IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-II NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .No.-4882/Del/2015 (ASSESSMENT YEAR-2008-09) Welco Sanitation Pvt.Ltd., vs ITO, C-398, DSIDC Narela Indl. Area, Ward-18(3), New Delhi. Roorkee. PAN-AAACW5516G (APPELLANT) (RESPONDENT) Appellant by Sh. K.Sampath, Adv. & Sh. V.Raja Kumar, Adv. Respondent by Ms. Anima Baranwal, Sr.DR Date of Hearing 03.08.2016 Date of Pronouncement 30.09.2016 ORDER present appeal has been filed by assessee assailing correctness of order dated 02.06.2015 of CIT(A)-22, New Delhi pertaining to 2008-09 assessment year on various grounds. However, at time of hearing, Ld. AR submitted that appeal of assessee may be allowed in view of fact that opportunity to cross-examine person whose statement was relied upon by Revenue was not provided to assessee. On account of this lapse, it was his submission that assessment be quashed. said prayer of assessee was opposed by Ld. Sr.DR. 2. record shows that assessee declared income of Rs.2,10,550/- which was processed under section 143(1) and subsequently by issuance of notice under section 148 following show cause notice is shown to have been issued to assessee:- "From various submissions made by you, it is gathered that you have made purchases of Rs.11,91,717/- from M/s Pashupati Enterprises and of Rs.16,89,879/-from M/s A.G. Overseas during F.Y. 2007-08. In this connection it is informed that I have information that no sales have been made by these concerns to you and these are only accommodation entries. You are Page 1 of 4 I.T.A .No.-4882/Del/2015 requested to explain why these entries may not be added to your income. Your reply in this connection should be received in this by 24.01.2014. Further, in your letter dated 1.10.2013 you have requested to provide copy of statement issued by partners of M/s Pashupati Enterprises and M/s A.G. Overseas. In this connection it is informed that copy of statement given by Sh. Rakesh Gupta dated 12.02.2013 is available in this office with undersigned. If you want to examine statement, you may do so on date as mentioned above i.e. 24.01.2014." 3. assessee in response thereto as per assessment order sought copy of statement recorded by Investigation Wing. It was submitted on behalf of assessee as per letter dated 30.01.2014 that Sh. Rakesh Gupta has admitted that only in 5% of cases business was genuine and bills given to his clients in names of various concerns floated by him to extent of 95% were only accommodation entries wherein only after receiving commission in lieu of this accommodation bills were provided. For same, VAT was charged on all bills issued to clients and in case of assessee also such VAT has been duly charged. Assessing Officer is found to have required assessee to demonstrate whether any goods have been transported to assessee by way of transportation bills, entries in stock registers (if it is maintained) and to whom and when these goods allegedly purchased from these two parties were sold and how payment was received as this enquiry would support assertion of assessee that assessee s purchase was genuine. However, since assessee failed to produce any supporting evidence purchases from two parties M/s Pashupati Enterprises and M/s AG Overseas were held to be bogus resulting in addition of Rs.28,81,596/-. 4. In appeal before First Appellate authority, addition was confirmed holding that assessee has not been able to provide any evidence by way of supporting evidences like transportation bills, entries in stock register and other details to establish that these were genuine purchases made from parties. Further relying on fact that as per note sheet dated 03.01.2014 notice issued under section 133 (6) to M/s AG Overseas and Page 2 of 4 I.T.A .No.-4882/Del/2015 M/s Pashupati Enterprises had returned unserved and assessee failed to offer any explanation why notice returned unserved. addition was sustained. relevant extract from impugned order is reproduced hereunder:- c) crucial issue which needs to be considered is that since matter relates to entry operator, appellant should have provided concrete evidence in term of challans of transporter or other documents to prove actual delivery of purchased items. Further, during assessment proceedings also despite large number of hearings, appellant could not establish genuineness of these transactions with two parties. Even notices sent to these parties had been returned which also corroborate observations of AO that purchases were not genuine. 5. Both parties have been heard. Considering prayer and facts on record, I am of view that primary prayer of assessee that since opportunity to cross- examine was not provided, assessment be quashed cannot be accepted. However considering judicial precedent as laid down in CIT vs Sunil Aggarwal [2015] 379 ITR 0367 (Delhi) and ITO vs M.Pirai Choodi [2011] 334 ITR 262 (SC) it is considered appropriate to set aside issue back to file of Assessing Officer with direction to provide assessee opportunity to cross-examine Sh. Rakesh Gupta whose statement has been relied upon by him and thereafter pass speaking order in accordance with law. opportunity so provided it is hoped is utilized by assessee in good faith by fully participating in proceedings as failing which AO would be at liberty to pass speaking order in accordance with law on basis of material available on record. 6. In result, appeal of assessee is allowed for statistical purposes. order is pronounced in open court on 30th September, 2016. Sd/- (DIVA SINGH) JUDICIAL MEMBER *Amit Kumar* Page 3 of 4 I.T.A .No.-4882/Del/2015 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Page 4 of 4 Welco Sanitation Pvt.Ltd. v. ITO, Ward-18(3), Roorkee