Home › Income-Tax Act › ACIT v. El Dorado Biotech Pvt. Ltd (2020) 208 TTJ 817/ (2021) 186 ITD 661 (Ahd )(Trib)

ACIT v. El Dorado Biotech Pvt. Ltd (2020) 208 TTJ 817/ (2021) 186 ITD 661 (Ahd )(Trib)

S. 68: Unexplained cash credit-Not providing an opportunity to cross examine the witness-violation of principles of natural justice-when all the requisite documents and information is provided by the assesse onus shifts to the Revenue to cross verify the details furnish-otherwise no addition can be made [ S. 132, 147 , 148 ]

Reassessment proceeding under section 147 was initiated on the basis the basis of information received during search conducted under section 132 on the premises of a third person, Mr. P by the Assessing Officer. In response, Assessee furnished all the requisite documents and requested for cross-examination of Mr. P since the entire addition of Rs. 29,82,89,600/- as unexplained cash credit under section 68 was proposed to be made on the statement of Mr. P a.k.a. the witness. It was observed that the Assessing Officer did not provide a copy of such statement of the witness neither did it provide an opportunity to the Assessee to cross-examine such witness. It also did not bring anything on record to rebut the factual position and explanation provided by the Assessee.

The CIT(A) as well as the Tribunal held that the order passed by the Assessing Officer is illegal and the entire addition solely based on such statement is likely to be deleted as there was a violation of principle of natural justice. The Tribunal held that if the Assessing Officer intends to rely, for the purposes of making addition to the total income of the assessee, on the statement of the third party as a witness, then he has to summon such witness, record his statement, offer that witness to the assessee for cross examination in order to rebut the material on the basis of which the Assessing Officer intended to proceed.

On the merits of the case, the Tribunal observed that the Assessee by furnishing the necessary details has discharged its onus, if such details are not cross verified by the department then the Department cannot go on to hold addition under section 68 in the facts and circumstances of the case. CIT v. Eastern Commercial Enterprises [1994] 210 ITR 103; Kalra Glue Factory v. Sales Tax Tribunal [1987] 167 ITR 498; CIT v. Pradeep Kumar Gupta [2008] 303 ITR 95 (Delhi); PCIT v. Best Infrastructure (India) (P.) Ltd. [2017] 84 taxmann.com 287 (Delhi); Andaman Timber Industries v. CCE [2015] 62 taxmann.com 3/52 GST 355 (SC); CIT Vs. Chanakya Developers reported in 43 taxmann.com 91; CIT v. Orissa Corp. (P.) Ltd. [1986] 159 ITR 78/25 Taxman 80 (SC); Deputy CIT v. Rohini Builders [2002] 256 ITR 360/[2003] 127 Taxman 523 (Guj.) followed. (ITA No(s) 1823/Ahd/2017 Dt. 11.02.2020) (AY. 2009-10)