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2007] 293 ITR 565 [2007] 160 TAXMAN 233 (ALL.) HIGH COURT OF ALLAHABAD Moti Lal Padampat Udyog Ltd. * v. Commissioner of Income-tax (Central), Kanpur R.K. AGRAWAL AND VIKRAM NATH, JJ. IT REFERENCE NO. 185 OF 1991 OCTOBER 26, 2006 Section 143, read with section 132, of the Income-tax Act, 1961 - Assessment - Additions to income - Assessment year 1975-76 - Assessee-company was engaged in business of manufacturing vanaspati oil - During search conducted at premises of firm 'V' to which assessee used to supply oil, a rough cash book was found which revealed that certain payments had been made by 'V' to assessee as 'on money' in addition to purchase price - ITO recorded statements of partners of firm and issued show-cause notice to assessee that why an amount received as 'on money' in addition to purchase price of vegetable oil sold to said party be not assessed in its hands - Statements of partners and cash book were served to assessee on its request - Assessee, however, vide its letter prayed that statements of partners and employees of 'V' and of any other person, as recorded by department, should be furnished to assessee and if no such statement had been recorded, then said persons should be summoned and their statement recorded on oath and due opportunity should also be provided to assessee to cross-examine each of them - ITO rejected assessee's explanation and made addition of amount received as 'on money' - Assessee's case was that as no such opportunity to cross-examine partners of firm had been provided to assessee, rough cash book and statement of said persons could not be used against it - It was found from letter that an opportunity to cross-examine was asked for only in case statements had not been recorded earlier - Whether since statement had already been recorded and assessee had proper opportunity to controvert material gathered by assessing authority and used against it, opportunity to cross-examine said persons did not arise - Held, yes FACTS The assessee-company was engaged in the business of manufacturing vanaspati oil. A search was conducted at the premises of the firm 'V', to which the assessee used to supply oil. During the search, a rough…

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