9911796707
TMI Blog2024 (2) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... er without allowing the assessee to cross examine the witness or to rebut the evidence then it would amount to violation of principle of natural justice as held by the Hon ble Supreme Court in case of Andaman Timber Industries vs. Commissioner of Central Excise 2015 (10) TMI 442 - SUPREME COURT] It is also settled proposition of law that the presumption u/s 132(4A) of the Act is subject to rebut and therefore, the assessee has right to be confronted with the information being used against the assessee. AO has used the loose paper seized from the premises of employee as well as his statement without giving an opportunity to assessee to cross examine or to substantiate its claim based on the affidavit filed. Accordingly, we are of the considered view that there is a violation of principle of natural justice, so far as the addition is made by the AO on account of alleged unaccounted payment of interest on the basis of the statement of employee of assessee and consequently, it renders the assessment order nullity as much as the additions are made by the AO. Further when the assessee has denied the alleged transactions of taking any loan or payment of any interest on the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrates only the ITAT's observations/ conclusions qua the affidavit but there is no indication that the same was confronted to the parties. In any case, when the assessee claims that he did not get opportunity to make submissions, we are of the view that we should not stop the assessee from making submissions. We do not hesitate in mentioning that ITAT is having motto of Nishpaksh Sulabh Satvar Nyay , which means the ITAT always wants to extent impartial justice to parties. Therefore, we must rectify the slightest apparent error, if any, which might have been identified by parties. Therefore, we are inclined to accept the prayer of assessee to recall our order partly to the extent it concerns to the grounds re-produced in foregoing Para No. 2 of this order. Accepted accordingly and these M / A are allowed. The Registry is directed to fix the original appeals for hearing qua the re-called issues, on a suitable date after giving intimation to the parties. 3. Thus, these two appeals are again listed for hearing and adjudication of ground no.2 of the revenue s appeals which read as under: For A.Y.2009-10 2. On the facts and in the circumstances of the case, the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and presumption and merely on the basis of few entries on the loose paper seized from the residence of Shri G.C. Gupta as well as the Tally data found in the laptop which belong to one of the ex-employee already expired. The CIT(A) deleted the addition made by the AO on this account and therefore, the revenue has filed these appeals. 5. Before us the Ld. DR has submitted that the AO has given the details of the entries found in the laptop seized during the search and seizure action and most incriminating data in the said laptop is regarding the entries in the file name XYZ 0809-2 which clearly shows that the assessee has taken amount of cash loan from individuals who are otherwise known to Shri Punit Agrawal Director of the assessee company. Thus, as per the provision of section 292C of the Act the tally data seized from the office premises of the assessee are deemed to belong to assessee. The Ld. DR has further submitted that during the search and seizure action a loose sheet in the shape of ledger account was also seized from the premises and from the possessing of Shri G.C. Patidar containing various entries of receipts and payments which corroborates the transactions as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs.5,600/- on 06.06.08. The same interest of Rs.5,600/- was thereafter, paid till 07.08.09. On 07.08.09 an additional amount of Rs.40,000/- was given and interest on Rs.6,00,000/- (Rs. 5,00,000/- + Rs. 60,000/- + Rs. 40,000/-) amounting to Rs.6,000/- was paid on 09.09.09 onwards. This fact also proves that the transactions mentioned in the Tally data is not a fiction of mind rather the transaction are actual transactions. 7. The documents seized from the premise of Shri GC Patidar a trusted employee of assessee is also getting corroborated with the Tally account XYZ 0809 2 . The sample copies of the seized documents from Shri Patidar's premise and the TALLY DATA is as under: AY 2010-11. Show cause as to why the amounts advanced by PATH to the directors/relatives shall not to be treated as unaccounted expenses in the hands of PATH and addition of Rs. 5,52,49,940/- for A Y2009-10 and Rs. 5,37,00,603/- for AY 2010-11 shall not be made to the total income of assessee in respective assessment years. 