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TMI Blog2013 (7) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... which is contrary to law and facts, void ab initio, beyond jurisdiction, and without giving adequate opportunity of hearing, by recording incorrect facts and findings and the same is not sustainable on various legal and factual grounds. 3. That in am case and in any view of the matter, action of Ld. CIT(A) in not providing all the adverse material used against the assessee and further erred in not granting the opportunity of cross examination despite specific request made by the appellant in this regard. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A and 2348 of the Income Tax Act. 1961." 2. Briefly stated the facts giving rise to this appeal are that the case was selected for scrutiny under CASS and a statutory notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was served on the assessee. The Assessing Officer scrutinized the claim of commission paid by the assessee and observed that the assessee had no agreement with the companies to whom commission was said to be paid and the assessee had failed to establish business c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that there was a specific request by the assessee for the same. 4. Replying to the above, ld. DR submitted that the assessee is an insurance broker/commission agent and has earned commission income during the year. The DR further submitted that the Assessing Officer rightly noticed that the assessee has claimed expenses amounting to Rs.69,06,732/- paid as commission to the aforementioned three companies. The DR pointed out that the authorities below provided adequate opportunity to the assessee to offer explanation in support of his claim pertaining to the impugned payment of commission but the assessee has failed to substantiate his claim. The DR vehemently contended that the assessee had no agreement with these companies and the assessee could not furnish evidence showing the nature of the services and duties performed by these companies, risk of assessee shared or sought to be covered by these companies and terms and conditions or release of payment of commission. Therefore, the Assessing Officer rightly made disallowance and addition which was confirmed by the Commissioner of Income Tax(A) on justified and reasonable basis. The DR supported the orders of the authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been held that when the assessee had failed to explain that the expenditure in question was made wholly and exclusively for the purpose of business of the assessee, then the revenue authorities were justified in disallowing the claim of the assessee. 8. On behalf of the assessee, it has been contended that the Commissioner of Income Tax (A) passed the impugned order without giving adequate opportunity of hearing to the assessee and by recording incorrect facts and findings. In ground no.3 of the assessee, it has also been contended that the Commissioner of Income Tax(A) used adverse material against the assessee without providing or granting opportunity of cross examination of the witnesses despite the fact that there was a specific request of the assessee in this regard. 9. For the above contentions, the DR submitted that the authorities below provided due opportunity of hearing to the assessee but the assessee and his representative were merely interested in taking adjournments, therefore, it cannot be said that the assessee was not provided due opportunity of hearing. On specific query from the Bench, the DR also submitted that the copy of inquiry report of DIT(Inv.) Ko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y employees for procuring the investment from Hero Honda Motors Ltd. The AO also noted that the three Kalkata based companies could not submit any evidence of any travel documents to show that any of the employees of the company ever travelled to Delhi for the purpose of procuring the investment from Hero Honda Motors Ltd or for liasoning with the assessee. After considering order of the AO and all these facts it was very much apparent that there was no genmneness for the claim of commission payments to the three Kolkata based companies and accordingly, it was decided to refer the matter for further inquiry to the DIT(lnv.) Kolkata and an inquiry report dated 21/02/2012 has been received which has been marked as Annexure-B. 5.2. In the inquiry report of the ADIT(inv.) Kolkata it has been stated that a survey u/s 133A was conducted on 17/1 0120 11 in all the three Kolkata based companies and it was found that all the three companies are Jama-kharchi bogus companies which are involved in bogus billing and accommodation entries. It is stated that Sh Abhishek Chokhani, the main person has admitted in his sworn statement dated 17/1 0/20 11 that he is controlling these three compancies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e part of order, we observe that the Commissioner of Income Tax(A) relied on the inquiry report of DIT(Inv), Kolkata,inter alia statements of Shri Abhishek Chokhani, Shri Malay Kumar Das and Shri Ranjeet Pathak. The Commissioner of Income Tax(A) has held that the confirmation report from Hero Motocorp Ltd. and other three companies and reconfirmation from disputed Kolkata based three companies has no meaning because these are stereotyped and self-serving documents. 12. In view of above, we observe that the Commissioner of Income Tax(A) has not followed the principles of natural justice because the Commissioner of Income Tax(A) has not provided due opportunity of cross- examination of witnesses and other material collected by DIT(Inv), Kolkata. We also observe that that the replies, evidence in the form of affidavit, confirmation and reconfirmation submitted by the assessee has also not been confronted to the Assessing Officer while taking the same into consideration by the Commissioner of Income Tax(A). Accordingly, we hold that the impugned order is not sustainable and we set aside the same by restoring the issue to the file of the Assessing Officer with a direction that the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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