TMI Blog2017 (12) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... in Rajesh Jhaveri Stock Brokers P. Ltd. (supra), we hold that the AO has rightly issued notice u/s 148. The 1st ground of appeal of the assessee is thus dismissed. Determination of income from house property - estimation of rent - Held that:- We find that the AO has estimated the rent of the second flat at ₹ 25,000/- per month without any basis. He has not mentioned in the assessment order the sort of market enquiry conducted by him. As the rate arrived at by the AO is based on conjectures, we delete the addition made by the AO as income from house property. - ITA No. 84/MUM/2017 And ITA No. 1748/MUM/2017 - - - Dated:- 31-10-2017 - SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances of the case and in law, the Learned CIT(A) has erred in upholding the reassessment proceedings initiated u/s 147 on 31/01/2013 by the learned Assessing Officer without independent application of mind on the information received from DGIT(Investigation). 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of the Assessing Officer of completing the assessment u/s 143(3) without providing any opportunity of cross examination of the witnesses relied upon by the Assessing Officer and thus violating the law laid down by Honorable Supreme Court in the case of Kishanchand Chellaram v. CIT (1980) 125 ITR 713 and Andaman Timber Industries vs. Commissioner of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case are that the assessee filed his return of income for the AY 2010-11 on 23.09.2010 declaring total income of ₹ 63,45,610/-. The return of income was processed u/s 143(1). Thereafter, the AO received information from the Director General of Income Tax (Inv.), Mumbai that the assessee had merely taken entries of purchases from hawala dealers as reflected in the website of the Sales Tax Department, Government of Maharashtra. Therefore, the AO issued notice u/s 148 reopening the assessment earlier made u/s 143(1). During the course of reassessment proceedings the AO issued notice u/s 133(6) to 15 parties at the address given by the assessee requesting them to file copy of ledger, bank statement, balance sheet with schedules and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand, the Ld. counsel of the assessee submits that the details were filed before the AO. He files a copy of the submission dated 14.02.2014, 25.02.2014 and 01.03.2014 filed before the AO. The Ld. counsel also submits a copy of the submission dated 06.10.2016 and 22.07.2016 filed before the Ld. CIT(A). A copy of the audited profit and loss account and balance sheet with schedules and return of income was filed by him before us. The Ld. counsel submits that the assessee should have been given opportunity to cross-examine the said parties. 7. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. As mentioned hereinbefore the AO has reopened by issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross-examination is allowed by procedural rules and evidently also by the rules of natural justice. Any witness who has been sworn on behalf of any party is liable to be cross-examined on behalf of the other party to the proceedings. The Hon'ble Supreme Court in State of Kerala vs. K.T. Shaduli Grocery Dealer AIR 1977 SC 1627, recognised the importance of oral evidence by holding that the opportunity to prove the correctness or completeness of the return necessarily carry with it the right to examine witnesses and that includes equally the right to cross-examine witnesses. In ITO vs. M. Pirai Choodi (2012) 20 taxmann.com 733 (SC), the Hon'ble Supreme Court has held that Order of assessment passed without granting an opportuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the income from house property at ₹ 2,52,000/- after allowing deduction u/s 24(b). In appeal the Ld. CIT(A) agreed with the reasons given by the AO and dismissed the appeal filed by the assessee. 8.1 We have perused the relevant materials on record. We find that the AO has estimated the rent of the second flat at ₹ 25,000/- per month without any basis. He has not mentioned in the assessment order the sort of market enquiry conducted by him. As the rate arrived at by the AO is based on conjectures, we delete the addition of ₹ 2,52,000/- made by the AO as income from house property. Thus we allow the 4th, 5th and 6th ground of appeal of the assessee. 9. In the result, the appeal of the revenue is allowed for statis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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