON FOR DISALLOWING TH E INTEREST IS THAT THE AUTHORITIES BELOW HAVE HELD THE LOAN CREDITORS TO B E BOGUS AND BEING ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES, BUT NO MATERIAL WAS FOUND DURING THE SEARCH INDICATING THE REIN THAT SUCH TRANSACTIONS WERE NOT GENUINE. MOREOVER, WE FIND T HAT THE ASSESSEE HAD ALREADY REPAID THE WHOLE OF THE LOAN AMOUNT DURING THE EARLIER YEAR AND PRESENT YEAR. AT THE TIME OF SEARCH I.E. ON 31/08/ 2015, BOTH ACCOUNTS STOOD SQUARED UP AS THE ASSESSEE HAD ALREADY REPAID THE L OANS ALONG WITH INTEREST AFTER DEDUCTION OF TAX AT SOURCE. THE ASSESSEE, DU RING THE ASSESSMENT PROCEEDINGS, SPECIFICALLY ASKED THE ASSESSING OFFIC ER TO PROVIDE OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. THIS IS APPA RENT FROM THE REPLY FILED BY ASSESSEE AGAINST THE SHOW CAUSE NOTICE DATED 22/ 12/2017 AND 24/12/2017 FOR DISALLOWANCE OF SUCH INTEREST. IN I TS REPLY THE ASSESSEE FILED DETAILED SUBMISSIONS VIDE LETTER DATED 26/12/2017, A COPY OF WHICH IS PLACED IN PAPER BOOK PAGES 228 TO 235 AND 223 TO 230 RESPE CTIVELY FOR ASSESSMENT YEARS 2014-15 AND 2015-16. IN BOTH YEARS BESIDES R EPLYING TO EACH I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 8 ALLEGATION OF ASSESSING OFFICER, THE ASSESSEE SOUGH T TO CROSS EXAMINE THE WITNESSES. THE RELEVANT PART OF REQUEST OF ASSESSE E IN ASSESSMENT YEAR 2014-15 HAS BEEN MADE PART OF THIS ORDER, WHICH FOR THE SAKE OF COMPLETENESS IS REPRODUCED BELOW: FURTHER, BEFORE SUBMITTING PARA WISE REPLY TO CAPT IONED LETTER DATED 22.12.2017 SERVED ON 24.12.2017 , THE ASSESSEE APPLICANT MAY SUBMIT THAT IN RESPONSE TO YOUR EARLI ER LETTERS THE ASSESSEE APPLICANT HAS ALREADY FILED DETAILED R EPLIES FROM TIME TO TIME. IN THE SAID REPLY THE ASSESSEE APPLIC ANT HAD REQUESTED YOUR GOOD SELF TO PROVIDE VARIOUS DETAILS AND INFORMATION AS WELL AS THE CROSS EXAMINATION OF THE RELATED PERSONS. IN COMPLIANCE TO THE OPPORTUNITY PROVIDED BY YOUR GOOD SELF FOR CROSS EXAMINATION OF THE AFORESAID PE RSONS THE ASSESSEE APPLICANT ATTENDED YOUR OFFICE WITH HIS CO UNSEL ON THE APPOINTED DATE TO AVAIL THE CROSS EXAMINATION B UT SURPRISINGLY ENOUGH, NO BODY TURNED UP ON THE SAID DATE. FROM YOUR SHOW CAUSE NOTICE IT IS SEEN THAT HEAVY R ELIANCE IS BEING PLACED ON THE STATEMENTS OF SUCH PERSONS , WH O HAD VIOLATED THE SUMMONS / DIRECTION OF YOUR GOOD SELF BY NOT COMING TO YOUR OFFICE . THE PENAL PROVISIONS AS PRO VIDED UNDER THE ACT ARE APPLICABLE AND THE DEPARTMENT MUST HAVE TAKEN SERIOUS ACTION AGAINST THEM. THE REASONS - AS TO WH Y THEY HAVE NOT COME, MAY KINDLY BE PROVIDED. APART FROM T HIS VARIOUS DETAILS AND INFORMATION AS REQUIRED VIDE OU R EARLIER LETTERS ARE ALSO AWAITED FOR OUR FURTHER SUBMISSION S. THE ASSESSING OFFICER DID NOT PROVIDE THE ASSESSEE OPPORTUNITY TO CROSS EXAMINE THE WITNESSES AND PROCEEDED TO DISALLOW THE INTEREST IGNORING ALL DOCUMENTARY EVIDENCES. WHEN THIS ISSUE WAS TAKEN B EFORE LEARNED CIT(A), HE HELD THAT THERE WAS NO NEED TO PROVIDE OPPORTUNI TY TO THE ASSESSEE FOR CROSS EXAMINATION. HIS FINDINGS IN BOTH THE YEARS ARE SIMILAR. FOR THE SAKE OF COMPLETENESS, THE FINDINGS OF LEARNED CIT(A) IN THIS RESPECT ARE REPRODUCED BELOW: I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 9 6.8 ON THE ISSUE OF CROSS EXAMINATION, UNDERSIGNE D IS OF THE VIEW THAT, STATEMENTS OF SHARE BROKERS, OPERATORS, PROMOTERS &. EXIT PROVIDERS WERE SHOWN AND CONFRONTED TO THE APPELLANT. FURTHER, HON'BLE SUPREME COURT, IN THE WELL-KNOWN DHAKESWARI COTTON MILLS (26 ITR 775 AT 782) CASE, R ULED THAT THE EVIDENCE ACT MAY HAVE NO APPLICATION TO TAX ASS ESSMENT PROCEEDINGS. HOWEVER, THE COURT ALSO CLARIFIED LATE R, IN CHUHARMAL VS CTT (172 I7R 250 AT 255 SC), THAT WHEN THE TAXING AUTHORITIES ARE DESIROUS OF INVOKING THE PRI NCIPLES OF THE EVIDENCE ACT IN PROCEEDINGS BEFORE THEM, THEY ARE N OT PREVENTED FROM DOING SO. ALL THAT IS REQUIRED IS TH AT WHATEVER MATERIAL THEY COLLECT WILL HAVE TO BE PLACED BEFORE THE TAX- PAYING ASSESSEE IF ADVERSE INFERENCE IS GOING TO BE DRAWN - AUDI ALTERAM PARTEM IS A WELL-KNOWN PRINCIPLE OF NA TURAL JUSTICE. THIS PRINCIPLE IS ESTABLISHED BY THE JUDGM ENT OF THE SUPREME COURT IN DHAKESWARI COTTON MILLS LTD. V. C. I.T. (26 I.T.R. 775,783), AND APPLIED BY THAT COURT IN KISHI NCHAND CHELLARAM VS C.I.T. (125 I.T.R. 713), WHERE AN ASSE SSMENT BASED ON THE RESULT OF PRIVATE INQUIRIES CONDUCTED BEHIND THE BACK OF THE ASSESSEE WAS SET ASIDE BECAUSE THE EVID ENCE SO GATHERED WAS NOT PLACED BEFORE THE ASSESSEE. IN GUN DA SUBBAYYA V. C.I.T.(7 ITR 21), LEACH CJ SAID: 'INFORMATION WHICH THE INCOME-TAX OFFICER HAS RECEI VED MAY NOT ALWAYS BE ACCURATE AND IT IS ONLY FAIR WHEN HE PROPOSES TO ACT ON MATERIAL WHICH HE HAS OBTAINED F ROM AN OUTSIDE SOURCE THAT HE SHOULD GIVE THE ASSESSEE AN OPPORTUNITY OF SHOWING, IF HE CAN, THAT THE INCOME- TAX OFFICER HAS BEEN MISINFORMED; BUT THE INCOME-TAX OBVIOUSLY NOT BOUND TO DISCLOSE THE SOURCE OF HIS INFORMATION' IN THE CASE OF P. S. BARKATHALI V. DIRECTORATE OF E NFORCEMENT, NEW DELHI AIR 81, THE HON'BLE HIGH COURT OBSERVED A S UNDER: 'EVEN THOUGH THE STATEMENT WAS SUBSEQUENTLY RETRACTED,, THE SIGNIFICANCE OF ADMISSION IN THE FI RST PLACE CANNOT BE UNDER-MINED. IT IS WELL ESTABLISHED THAT MERE BALD RETRACTION CANNOT TAKE AWAY THE IMPORTANC E AND EVIDENTIARY VALUE OF THE ORIGINAL CONFESSION, SPECIALLY IN VIEW OF THE FACT THAT IN THIS CASE, TH E DEPONENT OF THE STATEMENT HAD PROVIDED THE MINUTE DETAILS RELATING TO THE TRANSACTIONS. IT APPEARS TH AT THE I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 10 RETRACTION STATEMENT WAS MADE PURELY TO AVOID CLUTC HES OF LAW WHICH HAD CAUGHT UP WITH HIM AND LAID BARE H IS NEFARIOUS ACTIVITIES. ' FURTHER, JURISDICTIONAL HON'BLE ALLAHABAD HIGH COU RT IN THE CASE OF MOTILAL PADAMPAT UDYOG LTD. VS. CTT 293 ITR 656 HAS LAID DOWN THE CORRECT PREPOSITION OF LAW OF CROSS E XAMINATION AND HELD AS FOLLOWS; 'RIGHT OF CROSS-EXAMINATION OF PERSONS FROM WHOM TH E ASSESSING OFFICER HAS COLLECTED THE EVIDENCE IS NOT REQUIRED BY LAW. THE REQUIREMENT OF THE STATUTE FOR A VALID ASSESSMENT WOULD BE MET IF ALL THE EVIDENCE COLLECTED WHICH