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TMI Blog2006 (10) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the Tribunal is legally justified in holding the initiation of proceeding under section 148 valid without mentioning the reasons recorded for the initiation of the proceeding and without giving any reason? (ii)whether in view of the fact that the reasons recorded has not been communicated to the appellant which appellant had a right to get, Tribunal is legally justified in holding that there was violation of the principles of natural justice in this regard without adjudicating the real issue? (iii)whether the Tribunal is legally justified in confirming the addition under section 69C relying upon the statement of Sri Mohd. Shamim Khan which was taken at the back of the appellant without giving opportunity of cross examination? (iv)whether the observation of the Tribunal with regard to cross examination of Sri Mohd. Shamim Khan is legally correct and in accordance with law? (v)whether the statement of Sri Mohd. Shamim Khan which was taken on the back, the appellant could be relied upon against the appellant without giving opportunity of cross examination? (vi)whether the observation of the Tribunal that the Assessing Officer provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of India, Shahid Ganj, Saharanpur, wherefrom the gift has been made was obtained. A perusal of this account revealed that most of the credits of substantial amount were in round figures. Since credits in a N.R.E. account should be out of Foreign remittances, the credits in round figures appeared to be doubtful. (b)Credit vouchers pertaining to this account No. 14477 were examined. It was seen that most of these credits were on account of clearing of cheques of local Banks as such Punjab National Bank, Shahid Ganj, Saharanpur and Allahabad Bank, Saharanpur. Enquiries from these banks revealed that the cheques from Allahabad Bank were issued from Saving bank account No. 3896/18 in the joint names of Smt. Farhat Khanam (w/o appellant) Mohd. Shamim Khan (appellant). The cheques from P.N.B. were issued out of Saving Bank account No. 39112 in the name of the appellant himself. (c )A perusal of these Savings account revealed that the cash has been deposited in these accounts and the money has been transferred to the account from which gifts have been made by clearing cheques e.g., cash of ₹ 2,30,000 has been deposited in Saving Bank account No. 39112 on 27-1-1995 of Mohd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased of NRI gift by paying 10 per cent commission and, therefore, chargeable to tax under section 69C of the Act. The appellants filed their reply in which it was stated that the return already filed may be treated as return in compliance to notice under section 148 of the Act. 5. The Assessing Officer had provided the gist of the reasons recorded for the issuance of notice under section 148 of the Act to the appellants in the form of a show-cause notice. The appellants were required to prove the genuineness of the credit entry. It may be mentioned here that the appellants had not maintained books of account and they had filed the affidavit of the donor and the genuineness was being claimed with reference to the same. 6. The Assessing Officer examined the statement of Sri Mohd. Shamim Khan, which was recorded under section 131 of the Act, and concluded on the basis of the said statement that it was a case of Hawala receipt. The gift cheques were purchased by paying equal amount in cash and a commission of 10 per cent over and above that amount. As expenditure was incurred in purchase of the same NRI gifts, the source of which was not proved, provisions of section 69C of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) Ltd. [1977] 110 ITR 103 (Bom.). 2.Kalra Glue Factory v. Sales Tax Tribunal [1987] 167 ITR 498 (SC). 3.Mukund Singh Sons v. Presiding Officer, Sales Tax Tribunal [1997] 107 STC 300 (Punj. Har.) 9. Sri A.N. Mahajan, learned standing counsel on the other hand submitted that the Assessing Authority had supplied the gist of the reasons recorded by him for taking proceedings under section 147/148 of the Act and the appellants cannot be said to have suffered any prejudice; more so when the proceedings under section 147/148 have not been challenged by them. According to him, the Assessing Authority had informed the appellant about the date and time for cross-examination of Sri Mohd. Shamim Khan, which was initially fixed for 5-3-1998 at 3-00 P.M. subsequently adjourned to 9-3-1998 and instead of cross-examining the said person, the appellants for reasons best known to them did not avail of the opportunity and filed legal objections. Thus, it cannot be said that the opportunity of cross-examination was not afforded to the appellants. The additions made under section 69C of the Act have been justified. 10. We have given our anxious consideration to the various pleas raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned by the rules of evidence and is the creation of the court. It is part of legal and statutory justice, and not a part of natural justice, therefore, it cannot be laid down as a general proposition of law that the Revenue cannot rely on any evidence which has not been subjected to cross examination. 12. In the instant case, cross examination was made in relation to the witness of the assessee. Despite opportunity was given to him to cross examine the witness, he did not avail this opportunity. The deposition recorded under section 131 of the Act was relied upon in framing the assessment. The statement was recorded under oath. Therefore, it is a valid piece of evidence and, in our opinion Revenue authorities rightly considered the same for the purpose of deciding the issue. 12. From the order of the Tribunal reproduced above, we find that despite sufficient opportunity having been given to the appellants to cross examine the witness they did not avail of this opportunity. Sri Mohd. Shamim Khan had given an affidavit in support of the appellants claim which subsequently on statement being recorded under section 131 of the Act did not inspire confidence. The opportunity to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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