13.2.2 In response to the show cause the assessee replied as under: It is submitted that this laptop does not belong to the assessee company. It is furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the captioned notice have been prepared by Mr. NileshTavresh during the course of learning of accounting and excel program from Mr. Patidar without having any resemblance to any actual happening of the transactions. 13.2.6 Initially assessee was saying that data does not belongs to it now is saying that data is prepared by Late Shri Nilesh Tavresh. The issue in question is not who wrote/maintained the issue in question is that whether the data is dumb or data is real. As established that the data consists of statutory payments made for entry tax or commercial tax and as stated in the paras above that the data contains numerous ledgers which are either getting fully corroborated with books of accounts or are getting partially corroborated. Hence, the data is important evidence and must be read in totality. Also the part which is not getting corroborated with books of accounts is a valid transaction and is out of books unaccounted transactions. 13.2.7 The assessee further submitted that: Without prejudice to the above, it is submitted that during the course of the search in the residential premises of the directors of the assessee company, to whom the payments runni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an account payee cheque or draft. It is submitted that entire exercise made by your good self is sheer guess work and presumption. In none of the loose papers, it has been, explicitly or implicitly, mentioned that the assessee had taken any loan in cash or repaid any loan in cash. is factually incorrect. The assessee has taken a plea to hide behind the cover of incorrect facts. 13.2.9 It is extremely improbable for a seasoned businessman with sound knowledge of law and having plethora of Accountants on the role as employees whose advise is readily available to him to show cash loan in the income tax return as mentioned by the assessee in his submission on the issue on record that the assessee has not shown receipt/ repayment of any cash loan in his record. It is also an undisputed fact that the assessee, at no point of time, admitted to have received any unrecorded cash loans from any person or company. Hence, contention of the assessee is hereby rejected. 13.2.10 Overall the assessee's submission is rejected on the basis of facts and circumstance of the case. From the facts on record, tally data 'XYZ 0809 2', discussion in this part and considering as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or transactions in the loose paper seized from the possession of Shri G.C. Patidar as well as the ledger account found in the laptop. The dates as recorded in the loose paper seized from Shri G.C. Patidar are different from the dates from the entries in the ledger account even the amounts are not matching. The AO has assumed that the loose paper seized from the possession of Shri G.C. Patidar, bears signatures of the Shri Punit Agrawal, director of the assessee whereas there is no such fact brought on record or any evidence collected by the AO to substantiate this assumption that the said loose paper bears the signatures of the director of the assessee. He has submitted that some corrections were made in the hand writing in the said seized material which was initial by the person who has made the correct and therefore, there is no question of signature by the director of the assessee company. Therefore, this is purely an assumption on behalf of the AO without any inquiry or investigation. There is no such question ask even from Shri G.C. Patidar from whose possession the said document was seized about the signatures and rather Shri G.C. Patidar in the statement recorded u/s 132( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any independent inquiry conducted by the AO to verify the entries in the seized documents either from the parties in whom name the entries are made or from Shri G.C. Patidar the said seized material has no evidentiary value. He has further submitted that when there is no corresponding asset in existence or other utilization of the alleged cash loan found then the presumption of AO about the transactions as cash loan taken by the assessee is baseless. The AO has not even verified or got confirmed the transactions from the parties from whom the cash loan are allegedly taken by the assessee. 