IS TO BE USED AGAINST THE ASSESSES WHILE FRAMING THE ASSESSMENT ORDER IS PLACED BEFORE THE ASSESSEE AND HE IS GIVEN OPPORTUNITY TO REBUT THE EVIDENCE.' FURTHER, IN A RECENT JUDGMENT OF HON'BLE HIGH COURT , DELHI PUBLISHED ON 04.04.2019 IN ITATONLINE.COM IN THE CASE OF UDIT KALRA VS. ITO, IT WAS HELD THAT 'THE ASTRONOMI CAL GROWTH OF THE VALUE OF THE COMPANY SHARE NATURALLY EXCITED THE SUSPICION OF REVENUE. THE ASSESSES'S ARGUMENT THAT HE WAS DENIED THE RIGHT TO THE CROSS EXAMINE THE INDIVIDUA LS WHO'S STATEMENT LAID TO THE ENQUIRY AND ULTIMATE DISALLOW ANCE OF LONG TERM CAPITAL GAIN CLAIMS IS NOT RELEVANT IN TH E WAKE OF FINDING OF FACTS. THE APPEAL OF THE APPELLANT IS AC CORDINGLY DISMISSED.' IN THE INSTANT CASE ALL THE INCRIMINATING STATEMENT HAS BEEN SHOWN TO THE APPELLANT WHO HAS NOT CHALLENGED THE CONTENT OF THE INCRIMINATING STATEMENT. THEREFORE I T IS CONCLUDED THAT, AO HAS FOLLOWED THE PRINCIPAL OF NA TURAL JUSTICE BY PRODUCING AND CONFRONTING ALL THE INCRIM INATING DOCUMENTS AND STATEMENTS RECORDED IN FAVOUR OF REVE NUE TO THE APPELLANT. 6.9 IN VIEW OF THE ABOVE DETAILED DISCUSSION OF TH E FACTUAL MATRIX OF THE CASE AND CONSIDERING THE ENUMERATED J UDICIAL PRONOUNCEMENTS, IT IS CONCLUDED THAT APPELLANT COMP ANY HAS MISERABLY FAILED TO PROVE THE VITAL INGREDIENTS OF CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTION. THEREFORE, UNDERSIGNED FIND NO REASON TO I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 11 INTERFERE WITH THE ADDITION MADE BY ASSESSING OFFIC ER, U/S 68 OF THE ACT. THE SAME IS THEREFORE, CONFIRMED AND GR OUNDS OF APPEAL OF THE APPELLANT ARE DISMISSED FOR EACH ASSE SSMENT YEAR I.E. A.Y. 2010-11 TO A.Y. 2015-16. HOWEVER, LD . A.R. POINTED OUT THOROUGH HIS WRITTEN SUBMISSION THAT IN THE ASSESSMENT FOR A.Y. 2010-11, A.O. TOOK WRONG FIGURE OF UNSECURED LOAN AT RS.2,04,80,000/-, WHEREAS, ACTUAL FIGURES OF UNSECURED LOANS FROM M/S. SUCCESS VYAPAR LTD. AND M /S. NEIL INDUSTRIES LTD. IS RS.2,03,80,000/-. IN THIS REGARD , A.O. IS DIRECTED TO VERIFY THE FACTS AND TO TAKE CORRECT FI GURES OF UNSECURED LOANS AND RECTIFY THE MISTAKES, IF ANY, A T HIS END. 4.2 IN THE ABOVE FINDINGS, THE LEARNED CIT(A) HAS N OT APPRECIATED THAT CROSS EXAMINATION IS AN IMPORTANT ASPECT WHICH AN A SSESSEE IS ENTITLED SPECIALLY IN VIEW OF THE FACT THAT THE ASSESSEE HAD IN ITS POSSESSION THE RELEVANT DOCUMENTARY EVIDENCES IN SUPPORT OF ITS CL AIM. MERELY REJECTING THE RIGHT TO CROSS EXAMINE AND IGNORING OF THE IMPORTAN T EVIDENCES TO DISLODGE THE CLAIM OF THE ASSESSEE, IS NOT IN ACCORDANCE WIT H LAW AS HAS BEEN HELD BY HON'BLE SUPREME COURT IN THE CASE OF ANDMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CENTRAL EXCISE (2015) 281 CTR 0241 (SC). THE LUCKNOW BENCH OF THE TRIBUNAL IN ITS ORDER DATED 14/09/2021 , UNDER SIMILAR FACTS AND CIRCUMSTANCES, RELYING ON THE ORDER OF HON'BLE SUPR EME COURT IN THE CASE OF ANDMAN TIMBER INDUSTRIES (SUPRA) HAS DECIDED THE IS SUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A SEAR CH WAS CONDUCTED ON THE GROUP ON 27/11/2015 AND IN VIEW OF THAT SEARCH VARIOUS ASSESSEES WERE REQUIRED TO FILE RETU RNS U/S 153A OF THE ACT AND ASSESSING OFFICER COMPLETED THE ASSESSMENTS U/S 153A OF THE ACT EXCEPT IN THE YEAR OF SEARCH WHERE THE ASSESSMENT ORDER HAS BEEN PASSED U/S 143( 3) OF THE ACT. IT IS UNDISPUTED FACT THAT ADDITIONS IN T HESE CASES ARE NOT BASED UPON ANY INCRIMINATING MATERIAL FOUND DUR ING THE SEARCH AND RATHER HAVE BEEN MADE ON THE BASIS OF TRANSACTIONS WHICH WERE ALREADY RECORDED IN THE BOO KS OF ACCOUNT OF ASSESSEES. THE FACTS IN BRIEF ARE THAT ASSESSEES I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 12 HAD OBTAINED CERTAIN UNSECURED LOANS FROM TWO LOAN CREDITORS NAMELY SUCCESS VYAPAR LIMITED AND NEIL INDUSTRIES L TD. THE ASSESSING OFFICER ADDED BACK SUCH UNSECURED LOANS H OLDING THEM TO BE ACCOMMODATION ENTRIES AND DISALLOWED THE INTEREST PAID ON THESE LOANS AND ALSO MADE A FURTHER ADDITIO N OF 5% AS ASSUMED COMMISSION ON SUCH TRANSACTIONS. THE ASSES SING OFFICER HELD (ON THE BASIS OF STATEMENTS OF DIRECTO RS OF SUCH LENDER COMPANIES) THAT THESE LENDER COMPANIES WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. THE STATEMENTS OF DIRECTORS OF THESE LENDER COMPANIES HAVE BEEN MADE PART OF THE ASSESSMENT ORDER ITSELF. THE ASSESSEES HAD FIL ED COMPLETE INFORMATION AND EXPLANATION WITH RESPECT TO THE UNS ECURED LOANS TAKEN FROM THESE COMPANIES. THE EVIDENCES FI LED BY THE ASSESSEES INCLUDE THE CONFIRMED COPY OF ACCOUNT, CO PY OF ITR OF LENDERS AND FINAL ACCOUNTS OF THE LENDERS. SUCH CONFIRMATIONS AND EVIDENCES HAVE BEEN TAKEN ON RECO RD BY THE ASSESSING OFFICER AND A COPY OF SUCH CONFIRMATI ONS AND EVIDENCES IS PLACED AT PAGES 61 TO 65, 73, AND 45 T O 53 RELATING TO FIRST ASSESSEE AND AT PAPER BOOK PAGES 19 TO 22 IN RESPECT OF SECOND ASSESSEE AND AT PAPER BOOK PAGES 74 TO 77, 60 TO 62 AND 64 AND 55 OF THE PAPER BOOK IN THE CAS E OF THIRD ASSESSEE. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ALSO ISSUED NOTICES U/S 133 (6) OF THE ACT TO THE ABOVE LENDERS AND IN RESPONSE TO THE NOT ICES, THE ASSESSING OFFICER RECEIVED REPLIES FROM THE LENDERS WITH EVIDENCES OF HAVING ADVANCED THE LOANS TO THE ASSES SEES. ALONG WITH THE REPLY, THE LENDER COMPANIES ALSO FIL ED THEIR COPY OF ITRS AND FINAL ACCOUNTS ETC. WITH THE ASSES SING OFFICER AND THE ASSESSING OFFICER DID NOT FIND ANY DIFFEREN CE BETWEEN THE DOCUMENTS FILED BY THE ASSESSEES AND THOSE FILE D BY THE LENDERS DIRECTLY. LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO FILED BEFORE US IN PAPER BOOK THE CERTIFIED COPIES (CERTIFIED BY THE ASSESSING OFFICER) OF SUCH EVIDENCES WHICH HAD BEEN FILED BY THE LENDER COMPANIES DIRECTLY WITH THE ASSESSING OFFICER AND A COPY OF WHICH IS PLACED AT PAGES 235 TO 237, 246 TO 257, 234, 238 TO 245, 232, 233, 115, 120 TO 128, 11 6 AND 117 OF THE PAPER BOOK. WE FURTHER FIND THAT ASSESSEES HAD DULY DEDUCTED TDS ON THE INTEREST PAYMENTS AND WHICH HAV E BEEN DULY DEPOSITED IN THE GOVERNMENT ACCOUNT. THE INTE REST INCOME OF THE PAYEES HAS BEEN ACCEPTED TO BE THEIR INCOMES IN THEIR RESPECTIVE ASSESSMENT