9911796707
TMI Blog1978 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... cash credits as follows:- (1) M/s. Raghbir Chand Co. Rs. 10,000 (2) M/s. Gain Weaving Factory. Rs. 20,000 3. In the appeals which are before us now, there is no dispute about the cash credit of Rs. 10,000 which appeared in the name of M/s. Raghbir Chand Co; as the case of the assessee in this regard has been accepted. Cash credit of Rs. 20,000 appearing in the name of M/s Gain Weaving Factory is in dispute, and we, therefore, restrict our scrutiny only to this item. The assessee filed confirmatory letter of M/s. Gain Weaving Factory. However, it appears that the ITO made some enquiry from M/s. Gain Weaving Factory. On enquiry he was told that the so-called creditor merely provided an accommodatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Shri Gain Chand for cross-examination. It was found by him that sufficient opportunity for cross-examination was given by the ITO, inasmuch as, summons under s. 131 was issued to Sh. Gain Chained. Observing that there was already sufficient material on record to come to the conclusion that M/s. Gain Weaving Factory merely provided an accommodating-entry, the AAC confirmed the order of the ITO. The grievance of the assessee is that the orders of the authorities below are illegal inasmuch as the addition was made on the basis of an information given by Sh. Gian Chand who was not produced for cross-examination of the assessee. 4. As the additions were made on account of cash credits appearing in the names of M/s. Raghbir Chand Co. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Factory and, in fact, no loan had been advanced to the assessee. He remanded the case back to the ITO holding that the ITO shall issued summons under s. 131 afresh to Shri Gian Chand and afford an opportunity to the assessee of cross-examining the person who gave the information to the ITO on behalf of M/s Gain Weaving Factory. The question for consideration is whether the direction given by the AAC in the order dated 12th Aug., 1976 was complied with by the ITO and whether there is no violation of the principles of natural justice on the part of the ITO. It will be seen that after remand of the case, the ITO did issue summons under s. 131 to Shri Gian Chand. He failed to appear in response to the notice issued under s. 131 by the ITO. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss-examining the witness. The position has not improved after remand was ordered by the AAC. The AAC is in error in interpreting the law otherwise. He took an erroneous view that the ITO wholly discharged his onus by issuing a notice under s. 131. When the witness failed to appear, the ITO ought to have compelled his presence before him and then ought to have afforded an opportunity to the assessee of cross-examining. It is not the duty of the assessee to produce the witness before the ITO after issuing a notice under s. 131. We, therefore, agree with the assessee that the ITO wrongly acted upon an information which he gathered behind the back of the assessee from Gian Chand and on the basis of the information the amount of Rs. 20,000 plus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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