6.2 Ld. Sr. Counsel has also relied upon the Hon ble jurisdictional High Court in case of DCIT vs. Home Developers Pvt. Ltd. in ITA No. 301 of 2012 dated 23rd May 2012 and submitted that when the AO has not provided any opportunities to cross examine the witnesses whose statement, he has relied upon the addition made by the AO on the basis of the statement is not sustainable in law. Documents are not speaking one to reflect the nature of transactions or identifying/indicate the person with whom transactions has taken place then it is a dumb document and no addition can be made in absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of presumption u/s 132(4A) of the Act. 7. We have considered rival submissions as well as relevant material on record. The AO has made the addition on account of unexplained interest payment in respect of unaccounted cash loan on the basis of the loose paper seized from the premises of Shri G.C. Patidar an employee of the assessee as well as the tally account in the name of XYZ 0809-2 taken from laptop. The details of the seized document are reproduced by the AO in assessment order in para 7 8 as under: 7.1 The AO then proceeded to conclude that the transactions in the tally account of XYZ 0809-2 are corroborated by the transactions recorded in the loose paper seized from the premises of Shri G. C. Patidar and held that the transactions to the tune of Rs.5,32,60,000/- are cash loan received by the assessee out of book for A.Y.2009-10 on which the AO has computed the interest expenses of Rs.82,03,684/-. Similarly for A.Y.2010- 11 the AO taken loan of Rs.54,65,000/- and interest expenses of Rs.58,55,122/-. The details of these amounts have been given by the AO in para 11 as under: Name of Transaction Period Amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... papers. Further the AO has given only two ledger accounts as found in the laptop seized from the premises of the assessee but there is no entry regarding the payment of interest. Thus, even by considering the documents marked as LPS-1 and tally account found in the laptop would not lead to the conclusion that the assesse has paid interest on the alleged loan as there is nothing to reveal the payment of interest by the assesse. The entries as found in the account XYZ 0809-2 are regarding the credit and debit of the amounts which are all in round figures and do not represent any interest payment. Therefore, without going into the merits of the alleged transactions of cash loan taken by the assessee the documents relied upon by the AO itself do not reveal any payment of interest except the statement of Shri G.C. Patidar who has mentioned interest rate only and not the payment of interest during the year under consideration. We further note that the AO in para 13.3.5 rejected the contention of the assessee by considering the signature on the loose sheet on cutting and correction as signature of Shri Puneet Agrawal as under: 13.3.5 The contention of assessee is incorrect, importan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g assessment order. The CIT(A) has analysed all these documents in para 4.2.2 to 4.2.10 as under: 4.2.2 I have considered the facts of the case, plea raised by the appellant and findings of the AO. Admittedly, the sole basis of such huge addition is one the tally data recovered from laptop of old employee and loose papers sheets seized vide LPS-1 to 8 from premises of Shri G C Patidar. During the course of search, statement of Shri GC Patidar was recorded on oath which has been retracted vide affidavit dated 28.12.2016. Since, the statement given during search has been retracted, therefore, the same cannot be relied upon. As a matter of fact the appellant before, AO as well as before me has stated that the entries in respect of laptop data which has been seized from the office of the company was used by one of its employee Mr. Nilesh Tawrech who was taking tally accounting training under Shri G.C. Patidar, who used to provide him hypothetical entries for learning purpose for that reason and for learning purpose name of the company was taken as 'XYZ'. The appellant has claimed not having any knowledge of company 'XYZ' which has also been stated by appellant duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.04.2009 to 31.03.2010 . Appellant has strongly contended that the said printouts were taken by Shri G.C. Patidar and does not belong to him. The owner and creator of the documents have admitted that the said impunged printouts have been made by his ex-employee who is no more and had also explained the reason for preparing such documents. Shri G.C. Patidar has clearly stated that the tally accounts have been prepared for training purpose only and the data are picked from different sources which also includes random data of appellant. The AO failed to consider that neither the appellant nor his accountant has stated that any such firm actually exists and the transactions as mentioned in the seized printouts have been executed. The additions have been imposed on sheer presumption and assumption basis. Further, the AO did not even bother to carry out independent enquiries from the person whose names are mentioned on LPS-1 LPS 8 which Was seized from the premises of G C Patidar. The trainee junior Nilesh Tawarech has untimely passed away. Therefore, it is impossible for the appellant to bring Shri Nilesh Tawarech in person for examination on