9911796707
TMI Blog1981 (5) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... as of the view that income represented by the cash credit and the interest claimed thereon by the assessee escaped assessment. He, therefore, initiated proceedings under s. 147(a) r/w s. 148 The notice under s. 148 was issued on 24th July, 1975 and that was served on 7th Aug., 1975. The ITO purportedly gave opportunity to the assessee to cross-examine Shri Ravveeer Vikram Singh, who deposed on oath that he had not advanced Rs. 20,000 to the assessee, but it was only a Hawalal entry. The assessee failed to cross-examine that creditor. The ITO, therefore, made the addition of Rs. 20,000 in the assessment of the assessee vide order dt. 28th Feb., 1977. 3. The correctness of the said order was being challenged by the assessee in appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re being untrue disclosure on the part of the assessee, the Revenue contends, that the ITO was fully justified to take up the reassessment proceedings against the assessee. 5. We find substance in the submissions of the Revenue. In this connection, we rely on a celebrated decision of the Supreme Court in the case of ITO, I Ward, Distt. VI, Calcutta vs. Lakhmani Mewal Das 1976 CTR (SC) 220 : (1976) 103 ITR 437 (SC). In this case, the assessee claimed expenses amounting to Rs. 15,991. The expenses included Rs. 10,494 by way of interest. The said interest was claimed by the assessee to have been paid on various loans. The creditor was examined, who made a general statement that he had the Hawala business with various persons. No pointed stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anka were true, then the Supreme Court would have straightway differed from the Hon ble High Court and would have said that the duty that was cast on the assessee was fully discharged, inasmuch as the disclosure of the loan had been made by the assessee. The Supreme Court did not find that, on the facts of the case, full and true disclosure was made by the assessee. But the Supreme Court disapproved the decision of the High Court for a different reason that no nexus or live link between the material coming to the notice of the ITO and the formation of his belief that there was escapement of income was established. In the case, which was before the Supreme Court, the assessee claimed expenses which included interest. In means that the factum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is said that the cross-examination was to be done by Shri N.M. Ranka, the Senior Counsel. The case was adjourned from 14th Feb., 1977 to 15th Feb., 1977 and on that date, none appeared on behalf of the assessee. The question is whether sufficient opportunity was given to the assessee to cross-examine the creditor. Shri Ranka, the ld. counsel for the assessee argues that the case having been adjoined from 14th Feb., 1977 to 15th Feb., 1977 for the purpose of cross-examination of the creditor, it cannot be said that sufficient opportunity was afforded to the assessee for the purpose of cross-examination. we agree with the assessee that no proper opportunity was given to the assessee to enable its senior counsel to cross-examine the creditor. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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