2007 (4) TMI 704 - HC - Income Tax

Addition made on the basis of statement during survey - return filled at nil income - assessment getting time-barred - reasonable opportunity not granted - sale consideration at the higher amount fixed solely relying upon the statement of this seller and without conducting any independent enquiry relating to the value of the property - HELD THAT - From the records of this case show that the assessee was afforded reasonable opportunity and was also given opportunity that he can ask for documents if any but in spite of that the assessee did not ask for any documents for cross-examination till 22-3-2000 which goes to show that the assessee had nothing to explain and he was not interested to cross-examine Smt. Pushpa Seth. A number of opportunities were provided by the Assessing Officer to the assessee-company but the assessee-company was indulging in delaying tactics and only when the assessment was getting time-barred on 31-3-2000 it responded for the first time on 23-3-2000 when the documents furnished by Smt. Pushpa Seth were sought for the first time. Naturally at that stage the Assessing Officer could not give any further opportunity because the assessment was getting time-barred on 31-3-2000. It is also apparent from the record that the assessee-company was not a party before the Settlement Commission and therefore the proceedings could not be kept in abeyance by the Assessing Officer when the same were getting time-barred. There are concurrent findings of three statutory authorities with regard to this fact that sufficient opportunities have been granted to the assessee to cross-examine the vendor Smt. Pushpa Seth but the assessee did not avail of the opportunity granted to it. So we do not find any infirmity in the order passed by the authorities below and there is no reason to disagree with the finding given by the Tribunal on this regard. Thus no fault can be found with the view taken by the Tribunal. Thus the order of the Tribunal does not give rise to a question of law much less a substantial question of law to fall within the limited purview of section 260A of the Act which is confined to entertaining only such appeals against the order which involves a substantial question of law. Accordingly the present appeal filed by the assessee is hereby dismissed.

Summary

Issues:
Assessment of additional sale consideration in the hands of the assessee-company based on vendor's statement; Adequacy of opportunity for cross-examination and production of documents by the assessee; Request for keeping assessment proceedings pending due to Settlement Commission's involvement.

Analysis:
1. The appeal was filed challenging the order passed by the Income-tax Appellate Tribunal dismissing the appellant's appeal against the Commissioner of Income-tax (Appeals) order for the assessment year 1991-92.
2. The case involved the assessee purchasing a property for a declared amount of Rs. 6 lakhs, while the vendor confirmed receiving Rs. 45 lakhs, leading to an addition of Rs. 39 lakhs by the Assessing Officer.
3. The assessee requested to keep the assessment proceedings pending due to Settlement Commission involvement, but the Assessing Officer proceeded as the assessment was getting time-barred.
4. The Assessing Officer and Commissioner of Income-tax (Appeals) confirmed the addition of Rs. 39 lakhs in the absence of evidence from the assessee regarding the source of the additional consideration.
5. The Tribunal upheld the lower authorities' decision, noting that the assessee was given ample opportunity for cross-examination and to produce supporting documents.
6. The assessee's argument citing a Madras High Court decision was deemed inapplicable as the Assessing Officer had provided sufficient opportunities for cross-examination, which the assessee did not utilize.
7. The Tribunal found no fault in the lower authorities' decision, concluding that the order did not raise a substantial question of law for appeal under section 260A of the Income-tax Act, leading to the dismissal of the appeal.

This detailed analysis of the judgment highlights the key issues, the sequence of events, the arguments presented by both parties, and the reasoning behind the decision, providing a comprehensive understanding of the legal aspects involved in the case.