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TMI Blog2024 (10) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... n so obtained by the assessee from two corporate entities as unexplained cash credit u/s 68 merely on the basis of third-party statement as recorded by DGIT (Inv.) in independent proceedings. No separate enquiries, whatsoever, have been conducted by Ld. AO to ascertain the genuineness of these loan transactions. AO has merely borrowed the findings of DGIT (Inv.) and on the basis of the same, alleged that the lenders lacked creditworthiness. The same is third-party statement in independent proceedings and no opportunity of cross-examination has ever been provided to the assessee to controvert the same. The same is in gross violation of principle of natural justice and the assessment so framed, in such a case, is liable to be treated as bad-i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ld. CIT(A) went ahead with adjudication of the appeal. The aforesaid action is well within four corners of law and could not be faulted with. Even during hearing before us, no remand report has been shown to us. Onus as required under law was duly discharged by the assessee and the onus was on Ld. AO to rebut the same. There is nothing on record which would controvert the documents furnished by the assessee. As decided in the case of PCIT vs Ambe Tradecorp (P) Ltd. [ 2022 (7) TMI 902 - GUJARAT HIGH COURT] held that where the assessee took loan from two parties and the assessee had furnished requisite material showing identity of loan givers and that assessee was not beneficiary as loan was repaid in subsequent year, no addition under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration is addition made by Ld. AO u/s 68 as unexplained cash credit. 2. The Ld. Sr. DR submitted that Ld. CIT(A) erred in granting relief to the assessee whereas Ld. AR submitted that the assessee discharged the onus as required to be discharged u/s 68. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. Assessment Proceedings 3.1 The impugned addition stem from the fact that the assessee jointly with his brother had purchased a residential house property situated at Old no.2, New no.3, Gajapathy Road, Kilpauk, Chennai for aggregate consideration of Rs. 700 Lacs (excluding registration fees and stamp duty) on 4-11-2011 vide Document Nos. 4201/2011 4202/2011. The assessee was accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in the light of submitted evidences. 4.2 The assessee submitted that the addition was merely based on third-party statement which is against the principle of natural justice and the additions were unjust. The assessee also furnished various documents to establish the fulfillment of requirement of Sec.68. The same include ledger confirmations, Income Tax Returns of lenders, Balance Sheet, affidavit of lenders confirming the payment of loan to the assessee. 4.3 The Ld. CIT(A), upon perusal of documents, noted that the assessee applied for loan from HDFC Bank but he could not get the same before the registration of documents. Accordingly, the assessee obtained loans from these two entities. The loan from Bank was disbursed on 08-11-2011 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ependent proceedings and no opportunity of cross-examination has ever been provided to the assessee to controvert the same. The same is in gross violation of principle of natural justice and the assessment so framed, in such a case, is liable to be treated as bad-in-law as per the decision of Hon ble Supreme Court in the case of Andaman Timber Industries vs CCE, Kolkata-II [2015] 62 taxmann.com 3 (SC) holding that when the statements of witnesses are made basis of demand, not allowing assessee to cross-examine witnesses, is a serious flaw which makes order nullity, as it amounts to violation of principles of natural justice. Therefore, on this fact only, the assessment order is to be held as nullity. 6. Proceeding further, it could be seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvisory Pvt. Ltd. on 11-06-2011 15-06-2011. The same has fully been repaid on 08-07-2011. The assessee has obtained another loan of Rs. 200 Lacs on 03-11-2011 which has substantially been settled to the extent of Rs. 175 Lacs between 08-11-2011 to 26-11-2011. Similarly, M/s Rasili Barter Pvt. Ltd. has opening balance of Rs. 50 Lacs. The same is a carried forward amount which could not be held to be unexplained cash credit for this year. The assessee has obtained fresh loan of Rs. 175 Lacs on 03-11-2011. Out of aggregate loan of Rs. 225 Lacs, the assessee has repaid substantial loan of Rs. 170 Lacs during this year itself leaving closing balance of Rs. 55 Lacs. Both the lender entities have furnished affidavit to that effect. The creditworth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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