oath. It is pertinent to mention that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2.4 Further, the AO on the basis of one loose sheet which is page No. 21 of LPS-1 and reproduced at page 100 of the Order and on the basis of page No. 23 of LPS-1 and placing reliance on second table has reached to an inference that during financial year 2008, the Appellant -PATH has received a cash loan of Rs. 115 Lakhs in cash from Agroh (in short AIDPL) and in next financial year the appellant has accepted the cash loan of Rs. 3,66,25,000/- from M/s Agroh Infrastructure Developers Pvt. Ltd (In short AIDPL) and on other hand accepts the same to be cash- buyback of shares. The AO has also held that interest amounting to Rs. 14,83,394/- was charged by AIDPL. Whereas the said document only records some purported cash received and cash paid but no where the name of PATH is reflected. Even on second table at page 99, the name of PATH is not reflected therefore to attribute these transactions to PATH is fallacious. The said loose sheet was subject to varying interpretation in the year AY 2008-09 and is a non speaking/ dumb document. The director of Agroh cannot give any satisfactory reply during the statement recorded at the time of search however during the course of their assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Mishraji Name not found 11 Narendra Kala Name not found 12 Neeaj Modi Name not found 13 Nitin Goyal Name not found 14 R.P. Poddar Name not found 15 R.S. Modi Name not found 16 Santosh vrindavanagrawal Name not found 17 Satish Mewada Name found 18 SavitriPoddar Name not found 19 Sunil Modi Name not found The data in the form of loose sheet gathered from the premises of GC Patidar which is a print out of excel sheet cannot be relied upon in the absence of any corresponding entry being made of the loan given by the counter party in his books. It is the stand of the AO that some of the Modi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, we hold that document No.7 is a non- speaking document. Most important ratio laid down in the said judgment is that impugned document must be speaking one and without any second interpretation and must reflect all the details about transactions of the assessee. In the instant case, the dummy tally account was created for training purposes by Shri G.C. Patidar but taking data from different sources including that of appellant. It would not be out of world to point out that the AO has never asked/enquired from the persons whose names are mentioned on the loose papers. The AO also did not enquired from Shri G.C. Patidar who has admitted to have been owner and creator of the tally account and subsequently retracted by filing affidavit dated 28.12.2016. Absence of these vital details is making the loose paper under consideration as deaf dumb document . The onus was solely on the AO to fill such vital gaps by bringing positive evidence on record and prove the allegation about alleged cash loans by the assessee, which he utterly failed to do so. CBI vs VC Shukla 3 SCC 410 The Hon'ble Supreme Court has held that loose sheets of paper cannot be termed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad given a loan of Rs. 22.5 lacs on interest and earned interest income of Rs. 3.55 lacs on it. The Tribunal hold this document as dumb document. The relevant findings of the Tribunal as mentioned in the above order is as under:- We have ourselves examined the contents of the document and are unable to draw any clear and positive conclusion on the basis of figures noted on it. The letters 'H.S.', 'T.2' and 'D-Shop' cannot be explained and no material has been collected to explain the same. Likewise, the figures too are totally unexplained and on the basis of notings and jottings, it cannot be said that these are the transactions carried out by the assessee for advancing money or for taking money. Thus, in our opinion. this is a dumb document. Hon'ble High Court confirmed the findings of the Tribunal and relevant findings was as under:- 12. It is well settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or handwriting of that person, on such document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of such a dumb document, it cannot be said that there were investments made in fact by the assessee. Heavy onus lay upon the Revenue to prove that the document gives rise to undisclosed investment by the assessee. This onus has not been discharged. Accordingly no addition of undisclosed income could be made on the basis of such a document. Such a view has also been entertained by the Hon'ble Allahabad High Court in CIT vs. Dayachand Jain Vaidya (1975) 98 ITR 280 (All). The addition so made, therefore, is directed to be deleted. Stanamsingh Chhabra vs. Dy. CIT ( 2002) 74 TTJ (Lucknow) 976: None of the loose papers seized are in the hand writing of the assessee. There is some jotting by pencil in