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| The Tax Publishers2021 TaxPub(DT) 3632 (Ind-Trib) INCOME TAX ACT, 1961
Section 68
Where no opportunity was provided to cross examine the third persons who were allegedly found to be providing accommodation entries to assessee in respect of long term capital gain, therefore no addition was called for in the hands of the assessee without providing opportunity of cross-examination in view of the ratio laid down in the case of Andaman Timber Industries ((CA No. 4228 of 2006) : 2015 TaxPub(DT) 5186 (SC).
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Income from undisclosed sources - Addition under section 68 - Bogus LTCG - No opportunity provided to cross-examine the third persons
AO made addition of Bogus LTCG in the hands of assessee under section 68 on the ground that assessee was also a part or connected to the alleged racket of providing accommodation entry of bogus LTCG. Held: AO had referred to some investigation carried out by the Department in the case of Some Brokers and other assessee(s). As AO had not disputed that name of the assessee was not appearing in such report nor any evidence was found by the AO which could indicate that assessee was also a part or connected to the alleged racket of providing accommodation entry of bogus LTCG nor any proof of any agreement between the assessee and other persons mentioned in the report had been found. So, the basis of addition was primarily on the statement of third party as well as the information gathered from other sources. Perusal of the records shows that the assessee had not been provided any access to such report nor any opportunity was provided to cross examine those persons who accepted to have provided accommodation entries for the bogus LTCG, to the assessee. Thus claim of Long Term Capital Gain made by assessee deserves to be allowed as they had entered into the transactions of purchase
Followed:Andaman Timber Industries [(CA No. 4228 of 2006) : 2015 TaxPub(DT) 5186 (SC)].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, INODRE BENCH
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