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TMI Blog2019 (3) TMI 1540X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee, the assessee returned the original receipt to Mr. Niraj Jain, the assessee must have kept a photocopy of the same for records, further the assessee must be aware of the property for which such advance was given, furthermore, there should have been some MOU and Agreement to Sale disclosing the total consideration of the property at that time and other terms and conditions. However, nothing was placed on record by the assessee and he has failed to furnish even a single document on record to substantiate its stand. CIT(A) has rightly confirmed the addition - CIT(A) has rightly rejected the request of the assessee for cross examination of Sh. Niraj Jain. Therefore, no interference is required on my part in the well reasoned order of the Ld. CIT(A) on this issue, hence, I uphold the action of the Ld. CIT(A) on this issue and dismiss the ground raised by the Assessee. Reopning of assessment u/s 147 - issue of notice u/s. 148 of the Act after the period of four years without mentioning in the recorded reason that the escapement of chargeable income from tax was due to omission or failure on the part of the assessee to disclose fully and truly all material facts necessarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are without prejudice to one another and assessee prays permission to add, delete or amend one or more grounds of appeal. 7. That the assessee assures unstinted cooperation in all proceedings before your goodself. 2. The brief facts of the case are that assessee original assessment was completed u/s. 143(3)/148 of the Income Tax Act, 1961 (in short "Act") on 27.2.2013 at ₹ 3,62,900/- against the returned income of ₹ 1,00,400/-. The assessee filed an appeal before the Ld. CIT(A) who vide its order darted 16.7.2014 dismissed the appael of the assessee. Furtehr the assessee moved to the ITAT against the order of the Ld. CIT(A) and the Tribunal vide its order dated 6.8.2015 restored the matter back to the file of the AO with the directions to decide the matter afresh under the law, after considering the relevant evidences, after giving full opportunity to the assessee of being heard. Following the decision and directions of the ITAT, the AO completed the assessment proceedings u/s. 254 of the Act r.w.s. 143(3)(/148 of the At on 30.11.2016 by making the additions of ₹ 2,50,000/- as unexplained cash credit and ₹ 1,2500/- for the commission and assessed the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.6.2017 to CIT(A) for Remand Report; copy of letter dated 21.7.2017 to AO & CIT(A) for remand report; copy of letter dated 8.2.2013 to AO; copy of acknowledgement of return, computation and balance sheet of AY 2005-06; copy of acknowledgement of return and balance sheet of AY 2004-05; copy of acknowledgement of return of Sh. Neeraj Jain; copy of pass book of Assessee and copy of letter dated 22.3.2018 to CIT(A) and relied upon the ITAT decision dated 3.3.2016 passed in the case of VS Capital Services Pvt. Ltd. in ITA No. 6162/Del/2012 (AY 2002-03) by placing the copy thereof. 4. On the other hand, Ld. DR relied upon the orders of the authorities below and stated that they have passed well reasoned orders, which do not need any interference and needs to be upheld. 5. I have heard both the parties and perused and considered the records especially the impugned order as well as the Paper Book and the case law relied upon by the Assessee's counsel. I find that Ld. CIT(A) has elaborately discussed the issues in dispute and adjudicated the same vide para no. 5 to 6 at page no. 14 to 22, which are reproduced hereunder:- "5.1 After perusing the aforesaid findings of the Ld. CIT(A), we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounting to ₹ 2,50,000 and further added a sum amounting to ₹ 12,500/- on account of commission paid to obtain the above mentioned entry. Before the AO at the time of original assessment, the appellant's stand was that the amount of ₹ 2,50,000 was received back on account of the advance of ₹ 3,00,000 paid in cash by the appellant to Mr. Niraj Jain for purchase of property. However, the deal could not materialise and Mr. Niraj Jain only returned ₹ 2,50,000/- and forfeited ₹ 50,000/-. Before me the appellant raised two grounds of appeal. One pertaining to addition of ₹ 2,50,000/- made under Section 68 of the Act and other against addition of unaccounted expenses of ₹ 12,500/-. However, vide letter dated 18.04.2017, the appellant raised additional grounds. The appellant raised a ground stating that the AO has erred in reopening the case under Section 148 of the Act. Additional grounds of appeal raised during the appellate proceedings are as follows:- 1. That on the facts and in the circumstances of the case and in law, Ld. AO erred in reopening of the case u/s 148 due to following reasons:- a Total lack of tangible material a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings is barred by limitation as notice issued under Section 147 of the Act was not served within the prescribed time limits. In this regard, firstly no such ground of appeal is raised by the appellant, further no additional ground of appeal is also raised by the appellant on such issue. However, having considered so, even on merits, it is worth taking note that as per the provisions of Section 147/148 of the Act, the AO has to issue the notice within the prescribed timelines and it is not necessary that the order is served to the assessee within the said timelines. If the notice is