Principal Commissioner Of Income Tax-Central New Central Revenue Building, Statue Circle, Jaipur Raj v. Shri Prateek Kothari H-12 , Sukhi Jeevan Complex, Jacob Road, Ajmer Road, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 156 / 2017 Principal Commissioner of Income Tax-central New Central Revenue Building, Statue Circle, Jaipur Raj. ----Appellant Versus Shri Prateek Kothari H-12 , Sukhi Jeevan Complex, Jacob Road, Ajmer Road, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Siddharth Bapna for Mr. Anil MehtaFor Respondent(s) : _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASOrder 17/01/2018 By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department. Counsel for the appellant has framed the followingsubstantial questions of law:- i) Whether on the facts and circumstances of thecase in law, the ITAT is justified in deleting theaddition of Rs. 1,00,27,500/- (including interestof Rs. 27,500/- made u/s 68 of the I.T. Act on theaccount of bogus unsecured loan taken by theassessee. ii) Whether on the facts and circumstances of thecase in law the ITAT is justified in ignoring thefact that right of cross examination is not anabsolute right of the assessee.” We have gone through the judgment of CIT(A) as well as the Tribunal. While considering the matter the Tribunal has observedas under:- “2.9. In light of above discussions, in our view,the crux of the issue at hand is that whether theprinciple of natural justice stand violated in theinstant case. In other words, where the AOdoesn’t want to accept the explanation of theassessee and the documentation furnishedregarding the genuineness of the loan transactionand instead wants to rely upon the informationindependently received from the investigationwing of the department in respect of investigationcarried out at a third party, can the saidinformation be used against the assessee withoutsharing such information with the assessee andallowing an opportunity to the assessee toexamine such information and explain its positionespecially when the assessee has requested thesame to the Assessing Officer. 2.10 In this regard, the Hon’ble Supreme Court inthe case of Dhakeswari Cotton Mills Ltd. v. CIT(1954) 26ITR(SC) has held that “The rule of lawon this subject has been fairly and rightly statedby the Lahore High Court in the case of SethGurmukh Singh where it was stated that whileproceeding unde Sub-section (3) of Section 23,the Income-tax Officer, though not bound to replyon evidence produced by the assessee as heconsider to be false, yet if he proposes to makean estimate in disregard of that evidence, heshould in fairness disclose to the assessee thematerial on which he is going to find that anyprivate inquiries made by him, he mustcommunicate to the assessee the substance ofthe information so proposed to be utilized to suchan extent as to put the assessee in possession offull particulars of the case he is expected to meetand that he should further give him ampleopportunity to meet it.” It was held in that casethat “In this case we are of the opinion that theTribunal violated certain fundamental rules ofjustice in reaching its conclusions. Firstly, it didnot disclose to the assessee what information hadbeen supplied to it by the departmentalrepresentative. Next, it did not give anyopportunity to the company to rebut the materialfurnished to it by him, and lastly, it declined totake all the material that the assessee wanted toproduce in support of its case. The result is that the assessee had not had a fair hearing.” We are in complete agreement with the view taken by theTribunal. No substantial question of law arises. Hence, the appeal stands dismissed. (VIJAY KUMAR VYAS) J. (K.S. JHAVERI)J. A.Sharma/85