Tribunal held that ,  the assessee filed before the AO  the copies of ledger accounts, bank statement and purchase bills of the two parties. Also the assessee had filed the copies of corresponding sale bills and chart showing bill-wise purchases in respect of the two parties and the corresponding sales. Thus the assessee had disclosed the primary facts. Therefore the notice under S. 148 issued by the AO  was bad in law. Tribunal held that for the AY.2009-10,  the AO  received tangible material from the Sales Tax Department that the assessee had obtained accommodation entries from six parties to inflate its purchases. The reasons had a live link with the formation of belief. The assessee failed to disclose the primary facts before the AO in the original assessment proceedings. There was no change of opinion by the AO in the subsequent reassessment. Therefore the reassessment was valid.

Tribunal also held that  a proper hearing must always include a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view. Cross-examination is allowed by procedural rules and by the rules of natural justice. Any witness who has been sworn on behalf of any party is liable to be cross-examined on behalf of the other party to the proceedings. The matter was remanded to the Assessing Officer to make a fresh assessment after examining the concerned parties and giving opportunity of cross-examination to the assessee. The assessee was directed to file the relevant details before the Assessing Officer. The Assessing Officer would give reasonable opportunity of being heard to the assessee before finalising the assessment order ( AY.2008-09 to 2010-11)