issued within the suggested timelines it is a valid notice and not barred by limitation. In the instant case the notice was issued on 16.03.2012 much before the limitation hence, the notice is not barred by limitation. Further, the appellant has submitted that there is no nexus between alleged information and tentative inference, non-application of mind much less independent application of mind, total lack of clarity on the nature of transaction and hence the addition made and order passed under Section 147/148 is bad in law. Before me the appellant has also submitted few case law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of appeal raised before the said authority. The authority cannot go beyond the grounds raised. Ground Number 1 Now, considering the ground number 1 raised by the appellant, a bare perusal of the same would reveal that it appears to be a statement of fact rather than a ground of appeal. However, from perusal of the same, one could gather that the contention of the appellant is that no addition could be made in the absence of any evidence on record. In this regard, I have taken note of the order passed The AO gave ample opportunity to the appellant to prove the identity, creditworthiness and genuineness of the transaction. But instead of submitting anything on record, the appellant chose to keep quite after filing a letter for requisitioning the cross-examination. The whole act of the appellant itself suggest that the appellant was totally building up its case on the legal grounds of cross-examination without bringing anything on record to substantiate its claim. As regards the issue of providing an opportunity of cross examination of Mr. Jain, the assessee cannot shun its duty and responsibility as a taxpayer and take the shelter of such arguments instead of leading e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was an accommodation entry provider, I find that such right as held in various decisions, is not an absolute right and depends not only the circumstances of the case but also on the statute concerned. The Hon'ble Supreme Court has held in the case of State of J&K vs Bakshi Gulam Mohd. AIR 1967 (SC) 122, and in the case of Nath International Sales vs. UOI AIR 1992 Del 295 that the right of hearing does not include a right to cross examine. The right to cross examine must depend upon the circumstances of each case and also on the statute concerned. In the case of T. Devasahaya Nadar vs. CIT (1965) 51 ITR 20 (Mad) it was held that "it is not an universal rule that any evidence upon which the department may rely should have been subjected to cross-examination. If the AO refuses to produce an informant for cross examination by the assessee there cannot be any violation of natural justice. "In the case of GTC Industries ltd. Vs ACIT(1998) 60 TTJ(Bomb-Trib) 308, it was held that where statement and report of third parties are only the secondary and subordinate material which were used to buttress the main matter connected with the amount of addition, denial of opportunity to cross examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o furnish all the evidences before the AO to substantiate his case." However, in view of the above, it is obvious that the appellant has failed to furnish even a single document on record to substantiate its stand. In such a scenario, considering the submission and the grounds raised, this ground of appeal is rejected, and the addition of ₹ 2,50,000/- is sustained. Findings on Ground Number 2 The appellant has also raised a ground with regard to addition on account of expenses of commission at the rate of 5% amounting to ₹ 12,500 made under Section 69C of the Act. The ground reality that arranging of accommodation entry necessarily entails payment of commission to entry providers cannot be ignored. I find the rate of commission has reasonably been estimated by the AO at the rate of 5% on the amount of accommodation entry. Accordingly, addition of ₹ 12,500/- is also confirmed. 6. In the result, the appeal is dismissed." 5.1 As far as ground no. 1 & 3 relating to addition of ₹ 2,50,000/- made under section 68 of the Act is concerned, I find that that initial onus is on the assessee to substantiate the identity, creditworthiness and genuinenes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Sh. Niraj Jain. Therefore, no interference is required on my part in the well reasoned order of the Ld. CIT(A) on this issue, hence, I uphold the action of the Ld. CIT(A) on this issue and dismiss the ground raised by the Assessee. 5.3 As regards ground no. 4 relating to issue of notice u/s. 148 of the Act after the period of four years without mentioning in the recorded reason that the escapement of chargeable income from tax was due to omission or failure on the part of the assessee to disclose fully and truly all material facts necessarily for assessment is invalid, bad in law and needs to be quashed is concerned, I find that the said ground was not argued by the Ld. Counsel for the assessee, hence, the same is dismissed as such. However, Ld. CIT(A) has rightly adjudicated the legal ground against the assessee at page no. 17 & 18 of the impugned order which does not require any interference on my part. 5.4 As regards ground no. 5 relating to confirmation of addition of ₹ 12,500/- as commission paid is concerned, I find that the rate of commission has reasonably been estimated by the AO at the rate of 5% on the amount of accommodation entry and therefore, Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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