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| The Tax Publishers2020 TaxPub(DT) 0507 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where addition on protective basis was made on the basis of statement of Director and AO did not get any information as to in whose case substantive addition have been made and other addition was made on the basis of statement of some entry provider of bogus bills, even his name was not mentioned in the assessment order, therefore matter was remanded back to AO with a direction to re-decide the same by giving reasonable opportunity of being heard to assessee.
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Income from undisclosed source - Addition under section 68 - Bogus Purchases - Protective assessment in the hands of assessee
Assessee was engaged in business of Civil Construction activities on contract basis and entered into transactions with M/s. S. It submitted that assessee company had received work orders from Suzlon for preparation and re-surfacing of roads and other civil works at their different sites. The said contracts were further awarded to M/s. S on back to back basis. AO noted that survey operation was carried out in the case of M/s. S and statement of the Director was recorded who categorically stated that no construction work was carried-out. Since no work was executed by M/s. S and expenses claimed by assessee-company were bogus, therefore AO noted that assessee booked these expenses which were bogus and ultimate beneficiary in this transaction was Suzlon. Accordingly, AO made the addition in hands of assessee-company on protective basis. AO further noted that as per information received from the DIT (Inv.), assessee had booked bogus expenses from M/s C and this fact was admitted by the concerned provider of bogus bills in his statement. Held: It was not in dispute that addition on protective basis was made on the basis of statement of Director of M/s. S. AO did not get any information as to in whose case substantive addition have been made. Other addition was made on the basis of statement of some entry provider of bogus bills. Even his name was not mentioned in the assessment order. It was not clear from the order whether such statements were provided to assessee for explanation or any right of cross-examination have been given to assessee to cross-examine these witnesses. In this view, matter was remanded back to AO with a direction to re-decide the same by giving reasonable opportunity of being heard to assessee. AO should provide copies of all statements and incriminating material and in case any right of cross-examination is exercised by assessee.
REFERRED :
FAVOUR : In assessee's favour by way of remand.
A.Y. : 2010-11
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