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TMI Blog2015 (5) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... n opportunity for cross examining him and decide the issue in dispute, afresh under the law, after giving adequate opportunity of being heard to the assessee for substantiating its claim before the AO. - Decided in favour of revenue for statistical purposes. - I.T.A. Nos. 5262 & 5254/Del/2013, C.O. NOS. 26 & 25/Del/2014 - - - Dated:- 17-4-2015 - Shri S.V. Mehrotra And Shri H.S. Sidhu JJ. For the Appellant : Sh. Ramesh Chandra, CIT(DR) For the Respondent : Sh. Arun Garg, CA ORDER PER BENCH These appeals filed by the Revenue and Cross Objections filed by the Assessee emanate out of the separate Order both dated 09.7.2013 passed by the Ld. CIT(A)-I, New Delhi pertaining to assessment years 2008-09 2009-10. For the sake of convenience, we are proceeding to dispose off the appeals and cross objections by this consolidated order. 2. The grounds raised in the Revenue s appeal being ITA NO. 5262/Del/2013 read as under:- 1. The order of the Ld. CIT(A) is not correct in law and facts. 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of ₹ 32,00,000/- made by the AO on account of unexplained credits re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Before issuing notice u/s. 153C satisfaction was recorded on 23.11.2010 and a copy of the satisfaction note was given to the assesee at this request. In response thereto, the assessee had filed its Return of Income, declaring a total loss of ₹ 88,31,463/- on 8.3.2011. Initial notice u/s. 143(2) was issued on 8.3.2011. Another notice u/s. 143(2) of the Income Tax Act, 1961 was issued on 6.7.2011. Detailed questionnaire u/s. 142(1) was issued on 10.8.2011 and ld. Counsel of the assesee attended the proceedings and filed the necessary details/ clarifications. In this case the assessee company had filed its original return of income, declaring a total income of Rs. NIL on 26.9.2008. This return was processed u/s. 143(1) of the I.T. Act, 1961 at Rupees NIL. A survey operation u/s. 133A of the I.T. Act, 1961 was carried out in the business premises of one Sh. SK Gupta, CA by the Investigation Wing of the Department on 20.11.2007. It was gathered during the course of survey that Sh. Suresh Kumar Gupta, CA by professional was in the practice of providing accommodation entries to various persons. It was also noticed that various individuals associated in the group were having transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Income Tax Settlement Commissioner (ITSC) that he has been providing accommodation entries to various persons / entities. This has been held to be so by the ITSC, and has thus become final and undisputed qua Sh. SK Gupta. The appellant / other persons of Bhushan group have transactions with certain companies controlled by Sh. S K Gupta. This is also undisputed. The subject matter of transactions between the appellant / other persons of Bhushan group, with companies controlled by Sh. S K Gupta, is purchase sale of shares and receipt of proceeds thereof. Although this is disputed in as much as the addition of the entry amounts has been in the case of the appellant/ other persons of Bhushan Group, fact remains that capital gains offered to tax on these alleged transactions have also been charged to tax as capital gains in the assessments made. 5.3 It is well settled that strict rules of evidence are not applicable to tax proceedings. It was held in Dhakeswari Cotton Mills Ltd. v. ClT . [1955] 27 lTR 126 (SC) that the ITO is not fettered by technical rules of evidence and pleadings, and he is entitled to act on material which may not be accepted as evidence in a court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val submissions. The fact that Sh. SK Gupta an entry operator is undisputed. The fact that the appellant / other persons of Bhushan group had transactions with companies controlled by Sh. SK Gupta is undisputed. In Kishinchand Chellararn v Commissioner, of Income, Bombay City II [(1980) 125 ITR 713 (SC)], Hon'ble Apex Court held that t is true that the proceedings under the income tax law, are not governed by the strict rules of evidence and therefore, it might be said that even without calling the manager of the bank in evidence to prove this letter, it could be taken into account as evidence. But before the LT authorities could reply upon it, they were bound to produce it before the appellant so that the appellant could statements contained in it by asking for an opportunity to cross examine the manager of the Bank with reference the statements made by him. Therefore, as it is equally well settled that the principles of natural justice are applicable to tax proceedings, the statement as well as opportunity to cross examine the person making the statement relied upon ought to have been made available to the appellant. Absence of cross examination by the appellant during the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the AO. We know that Ld. CIT(A) has no power to set aside the issue in dispute to the AO, but the deletion of the addition is also not permissible, in view of the facts and circumstances of the case, as explained in the impugned order. In the interest of justice, we are setting aside the issue in dispute to the file of the AO with the direction to provide the copy of the statement given by Sh.SK Gupta to the assessee and also provide an opportunity for cross examining him and decide the issue in dispute, afresh under the law, after giving adequate opportunity of being heard to the assessee for substantiating its claim before the AO. 8. In the result, both the appeals filed by the Revenue stands allowed for statistical purposes. 9. Since we have set aside the issues to the file of the AO for fresh adjudication in the Revenue Appeals, both the Cross Objection filed by the Assessee have become infructuous and the same are dismissed as such. 10. In the result, both the Appeals filed by the Revenue stands allowed for statistical purposes and both the Cross Objections filed by the Assessee are dismissed, as infructous. Order pronounced in the Open Court 17-4-2015. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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