Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (9) TMI 137 - AT - Income TaxAddition on protective basis - coal business carried out by the assessee through the syndicate of Bhutoria Group - assessee contended that this addition was made in the hands of the assessee, solely on the basis of the statement of Shri. Prakash Chandra Bhutoria and some documents seized from his computer - CIT(A) deleted the addition - Held that:- Undisputedly the addition was made in the hands of the assessee on protective basis. Though it was observed in the assessment order that substantive addition is to be made in the hands of the alleged syndicate AOP pointed out by Shri. Prakash Chandra Bhutoria in his statement recorded during the course of search conducted at Bhutoria group or his premises, but nothing has been placed on record to establish whether any substantive addition was made in the hands of the AOP syndicate. Answer to the question whether the addition on protective basis made in the hands of the assessee can be converted into substantive addition in the hands of the assessee in the absence of the fact that no substantive addition has been made in the hands of the syndicate group, the answer is certainly no, as the Assessing Officer himself is not confident with regard to the addition in the hands of the assessee on the basis of the statement of Shri. Prakash Chandra Bhutoria and the seized documents which were neither confronted nor the assessee was allowed to cross-examine Shri. Prakash Chandra Bhutoria whose statement was used to make the addition in the hands of the assessee. It is settled opposition of law that any evidence/statement/declaration cannot be used against a person or the assessee unless and until the same is confronted to the assessee and the assessee is allowed to crossexamine the said witness or person. In the instant case, the assessee has asked the Assessing Officer during the course of assessment proceedings to allow him to cross-examine Shri. Prakash Chandra Bhutoria whose statement was sought to be relied on by the Assessing Officer. Initially the Assessing Officer has summoned Shri. Prakash Chandra Bhutoria and asked the assessee to cross-examine in Kolkata, but on the designated date Shri. Prakash Chandra Bhutoria did not appear and the assessee was forced to come with empty hands. Thereafter though the assessee has requested to afford an opportunity to cross-examine Shri. Prakash Chandra Bhutoria with respect to the documents found during the course of search, but the Assessing Officer did not enforce his attendance for cross-examination and finally despite repeated requests the assessee was not allowed to cross-examine Shri. Prakash Chandra Bhutoria. The Assessing Officer, however, heavily relied upon the statement and the seized documents for making the addition in the hands of the assessee on account of undisclosed receipt from the alleged syndicate group. Thus addition in the hands of the assessee cannot be made on the basis of third party’s statement who was not allowed to be cross-examined by the assessee for any reason. More so in the instant case addition in the hands of the assessee was made on protective basis which means the Assessing Officer himself was not confident with respect to the tax liability of the alleged income estimated by him in the hands of the assessee. - Decided in favour of assessee. Addition made on account of unexplained investment in coal business - CIT(A) deleted the addition - Held that:- Assessing Officer has made addition only on conjectures and surmises. No evidence was brought on record in order to establish that the assessee has earned any other income except commission receipts. Moreover, the assessee worked as an agent of NCCF who sold coal to the consumers. Undisputedly the coal was being supplied directly to the consumers by NCCF and assessee earned only commission thereon. Therefore, addition on account of investment is not sustainable in the eyes of law - Decided in favour of assessee. Addition made under different heads as profit earned by the assessee - profit in trading of coal at Kanpur, Kolkata and Bhubaneswar - CIT(A) deleted the addition - Held that:- the basis for these additions was only the material seized during the course of search from Shri. Prakash Chandra Bhutoria and his statement. Shri. Prakash Chandra Bhutoria was not allowed to be cross-examined by the assessee, therefore, his statement cannot be relied on for making the addition against the assessee. Accordingly, we find no infirmity in the order of the ld. CIT(A) - Decided in favour of assessee.
|