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2023 (6) TMI 1017 - AT - Income TaxPayment of on-money in cash - not extending an opportunity to the appellant to cros xamine witnesses relied upon - AO on the basis of information received from the Directorate of Investigation that the assessee has been identified as one of the persons who had paid on-money in cash to M/s Runwal Homes Private Limited for the purchase of property, initiated proceedings u/s 147 - HELD THAT:- As evident from the record, when summons were issued by the AO to the assessee as well as the builder, Mr. Subodh Runwal, calling for the details and explanation in support of the on-money paid/received, none of them replied to the summons and therefore, the assessment was completed on the basis of material available on record. Thus, when the person, whose statement was relied upon to make the addition in the hands of the assessee, does not appear in response to the summons, the submission of the Revenue that the assessee chose not to avail the opportunity to cross-examine the builder provided by the AO appears to be a mere empty formality. As difference in the price of the property, which was considered as on-money paid in cash is based on sale value as per the email, however, there is no evidence available on record as to between whom this email correspondence took place. Merely providing the evidence relied upon by the AO cannot substitute the fundamental requirement of providing the opportunity for cross-examination. Hon’ble Supreme Court in I.C.D.S. Ltd. [2020 (2) TMI 1424 - SUPREME COURT] held that where the issue involved was about not extending an opportunity to the appellant to cross-examine witnesses relied upon by AO, the entire matter would be considered by First Appellate Authority afresh by giving fair opportunity to both sides to espouse their claim. We set aside the impugned order and restore the matter to the file of AO for de novo adjudication after providing the assessee with all the documents, which were relied upon in support of the impugned addition. Further, the AO is directed to grant the opportunity to cross-examine the party on whose statement reliance was placed. Grounds raised by the assessee are allowed for statistical purposes.
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