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| The Tax Publishers2021 TaxPub(DT) 4196 (Ind-Trib) INCOME TAX ACT, 1961
Section 68
AO had been guided by the report of investigation team in respect of bogus transactiosn of capital gain. However, nothing was brought on record by revenue to show that persons investigated, including entry operators or stock brokers, who named the assessee in collusion with them. Assessee was not given the opportnity to cross-examine the person based on whose statement addition was made. It was a serious flaw as it amounted to violation of principles of natural justice. Therefore, addition was not sustainable.
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Income from undisclosed sources - Addition under section 68 - LTCG on sale of shares alleged as bogus base on statement recorded by investigation wing - Assessee wasnot given the opportunity to cross-examine the person based on whose statement addition was made
AO based on statement recorded by investigation wing in case of alleged entry operators, treated LTCG onsale of share declared by assessee under section 10(38) as bogus and thus made addition under section 68. Assessee pleaded to opportunity of cross examination given to assessee. Held: AO had been guided by the report of investigation team in respect of bogus transactiosn of capital gain. However, nothing was brought on record by revenue to show that persons investigated, including entry operators or stock brokers, who named the assessee in collusion with them. No finding specifically agianst assessee had been made in the investigation team report. Assessee was not given the opportnity to cross-examine the person based on whose statement addition was made. It was a serious flaw as it amounted to violation of principles of natural justice. Therefore, addition was not sustainable.
Supported by:Andaman Timber Industries v. CCE (2015) 281 CTR 241 (SC) : 2015 TaxPub(DT) 5186 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, INDORE BENCH
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