some coded form on the loose papers made by the surveyed person or some other person. Moreover, no entries are supported by any corroborative evidence; such loose papers can not be called even the documents as they are simply the rough papers to be thrown in the waste paper basket. In this connection, the assessee relies upon the court decisions. CIT Vs. Chandra Chemouse P. Ltd. (2008) 298 ITR 98 (Raj.): it is held that - (i) Additions can be made only when e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n setting aside the order of the trial court, the High Court accepted the contention of the respondents that the documents were not admissible in evidence under Section 34 with the following words: An account presupposes the existence of two persons such as a seller and a purchaser, creditor and debtor. Admittedly, the alleged diaries in the present case are not records of the entries arising out of a contract. They do not contain the debits and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arises to do so for his future purpose. Admittedly the said diaries were not being maintained on day-to-day basis in the course of business. There is no mention of the dates on which the alleged payments were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. They have been shown in abbreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the dumb loose slips seized from his residence, in the absence of any corroborative material to show payment of any undisclosed consideration by the assessee towards purchase of land . (ii) Monga Metals (P) Ltd Vs. ACIT 67 TTJ 247 (All. Trib)- Holding that Revenue has to discharge its burden of proof that the figures appearing in the loose papers found from assessee's possession constitute undisclosed income. [In the present case, loose papers were not even seized from assessee's possession]. (iii) Pooja Bhatt Vs. ACIT (2000) 73 ITD 205 (Mum. Trib) Held that where document seized during search was merely a rough noting and not any evidence found that actual expenditures were not recorded in books of account, additions not justified. [In the instant case, similarly no other corroborative evidence was found in search to prove that details/figures mentioned in notings on page 117 to 119 of A/1 represent 'on money' payments by the assessee). (iv) Atual Kumar Jain Vs. DCIT (2000) 64 TTJ (Del.Trib) 786- Held that additions based on chit of paper, surmises, conjectures etc could not be sustained in the absence of any corroborative evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of this lacune on the part of AO, the penalty imposed is legally not sustainable. As held in the case of CIT v/s KP Varghese 131 ITR 574 (SC) by Hon'ble Apex Court in absence of evidence that actually assessee paid more amount than declared in registered deed, no addition can be made. In the case of Bansal Strips (P) Ltd Ors Vs. ACIT (2006) 99 ITD 177 (Del) it has been held that :- If an income not admitted by assessee is to be assessed in the hands of the assessee, the burden to establish the such income is chargeable to tax is on the AO. In the absence of adequate material as to nature and ownership of the transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed document . 4.2.8 It is settled law that AO cannot make any addition merely on basis of suspicion, however strong it may be. The AO is not justified in presuming certain facts without having anything to corroborate. Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. Inference was simply drawn on the basis of the interpretation given to the various figures appearing in the loose papers. Inference, as we have already held, whatsoever strong, cannot take the place of actuality. We have gone through the various decisions as has been relied. Hon. Supreme Court in the context of sec. 69C in the case of Pr. CIT Central III Vs. Lavnya Land Pvt Ltd [2019] 103 Taxmann.com 9 (SC)/ [2019] 261 Taxmann 454 (SC) dismissed the SLP arising out of the Judgment CIT Vs. Lavnya Land Pvt Ltd [2017] 83 Taxmann.com 161 (Bom). The issue decided in favor of assessee as under, Whether since seized document did not belong to Assessee but seized from residential premises of one DD who had later retracted his statement, no action Under section 153C could have been undertaken in respect of Assessee, Held Yes. Whether further since entire decision was based on seized document and there was no material to conclusively show that huge amount revealed from seized document were actually transferred from one side to another, addition under section 69C were not sustainable. Hon'ble Supreme Court in the case of Pr. CIT Vs. Vinita Chaurasia [ 2018] 98 Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor relationship. The taking or accepting a loan is a bilateral action but there is nothing on record to suggest such essential bilateral character which is vital to constitute a transaction of loan or deposit. Any person of ordinary prudence, giving loan in cash would ask for security such as post dated cheque, collateral guarantee etc or at least a promissory note to secure his lending. Nothing has been found during the course of search to justify the huge alleged cash borrowings. Further, as per the own averment of the Learned AO, subsequent to the Financial Year 2008-09 and 2009- 10, such entries were not found carried out in the subsequent years. If these entries represent actual state of financial affairs i.e. loan taken or given in cash, they are invariably required to be carried forward to next year as is the practice strictly followed in book keeping and accounts. 