| COURT: | Bombay High Court |
| CORAM: | A. K. Menon J., M. S. Sanklecha J |
| SECTION(S): | 68 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Bogus Loans, cross examination, Failure of natural justice, Undisclosed Income |
| COUNSEL: | Deepak Tralshawalla |
| DATE: | June 30, 2016 (Date of pronouncement) |
| DATE: | July 7, 2016 (Date of publication) |
| AY: | 1983-84 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 68: The assessee is bound to be provided with the material used against him apart from being permitted to cross examine the deponents. The denial of such opportunity goes to root of the matter and strikes at the very foundation of the assessment order and renders it vulnerable | |
(i) On a very fundamental aspect, the revenue was not justified in making addition at the time of reassessment without having first given the assessee an opportunity to cross examine the deponent on the statements relied upon by the ACIT. Quite apart from denial of an opportunity of cross examination, the revenue did not even provide the material on the basis of which the department sought to conclude that the loan was a bogus transaction.
(ii) In the light of the fact that the monies were advanced apparently by the account payee cheque and was repaid vide account payee cheque the least that the revenue should have done was to grant an opportunity to the assessee to meet the case against him by providing the material sought to be used against assessee in arriving before passing the order of reassessment. This not having been done, the denial of such opportunity goes to root of the matter and strikes at the very foundation of the reassessment and therefore renders the orders passed by the CIT (A) and the Tribunal vulnerable. In our view the assessee was bound to be provided with the material used against him apart from being permitting him to cross examine the deponents. Despite the request dated 15th February, 1996 seeking an opportunity to cross examine the deponent and furnish the assessee with copies of statement and disclose material, these were denied to him. In this view of the matter we are inclined to allow the appeal
Cases referred:
(i) Mather and Platt (India) Ltd. Commissioner of Income Tax 168 ITR 493 (Cal);
(ii) S. Hastimal vs. Commissioner of Income Tax 49 ITR 273 (MAD);
(iii) Additional Commissioner of Income Tax vs. Bahri Brothers (P) Ltd. 154 ITR
244 (PAT);
(iv) Nemi Chand Kothari vs. Commissioner of Income Tax and Anr. 264 ITR 254 (Gauhati);
(v) Deputy Commissioner of Income Tax v. Rohini Builders 256 ITR 360 (Gujarat);
(vi) Kishinchand Chellaram vs. Commissioner of Income Tax 125 ITR 173 (SC);
(vii) Commissioner of Income Tax v. Ashwani Gupta 322 ITR 396 (Del);
(viii) M/s. Andaman Timber Industries v. Commissioner of Central Excise, Kolkata in Civil Appeal No.4228 of 2006 dated 2nd September, 2015;
(ix) Ranchi Handloom Emporium v. Commissioner of Income Tax & Anr. 235 ITR 604 (Pat).
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