TMI Blog2013 (4) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 5149/Del/2012 - - - Dated:- 5-4-2013 - G. D. Agrawal (Vice President) And Chandra Mohan Garg (Judicial Member) For the Petitioner : Anuradha Misra For the Respondent: Salil Aggarwal, Shailesh Gupta ORDER G. D. Agrawal (Vice President) This appeal by the Revenue is directed against the order of learned CIT(A)-XXXI, New Delhi dated 25th July, 2012 for the AY 2008-09. 2. The Revenue has raised the following grounds:- 1. The order of ld.CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of ₹ 1,35,00,000/- made by the Assessing Officer on account of unaccounted profit amounting to ₹ 27,00,000/- and unaccounted investment amounting to ₹ 1,08,00,000/- found during the course of search and seizure operation u/s 132(1) of IT Act, 1961. 3. At the time of hearing before us, it was stated by the learned CIT-DR that during the course of search at the premises of Shri Sohan Raj Mehta, who is a carry and forward agent of RMD Group of Pan Masala and Gutkha products, certain chits were found. From those chits, it was ascertained that Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was sale outside the books by the assessee. That as per chits found from Shri Sohan Raj Mehta, the total payment made by him was only ₹ 9 lakhs which has been decoded by the Revenue to be ₹ 9 crores. That Shri Sohan Raj Mehta has retracted his statement and the Assessing Officer, for the reasons best known to him, has not mentioned about his retraction. That the assessee had requested for allowing opportunity of cross-examining Shri Sohan Raj Mehta, but, the same was not allowed. He also relied upon the following decisions:- (i) CIT Vs. Ved Prakash Choudhary - (2008) 305 ITR 245 (Delhi). (ii) Straptex (India) (P.) Ltd. Vs. DCIT - (2003) 84 ITD 320 (ITAT-Mum.). 5. In view of the above, it was submitted by the learned counsel that the order of learned CIT(A) should be sustained and the Revenue's appeal be dismissed. 6. We have carefully considered the arguments of both the sides and perused the material placed before us. We find that learned CIT(A) has discussed the issue at length and held as under:- 6.1 I have considered the rival arguments. The whole addition hinges on evidence gathered from third party document or statement. Now the issue is can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant the presumption provided u/s 132(4A) will not be applicable until and unless corroborated by other evidence. In other words it is now a well settled law that presumptions regarding the correctness of paper, documents or books of accounts cannot be raised against a third party in the absence of corroborative evidence. The provisions of section 132(4A) provide that presumption can certainly be drawn against the person in whose case search is authorized and from whose possession or control the books of accounts, loose papers, slips or any other incriminating material or documents are found in the course of search but not against a THIRD PARTY. It has been observed from the statements recorded under oath u/s 132(4)/131 by the Income Tax officials on 09.10.2009, 15.10.2009, 07.11.2009 and 10.08.2011 that Sh. Sohan Raj Mehta has not mentioned the name of the appellant. No specific queries have been raised in the statement about the alleged payments having been made to the appellant. No corroborative evidence was found while conducting a consequential search on the appellant's premises. 6.3 The alleged transactions noted on the loose slips were not handwritten by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement by Shri Mehta undermines the credibility of its genuineness and such doubtful statement given and retracted and again withdrawn on flimsy grounds of money not been paid by RMD Group invalidates such statement ab-initio. I agree with the appellant that keeping in mind the principles of natural justice the A.O. should have at least provided the Retraction of the original statement to the appellant at the assessment stage for rebuttal. Frequent retraction has definitely undermined the credibility of statement and appears motivated. The AO in the assessment order para 16 has stated that the appellant was a regular supplier to M/s RMD Group therefore, it is highly probable that the appellant has received ₹ 9 crore from M/s RMD group. This finding on probability is misplaced because it cannot sustain the test of judicial scrutiny in absence of other independent corroborative evidence. The findings of the AO are not legally tenable. 7. After considering the arguments of both the sides and the facts of the case, we do not find any infirmity in the above order of learned. The addition has been made on the basis of certain chits found from Shri Sohan Raj Mehta and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n provided statement of Sh.Sohan Raj Mehta. However, it is further submitted that the assessee should be given the opportunity to cross examine the genuineness of the statements of Sh. Sohan Raj Mehta and should be given reasonable opportunity to verify the claims made by him. In the case of Kishan Chand Chelaram (125 ITR) it has been held by the Hon'ble Supreme Court of India that before taking a decision the assessee has to be allowed a chance or an opportunity of rebuttal with respect to the documents which are to be used against hte assessee. The assessee has gone through the entire statements of Sh. Sohan Raj Mehta recorded under section 132(4) of the Income Tax Act. Nowhere there is any mention of Bhola Nath Radha Kishan or any of its partner in the said statement. The assessee cannot be held liable for any act of the omission or commission done by him. Mr. Sohan Raj Mehta's statement regarding decoding of figures is also not applicable on the assessee since this has no bearing or nexus of connection with the assessee firm or its business transaction. No addition or adverse decisions can be taken on the basis of surmises and/or conjectures. There has to be specif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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