ORDERS AND NO ADDITI ON HAS BEEN MADE IN THEIR CASES. THE COPY OF ASSESSMENT O RDERS OF LENDER COMPANIES IS PLACED AT PAGES 101 TO 127 AND 128 TO I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 13 157 OF THE PAPER BOOK. THE ASSESSING OFFICER, WHIL E MAKING ADDITIONS ON ACCOUNT OF UNSECURED LOANS AND ON ACCO UNT OF INTEREST PAID ON SUCH UNSECURED LOANS, HAS RELIED O NLY ON THE STATEMENTS OF DIRECTORS OF SUCH COMPANIES WHICH WER E RECORDED BY THE INVESTIGATION WING. WHILE MAKING S UCH ADDITIONS, THE ASSESSING OFFICER HIMSELF DID NOT CA RRY OUT ANY ENQUIRY AND STRAIGHTFORWARD RELYING ON THE STATEMEN TS RECORDED BY SOME DIFFERENT OFFICER, HAS MADE THE AD DITIONS. WHILE MAKING THE ADDITIONS HE HAS ALSO IGNORED THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEES AND HA S ALSO IGNORED A VITAL EVIDENCE THAT A SUBSTANTIAL PART OF UNSECURED LOANS WAS ALREADY REPAID EVEN BEFORE THE DATE OF SE ARCH. THIS FACT OF HAVING REPAID A PART OF UNSECURED LOANS BEF ORE THE DATE OF SEARCH IS APPARENT FROM THE YEAR-WISE COPY OF ACCOUNT OF SUCH LENDERS, WHICH FOR THE SAKE OF COMPLETENESS HAS BEEN MADE PART OF THIS ORDER AND IS REPRODUCED BELOW: I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 14 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 15 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 16 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 17 5.1 WHILE MAKING THE ADDITIONS ON THE BASIS OF STAT EMENTS OF SUCH PERSONS, THE ASSESSING OFFICER ALSO NOTED I N THE ASSESSMENT ORDER THAT NOTICES U/S 131 OF THE ACT WE RE ISSUED TO THE PERSONS WHO HAD GIVEN THE STATEMENTS FOR CRO SS EXAMINATION BY THE ASSESSEES BUT THE FACT OF HAVING ISSUED NOTICES U/S 131 OF THE ACT IS NOT COMING OUT FROM T HE COPY OF ORDER SHEETS PLACED AT PAGES 262 TO 264, 260 TO 262 , 218 TO 220, 449 TO 451, 423 TO 425 AND 414 TO 416 OF THE PAPER BOOK AND NEITHER THE ASSESSMENT ORDERS STATE AS TO WHEN THESE NOTICES WERE SERVED. WE FURTHER FIND THAT I N REPLY TO VARIOUS NOTICES BY THE ASSESSING OFFICER, THE ASSES SEE HAS BEEN FILING REPLIES AND WAS ALSO FILING VARIOUS EVI DENCES FROM TIME TO TIME, THE COPIES OF VARIOUS REPLIES, FILED BY THE ASSESSEES, HAVE BEEN SUMMARIZED AND MADE PART OF TH IS ORDER IN THE FORM OF A CHART, AS REPRODUCED BELOW AND WHE REIN VARIOUS DOCUMENTS INDICATING THE PAGES OF PAPER BOO KS ARE MENTIONED: I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 18 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 19 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 20 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 21 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 22 5.2 THEREFORE, THE FINDINGS OF THE ASSESSING OFFICE R THAT ASSESSEES HAVE NOT FILED COMPLETE INFORMATION IS CO NTRARY TO THE FACTS ON RECORD. THE ASSESSING OFFICER NOTED THAT DESPITE GIVING NOTICES U/S 131, NOBODY HAD APPEARED FOR CROSS EXAM INATION AND THEREFORE, HE HELD THAT ASSESSEES WAS ALSO RESP ONSIBLE FOR BRINGING THEM BEFORE HIM FOR CROSS EXAMINATION AND THEREFORE, HE SHIFTED THE ONUS TO ASSESSEES FOR BRINGING THE D EPARTMENTAL WITNESSES FOR THEIR CROSS EXAMINATION. THE ASSESSI NG OFFICER STARTED THE ASSESSMENT PROCEEDINGS AT THE FAG END O F TIME BARRING DATE AS THE FIRST QUERY LETTER WAS ISSUED I N SEPTEMBER, 2017. THESE ASSESSEES WERE REQUIRED TO EXPLAIN TH E UNSECURED LOANS FROM THESE CREDITORS FOR THE FIRST TIME IN DE CEMBER ONLY BY ISSUING SHOW CAUSE NOTICE DATED 14/12/2017 AND T HROUGH THIS NOTICE DATED 14/12/2017, THE ASSESSING OFFICER SENT TO THE ASSESSEES THE STATEMENT OF ITS WITNESSES. THE ASSE SSMENT ORDERS HAVE BEEN PASSED ON 31/12/2017. IN THIS BR IEF PERIOD OF SIXTEEN DAYS, THE ASSESSMENTS HAVE BEEN COMPLETE D AND THAT TOO WITHOUT PUTTING FULL EFFORTS TO MAKE AVAILABLE THE WITNESSES FOR CROSS EXAMINATION BY ASSESSEES. 5.3 FROM THE ABOVE FACTS AND CIRCUMSTANCES WHERE TH E ASSESSEES HAVE FILED COMPLETE EVIDENCES OF THE TRAN SACTIONS AND THE ASSESSING OFFICER HAS ALSO DIRECTLY OBTAINED SU CH EVIDENCES FROM THE LENDERS U/S 133(6) AND DID NOT FIND ANY DI SCREPANCY IN I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 23 SUCH EVIDENCES, THE RELIANCE PLACED BY THE ASSESSIN G OFFICER ON THE STATEMENTS OF DIRECTORS OF THE LENDER COMPANIES , WITHOUT MAKING THE SAID STATEMENTS AVAILABLE FOR CROSS EXAM INATION BY THE ASSESSEES, IS NOT SUSTAINABLE IN VIEW OF THE JU DGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ANDMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CENTRAL EXCISE (2015 ) 281 CTR 0241 (SC). THE LUCKNOW BENCH OF THE TRIBUNAL IN TH E CASE OF MORNING GLORY INFRA LTD. VS. DCIT, IT(SS)A NO.72/LK W/2018 HAS ALSO HELD THAT ADDITIONS, ON THE BASIS OF STATEMENT S OF CERTAIN PERSONS, CANNOT BE SUSTAINED IN THE ABSENCE OF CROS S EXAMINATION BY THE ASSESSEE. SIMILAR FINDINGS HAVE BEEN MADE BY LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF SIG MA CASTINGS LTD. VS. DCIT & OTHER APPEALS IN I.T.A. NO.510/LKW/ 2019 AND OTHERS. 5.4 THE FINDINGS IN THE CASE OF MORNING GLORY INCOR PORATING THE FINDINGS OF HON'BLE SUPREME COURT IN THE CASE O F ANDMAN TIMBER INDUSTRIES ARE REPRODUCED BELOW: 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132(1) OF THE INCOM E-TAX ACT, 1961 WAS CARRIED OUT AT THE RESIDENTIAL AND BU SINESS PREMISES OF DOLPHIN DEVELOPERS/ANAND/ROTOMAC GROUP OF CASES ON 25/6/2014 AT KANPUR. SIMULTANEOUSLY, A SU RVEY UNDER SECTION 133A OF THE ACT WAS ALSO CONDUCTED AT THE REGISTERED OFFICE AND THE OFFICE OF M/S MORNING GLO RY INFRA LTD., SITUATED AT PLOT NO.2, BLOCK-I, GOTAIYA SCHEM E NO.VII, 7/102, SWAROOP NAGAR, KANPUR AND 17/K/13, SARVODAYA NAGAR, KANPUR. SHRI ANOOP ASTHANA, PROP. M/S ANOOP ASTHANA PROPERTIES, MAIN BROKER FOR ANAND/DOLPHIN GROUP AND MORNING GLORY INFRA LTD. WA S ALSO COVERED UNDER SECTION 133A OF THE ACT. DURING THE COURSE OF SURVEY OPERATION AT THE PREMISES OF M/S A NOOP ASTHANA PROPERTIES, SITUATED AT RATAN BHAWAN, 7/108 , SWAROOP NAGAR, KANPUR, A DIARY WAS FOUND AND IMPOUNDED AS ANNEXURE A-14 PAGE NO.163 TO 165, WHIC H, AS PER THE AUTHORITIES BELOW, CONTAINED THE DETAILS RELATED TO EMERALD GARDEN PROJECT BEING CARRIED OUT BY M/S MORNING GLORY INFRA LTD. THE ASSESSING OFFICER COM PLETED THE ASSESSMENT BY MAKING THE ADDITION OF RS.64,00,00,000/- ON ACCOUNT OF UNACCOUNTED INCOME. 