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TMI Blog2018 (5) TMI 1694X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by the assessee there was only adjustment of payment or entry. Hence the addition so made by the AO and confirmed by the CIT (A) is totally contrary to the provisions of law and facts on the record and hence the same may kindly be deleted in fully. 3. Rs. 1,00,000/-: The ld. CIT (A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 1,00,000/- made by the AO on account of payment made for purchase of plot as undisclosed income when the payment was not made in the year under consideration the same was made in the year 2006-07 from the disclosed source. Hence the addition so made by the AO and confirmed by the CIT (A) in this year is totally contrary to the provisions of law and facts on the record and hence the addition may kindly be deleted in full. 4.1. Rs. 48,11,525/-: The ld. CIT (A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 48,11,525/- made by the AO on account of alleged 25% share of profit from the sale of properties of Balaji Nagar only on the basis of rough and dumb document found in the possession of third party and statement of third parties which has not been cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which he along with other persons has done the work of brokerage. Further, the assessee in partnership with Shri Ram Avtar Gupta and three other persons have also done some transactions of purchase and sale of properties and earned profits. Since the assessee did not disclose any income from purchase and sale of properties, the AO proposed to reopen the assessment by issuing the notice under section 148 on 21st March, 2013. In the reassessment proceedings, the assessee objected to the addition on account of income from transactions of purchase and sale of the properties in Balaji Vihar-II. However, the AO made the addition of Rs. 48,11,525/- on account of 25% share of profit from sale of properties in Balaji Vihar-II. Apart from this addition, the AO has also disallowed/made the addition on account of commission/brokerage income as well as the payment made by the assessee for purchase of plot. The assessee challenged the action of the AO before the ld. CIT (A), however, could not succeed. 3. Before us, the ld. A/R of the assessee has submitted that notice under section 148 can be issued only when there is escapement of income and the AO has reason to believe that an income charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the returned income of Rs. 1,37,412/-. Thus it is clear that the assessee did not declare and disclose any business transactions of purchase or sale of properties. Subsequently, the AO has reopened the assessment by recording the reasons as under :- " The assessee (PAN-ABDPG 2308 P) filed his return for A.Y. 2006-07 of income on 31.03.2007 declaring total income of Rs. 1,37,412/-, which was processed u/s 143(1) on 13.06.2007 at returned income. During the course of survey u/s 133A conducted on 13/14.08.2012 at the business premises of M/s. Vedang Coloniser Pvt. Ltd., E-61, Malviya Nagar, Jaipur certain incriminating documents were found and impounded by ITO Ward 6(1), Jaipur for further verification. On verification of impounded documents it is noticed that following transactions have been recorded in the documents impounded named as Annexure-AA :- Page No. 63 and 51 Annexure-AA: Rs. 2,93,75,979 (Balaji Vihar Nayala Road) Page No. 63 Annexure-AA : Rs. 48,11,525/- as profit Page No. 48 Annexure-AA : 17,00,000/- = 1,00,000 Page 42 Annexure-AA : Rs. 17,00,000/- 1.4.05 to 30.3.08 (Firoj Khan cash book) Page 37 Annexure-AA : Rs. 1,00,000/- 1.4.05 to 1.5.05 (Firoj Khan s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. Therefore, all these new facts revealed by the impounded material during the survey conducted under section 133A constitute tangible material to form the belief that the income assessable to tax in the hands of the assessee has escaped assessment. The ld. A/R has forcefully contended that the AO has reopened the assessment on the reason to suspect and not on the reason to believe. However, we note that the impounded documents revealed the transactions of purchase and sale of the properties and the name of the assessee is found mentioned against the land dealing transactions. Therefore, when the assessee has not declared any income on account of transactions in real estate and further the other transactions recorded in the impounded material were also not disclosed by the assessee in the return of income, it certainly constitute a reason to believe that an income assessable to tax in the hands of the assessee has escaped assessment. At the time of reopening of the assessment what is required to be only a prima facie belief that the income chargeable to tax has escaped assessment and the AO is not required to establish the correctness of the material forming the basis of such be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is having a particular share in the profits of the transactions and rather the nature of transaction is also not clear from the entries in the impounded documents. Therefore, the statement recorded under section 131 of Shri Rajesh Tambi is an important link which forms the basis of the addition made by the AO. It is also not in dispute that the assessee was not given an opportunity to cross examine Shri Rajesh Tambi. The Hon'ble Supreme Court in the case of Andaman Timber Industries vs. CCE (supra) while dealing with the issue has held in para 5 to 8 as under :- "5. We have heard Mr. Kavin Gulati, learned senior counsel appearing for the assessee, and Mr. K. Radhakrishnan, learned senior counsel who appeared for the Revenue. 6. According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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