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TMI Blog2019 (5) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards ITAT, SMC, Delhi decision in the case of Pooja Ajmani vs. ITO [ 2019 (4) TMI 1665 - ITAT DELHI] in this case the assessee has not raised any legal ground and argued only on merit for which asseseee has failed to substantiate his claim before the lower revenue authorities as well as before the Tribunal, which establish the facts are not identical to the present case, hence, do not support the case of the Department. X X X X Extracts X X X X X X X X Extracts X X X X ..... commodation entry amounting to ₹ 40,00,000/- in FY 2008-09 from three of the companies managed and manipulated by S. K. Jain group. The details of these transactions as gathered during Search & Seizure operation have been tabulated by the AO in the assessment order which reveal that the assessee has received ₹ 15,00,000/- each from M/s Victory Software Pvt. Ltd. and Hum Turn Marketing Pvt. Ltd. and ₹ 10,00,000/- from VIP Leasing & Finance Pvt. Ltd. respectively in the garb of share application money. After recording reasons to believe, notice u/s 148 of the I.T. Act, 1961 was issued to the assessee company and assessment was completed u/s 143(3)/147 of the Act. The AO asked the assessee to produce the Directors of the above mentioned companies which remained un-complied with. After detailed discussion of legal and factual aspects of the case, the AO held that the assessee has failed to discharge its onus u/s 68 and placing reliance on a number of case laws and in view of the detailed investigation carried out by the Investigation Wing in this regard, the AO treated ₹ 40 lacs as assessee's undisclosed income u/s 68 of the I.T. Act. The AO further added a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y cross examination." 3.1 Since Ld. CIT(A) has not properly adjudicated the grounds no. 5, 6, & 7, hence, assessee has raised the ground no. 4 raised before the Tribunal. In this regard, he draw my attention towards page no. 23-24 of the Ld. CIT(A)'s order vide para no. 7.15 and stated that Ld. CIT(A) has wrongly held that the right of hearing does not include a right to cross examine and the right to cross examine must depend upon the circumstances of each case and also on the statute concerned and also stated that if AO refuses to produce an informant for cross examination by the assessee there cannot be any violation of natural justice and hence, not properly decided the ground no. 5, 6, & 7. raised before the Ld. CIT(A). In view of above, he submitted that the addition in dispute was made and no statement is confronted to the assessee much less offered for cross examination which also lacks of independent corroboration from any incriminating material, which is not sustainable in the eyes of law. Therefore, he submitted that the issue argued vide ground no. 4 is squarely covered by the decision of the ITAT, SMC, Delhi Bench wherein the Tribunal vide its order dated 06.11.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, I find that the appellant has failed to discharge its burden of proof and the AO, on the other hand, has proved that the claim of the appellant was incorrect. It has also been emphatically contested by the appellant before me that the assessee was not provided with any adverse report and no opportunity was provided to cross examine the persons /witness whose statements have been used against the appellant. I find that such right as held in various decisions, is not an absolute right and depends not only the circumstances of the acse 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 a 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific request was made by the assessee for al lowing cross examination was denied by the Assessing Of ficer. The first appel late authority also did not consider it fit to allow cross-examination. This is in gross violation of the principles of natural justice and against the ratio laid down by the Hon'ble Supreme Court in the case of Andaman Timber Vs. CIT Civil Appeal No. 4228 OF 2006 wherein it has been held as under: "According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the 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. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the present case and respectful ly fol lowing the order of the Tribunal, SMC Bench, Delhi in the case of Smt. Jyoti Gupta vs. ITO (Supra) and in view of the law settled by the Hon'ble Supreme Court of India in the case of Andaman Timber vs. CIT (Supra), on identical facts and circumstances, the addition in dispute is deleted and the appeal of the assessee is al lowed. As regards the case laws cited by the Ld. DR are concerned, in the case of Udit Kalra vs. ITO, the Hon'ble Delhi High Court has adjudicated the case on merits and has not adjudicated the issue on cross examination, therefore it wi l l not help the department. As regards ITAT, SMC, Delhi decision in the case of Pooja Ajmani vs. ITO is concerned, in this case the assessee has not raised any legal ground and argued only on merit for which asseseee has fai led to substantiate his claim before the lower revenue authorities as wel l as before the Tribunal, which establ ish the facts are not identical to the present case, hence, do not support the case of the Department.
7. In the result, all the 03 appeals filed by the assessee are allowed.
The decision is pronounced on 21/05/2019. X X X X Extracts X X X X X X X X Extracts X X X X
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