3. THE LD. CIT(A) CONFIRMED THE ADDITION. I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 24 4. APROPOS GROUND NO.2.2, THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A)/ASSESSIN G OFFICER ERRED ON FACTS AND IN LAW IN MAKING THE AFO RESAID ADDITION ON THE BASIS OF EX-PARTE MATERIAL, IN GROS S VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 5. THE LD. D.R., ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER, WHEREBY THE LD. CIT (A) HAS HELD THAT IT CANNOT BE SAID THAT THE ASSESSEE W AS NOT PROVIDED ANY OPPORTUNITY OF CROSS-EXAMINATION OF SH RI ANOOP ASTHANA. 6. THE FOLLOWING GROUNDS, IN THIS REGARD, WERE RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A):- 2. THAT THE ASSESSING OFFICER ERRED ON FACTS AND I N LAW IN MAKING ADDITION OF RS.64 CRORES ALLEGING THE SAME TO HAVE BEEN RECEIVED BY THE APPELLANT AS ON-MONEY IN CASH, NOT ACCOUNTED FOR IN THE REGULAR BOOKS, AGAINST SALE/ BOOKING OF FLATS IN EMERALD GARDEN PROJECT. 2.1 THAT THE ASSESSING OFFICER ERRED ON FACTS AND I N LAW IN MAKING THE AFORESAID ADDITION BY MERELY RELYING UPON EX-PARTE STATEMENT OF ONE MR. ANOOP ASTHANA, A PROPERTY BROKER AND CONTENTS OF DIARY PURPORTEDLY IMPOUNDED FROM HIS PREMISES, WITHOUT ANY RELIABLE/ CREDIBLE MATERIAL/EVIDENCE TO SUBSTANTIATE/CORROBORATE THE SAME. 2.2 THAT THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SIMULTANEOUS SURVEY AT THE PREMISES OF THE APPELLANT AND THE MANAGING DIRECTOR OF THE APPELLANT-COMPANY WHO REPEATEDLY DENIED HAVING RECEIVED ANY ON-MONEY. 2.3 THAT THE ASSESSING OFFICER ERRED ON FACTS AND I N LAW IN MAKING THE AFORESAID ADDITION ON THE BASIS O F EX-PARTE MATERIAL, IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 7. IN ITS WRITTEN SUBMISSIONS, THE ASSESSEE, INTER ALI A, SUBMITTED BEFORE THE LD. CIT(A) THAT:- IT IS, AT THE OUTSET, EMPHATICALLY SUBMITTED THAT THE AFORESAID HUGE ADDITION OF RS.64 CRORES MADE I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 25 BY THE ASSESSING OFFICER IS PATENTLY ILLEGAL AND BA D IN LAW SINCE THE SAME HAS BEEN MADE MERELY ON THE BASIS OF PRESUMPTIONS, CONJECTURES AND SURMISES, WITHOUT ANY CREDIBLE MATERIAL/CORROBORATIVE EVIDENCE TO ESTABLISH RECEIP T OF ANY INCOME/CASH, OUTSIDE THE BOOKS OF ACCOUNT, AS EXPLAINED HEREUNDER: THE ASSESSING OFFICER, AS STATED ABOVE, HAS SIMPLY PRIMARILY RELIED UPON THE CONTENTS OF A DIARY PURPORTEDLY IMPOUNDED FROM THE PREMISES OF ONE PROPERTY BROKER, MR. ANOOP ASHTHANA, AND HIS EX- PARTE STATEMENT RECORDED DURING THE COURSE OF SURVEY AT HIS PREMISES. RE: DIARY IMPOUNDED FROM PREMISES OF MR. ANOOP ASTHANA IT IS RESPECTFULLY SUBMITTED THAT THE CONTENTS OF T HE AFORESAID DIARY FOUND DURING SURVEY IN THE CASE OF MR. ANOOP ASTHANA MARKED AS ANNEXURE A-14, PAGES 163-165 WHEREOF HAVE BEEN RELIED UPON BY THE ASSESSING OFFICER, COULD NOT HAVE BEEN THE BASIS FOR MAKING SUCH HUGE ADDITION IN THE HANDS OF THE APPELLANT FOR THE FOLLOWING REASONS: . (F) PERTINENTLY, EVEN THE NAMES OF THE INDIVIDUAL PARTIES APPEARING IN THE DIARY ALONGSIDE THE AMOUNTS, ARE COMPLETELY ALIEN TO THE APPELLANT. THE APPELLANT HAD NOT SOLD ANY FLAT IN THE EMERALD GARDEN PROJECT TO THE PERSONS NAMED IN THE SOLD DIARY. THEREFORE, THE VERY CONTENTS OF THE DIARY A RE MATTER OF GREAT SUSPECT AND ARE TOTALLY UNRELIABLE/UNAUTHENTIC. (G) NO ADVERSE INFERENCE CAN BE DRAWN FROM CERTAIN PAYMENT RECEIPTS (3 IN NUMBER) IN RESPECT OF FLATS IN EMERALD GARDEN PROJECT FOUND FROM THE PREMISES OF MR. ANOOP ASTHANA, PARTICULARLY WHEN NOTHING ADVERSE HAS BEEN STATED BY MR. ASTHANA IN THIS REGARD. ON PERUSAL OF THE AFORESAID, IT WILL KINDLY BE APPRECIATED THAT THE CONTENTS OF THE DIARY FOUND AT I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 26 THE PREMISES OF A THIRD PARTY ARE TOTALLY UNRELIABL E AND UNAUTHENTIC, WHICH COULD NOT HAVE BEEN THE BASIS OF DRAWING ANY ADVERSE INFERENCE AGAINST THE APPELLANT, MUCH LESS FOR THE PURPOSE OF MAKING ANY ADDITION. RE: STATEMENT OF MR. ANOOP ASTHANA RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS. COMING TO THE STATEMENT OF MR. ANOOP ASTHANA, RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS AT HIS PREMISES, WHICH HAS BEEN HEAVILY RELIED UPON BY THE ASSESSING OFFICER TO INFER THAT THE APPELLANT TOOK ON MONEY IN CASH FROM THE CUSTOMERS ON SALE/BOOKING OF FLATS, IT IS RESPECTFULLY SUBMITTED AS UNDER: IT IS SUBMITTED THAT THE AFORESAID STATEMENT COULD NOT HAVE BEEN RELIED UPON BY THE ASSESSING OFFICER FOR THE FOLLOWING REASONS: (A) COPY OF STATEMENT OF MR. ANOOP ASTHANA TO ALLEGE THAT THE APPELLANT HAD RECEIVED CASH ON SALE/BOOKING OF FLATS OUTSIDE ITS REGULAR BOOKS OF ACCOUNT, WAS NOT EVEN PROVIDED TO THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE APPELLANT WAS DENIED ANY EFFECTIVE OPPORTUNITY TO REBUT THE CONTENTS OF THE STATEMENT SO MADE. (B) FURTHER, NO OPPORTUNITY TO CROSS-EXAMINE MR. ANOOP ASTHANA WAS EVER ACCORDED TO THE APPELLANT. IN ABSENCE OF COPY OF STATEMENT BEING PROVIDED TO THE APPELLANT AND/OR OPPORTUNITY TO CROSS-EXAMINE MR ANOOP ASTHANA, HIS STATEMENT COULD NOT HAVE BEEN TAKEN INTO CONSIDERATION TO DRAW ANY NEGATIVE INFERENCE AGAINST THE APPELLANT. 