AO cannot make addition for mere non-appearance of parties before him

PCIT  Vs. Chawla Interbild Construction Co. Pvt. Ltd (Bombay High Court)

Assessing Officer while passing the assessment order has dis-allowed 40% of the total payments made on the basis of the payments made to 13 parties, who were not produced before him during the assessment proceedings. This on the ground that payments are not genuine. We are unable to understand on what basis the dis-allowance is made on the total payments, if at all it should have been restricted only to the amounts paid to the 13 persons who are not produced before the Assessing Officer. Be that as it may, we find that the respondent – assessee had done everything to produce necessary evidence, which would indicate that the payments have been made to the parties concerned. The details furnished by the respondent assessee were sufficient for the Assessing Officer to take further steps if he still 1103-15-ITXA-19=.doc doubted the genuineness of the payments to examine whether or not the payment was genuine. The Assessing Officer on receipt of further information did not carry out the necessary enquiries on the basis of the PAN numbers, which were available with him to find out the genuineness of the parties. The CIT(A) as well as the Tribunal have correctly held that it is not possible for the assessee to compel the appearance of the parties before the Assessing Officer.

FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT

1. This Appealunder Section 260-A of the Income Tax Act, 1961 (the Act) challenges the order dated 11^th March, 2015 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 2009-10.

2. Mr. Pinto, learned Counsel for the Revenue urges the only following re-framed question of law :-

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