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2022 (6) TMI 599 - AT - Income TaxUnexplained/undisclosed income - Addition based on finding are based on the statements of erstwhile teachers who have been terminated from service - Assessee is a pensioner retired from Police Department. After retirement he is stated to be Director in school named Jayanti Jyoti Muk Badhir Nivasi School run for deaf and dumb children - Tax Evasion Petition (TEP) received against the Assessee from some staffs of the said School stating that, in the capacity of Secretary of the school, the Assessee has received certain amounts from them for their appointment as teacher/ caretaker / staff - HELD THAT:- As per the Assessing Officer, the assessee is in capacity of Secretary of the School of Jayant iJyoti Muk Badhir Nivasi School, has received certain amounts during the Financial Years under consideration for appointment of teacher/caretaker/staff. Based on the statement reordered u/s 131 of the Act from the persons who claimed to have paid the amount to the Assessee, the statement made before Police Authority and based on the statement of one complainant recorded before the Court. AO has treated the alleged money given to the Assessee in lieu of the job as unexplained/undisclosed income and added to the total income of the assesse. By mere reading of the assessment order, the Ld. AO has not provided any opportunity to the Assessee to dispute or contradict the statement made by the persons who claimed to have paid the amount to the Assessee. Admittedly all the persons who gave given the statements against the Assessee have been dismissed from the service and after dismissal from the service the Tax Evasion Petitions have been filed and thereafter recorded the statements u/s. 131 of the Act have been recorded. Therefore the said statements cannot be believed in the facts and circumstances of the case more so when those statements were not subject to any cross examination by the Assessee. AO has relied on statements made before the Police Authority and also the statement recorded before the Court by the complainant and the witnesses in the Criminal Trial. It is found that, based on the complaint given by one Sh. Mahadeorao Kokate a criminal prosecution has been launched for the offence punishable u/s 420 of IPC against the Assessee. The prosecution has failed to prove the allegations made in the complaint that the complainant and other witnesses have paid money to the Assessee for appointment of teacher/caretaker/ staff. The Ld. Magistrate after conducting the due Trial has acquitted the Assessee from all the charges levelled against him. Further Assessee was also subject to the enquiry conducted by the Anti Corruption bureau, wherein the Assessee has been found not guilty of the allegations of corruption made against him. We are of the considered opinion that the addition made by the Ld. AO which has been upheld by the Ld. CIT(A) is not sustainable under law and the same is deserves to the set aside. Therefore, we allow the grounds of appeal by setting aside the orders passed by the lower authorities by allowing the appeals.
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