8. THE LD. CIT(A) HAS HELD, INTER ALIA, AS FOLLOWS:- 5.6 THE INCRIMINATING DOCUMENT AT PAGE 163, 164 AND 165 CONTAINS THE DETAILS RELATED TO THE EMERALD GARDEN PROJECT BEING DEVELOPED BY THE APPELLANT COMPANY. PAGE NO.163 OF THE ANNEXURE A-4 I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 27 MENTIONS CERTAIN FIGURES WHICH ESTABLISHES THAT THE MONEY WAS RECEIVING SALE CONSIDERATION IN WHITE AND BLACK FOR EXAMPLE FOR A 3 BHK FLATS 2080 SQUARE FEET, THE QUANTUM OF WHILE AND BLACK MENTIONED ARE RS.1,20,57,600/- AND RS.42,12,000/- RESPECTIVELY. FURTHER, ANOTHER ENTR Y IS MADE FOR THE 3 BHK FLAT ADMEASURING 2325 SQ. FT. AREA, WHEREIN AMOUNT OF WHITE AND BLACK MENTIONED IS 1,34,81,400/- AND RS.47,08,125/- RESPECTIVELY. THUS, ASSESSING OFFICER HAS CALCULATED THE QUANTUM OF BLACK AMOUNT AT 25% OF THE TOTAL CONSIDERATION. DURING SURVEY PROCEEDINGS THE STATEMENT OF SHRI ANOOP ASTHANA, PROPRIETOR OF AAP WAS RECORDED. FOR ANSWER TO QUESTION NO.22, IN THE STATEMENT RECORDED ON 25/6/2014 SHRI ANOOP ASTHANA HAS CATEGORICALLY STATED THAT PAGE 163 OF THE ANNEXURE A-4 ARE THE ENTRIES RELATING TO EMERALD GARDEN AND THE AMOUNT OF WHITE AND BLACK REPRESENTS THE AMOUNT OF CHEQUE AND CASH. IT IS ALSO STATED THAT THE BLACK AMOUNT WHICH IS INVARIABLY IN CASH IS DIRECTLY PAID TO THE APPELLAN T COMPANY BY THE INVESTOR TO THE DIRECTOR OF THE APPELLANT COMPANY. SHRI ANOOP ASTHANA ALSO STATES THAT HE ONLY GETS THE COMMISSION INCOME AT THE TIME OF REGISTRATION OF THE PROPERTY. HE IS CONTINUING TO STATE IN THE SAME ANSWER THAT THIS PROCESS HAS BEEN FOLLOWED IN MINIMUM 12 FLATS OF THE EMERALD GARDEN WHICH IS BOOKED THROUGH HIM. THUS, IT IS CRYSTAL CLEAR THAT THE APPELLANT COMPAN Y IS RECEIVING 25% CONSIDERATION IN CASH WHICH IS NOT REFLECTING IN THE REGULAR BOOKS OF ACCOUNT. 5.7 DURING THE POST SURVEY PROCEEDINGS THE INCRIMINATING DOCUMENT MENTIONED HERE-IN-ABOVE AND THE STATEMENT OF SHRI ANOOP ASTHANA WAS SPECIFICALLY CONFRONTED TO THE MANAGING DIRECTOR OF THE APPELLANT COMPANY SHRI SANJEEV KUMAR JHUNJHUNWALA (SKJ) ON 27/6/2014 WHICH IS REPRODUCED AT PAGE 6 AND 9 OF THE ASSESSMENT ORDER BY THE ASSESSING OFFICER. IN THE STATEMENT SHRI SKJ ACCEPTED THE STATEMENT OF SHRI ANOOP ASTHANA THAT THE ENTRIES ARE RELATED TO THE APPELLANT COMPANIES. HOWEVER, HE SURRENDERED I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 28 RS.9 CRORE AS AN UNACCOUNTED INCOME FOR THE F.Y. 2014-15 RELATING TO A.Y. 2015-16 AS THE UNDISCLOSED INCOME IN HIS INDIVIDUAL CAPACITY. THI S IS INTERESTING TO NOTE THAT UNDISCLOSED INCOME OF RS.9 CRORE OFFERED BY SHRI SKJ IS ON VERY FLIMSY GROUND THAT HE EARNED THE UNDISCLOSED INCOME FROM COMMODITY TRADING. IT IS ALSO INTERESTING TO NOTE THAT SHRI SKJ HAS NOT DISCLOSED ANY PROFITS FROM THE COMMODITY TRADING IN ANY OF THE IMMEDIATE PREVIOUS YEAR OR SUBSEQUENT YEAR. THUS, THE CONTENTION OF SKJ THAT SURRENDERED AMOUNT OF RS.9 CRORE IS ON ACCOUNT OF COMMODITY TRADING REMAINS UNSUBSTANTIATED OBVIOUSLY BECAUSE IT REPRESENTS ON MONEY RECEIVED IN THE EMERALD PROJECT. 5.10. DURING THIS APPEAL PROCEEDINGS LD. A.R. OF THE APPELLANT HAS VEHEMENTLY ARGUED THAT THE INCRIMINATING DOCUMENT FOUND AND IMPOUNDED FROM THE PREMISES OF THE AAP DOES NOT BELONG TO THE APPELLANT COMPANY AND SINCE NO OPPORTUNITY OF CROSS EXAMINATION OF SHRI ANOOP ASTHANA WAS EVER ACCORDED TO THE APPELLANT. THE CONTENTION OF THE APPELLANT IS HOLLOW AND ARE NOT BASED ON THE PROPER APPRECIATION OF THE FACTS. IT IS ADMITTED F ACT THAT SHRI ANOOP ASTHANA PROPRIETOR OF AAP WAS ACTING AS A PROPERTY BROKER FOR THE APPELLANT COMPANY. THIS FACT IS ALSO EVIDENT FROM THE COMMISSION PAID TO SHRI ANOOP ASTHANA, WHEREIN TDS WAS ALSO DEDUCTED BY APPELLANT COMPANY. IT IS NOT DENIED BY THE LD. AR THAT NO COMMISSION WHATSOEVER WAS PAID TO AAP. THUS THE RELATION BETWEEN THE APPELLANT COMPANY AND SHRI ANOOP ASTHANA PROPRIETOR OF AAP IS ESTABLISHED AS PROPERTY DEVELOPER AND THE PROPERTY BROKER. THE INCRIMINATING DOCUMENT FOUND FROM PREMISES OF AAP ESTABLISHES THE FACT THAT APPELLANT COMPANY IS ENGAGED IN RECEIVING 25% OF THE SALE CONSIDERATION IN CASH, WHICH IS UNACCOUNTED IN THE BOOKS OF THE APPELLANT. ASSESSING OFFICER HAS CORRECTLY EXTRAPOLATED THE MODUS OPERANDI FOR CALCULATING UNACCOUNTED INCOME OF APPELLANT. I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 29 5.11. THE CONTENTION OF THE LD. AR THAT NO OPPORTUNITY OF CROSS EXAMINATION TO SHRI ANOOP ASTHANA WAS EVER ACCORDED TO THE APPELLANT IS FAR AWAY FROM TRUTH AND REALITY OF THE CASE. THE INCRIMINATING DOCUMENT FOUND AND IMPOUNDED IN THE BUSINESS PREMISES OF THE ANOOP ASTHANA AND THE INCRIMINATING STATEMENTS OF SHRI ANOOP ASTHANA WAS SPECIFICALLY CONFRONTED TO THE MANAGING DIRECTOR OF THE APPELLANT COMPANY SHRI SANJEEV KUMAR JHUNJHUNWALA ON 27/1/2014. THIS STATEMENT IS PART AND PARCEL FO THE ASSESSMENT ORDER PAGE 6 TO 9, THEREFORE, THE PLETHORA OF THE CASE LAWS CITED BY THE LD. AR OF THE APPELLANT DOES NOT APPLY TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 9. THUS, THE ASSESSEE SPECIFICALLY CONTENDED BEFORE THE LD. CIT(A), THAT ANY CROSS-EXAMINATION OF SHRI ANOOP ASTHANA WAS NOT ALLOWED TO IT. THE LD. CIT(A) HAS HELD THAT THE STATEMENT OF SHRI ANOOP ASTHANA WAS SPECIFICALLY CONFRONTED TO THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY. HOWEVER, HE DOES NOT DENY THAT T HE ASSESSEE WAS NOT ALLOWED TO CROSS-EXAMINE SHRI ANOO P ASTHANA, WHOSE STATEMENT WAS USED BY THE ASSESSING OFFICER AGAINST THE ASSESSEE, THOUGH THE SAID STATE MENT WAS RECORDED AT THE BACK OF THE ASSESSEE. HE MEREL Y STATES THAT DURING SURVEY PROCEEDINGS THE STATEMENT OF SHRI ANOOP ASTHANA PROPRIETOR OF AAP WAS RECORDED; THAT IN ANSWER TO QUESTION NO.22, IN THE STATEMENT RECOR DED ON 25/6/2014, SHRI ANOOP ASTHANA HAS CATEGORICALLY STATED THAT PAGE 163 OF THE ANNEXURE A-4 ARE THE EN TRIES RELATING TO EMERALD GARDEN AND THE AMOUNT OF WHITE AND BLACK REPRESENTS THE AMOUNT OF CHEQUE AND CASH; THA T IT IS ALSO STATED THAT THE BLACK AMOUNT, WHICH IS INVA RIABLY IN CASH, IS DIRECTLY PAID TO THE APPELLANT COMPANY BY THE INVESTOR, TO THE DIRECTOR OF THE APPELLANT COMPANY; THAT SHRI ANOOP ASTHANA ALSO STATES THAT HE ONLY GETS TH E COMMISSION INCOME AT THE TIME OF REGISTRATION OF TH E PROPERTY; THAT HE CONTINUES TO STATE IN THE SAME AN SWER THAT THIS PROCESS HAS BEEN FOLLOWED IN MINIMUM 12 F LATS OF EMERALD GARDEN, WHICH IS BOOKED THROUGH HIM; THA T THUS, IT IS CRYSTAL CLEAR THAT THE APPELLANT COMPAN Y IS I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 30 RECEIVING 25% CONSIDERATION IN CASH WHICH IS NOT REFLECTING IN THE REGULAR BOOKS OF ACCOUNT; THAT FU RTHER, AS PER MATERIAL LP-32, 33 AND 51, IMPOUNDED FROM THE PREMISES OF AAP, IT IS NOTED THAT THESE DOCUMENTS A RE THE RECEIPTS OF PAYMENTS MADE BY SHRI ARUN KUMAR (LP-32 ), SHRI SARAJ KATIYAR (LP-3) AND SHRI HIMANSHU CHUG (L P- 51); THAT WHEN CONFRONTED WITH THE FACT THAT SOME O F THE RECEIPTS ISSUED BY THE APPELLANT COMPANY WERE FOUND IN THE PREMISES OF (AAP), SHRI SKJ HAS SHOWN HIS IGNOR ANCE; AND THAT THIS IS MAINLY DUE TO THE FACT THAT INCRIM INATING MATERIAL WAS FOUND FROM THE PREMISES OF AAP AND SKJ WISHED TO DISTANCE THE APPELLANT COMPANY FROM AAP. 10. THUS, THE POSITION OBTAINING IS THAT A DIARY WAS RECOVERED FROM THE PREMISES OF SHRI ANOOP ASTHANA DURING THE SURVEY. PAGES 163, 164 AND 165 OF THE D IARY, ANNEXURE A-14, HAVE BEEN TAKEN TO GO AGAINST THE ASSESSEE. THESE THREE DOCUMENTS, FIRSTLY, WERE NOT RECOVERED FROM THE POSSESSION OF THE ASSESSEE. THE N, PAGE 163 IS UNDATED, WHEREAS PAGES 164 AND 165 DO N OT PERTAIN TO THE YEAR UNDER CONSIDERATION. IT IS ONL Y IN THE STATEMENT OF SHRI ANOOP ASTHANA, THAT HE ATTRIBUTED ACCOUNT OF THESE DOCUMENTS TO THE ASSESSEE. 