9911796707
TMI Blog2011 (1) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... S.JUSTICE HARSHA DEVANI) 1. The appellant revenue in this appeal under Section 260-A of the Income Tax Act, 1961 (the Act) has challenged order dated 31.07.2008 made by the Income Tax Tribunal, (the Tribunal) proposing the following three questions: [A] Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in deleting the addition of Rs.25 lacs made on account of unexplained credits u/s. 68? [B] Whether the Appellate Tribunal erred in law in not appreciating that in view of the categorical admission by late Shri Mahendra H Shah in his statement recorded during the course of search u/s. 132 (4) of the Act, the concerns from which the said credits were shown in the books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Mahendra H Shah and other material being used against it. The assessee also requested the Assessing Officer to issue summons to the creditors to examine them as they were not cooperating with the assessee in giving confirmation of loans and demanded cross-examination of the responsible persons of the firm/ company. It was contended by the assessee that the transactions with Madhupuri Metal Industries Pvt. Ltd., were not in the nature of loan transactions, but advances against sale of goods. The Assessing Officer did not accept the assessee's explanation and observed that the transactions were not in the nature of sale but were accommodative loan entries and the cash provided for getting such entries had not been accounted for by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, held that there was no material on record to doubt the identity and capacity of the creditors and also genuineness of the transactions and accordingly deleted the addition made by the assessee. In revenue's appeal, the Tribunal upheld the order made by the Commissioner (Appeals). 3. Ms. Mauna M Bhatt, learned Senior Standing Counsel appearing on behalf of the appellant assailed the impugned order of the Tribunal submitting that the Tribunal was not justified in holding that the proceedings under section 158BD were initiated against the assessee not on the basis of any material or evidence gathered during the search but on the basis of post search inquiry. It was submitted that the impugned order of the Tribunal does give r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal, the Assessing Officer could at least have allowed cross-examination of the other persons who were fully aware of the affairs of the Madhupuri Group concerns. The Tribunal was of the view that the Assessing Officer as a quasi judicial authority was under an obligation to adhere to the principles of natural justice and as such the statement of Shri Mahendra H. Shah could not have been made use of while drawing adverse inference against the assessee in view of the fact that the same had not been provided to the assessee. The Tribunal further took note of the fact that the revenue had not disputed the findings of the Commissioner (Appeals) that proceedings under section 158BD were initiated against assessee not on the basis of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cross-examine the associates of Shri Mahendra H Shah; and had also not issued any summons to the creditors to enforce the attendance; the Tribunal was justified in holding that there was a breach of the principles of natural justice on the part of the Assessing Officer. In the circumstances, when the revenue had not established that the assessee in fact had any undisclosed income, the addition made under section 68 of the Act had rightly been deleted. 7. In view of the above discussion, there being no infirmity in the impugned order of the Tribunal, the same does not give rise to any question of law, much less, a substantial question of law. The appeal being devoid of merit is accordingly dismissed. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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