No Cross-Examination, No Addition: ITAT Deletes ₹1.09 Crore “Entry Operator” Loan Addition

Ratul Tex Private Limited Vs DCIT (ITAT Mumbai) The Mumbai ITAT deleted an addition of ₹1.09 crore made under section 69A where the entire case of the Revenue was based on the statement of an alleged accommodation entry operator, without granting the assessee an opportunity to cross-examine him. The Tribunal held that denial of cross-examination amounts to a serious violation of natural justice, relying on the Supreme Court ruling in Andaman Timber Industries v. Commissioner of Central Excise. The assessee had received a loan from Surya Diamonds Pvt. Ltd., which the Department treated as a b...