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2008 (3) TMI 685 - AT - Income TaxUnexplained investment - addition made on the basis of statements of third parties - no opportunity given to controvert the evidence utilized in the assessment which was in the shape of statement - Onus to Prove - failed to allow cross examination - HELD THAT:- Even if the explanation of the assessee is not found to be satisfactory, the ITO has discretion to treat or not to treat such investment as assessee’s income. For this proposition reliance can be placed in the case of CIT v. Smt. P.K. Noorjahan [1997 (1) TMI 6 - SUPREME COURT] and CIT v. Moghul Durbar [1995 (2) TMI 34 - ANDHRA PRADESH HIGH COURT]. It is clear from the reading to section 69 that before the amount of unexplained investment, is included in the total income of the assessee, he is entitled to an-opportunity to explain T.C.N. Menon v. ITO [1973 (7) TMI 17 - KERALA HIGH COURT]. The assessee’s income is to be assessed by the Assessing Officer on the basis of material which is required to be considered for the purposes of assessment and ordinarily not on the basis of statement of a third party, unless there is a material to corroborate that statement is available on record. The mere fact that somebody made a statement by itself cannot be treated as having resulted in an irrebuttable presumption against the assessee. The burden of showing that the assessee had disclosed income is on the revenue and that burden cannot be said to be the charged by merely referring to the statement of a third party in connection with the transaction, therefore, such statement cannot be made the sole foundation that the assessee deliberately suppressed his income. Even otherwise, if the explanation of the assessee is not acceptable, the onus shifts to the revenue to prove the same with corroborating material. Identical ratio was laid down by the Hon’ble Madras High Court in the case of CIT v. N. Swamy [1998 (9) TMI 27 - MADRAS HIGH COURT]. No specific infirmity has been pinpointed by the revenue in the impugned order, nor any adverse material has been brought on record by the Assessing Officer to substantiate its contention that the assessee paid any underhand money except the money which has been shown in the sale deed, therefore, in the light of the facts and the cases relied upon, we have no option but to uphold the impugned order. In the result both these appeals of the revenue are dismissed.
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