TMI Blog2004 (9) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... larly, in the case of Smt. Sampat Devi M. Daga, assessee in ITA No. 7845/Mum/2003, she had made a voluntary disclosure under VDIS 1997 disclosing possession of 65..90 carats of loose diamonds and other gold ornaments accepted by CIT. She filed her return of income for asst. yr. 1998-99 on 26th Oct., 1998, wherein she showed sale of 65.90 carat loose diamonds and gold ornaments claimed long-term capital gain/loss. The return was processed under s. 143(1)(a). The original assessments were reopened in the cases of both the above assessee's by issuing notices under s. 148 on 11th June, 2001, in the case of Smt. Sampat Devi and on 19th Feb., 2002 in the case of Mohanlal Daga. The assessee Mohanlal vide letter dt. 25th Feb., 2002, requested the AO to supply him the reasons for reopening assessment, but, the same were not supplied. Similarly, the reasons for reopening were not supplied to Smt. Sampat Devi despite request. 5. A survey action under s. 133A was taken on 30th/31st March, 2000 by ITO, Thane, against Vishnu Dutt Trivedi (VDT) Proprietor of M/s Dhanunjay Diamonds (DD) and his statements were recorded on 30th March, 2000 and 31st March, 2000, on the basis of which the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial on record to justify the denial. There was no material in the affidavit to show that the escapement was by reasons of the omission for failure on the part of the assessee to make the return or to disclose fully or truly, all material facts necessary for the assessment for the year in question. In these circumstances, it was held that the mandatory requirement of s. 148 was not complied with and, therefore, the notice issued under s. 148 was liable to be quashed. 10. In GKN Dnveshafts (India) Ltd. vs. ITO (supra) it has been held that when a notice under s. 148 is issued, the proper course of action for the noticee is to file the return and to seek reasons for issuing notice and then AO is bound to furnish reasons within a reasonable time. It has also been held that on receipt of reasons, the noticee is entitled to file objections to the issuance of notice and the AO is bound to dispose of the same by passing a speaking order. 11. In (2003) 184 CTR (Raj) 446 : (2004) 267 ITR 782 (Raj) (supra), the judgment of Hon'ble Supreme Court in (2003) 179 CTR (SC) 11 : (2003) 259 ITR 19 (SC) (supra) has been followed and the AO having not supplied the reasons to the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 paper book. He has contended that the affidavit of assessee explaining the details of acquisition and utilisation of assessee's jewellery as also loose diamonds weighing 781 cts. has been furnished. He has contended that in the reopened assessment (reassessment), the AO made addition on the basis of this sale of loose diamonds weighing 71 cts. which is not justified inasmuch as the assessee has explained and furnished the supportive evidence. He has contended that the sale of 71 cts. of diamonds by assessee is supported by sales certificate dt. 7th Jan., 1998 p. 93 paper book of M/s Dhananjay Diamonds. He has contended that the AO's case is that this sale of diamond is only a paper transaction and is bogus and that the assessee had routed assessee's own unaccounted money through VDT, proprietor of M/s Dhananjay Diamonds. He has contended that for making the addition as above in the hands of assessee, the AO has relied on the first and second statements of VDT recorded on 30th March, 2000 (pp. 83 to 87 paper book) and 31st March, 2000 (pp. 88 to 92 paper book) respectively and ignoring his third statement recorded on 25th Oct., 2002 (pp. 55A to 55F paper book). He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he two cheques would have bounced if the transaction had been a bogus one. He has contended that the assessee has furnished the summary of cash book and the Department has accepted assessee's long-term capital gain in original assessment under s. 143(3). The learned Authorised Representative of assessee has contended that for coming to a right conclusion, the statement should be read as a whole. In this regard, he has cited the following decisions : 1. Glass Line Equipments (P) Ltd. vs. CIT (2001) 170 CTR (Guj) 470 : (2002) 253 ITR 454 (Guj) 2. Chander Mohan Mehta vs. Asstt. CIT (1999) 65 TTJ (Pune) 327 : (1999) 71 ITD 245 (Pune). He has contended that the assessee has proved the identity of the purchaser as also his credit-worthiness and furnished copy of the bank statement of VDT. He has contended that the genuineness of transaction has also been established by assessee on the basis of VDT's statement dt. 25th Oct., 2002 (pp. 65A to 55F, paper book) affidavit (pp. 53 to 55 paper book), purchase bill (p. 93 paper book), VDIS certificate, bank statement etc. He has cited Dy. CIT vs. Rohini Builders (2003) 182 CTR (Guj) 373 : (2002) 256 ITR 360 (Guj). He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng been recorded not during the proceedings pertaining to assessee, but during survey in the case of VDT, the copies of the same having not been supplied to the assessee prior to assessment and supplied only as attached with the assessment order and opportunity for cross-examining VDT in respect of those statements having not been accorded to the assessee, the same cannot be read/used against assessee. The question of assessee's self asking for cross-examination of VDT in respect of those two statements dt. 30th and 31st March, 2000 does not arise when the copies of the same had not been supplied to the assessee before making assessment. Besides, it is the basic principle of law that without affording opportunity of cross-examination, a statement recorded at the back of assessee will not partake of the nature of evidence against assessee and cannot be read/used against assessee. Even apart, the said statements have been retracted by VDT vide his letter dt. 4th April, 2000 (p. 55G, paper book) and the same was despatched by registered post on 11th April, 2000 vide postal receipt placed on p. 55H paper book and was delivered to the Department vide AD receipt dt. 17th April, 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentatives have relied on their same contentions as relied by them on similar issue in the case of Mohanlal R. Daga, in ITA No. 7963/Mum/2003, as discussed by us above, submitting that the facts of both the cases are identical. 19. We have considered the rival contentions, relevant material on record as also the cited decisions. In the case of assessee Smt. Sarnpat Devi Daga also, the addition has been made by AO by treating the sale as bogus on the basis of VDT's statements dt. 30th and 31st March, 2000, recorded during survey in the case of VDT, and not during assessment proceedings of Smt. Sampat Devi Daga. The copies of statements were supplied as attached to assessment order and no opportunity of cross-examining VDT in respect of those statements was afforded to assessee. The statement recorded during assessment proceedings of present assessee Smt. Sampat Devi Daga is one dt. 25th Oct., 2000 wherein VDT has supported the assessee's case by admitting purchase, making payment by account payee cheques and issuing purchase bill. VDT also furnished his affidavit dt. 25th Oct., 2000 corroborating the transaction as pleaded by assessee, when he appeared before AO in respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
