9911796707
TMI Blog2017 (4) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... Andaman Timber Industry Vs. Commissioner of Central excise [2015 (10) TMI 442 - SUPREME COURT] has held that not allowing the assessee to cross examine the witnesses by adjudicating the authority, though the statement of those witnesses were made the basis of impugned order is a serious flaw, which makes the order nullity, inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. This to be borne in mind that the order of the CCE was based upon the statement given by two witnesses. - Decided in favour of assessee. - D.B. Income Tax Appeal No. 284/2016 - - - Dated:- 25-4-2017 - Mr. K.S. Jhaveri And Mr. Vijay Kumar Vyas JJ. For the Appellant(s) : Mrs. Parinitoo Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w to him. The identical case has already been considered by the Coordinate Bench in ITA Nos.1351 to 1356/JP/2008 order dated 31/03/2010 where additions were made without providing cross examination of Shri Gajendra Porwal, which has been either confirmed or deleted by the ld. CIT(A), has been decided in favour of the assessee by the ITAT. The operative portion of the Coordinate Bench is as under:- Under the facts and circumstances in totality, we come to the conclusion that the admission made by Shri Porwal admitting that the transaction in question was manged by him for beneficiaries on charging of commission are not worth relying in absence of his being cross examined by the assessee and in absence of any supporting evidence especia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Gajendra Porwal was supported with circumstantial evidences. AO also emphasis that Sh. Porwal did not retract his statement which is proved by the affidavit filed by him on 1.11.2006. The credit worthiness of Purchaser Company i.e. JTFSPL was doubted as before issuing cheques equivalent cash was deposited in its bank account. That credit worthiness of M/s. JTFSPL and genuineness of the transaction could not be proved. The receipts of ₹ 41,50,000/- was therefore added as unexplained credit u/s 68 of IT Act. From the observation of the AO it it clear that he had no other material or evidence except the statement of Sh. Gajendra Porwal. For considering the credit entries as unexplained, the AO was supposed to prove that the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age to the fact that Sh. Porwal in his affidavit filed much after the search action has confirmed his earlier statement recorded u/s 132(4). Thus the entire addition is based on the statement of Sh. Porwal recorded u/s 132(4). Not providing the opportunity of cross examination of Sh. Porwal is not justified. No material was borne out from the statement of Sh. Gajendra Porwal which justifies the additions. Except statement there is no other materail to support that the transaction was an accommodation entry. The possession of shares in he hands of the appellant has not been doubted. To come out of clutches of section 68 of assessee is to prove identity and credit worthiness of the creditor and genuineness of the transaction. Identity of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case as discussed above. The first appellate order in this regard is thus upheld. The ground is accordingly rejected. Recently, the Hon'ble Supreme Court in the case of Andaman Timber Industry Vs. Commissioner of Central excise in Civil appeal No. 4228/2006 vide order dated 2nd September, 2015 has held that not allowing the assessee to cross examine the witnesses by adjudicating the authority, though the statement of those witnesses were made the basis of impugned order is a serious flaw, which makes the order nullity, inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. This to be borne in mind that the order of the CCE was based upon the statement given by two ..... X X X X Extracts X X X X X X X X Extracts X X X X
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