4.2.10 Even if the legislative presumption under section 132(4A) is available in the statute of income tax, yet the ingredient of default has to be established by the Department. In the case of Ushakant N Patel vs CIT (2006) 6 ITJ 312 ( Gujrat HC) it has been held that undisclosed investment under Sec. 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only inference can be drawn that the AO has nothing to say about the affidavit filed by Shri G.C. Patidar retracting his earlier statement recorded u/s 132(4) of the Act. 7.6 Since the AO has relied upon the statement of Shri G.C. Patidar recorded u/s 132(4) which was subsequently retracted by filing the affidavit therefore, the veracity of the statement of Shri G.C. Patidar becomes questionable. The AO ought to have examined to Shri G.C. Patidar to find out the correct facts as he has made two versions of the statement one u/s 132(4) and another in affidavit filed before the AO. Further when the statement of Shri G.C. Patidar was relied upon by the AO as basis of the addition made in the assessment then it is incumbent upon the AO to give an opportunity to the assessee to cross examine Shri G.C. Patidar. The Hon ble jurisdictional High Court in case of Prakash Chand Nahata vs. CIT 301 ITR 134 has held in para 19 to 20 as under: 19. In the case at hand Mohd. Rashid was summoned and his statement was recorded. A request was made by the assessee to cross-examine him. The same was not allowed. On a perusal of the assessment order it is perceivable that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the witnesses. Similarly in case of Vetrivel Minerals vs. ACIT 437 ITR 179 (Mad) the Hon ble Madras High Court had held in para 22 23 as under: 22. On the next issue of refusal of cross examination of the persons whose statements were recorded during the time of search under Section 132(4) of the Income Tax Act, it is trite law that the person against whom a statement is used, should be given opportunity to counter and contest the same. I am unable to accept the contention of the learned Senior Counsel that since the statements recorded were of persons who were employees of the assessee and therefore the assessee cannot seek for cross examination of them. The basic principles of jurisprudence governing the law of evidence can in no way interfered and could not be by the Income Tax Act provisions and neither the authorities functioning under the Income Tax Act has any discretion in such matters. The Supreme Court in the judgment Kishan Chadn Chellaram reported in 125 ITR 713 at page 720 which is also followed in the judgments cited by the petitioner in the case of Deputy Commissioner of Income Tax vs. M/s. Roger Enterprises (P) Ltd., reported in 2012 SCC Online ITAT 11821 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not supplied to the Assessee. The CIT(A) and the Tribunal have considered the said survey report without showing it to the Assessee and without giving opportunity to the Assessee to furnish its explanation about it by observing that the same is confidential in nature. They held that the report was available on record of the Assessing Officer which can be looked by any judicial authority in confidence, if need so arise. Having regard to this undisputedly the findings have been recorded by the CIT(A) and the Tribunal on the basis of the survey report which was never supplied to the Assessee. It has now been well settled that the Income Tax Officer though not bound to rely on evidence produced by the Assessee as he considers to be false, yet if he proposes to make an estimate in disregard of that evidence he should in fairness disclose to the Assessee the material on which he is going to found that estimate; and that in case he proposes to use against the Assessee the result of any private inquiries made by him, he must communicate to the Assessee the substance of the information so proposed to be utilized to such an extent as to put the Assessee in possession of full particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llity 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 specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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