Brief of the case
In the case of /s R.W. Promotions P. Ltd vs. ACIT Bombay High Court held that AO must gives an opportunity to cross examine the witnesses whose statement is relied upon by the revenue , violation of this right is clearly a breach of principles of natural justice.
Facts of the case
1. The appellant is engaged in the business of advertisement, market research and business promotions for its clients. During the subject Assessment Year 200708, the appellant had engaged services of M/s Inorbit Advertising and Marketing Services P. Ltd. (‘Inorbit’) and M/s Nupur Management Consultancy Pvt. Ltd. (‘Nupur’) to enable them to carryout promotional and advertisement activities. The amounts of Rs.1.15 crores paid to them was treated as expenditure to arrive at its profit while filing its return of income.
2. This was accepted by the Assessing Officer u/s 143(1) of the Act. Thereafter on 4 February 2010, the Assessing Officer issued a notice u/s 148 of the Act seeking to reopen the assessment for the Assessment Year 200708. This on the ground that the expenditure claimed of Rs.1.15 crores was bogus as evidenced by statement of representatives of M/s Inorbit and M/s Nupur. The appellant objected to reopening.
