DCIT Vs N. Kumar Construction Co. Pvt. Ltd. (ITAT Nagpur)
ITAT Nagpur held that addition under section 68 of the Income Tax Act without providing an opportunity to assessee to cross-examine the person whose statement was relied upon is untenable in law and hence liable to be deleted.
Facts- The assessee is engaged in the business of construction and for the year under consideration filed its return of income on 11/10/2010 The case was re–opened and notice u/s. 148 of the Income Tax Act, 1961 was issued. The case of the assessee was re–opened on the basis of information received from DCIT that the assessee company had obtained accommodation entries worth Rs. 6,58,12,500, from various companies.
Notably, while framing the assessment order, the Assessing Officer has made addition on account of seven companies though the addition on account of two companies out of seven companies were already been made in the assessment year 2010-11. Being aggrieved, the assessee preferred appeal before the first appellate authority.
CIT(A) allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that during the course of assessment proceedings, the learned Counsel for the assessee had requested for supply of copies of the statement and other material based on which the department had taken an adverse view against the assessee. We find that these were neither provided by the Assessing Officer nor opportunity granted to cross– examination. Whereas, the Assessing Officer on basis of statement of one unrelated person, proceeded to make an addition to income of the assessee as unexplained cash credit. It was incumbent on the Assessing Officer to afford the assessee an opportunity of cross-examination and in the absence of such an opportunity, the impugned addition was not justified.
