IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  08.02.2011 
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 Present:        Mr. Rajesh Mahna, Mr. Manu Giri and Mr. Ramanand Roy, Advocates 
 for the appellant. 
 Mr. N.P. Sahni and Mr. Ruchesh Sinha, Advocates for the respondent. 
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 + ITA No. 273/2011 
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 1.       In this appeal preferred by the assessee we are concerned with one 
 addition which was made by the Assessing Officer in the assessment order.  This 
 pertains to a long term capital gain on sale of shares and the Assessing Officer 
 had made addition of `39,84,775/-.  It is not necessary to spell out the reasons 
 that prompted the Assessing Officer to make this addition as the issue involved 
 in this appeal with relation to that addition is altogether different. 
 2.       Suffice us to state that after going through the evidence produced 
 before him and also the statements of certain persons, said addition was made. 
 3.       The assessee made a request for cross-examination of those persons 
 whose statement was recorded prior to the search operation conducted at the 
 premises of the assessee. The Assessing Officer refused to give this 
 opportunity. 
 4.       When the matter was taken up in appeal by the assessee before the 
 CIT(A), the assessee argued that the order of the Assessing Officer was 
 violative of principles of natural justice as she was entitled to cross-examine 
 the persons whose statements were recorded. The Authorised Representative of the 
 assessee had also made submissions on merits contending that the addition made 
 by the Assessing Officer was not justified. The CIT(A) noted the submissions. 
 However, its order shows that challenge of the assessee was accepted and 
 deletion of the aforesaid addition was made on the ground that the order of the 
 Assessing Officer rejecting the application of the assessee for cross- 
 examination of the persons whose statements had been recorded was not 
 permissible and the Assessing Officer was wrong in holding that the cross- 
 examination of the departmental witnesses should not be allowed.  The revenue 
 preferred appeal against this order of CIT(A) before the Tribunal.  The Tribunal 
 has concurred with the opinion of the CIT(A) that the Assessing Officer should 
 have allowed the assessee to cross-examine the persons whose statements were 
 recorded earlier.  At the same time, the Tribunal also opined that since the 
 proposals of the CIT(A) is co-terminus with that of the Assessing Officer, what 
 the Assessing Officer has failed to do, the CIT(A) is competent to do the same 
 and he cannot brush aside the findings recorded by the Assessing Officer only on 
 the ground of cross-examination not allowed to the assessee.  The Tribunal in 
 these circumstances held the view that CIT(A) should have allowed the cross- 
 examination before deleting the addition made by the Assessing Officer and 
 should have controverted the findings recorded by the Assessing Officer by 
 mentioning his observation and comments thereof as no such positive finding are 
 given by the CIT(A) with regard to holding of shares by the assessee on the date 
 of sale.  The Tribunal has restored the entire matter back to the file of the 
 Assessing Officer with directions to allow cross-examination of the witnesses by 
 the assessee and to decide the issue fresh after giving due opportunity to the 
 assessee. 
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 5.       We do not find any illegality, impropriety or irregularity in the 
 aforesaid directions given by the Tribunal and having regard to the facts taken 
 note of the above. 
 6.       Mr. Mahana, learned counsel appearing for the appellant/assessee 
 submits that once it was accepted that it was right of the appellant to cross- 
 examine the witnesses, two submissions were relied upon.  The CIT(A) was 
 justified in deleting the addition as the said order of the Assessing Officer 
 was non-est. No doubt if the orders suffer from non compliance with the 
 principles of natural justice it could be set aside.  Same has been done by the 
 CIT(A) and even by the ITAT. However the Tribunal is right in holding that when 
 it was a procedural violation conducted by the Assessing Officer the same can be 
 taken care of by providing another opportunity to the assessee to cross-examine 
 those witnesses and to examine the matter on merits. 
 7.       This approach of the Tribunal is inconsonance with law as there is 
 nothing wrong. 
 8.       Another argument addressed by Mr. Mahana was that the CIT(A) had 
 deleted the addition on merits as well.  We are unable to discern this from the 
 order of the CIT(A) as stated above, though the contention of the assessee in 
 this behalf are taken note of, but the reason for deleting the addition is non 
 grant of opportunity to cross-examine the departmental witnesses. 
 9.       We thus do not find any merit in this appeal and are of the opinion 
 that no substantial question of law arise.  This appeal is accordingly 
 dismissed. 
 10.       Before we part with, we may take note of another aspect of the matter. 
 In the impugned order, the Tribunal had noted the attendance of the counsel for 
 the assessee as that of the Department and has stated in the order that nobody 
 appeared on behalf of the assessee.  Whereas  the fact is that nobody had 
 appeared on behalf of the Department and assessee had appeared whose attendance 
 was wrongly recorded.  On this premise, the assessee had moved an application 
 under Section 254(2) of the Act which has been dismissed by the Tribunal vide 
 order dated 15th October, 2010.  Since no appeal is maintainable against the 
 order passed by the Tribunal under Section 254(2) of the Act, we have not gone 
 into the correctness or otherwise of the said order and it would be open to the 
 assessee, if she so desires, to challenge that order by following appropriate 
 proceedings. 
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 A.K. SIKRI, J. 
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 M.L. MEHTA, J. 
 FEBRUARY 08, 2011 
 AK 
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