11. FIRST AND FOREMOST, THE SUBJECT DIARY/PAGES WERE FOUND AND IMPOUNDED FROM THE PREMISES OF SHRI ANOOP ASTHANA, A THIRD PARTY, AND NOT FROM THE APPELLANT. FURTHER, SHRI ANOOP ASTHANA, IN HIS STATEMENT, HAD STATED THAT ENTRIES IN THE SAID DIARY WERE MADE BY STAFF M EMBER OF SHRI ANOOP ASTHANA, WITHOUT PROVIDING DETAILS OF THE SO-CALLED STAFF MEMBER. THUS, THE AUTHOR OF THE SO -CALLED DIARY IN QUESTION IS NOT EVEN KNOWN TILL DATE. SHR I ANOOP ASTHANA NOWHERE STATED THAT THE DIARY WAS WRITTEN B Y SOMEONE ON HIS BEHALF AND/OR ON HIS INSTRUCTIONS. THEREFORE, THE ENTIRE CASE IS FUNDAMENTALLY BASED O N A MERE INFERENCE DRAWN ABOUT THE NATURE OF THE CONTEN TS OF THE DIARY WRITTEN BY SOMEONE UNKNOWN, MORE PARTICULARLY, ONLY ON THE STATEMENT OF SHRI ANOOP ASTHANA ABOUT THE CONTENTS OF THE DIARY WRITTEN BY SOMEONE ELSE. SINCE THE DIARY WAS UNDISPUTEDLY FOU ND FROM THE POSSESSION OF SHRI ANOOP ASTHANA AND NOT F ROM THE APPELLANT, THE CONTENTS OF THE SAID DIARY, SIMP LICITOR, WITHOUT ANY CORROBORATIVE MATERIAL/EVIDENCE COULD N OT HAVE BEEN, IN THE ABSENCE OF ANY CORROBORATIVE MATE RIAL / I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 31 EVIDENCE, MADE THE BASIS OF DRAWING ANY ADVERSE INFERENCE AGAINST THE APPELLANT, MUCH LESS MAKING A NY ADDITION IN THE CASE OF THE APPELLANT. IN THE DIAR Y, NAME OF THE PROJECT EMERALD GARDEN PROJECT BEING CONST RUCTED BY THE APPELLANT ALONG WITH CERTAIN NAMES OF INDIVI DUALS AND AMOUNTS WAS STATED TO BE MENTIONED. AS TO WHY AND FOR WHAT PURPOSE THE AUTHOR HAD MADE SUCH NOTING IS NOT KNOWN, NOR BROUGHT ON RECORD. THE APPELLANT HAS, A LL THROUGH, DENIED ANY KNOWLEDGE OF THE CONTENTS OF TH E DIARY. IT ALSO COULD NOT BE EXPECTED TO BE AWARE OF THE CONTENTS RECORDED IN THE DIARY FOUND AT THE TIME OF SURVEY AT THE PREMISES OF SHRI ANOOP ASTHANA, A THI RD PARTY. IT IS UNDISPUTED THAT THE CONTENTS OF THE D IARY HAD NO SIGNATURE AND/OR ANY OTHER AUTHENTICATION ON BEH ALF OF THE APPELLANT. THIS BEING SO, THE DIARY IMPOUNDED FROM THE PREMISES OF SHRI ANOOP ASTHANA CANNOT BE USED T O DRAW ANY ADVERSE INFERENCE AGAINST THE APPELLANT, I N ANY MANNER. THE ASSESSEE/APPELLANT MAINTAINS AS FOLLOW S. SHRI ANOOP ASTHANA WAS ONE OF THE PROPERTY BROKERS WHO DEALT WITH IN THE PROJECT OF THE APPELLANT AND ACTE D AS BROKER FOR SALE OF CERTAIN PLOTS IN THE EMERALD GAR DEN PROJECT, DURING PRECEDING YEARS. THE APPELLANT HAD NOT SOLD ANY FLAT THROUGH SHRI ANOOP ASTHANA DURING THE YEAR UNDER CONSIDERATION (I.E. F.Y. 2014-15). PERTINENT LY, SHRI ANOOP ASTHANA, EARLIER IN JANUARY 2014 (31/1/2014), HAD BOOKED TWO FLATS WITH THE APPELLANT IN HIS OWN WIFE S NAME IN THE EMERALD GARDEN PROJECT, BUT SINCE HE CO ULD NOT MAKE NECESSARY PAYMENTS AS PER THE PAYMENT SCHEDULE, THE APPELLANT WAS CONSTRAINED TO CANCEL H IS BOOKING ON 8/12/2014. ON ACCOUNT OF THE AFORESAID, THERE HAD BEEN DIFFERENCES/DISPUTES BETWEEN THE APPELLANT AND SHRI ANOOP ASTHANA AND ACCORDINGLY, THE APPELLANT H AD NOT SOLD ANY FLAT THROUGH SHRI ANOOP ASTHANA DURING THE RELEVANT YEAR AND HAD NOT PAID ANY COMMISSION TO HI M DURING THE RELEVANT YEAR. ON ACCOUNT OF THE ONGOIN G DISPUTE BETWEEN THE APPELLANT AND SHRI ANOOP ASTHAN A, ANY AVERMENT MADE BY SHRI ANOOP ASTHANA AGAINST THE APPELLANT COULD NOT BE TAKEN AT ITS FACE VALUE. FU RTHER, THE DATES MENTIONED IN THE DIARY IMPOUNDED RELATE B ACK TO JANUARY, 2014 (18/1/2014, 23/1/2014), WHICH IS T HE PERIOD WHEN SHRI ANOOP ASTHANA BOOKED TWO FLATS WIT H THE APPELLANT IN HIS PERSONAL CAPACITY. THEREFORE, THE RECORDINGS IN THE DIARY COULD NOT BE HELD TO BE REL ATED TO I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 32 THE OTHER SALE OF FLATS UNDERTAKEN BY THE APPELLANT , WITHOUT ANY INVOLVEMENT OF SHRI ANOOP ASTHANA. EVE N THE NAMES OF THE INDIVIDUAL PARTIES APPEARING IN TH E DIARY ALONGSIDE THE AMOUNTS ARE, STATEDLY, COMPLETELY ALI EN TO THE APPELLANT. THE APPELLANT HAD NOT SOLD ANY FLAT IN THE EMERALD GARDEN PROJECT TO THE PERSONS NAMED IN THE SAID DIARY. THEREFORE, THE VERY CONTENTS OF THE DIARY A RE SUSPECT AND ARE TOTALLY UNRELIABLE/UNAUTHENTIC. NO ADVERSE INFERENCE CAN BE DRAWN FROM THE PAYMENT RECEIPTS (3 IN NUMBER) IN RESPECT OF FLATS IN EMERA LD GARDEN PROJECT FOUND FROM THE PREMISES OF SHRI. ANO OP ASTHANA, PARTICULARLY WHEN NOTHING ADVERSE HAS BEEN STATED BY SHRI. ASTHANA IN THIS REGARD. 12. THESE FACTS, AS SPECIFICALLY CONTENDED BY THE ASSESSEE BEFORE THE LD. CIT(A) HAVE NOT BEEN REBUTT ED AND THE LD. CIT(A) HAS GONE MERELY BY THE UNCORROBORATED UNILATERAL STATEMENT OF SHRI ANOOP ASTHANA, QUA WHICH, NO OPPORTUNITY OF CROSS-EXAMINA TION OF THE DEPONENT, SHRI ANOOP ASTHANA, WAS AFFORDED T O THE ASSESSEE AT ANY STAGE WHATSOEVER. IT IS NOT SUFFIC IENT TO OBSERVE, AS HAS BEEN DONE BY THE LD. CIT(A), THAT THE INCRIMINATING DOCUMENT FOUND AND IMPOUNDED IN THE BUSINESS PREMISES OF SHRI ANOOP ASTHANA AND THE INCRIMINATING STATEMENTS OF SHRI ANOOP ASTHANA WAS SPECIFICALLY CONFRONTED TO THE MANAGING DIRECTOR OF THE APPELLANT COMPANY SHRI SANJEEV KUMAR JHUNJHUNWALA O N 27/1/2014... IT IS TRITE LAW THAT MERELY CONFRO NTING THE STATEMENT RECORDED AT THE BACK OF THE ASSESSEE, TO THE ASSESSEE, IN THE ABSENCE OF PROVIDING A CROSS- EXAMINATION OF THE MAKER OF THE STATEMENT, IS IN COMPLETE VIOLATION OF THE NATURAL JUSTICE PRINCIPLE OF AUDI ALTERAM PARTEM. THE FOLLOWING JUDGMENTS, INTER ALI A, ARE ELOQUENT IN THIS REGARD:- 1. KISHINCHAND CHELLARAM VS. CIT, 125 ITR 713 (SC). 