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Weekly Legal Updates

Compiled by our Legal Expert - Adv Vaishali Gupta


DM us to book an appointment or to clarify any of your legal doubts.



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Follow us for more such goods and services and to stay updated

RIGHT OF THE ASSESSEE TO CROSS EXAMINE THE PARTY INFORMATION GATHERED DURING INVESTIGATION-

Partner - CA S.L. Gupta
Assisted by- Advocate Vaishali Gupta

CIT v/s Odeon Builders Pvt. Ltd.

Citation- Review Petition (C) Diary Number 22394 of 2019
Forum- Supreme Court of India
Date of Decision- 21.08.2019
• The Court dismissed the Review Petition and upheld the order of CIT (Appeal).
• While delivering the judgment the Court said that, “(…) the entire disallowance in this case is based on third party information gathered by the Investigation Wing of the Department, which have not been independently subjected to further verification by the AO who has not provided the copy of such statements to the appellant, thus denying opportunity of cross examination to the appellant, who has prima facie discharged the initial burden of substantiating the purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and the fact of payment through cheques, & VAT Registration of the sellers & their Income Tax Return. In view of the above discussion in totality, the purchases made by the appellant from M/s Padmesh Realtors Pvt. Ltd. is found to be acceptable and the consequent disallowance resulting in addition to income made for Rs.19,39,60,866/-, is directed to be deleted.”

Andaman Timber Industries v/s Commr. Of Central Excise, Kolkata-II

Citation- Civil Appeal NO. 4228 of 2006
Forum- Supreme Court of India
Date of Decision- 02.09.2015
• The Hon’ble Court allowed the appeal and set aside the impugned order.
• While analysing the facts and law in question the court said that, “According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them.”

M/s Kishinchand Chellaram v/s CIT Bombay

Citation- Civil Appeal NO. 2728 0f 1972
Forum- Supreme Court of India
Date of Decision- 16.09.1980
• The Hon’ble Court allowed the appeal answered the questions in favour of assessee.
• Question involved- whether there was any material evidence to justify the findings of the Tribunal that the amount of Rs. 1,07,350 said to have been remitted by Tilokchand from Madras represented the undisclosed income of the assessee?
• The Court held that, “it is true that the proceedings under the Income Tax law are not governed by the strict rules of evidence and therefore it might be said that even without calling the Manager of the Bank in evidence to prove this letter, it could be taken into account as evidence. But before the Income Tax Authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross examine the Manager of the Bank with reference to the statements made by him.”

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