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2020 (12) TMI 444 - ITAT MUMBAIAssessment u/s 153A - Addition u/s 69 - on money payment made by the assessee - AO has failed to allow cross examination of key witness Shri Praveen Mishra, an employee of the builder before making addition - HELD THAT:- In this case for on money payment for the booking of flat is solely based upon the pendrive drive and the statement of the employee of the builder. The same has been retracted. Apart from the above there is no other corroborative material. Assessee during the course of search has admitted to have paid ₹ 2.08 crore for amenities in cash. This was duly offered for assessment in the case of the company of the assessee where he was director and the same has been accepted by the Department. No addition on this account has been done by the assessing officers also. As regards the addition based upon the statement of the employee of the builder proposed by the assessing officer, the assessee has duly explained that if the same is accepted as correct then the rate of flat in October 2010 would be ₹ 51,500 As noted by the learned CIT(A) despite extensive search no other material of on money was seized except for the admission of the assessee for the amount paid for the amenities, which were duly offered to tax in the hands of the assessee’s company in which he was director - there is no other material on record to suggest that the value of the flat would be at that rate assigned by the assessing officer. It is also not the case that assessing officer had sent the matter for valuation by the DVO. In similar circumstances when there was allegation of on money paid, honourable Madras High Court in the case of P.V. Kalyansundaram [2006 (2) TMI 79 - MADRAS HIGH COURT] found that non-reference to DVO is fatal. In the said case on money/addition solely based upon scribblings/jottings was found to be non- sustainable. The honourable Supreme Court had duly affirmed the said decision reported in the case of Commissioner of Income Tax vs. P.V. Kalyanasundaram ([2007 (9) TMI 25 - SUPREME COURT]The other case laws referred by learned CIT(A) are also germane and support the case of the assessee. Hence in our considered opinion on the facts and circumstances of the case when the addition is solely based upon builder’s employee statement, which has been retracted and without any corroborative material brought on record, the same is not sustainable. The case laws cited above duly support this proposition. As already noted above the assessing officer having not referred the matter to the DVO for valuation has committed a fatal error. - Decided against revenue.
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