ORDER
R. K. Bali, A.M.
1. These three appeals by the Revenue and cross-objections by the assessee relating to asst. yrs. 1982-83, 1983-84 and 1984-85 are taken up together and disposed of by this common order for the sake of convenience. The common substantive grounds taken by the Revenue in its appeals are as under :
(i) The CIT(A) erred in deleting the addition in respect of unexplained cash credits asst. yr. 1982-83 Rs. 1,00,000; asst. yr. 1983-84 Rs. 3,80,000 and asst. yr. 1984-85 Rs. 3,70,000.
(ii) The CIT(A) erred in overlooking the evidence on record that during the course of investigation in Bombay some cash creditors had confirmed before the enquiry officer that they had only given names and not advanced any loans and in overlooking the facts that in spite of repeated opportunities provided to the assessee he failed to prove the genuineness and creditworthiness of even one of the cash creditors.
2. The grounds of cross objections taken by the assessee for three assessment years are as under :
(i) The CIT(A) erred in not giving clear decision relating to action of AO in reopening the assessments for asst. yrs. 1982-83 to 1984-85.
(ii) The CIT(A) erred in not giving any decision about validity of assessment made under s. 143(3) r/w s. 147/148 without giving any notice under s. 143(3) and/or s. 142(1) of IT Act.
3. Briefly the facts are that all these three appeals by the Revenue and cross-objections by the assessee are directed against the common order dt. 7th March, 1994, passed by the CIT(A)-I, Surat. The original assessments in the case of the assessee were completed for asst. yrs. 1982-83 & 1983-84 on 21st August, 1985, and for asst. yr. 1984-85 on 7th February, 1986, determining the total income at Rs. nil under s. 143(3). Subsequently, during the course of assessment proceedings for asst. yr. 1989-90 the AO found that there were certain cash credits in the books of accounts of the assessee which were of doubtful nature because during the course of investigation in Bombay, some of these cash creditors have confirmed before the inquiry officer that they had only given names and not advanced any genuine loan to the parties who approached them. On the basis of that information, the proceedings in the case of the assessee for asst. yrs. 1982-83, 1983-84 and 1984-85 were reopened under s. 147 and notices under s. 148 were issued on 10th July, 1992. In response to the notices issued under s. 148, the assessee filed returns on 6th August, 1992. Thereafter, the AO completed the assessments under s. 143(3) r/w s. 148 on 7th October, 1992, by making an addition of Rs. 1,00,000 for asst. yr. 1982-83, Rs. 3,80,000 for asst. yr. 1983-84 and Rs. 3,70,000 for asst. yr. 1984-85 on account of unproved cash credits on the basis of information obtained from the AO before whom some of the parties have confessed that they were indulging into name-lending activity only and they have not given any genuine loan to the parties.
4. The assessee appealed and pleaded before the CIT(A) that there was no ground for reopening the assessments and the AO has not made any enquiry whatsoever during the course of reassessment proceedings and the reassessment proceedings were completed without issuing any specific notices under s. 142(1) and/or s. 143(3) and the reassessments were simply based on the basis of some alleged information received from the AO at Bombay before whom some of the creditors have admitted that they were indulging into name-lending activity. The CIT(A) during the course of appellate proceedings directed the AO on 23rd September, 1993, to issue summons to all the parties from whom the assessee had taken loans and examine them at Bombay and in pursuance to the order of the CIT(A), the AO conducted examination of those parties at Bombay and he submitted the remand report to the CIT(A) on 13th January, 1994, which report has been reproduced by the CIT(A) in his appellate order at pp. 3 and 4. The CIT(A) also took note of the fact that at the time of original assessments the details of loans along with the confirmation letters were filed and subsequently during the course of proceedings conducted by the AO at Bombay pursuance to the directions of the CIT(A), affidavits of the creditors were filed and their statements were also recorded. In the affidavits/statements the creditors admitted having given genuine loans to the assessee and the AO was satisfied about the genuineness of the loans and he stated so in his report submitted to the CIT(A) on 13th January, 1994, which have been reproduced in the order of the CIT(A). Accordingly, the CIT(A) deleted the additions made by the AO for all the three years under consideration although the CIT(A) has not given any decision relating to the action of the AO in reopening the assessments for asst. yrs. 1982-83 to 1984-85 as well as the validity of the orders passed by the AO under s. 143(3) r/w s. 147/148 without giving any specific notice under s. 143(2), 142(1) and/or 143(3) of the Act.
5. Aggrieved with the order of the CIT(A) the Revenue has filed case appeals while the assessee has filed cross-objections in relation to the action of the CIT(A) in not recording specific finding with regard to the assumption of jurisdiction by the AO under s. 147 as well as the validity of the assessments framed under s. 143(3) r/w ss. 147/148 of the Act.
6. We have considered the rival submissions and have also gone through the orders passed by the AO as well as the CIT(A). We are constrained to observe that the Revenue has filed these appeals without application of mind. The original assessments for all these years were completed by the AO under s. 143(3) when the information with regard to these cash credits along with the confirmation letters were filed by the assessee and were on the record of the AO. Subsequently the proceedings were reopened on the basis of statements given by some of the creditors before the inquiry officer at Bombay and on the basis of that the proceedings were reopened under s. 147 and the reassessments were framed without giving any specific opportunity to the assessee which is a clear violation of the principles of natural justice. During the course of appellate proceedings before the CIT(A) the learned first appellate authority required the AO to examine the parties at Bombay and also allow cross-examination to the assessee. Pursuant to the directions of the CIT(A) the AO did examine the cash creditors at Bombay by holding camp on 13th and 14th December, 1993 and some of the parties from Daman were produced and examined by the AO at Surat on 22nd December, 1993. Thereafter the AO has submitted a report to the CIT(A) accepting that all the loans are genuine and he was satisfied by the statements as well as affidavits filed by the creditors. On the basis of that report of the AO, the CIT(A) deleted the additions for all the three assessment years under consideration. In this view of the matter, we fail to understand as to how the Revenue can be aggrieved with the order of the CIT(A). Accordingly, we dismiss all these appeals filed by the Revenue.
7. Since we are dismissing the appeals filed by the Revenue on the merits of the case, we do not think it proper to adjudicate on the legal cross-objections taken by the assessee which in any case will become infructuous once the additions are deleted on merits.
8. By virtue of power vested in the Tribunal by s. 254(2B) we order the Revenue to pay Rs. 2,000 as cost of these appeals to the respondent-assessee.
9. Accordingly, the appeals by Revenue and cross-objections by assessee both are dismissed.