2. SARASWATI INDUSTRIAL SYNDICATE LTD. VS. CIT, 237 IT R 1 (SC). 3. STATE OF PUNJAB VS. BHAGAT RAM, AIR 1974 SC 2335. 4. KALRA GLUE FACTORY VS. SALES TAX TRIBUNAL, 167 ITR 498 (SC). 5. CIT VS. PRADEEP KUMAR GUPTA, 207 CTR 115 (DEL). 6. SONA ELECTRIC COMPANY VS. CIT, 152 ITR 507 (DEL). I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 33 7. CIT VS. EASTERN COMMERCIAL, 210 ITR 103, 110 (CAL). 8. P.S. ABDUL MAJEED VS. STO, 209 ITR 821, 823 (KER). 9. CIT VS. SHAM LAL, 127 ITR 816 (P&H). 10. MUKUND SINGH AND SONS VS. PRESIDING OFFICER, 107 STC 300 (P&H). 11. ANUPAM AGENCIES VS. STATE OF PUNJAB, 98 STC 338 (P&H). 12. PRAKASH CHAND MEHTA VS. CIT, 220 ITR 277, 279 (MP) 13. CIT VS. D.M. DOSHI, 229 ITR 315 (GUJ) 14. AMARJIT SINGH BAKSHI (HUF) VS. ACIT, 263 ITR (AT) 75 (DEL) (TM) 15. MAHES GULABRAI JOSHI VS. CIT, 95 ITD 300 (MUM). 16. MONGA METALS (O) LTD., 67 TTJ 247 (ALL) 17. VERMA ROADWAYS VS. ACIT, 75 ITD 183 (ALL) 18. SARITA DEVI KAJARIA VS. ITO, 89 ITD 109 (KOL) (TM). 19. ITO VS. PUKHRAJ N. JAIN, 95 ITD 281 (MUM) 20. OBULAPURAM MINING COMPANY (P) LTD. VS. DCIT, 160 ITD 224 (BANG.). 21. CIT VS. SMC SHARE BROKERS LTD., 288 ITR 345 (DEL). 22. CIT VS. DHARAM PAL PREM CHAND LTD., 295 ITR 105 (DEL). 23. ANDAMAN TIMBER INDUSTRIES VS. CCE 281 CTR 241 (SC). 13. SOME DECISIONS IN THIS REGARD ARE DISCUSSED THUS. 14. IN KISHINCHAND CHELLARAM VS. CIT (SUPRA), IT HAS BEEN HELD BY THE HON'BLE SUPREME COURT THAT THE ASSESSME NT MADE BY RELYING UPON THE STATEMENT OF A THIRD PARTY, WIT HOUT GIVING THE EFFECTED PERSON A CHANCE TO CROSS-EXAMINE SUCH THIRD PARTY, IS LIABLE TO BE HELD AS BASED ON NO EVIDENCE AND, THEREFORE, LIABLE TO BE DELETED. 15. IN SONA ELECTRIC COMPANY VS. CIT (SUPRA), IT HAS BEEN HELD THAT THE STATEMENT OF A WITNESS RECORDED AT TH E BACK OF THE ASSESSEE HAS TO BE EXCLUDED, AS THE SAME WAS RE LIED ON WITHOUT GIVING ANY OPPORTUNITY TO CROSS-EXAMINE THE PERSON GIVING STATEMENT; AND THAT THE ASSESSMENT BASED ON SUCH A I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 34 STATEMENT IS A STATEMENT RENDERED AS BASED ON NO EV IDENCE AND, ACCORDINGLY, LIABLE TO BE ANNULLED. 16. IN AMARJIT SINGH BAKSHI (HUF) VS. ACIT (SUPRA), IT HA S BEEN HELD THAT OPPORTUNITY TO CROSS-EXAMINE THE PER SON GIVING A STATEMENT OF CULPABLE NATURE HAS TO BE GIVEN; AND THAT IN THE ABSENCE OF SUCH AN OPPORTUNITY BEING GIVEN TO T HE AFFECTED PERSON, THE STATEMENT CEASES TO BE MATERIA L FOR THE PURPOSES OF ASSESSMENT. 17. IN CIT VS. SMC SHARE BROKERS LTD. (SUPRA), IT WAS HELD THAT A STATEMENT GIVEN BY A BROKER AT THE BACK OF T HE ASSESSEE COULD NOT BE USED TO THE DETRIMENT OF AN ASSESSEE A ND DISMISSAL OF REVENUES APPEAL WAS HELD TO BE JUSTIF IED. 18. IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CENTRAL EXCISE, 281 CTR 241(SC), I T HAS BEEN HELD THAT THE ASSESSEE WAS MANUFACTURING PLY- WOODS AND RELATED PRODUCTS IN ITS FACTORY. SOME OF THOSE PRODUCTS WERE SOLD FROM FACTORY PREMISES ONLY TO CE RTAIN BUYERS. HOWEVER, MAJOR PORTION OF PRODUCTS MANUFACTURED WERE SOLD TO OTHER DEALERS FROM THEIR NUMEROUS DEPOTS SITUATED AT DIFFERENT PLACES IN COU NTRY. ASSESSEE FILED ITS DECLARATION U/S. 173C OF CENTRAL EXCISE RULES SHOWING PRICE OF GOODS AT WHICH THEY WERE SOL D EX- FACTORY AND DELIVERY BASIS. REVENUE FOUND THAT THER E WAS LOT OF PRICE DIFFERENCE BETWEEN GOODS SOLD AT EX-FA CTORY AND DELIVERY BASIS IN COMPARISON WITH GOODS WHICH W ERE SOLD TO BUYERS FROM DEPOTS. INVESTIGATION WAS CARR IED OUT AND STATEMENTS OF TWO BUYERS WERE RECORDED, ON BASI S OF WHICH SHOW CAUSE NOTICE WAS SERVED UPON ASSESSEE. ADJUDICATING AUTHORITY PASSED ORDER CONFIRMING DEMA ND IN SHOW CAUSE NOTICE ON GROUND THAT PRICE AT WHICH GOODS WERE SOLD TO CUSTOMERS FROM DEPOTS MAY NOT BE BASIS FOR DETERMINING VALUE FOR PURPOSE OF EXCISE D UTY- ADJUDICATING AUTHORITY ALSO TOOK INTO CONSIDERATION PRICE LIST OF ASSESSEE MAINTAINED AT ITS DEPOTS THAT WAS TREATED AS PRICE FOR PURPOSES OF LEVYING EXCISE DUTY. ASSE SSEE FILED APPEAL AGAINST ORDER OF ADJUDICATING AUTHORIT Y THAT WAS DISMISSED BY CESTAT. ASSESSEE SUBMITTED THAT I T WAS NOT ALLOWED TO CROSS-EXAMINE DEALERS WHOSE STATEMENTS WERE RELIED UPON BY ADJUDICATING AUTHORI TY IN PASSING IMPUGNED ORDERS. HELD, NOT ALLOWING ASSESS EE TO CROSS-EXAMINE WITNESSES BY ADJUDICATING AUTHORITY THOUGH STATEMENTS OF THOSE WITNESSES WERE MADE AS I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 35 BASIS OF IMPUGNED ORDER, AMOUNTED IN SERIOUS FLAW W HICH MAKE IMPUGNED ORDER NULLITY AS IT AMOUNTED TO VIOLA TION OF PRINCIPLES OF NATURAL JUSTICE. IT WAS TO BE BOR NE IN MIND THAT ORDER OF COMMISSIONER WAS BASED UPON STATEMENTS GIVEN BY TWO WITNESSES. EVEN WHEN ASSES SEE DISPUTED CORRECTNESS OF STATEMENTS AND WANTED TO CR OSS- EXAMINE WITNESSES, ADJUDICATING AUTHORITY DID NOT G RANT OPPORTUNITY TO ASSESSEE. IN IMPUGNED ORDER PASSED BY ADJUDICATING AUTHORITY IT WAS SPECIFICALLY MENTIONE D THAT SUCH OPPORTUNITY WAS SOUGHT BY ASSESSEE, HOWEVER, N O SUCH OPPORTUNITY WAS GRANTED. ASSESSEE CONTESTED TRUTHFULNESS OF STATEMENTS OF TWO WITNESSES AND WAN TED TO DISCREDIT THEIR TESTIMONY FOR WHICH PURPOSE OPPO RTUNITY OF CROSS-EXAMINATION WAS SOUGHT. IT WAS NOT FOR ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COU LD BE SUBJECT MATTER OF CROSS-EXAMINATION AND DENY PRAYER OF ASSESSEE. IN CASE TESTIMONY OF TWO WITNESSES WAS DISCREDITED, THERE WOULD BE NO MATERIAL WITH DEPART MENT TO JUSTIFY ITS ACTION, AS STATEMENT OF TWO WITNESSE S WAS ONLY BASIS OF ISSUING SHOW CAUSE NOTICE. IMPUGNED ORDER AS PASSED BY CESTAT WAS SET ASIDE. APPEAL ALLOWED. 