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2021 (10) TMI 359 - AT - Income TaxReopening of assessment u/s 147 - unaccounted cash receipts - on-money towards sale of shops / flats - addition based on one statement of Shri Suraj Parmar promoter of Cosmos group - abbreviations “RJ‟ as used in the excel sheet as interpreted to mean the director of the assessee company Shri Ravi Jhunjhunwala - HELD THAT:- The prime reason to make the addition of on-money in the hands of the assessee is the statement of Shri Suraj Parmar. However, in reply to question no.13, Shri Parmar categorically stated that cash generated from the project was distributed to the partners in the respective projects and it is mainly utilized in purchase of land. Therefore, whatever cash was generated by the cosmos group or Shri Suraj Parmar on account of on-money towards sale of shops / flats that was distributed among the partners of M/s Cosmos Lifestyle and the assessee is not a partner of that entity - in the statement of Shri Suraj Parmar, Shri Bharat Jhunjhunwala was stated to be the key person of the assessee group and stated to be the recipient of cash component. However, Shri Bharat Jhunjhunwala, in statement on oath u/s 131 recorded on 12/10/2015, denied having received any cash component from the cosmos group. The assessee has also denied having received cash component in the project. In such a case, the onus would be on revenue to prove the fact of exchange of cash between the Cosmos group and the assessee entity. We find that except for statement of Shri Suraj Parmar, there is no other corroborative evidence on record to substantiate this fact. Name of assessee entity nowhere figures in the seized data and there is no material on record which would suggest that any cash was paid to the assessee out of on-money received by Cosmos Group. The data only mentions abbreviations “RJ‟ which is amenable to several interpretations and could not go on to conclusively prove that the same would represent director of the assessee company. Therefore, no concrete belief could be made on the basis of these abbreviations. No additions could be made merely on the basis of presumption, conjectures and surmises. The assessee has all along denied having received any cash component from the cosmos group. In such a situation, the onus was on revenue to prove with corroborative material the fact of exchange of cash between the assessee and the cosmos group. However, except for statement of Shri Suraj Parmar, there is nothing in the armory of Ld. AO to prove this fact. Denial of natural justice - denial of opportunity to cross examine - As opportunity to cross-examine the person making adverse statements against the assessee has never been provided to the assessee. Since the statement formed the very basis of making additions in the hands of the assessee, not providing such an opportunity of cross-examination would make the additions unsustainable in the eyes of law as held by Hon‟ble Apex Court in M/s Andaman Timber Industries - Decided in favour of assessee.
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