19. EVIDENTLY, THE THREE DOCUMENTS FOUND DURING SURVEY FROM THE POSSESSION OF SHRI ANOOP ASTHANA, I N THE ABSENCE OF THE STATEMENT OF SHRI ANOOP ASTHANA, DO NOT HAVE ANY VALUE, PARTICULARLY IN THE FACE OF THE FAC T THAT THEY ARE NOT CORROBORATED BY ANY INDEPENDENT EVIDEN CE. PAGE NO. 163 : THIS IS UN-DATED, BUT NAME OF THE PROJECT 'EMERALD GARDEN' LAUNCHED BY THE APPELLANT WAS MENTIONED THERE. WITH REFERENCE TO THIS, SHRI ANOOP AATHANA WHO HAD BEEN EXAMINED BY THE AUTHORISED OFFICERS, STATED CATEGORICALLY THAT HE HAD BEEN WOR KING AS A BROKER FOR LAST 30 YEARS AND ALL THE PROMINENT DEVELOPERS OF KANPUR WERE HIS CLIENTS. IN HIS SUBSE QUENT STATEMENT WHICH APPEARS AT PAGE 31 TO 36 OF THE SYNOPSIS DATED 10.12.2018, AND IN RESPONSE TO QUEST ION NO.7, HE STATED THAT 'CASH MONEY' AS MENTIONED THER E WAS SUBJECT TO NEGOTIATION BETWEEN THE CUSTOMER AND THE DEVELOPER . HE FURTHER STATED IN HIS REPLY THAT HE WAS NOT CONCERNED WITH THE 'INCOMING' AND 'OUT-GOING' ' LEN- DEN PAYMENTS. I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 36 PAGE NOS. 164 AND 165 : THESE WERE DATED 18.01.2014 AND 13.01.2013, FALLING IN THE ASSESSMENT YEARS 201 4-15 & 2013-14 RESPECTIVELY, I.E., THE EARLIER TWO YEARS . NO SUCH ADDITION HAD BEEN MADE M THE A.Y. 2013-14 & A. Y. 2014-15, FROM WHICH IT FOLLOWS THAT ALL SUCH ENQUIR IES, AS WERE CALLED FOR, HAD DULY BEEN MADE BY THE ASSESSIN G OFFICER AND NOTHING CONTRARY TO THE APPELLANT WAS F OUND, ALTHOUGH ASSESSMENTS FOR THE ASSESSMENT YEARS 2013- 14 & 2014-15 WERE MADE UNDER SECTION 153C ON THE SAME DATE, AS ON WHICH THE ASSESSMENT FOR A.Y. 2015-16 W AS MADE, I.E., ON 9.12.2016. STRIKINGLY, THE MATERIAL FORMING THE BASIS OF THE ADDITION PRESENTLY UNDER CONSIDERA TION IS THE VERY SAME AS THAT ON WHICH THE COMPLETED ASSESSMENTS UNDER SECTION 153C FOR THOSE EARLIER YE ARS WERE REOPENED, BUT NO ADDITION WAS MADE. 15. AS REGARDS RECEIPTS BEARING NO.1030 DATED 31.05.2013, NO.1396 DATED 05.04.2014 AND NO.1418 DATED 28.04.2014, THE SAME HAD BEEN FOUND FROM THE POSSESSION OF SHRI ANOOP ASTHANA, THE BROKER. SO FA R AS REGARDS THE TWO RECEIPTS DATED 05.04.2014 AND 28.04.2014, THE RELATED SALE DEEDS WERE EXECUTED AN D FINAL REGISTRATION IN FAVOUR OF THE CUSTOMERS WAS E XECUTED ON 19.06.2018 AND 31.05.2018, RESPECTIVELY. THE REC EIPT NO.1030 DATED 31.05.2013 RELATED TO ASSESSMENT YEAR 2014-15, BUT NO ADDITION WAS MADE IN THE SAID ASSESSMENT YEAR. IN RELATION TO THE SAID RECEIPTS, SHRI SANJEEV KUMAR JHUNJHUNWALA HAD BEEN EXTENSIVELY EXAMINED BY THE AUTHORISED OFFICER DURING THE COURS E OF SURVEY AND HE HAD GIVEN NAME-WISE DETAILS OF THE PERSONS TO WHOM THE RECEIPTS IN QUESTION HAD BEEN ISSUED BY THE APPELLANT COMPANY. HIS STATEMENT WAS RECORDED ON 27.06.2014, IN CONTINUATION TO THE STAT EMENT RECORDED ON 26.06.2014. IN SUCH STATEMENT, HE HAD DECLARED AN INCOME OF RS.9 CRORES STATED TO HAVE BE EN EARNED BY HIM FROM COMMODITY TRADING TILL THAT DATE . DURING THE COURSE OF REGULAR ASSESSMENT PROCEEDINGS , HE WAS EXTENSIVELY EXAMINED ON 01.09.2016 BY ISSUE OF SUMMONS UNDER SECTION 131(1). IN RESPONSE TO QUEST ION NOS.14, 15 AND 16, HE STATED THAT HE HAD DONE TRADI NG IN COMMODITY, AND LOOKING TO THE MARKET CONDITIONS PREVAILING AT THAT TIME, IT WAS NOT IMPROBABLE TO H AVE EARNED INCOME OF THIS VOLUME. FURTHER, IN RESPONSE TO I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 37 QUESTION NO.18, HE WAS REQUIRED TO SUBMIT DOCUMENTA RY EVIDENCES IN SUPPORT OF INCOME DECLARED BY HIM. IN RESPONSE TO QUESTION NO.21, HE GAVE COMPLETE DETAIL S SUPPORTED BY DOCUMENTARY EVIDENCES RELATING TO COMMODITY TRADING. FURTHER, IN RESPONSE TO QUESTION NO.22, HE GAVE COMPLETE INFORMATION ABOUT INCOME DECLARED AND INCOME TAX, WEALTH TAX PAYMENTS MADE B Y HIM ON SUCH INCOME/WEALTH. IN RESPONSE TO QUESTION NO.23, HE GAVE COMPLETE INFORMATION, NAME-WISE, OF THE BOOKING RECEIPTS AS HAD BEEN IMPOUNDED DURING THE COURSE OF SURVEY AT THE OFFICE PREMISES OF SHRI ANO OP ASTHANA, AND IN THE END, HE CATEGORICALLY STATED T HAT IT WOULD NOT BE PROPER TO DRAW ADVERSE INFERENCE IN RELATION TO INCOME FROM COMMODITY TRADING. 16. THUS, ONE CANNOT BUT COME TO THE INEXORABLE CONCLUSION THAT THE ORDER UNDER APPEAL SUFFERS FROM THE VICE OF NOT TAKING INTO CONSIDERATION THE ASSESSEE S CONTENTION, WHICH CONTENTION ALSO DOES NOT STAND REBUTTED, THAT IT WAS NOT PROVIDED WITH ANY OPPORTU NITY OF CROSS-EXAMINING SHRI ANOOP ASTHANA. 17. IN VIEW OF THE ABOVE, WE HOLD THAT: (I) THE CASE OF THE ASSESSEE HAS BEEN PREJUDICED FOR WANT OF PROVIDING HIM OPPORTUNITY OF CROSS-EXAMINATION OF SHRI ANOOP ASTHANA, WHOSE UNILATERAL STATEMENT RECORDED EX- PARTE QUA THE ASSESSEE HAS BEEN MADE THE SOLE BASIS OF THE ADDITION, THEREBY VIOLATING THE PRINCIPLES OF NATURAL JUSTICE; AND (II) THE OTHER MATERIAL, I.E., THREE PAGES OF THE DIARY FOUND IN THE SEARCH DO NOT ESTABLISH ANY CASE FOR ADDITION IN THE HANDS OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION, AS NONE OF THESE DOCUMENTS RELATE TO THE YEAR UNDER CONSIDERATION, ONE OF THEM DOES NOT CONTAIN ANY DATE/YEAR AND THE OTHER TWO PERTAIN TO EARLIER YEARS, IN WHICH, NO ADDITION BASED ON THESE DOCUMENTS WAS MADE. 18. THEREFORE, THE GRIEVANCE SOUGHT TO BE RAISED BY THE ASSESSEE IS JUSTIFIED. IT IS ACCEPTED AS SUCH. AC CORDINGLY, THE ADDITION MADE IS DELETED. NOTHING FURTHER SURV IVES FOR ADJUDICATION, NOR WAS ANYTHING ELSE ARGUED. I.T.A. NO.523 & 524/LKW/2019 ASSESSMENT YEAR:2014-15 & 15-16 38 19. IN THE RESULT, THE APPEAL IS ALLOWED. 5.5 IN THE ABOVE NOTED CASE, DECIDED BY LUCKNOW BEN CH OF THE TRIBUNAL, THE BENCH HAS TAKEN INTO ACCOUNT ALL THE RELEVANT CASE LAWS AND HAS DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE. 5. IN THE PRESENT CASE, ALL DOCUMENTARY EVIDENCES, FOR THE CLAIM MADE BY THE ASSESSEE, ARE AVAILABLE WITH THE AUTHORITIES FO R WHICH THEY HAVE NOT MADE ANY ADVERSE COMMENTS. THE ONLY REASON FOR MAK ING AND UPHOLDING THE DISALLOWANCE OF THE INTEREST IS THE STATEMENT R ECORDED BY THE OFFICERS OF THE DEPARTMENT AND THAT TOO NOT BY THE ASSESSING OF FICER HIMSELF AND THAT TOO WHICH WERE NOT MADE AVAILABLE TO THE ASSESSEE F OR CROSS EXAMINATION AND THEREFORE, THESE STATEMENTS CANNOT BE UTILIZED AGAINST THE ASSESSEE. IF WE IGNORE THESE STATEMENTS, THE REST OF DOCUMENTARY EVIDENCES WELL SUPPORT THE CLAIM OF THE ASSESSEE. THEREFORE, GROUND NO. 4 TO 9 ARE ALLOWED. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE STAND PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28/09/2021) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:28/09/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR