TMI Blog2017 (7) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... AVERI AND MR. INDERJEET SINGH, JJ. For The Appellant : Mr. Anil Mehta with Mr. Sameer Sharma For The Respondent : Mr. Siddharth Ranka with Mr. Muzaffar Iqbal Judgment 1. In all these appeals, common questions of law and facts are involved, hence they are decided by this common judgment. 2. By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby the tribunal has dismissed the appeal of the department and allowed the appeal of the assessee. 3. While admitting the appeals, this court framed the following substantial questions of law:- Income Tax Appeal No.197/2012 admitted on 12.08.2015. (i) Whether the Tribunal was justified in deleting the addition of ₹ 4,07,00,000/- made by the Assessing Officer and confirmed by the CIT(A), being on money received with respect to subject land of the assessee from Unique Group, which was evidence by the document seized during search u/s 132 of the Act? (ii) Whether on the premises that Ravindra Singh Thakkar on whose testimony the present assessee was also fasten the tax liability supposed to be afforded opportunity of cross-examination in the facts of the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side both the orders of the lower authorities and restore the matter back to the AO to examine the issue from the record of the Municipal council/JDA or any Government agency. If the properties stand in the name of the assessee, only then the addition can be made in the hands of the assessee. However, the AO will be at liberty to examine the case for making the addition in the hands of the persons in whose name the property is recorded in the record of the Municipal Council/JDA etc., if need be. With this direction, the issue is set aside to the AO who will adjudicate in the light of above discussion and by considering the entire evidence as per law but by providing reasonable opportunity to the assessee. 10. After hearing rival submissions and considering the material available on record, we are of the view that the AO made the addition de hores without having any specific material on hand. The said property at Hanuman Nagar D is not identifiable as the Hanuman Nagar D is the name of the colony. The ld. A/R submitted that the assessee is not owning any property in Hanuman Nagar D nor he had sold any property during the assessment year under consideration. 11. From the AO s o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge business. Moreover, no chance was given for to confront Shri Ashok Kumar Jain. Shri Ashok Kumar Jain never stated of having the brokerage business with the assessee. In these circumstances, we find no justification for making the addition of ₹ 1,13,000/-. Therefore, by setting aside both the orders of the lower authorities, we delete this addition. Thus, the assessee will get the relief of this amount. 19. After hearing rival submissions and considering the material available on record, we are of the view that the AO made the first two additions in summary manner as appears from his order. The CIT(A) has confirmed the order without any discussion. The above two additions are without any material. The AO made no attempt to bring any corroborative evidence or specific circumstances for the presumption. Hence the addition of ₹ 3,24,000/- for the year 1997-98 and addition of ₹ 35,000/- for the years 1998-99 are deleted as the same are de hors without any material. 23. After hearing rival submissions and considering the material available on record, it appears that in the previous ground the AO made the addition for taking the advances from Shri Ashok Kumar Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs which are based upon retracted statements made by the assessee null and void. 8. However, counsel for the respondent contended that the view has been taken by the Supreme Court in recent judgment in case of M/s Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata-II reported in [2015] 281 CTR 241 (SC) wherein it has been held as under:- As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination-in-chief non est. It was the case of the defendant that he was carrying on the business of advertisement by putting up the hoardings of different parties. The board was made by him, paintings and writings were also done by him and for putting the hoarding he charged from his customers. Therefore, it appears to us that there are no clear findings that anybody was given lease or anybody was given the right to put up the hoarding and there was parting of possession in favour of anyone else. It was, however, argued that even if the appellant had put the advertisement board hoarding he was earning a huge amount by the same and this was a factor which would indicate that there was parting of possession by him. It was, however, submitted on behalf of the appellant that when the shop had been let out to the defendant-appellant for carrying on business it was the right of the defendantappellant to carry on the business. It was legally permissible to use the said shop room and also use the roof thereof and earn as much as could be done and as such it is not parting with possession. 10. In view of the above, the view taken by the CIT(A) which was confirmed by the Tribunal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 9,00,000/-, especially, in the light of the recitals in the registered agreement. There was also no document to show the payment of ₹ 4,00,000/- by way of cash. Hence, this was no evidence to show that the balance amount due under the agreement after the admitted payment of ₹ 5,00,000/- was paid. The affidavit produced before the State Forum and the evidence of the colleague of the respondent is clearly inadmissible and insufficient to prove any such payment. Thus, the case set up by the respondent in his evidence was not established. It is in that situation that the District Forum taking note of the payment of ₹ 5,00,000/- and the failure of the respondent to encash the cheque for ₹ 5,00,000/- that was returned by the company, ordered the complainant to pay the balance amount due under the transaction as evidenced by the written instrument and take delivery of the premises in question and in the alternative gave him the option to take back the sum of ₹ 5,00,000/- with interest. Neither the State Commission, nor the National Commission has given any sustainable reason for differing from the conclusion of the District Forum. A mere suspicion that bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64 SC 708; New India Assurance Co. Ltd. v. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors. v. Gurmit Singh and Ors.AIR 2009 SC 2448; Biecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha AIR 2010 SC 3131). 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the Assessee had specifically asked to be allowed to cross-examine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would amount to a denial of the right to be heard i.e. audi alteram partem. 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government, is that the government servant is afforded a reasonable opportunity to defend himself agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to crossexamine, the Adjudicating Authority did not grant this opportunity to the Assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers could not have brought out any material which would not be in possession of the Appellant themselves to explain as to why their exfactory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the Appellant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the circumstances, as rightly observed by the learned Tribunal, the Assessing Officer was not justified in making addition under Section 69B of the Act solely relying upon the statements of those two farmers. 13. We see no reason to interfere with the findings recorded by the learned Tribunal. We are in complete agreement with the view taken by the learned Tribunal while deleting the addition made by the Assessing Officer made under Section 69B of the Act. No substantial question of law arises. 8. CIT v. Devendra Kumar Singhal 5. The ITAT thereafter relied upon finding of CIT (A) regarding the nature of diary, which was not found to be an exclusive record of the financial transactions. The ITAT observed:- It is also observed by the ld. CIT (A) that the diary did not show an element of exclusive/confidential business record. The ld. CIT (A) treated the diary as general household diary and not related to actual business transactions. We fully agree with this observation of the ld. CIT (A) that there is no sufficient material including LP-4, which could lead to the conclusion that the assessee has received any undisclosed money from employer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) had clearly held that the Assessing Officer had passed the assessment order in violation of the principles of natural justice inasmuch as he had neither provided copies of the seized material to the assessee nor had he allowed the assessee to cross-examine one Mr. Manoj Aggarwal on the basis of whose statement the said addition was made. The Commissioner of Income Tax (Appeals) also held that the entire addition deserved to be deleted, particularly so, because the transactions also stood duly reflected in his regular returns. 3. The Tribunal, after referring to the decision of this Court in the case of CIT v. SMC Share Brokers Ltd. MANU/DE/9286/2006 : [2007] 288 ITR 345, came to the conclusion that there was no infirmity in the order of the Commissioner of Income Tax (Appeals) and, therefore, declined to interfere with the same and dismissed the appeal of the Revenue. 12. ACIT vs. Govindbhai N. Patel Addition under section 69B Undisclosed investment in purchase of agricultural lands--The addition made by the AO on account of undisclosed investment in purchase of agricultural lands. The AO had carried out investment and had collected statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that there being no corroborative evidence, no adverse inference could be drawn from entries of parcha against assessees- Whether finding recorded by Tribunal was pure finding of fact based on material on record and, therefore, no question of law arose therefrom-Held, yes. 14. Commissioner of Income Tax vs. Bhanwarlal Murwatiya and Ors. 4. The entire case was sought to be hanged by the Revenue on the peg of statement of Shri Suresh Kumar Soni, said to have been recorded from time to time, who had given varying statements, at different times. Learned AO also relied upon certain statements, said to have, been recorded by the Asstt. Director of IT, of Amar Chand, Bhanwarlal and Radhey Shyam, but then, no reliance was placed on those statements by the learned Tribunal. 5. Assailing the impugned judgment, it is contended, with all vehemence, that it is more than clearly established on record, that a consideration of ₹ 61 lacs did pass, so much so that Suresh Kumar Soni has been assessed, his balance sheets have been considered, and it is writ large, that during the relevant time, his resources had disproportionately increased, which obviously wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT, or the learned Tribunal. 15. CIT vs. Dhrampal Premchand Ltd. However, AO paid no heed to such request and proceeded with assessment order- Whether since correctness or otherwise of report, on basis of which assessment order was passed against assessee, was itself under challenge, said repost could not be automatically accepted and Assessing Officer committed violation of principles of natural justice in not permitting cross-examination of analyst and relying upon his report to detriment of assessee-Held, yes. 16. CIT vs. S.M.Aggarwal 11. In the present case the Assessing Officer has placed reliance on the statement of Smt.Sarla Aggarwal, daughter of the assessed while arriving at the conclusion, that the entries belong to the transactions of the assessed. This statement made by Smt.Sarla Gupta, cannot be said to be relevant or admissible evidence against the assessed, since the assessed was not given any opportunity to crossexamine her and even from the statement, no conclusion can be drawn that the entries made on the relevant page belongs to the assessed and represents his undisclosed income. It is also an admitted fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writing between the parties where one has to pay the other a principal sum by specified date then the oral agreement that the money was not to be paid till the specified date cannot be proved. Therefore, it follows that no oral agreement contradicting/varying the terms of a document could be offered. Once the aforesaid principal is clear then ostensible sale consideration disclosed in the sale deed dated 24-9-2002 (A.7) has to be accepted and it cannot be contradicted by adducing any oral evidence. Thereafter, the order of the Tribunal does not suffer from any legal infirmity in reaching to the conclusion that the amount shown in the registered sale deed was received by the vendors and deserves to be added to the gross income of the assessee-appellant. 18. CIT-13 Vs. M/s. Ashish International (ITA No. 4299 of 2009; dated, 22.02.2011) The Tribunal has recorded a finding of fact that the assessee had disputed the correctness of the above statement and admittedly the assessee was not given any opportunity to cross examine the concerned Director of M/s. Thakkar Agro Industrial Chem Supplies P. Ltd. who had made the above statement. The appellate authority had sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. S.C. Sethi, D.B.I.T Appeal No. 78 of 2005, 10.03.2006 10. The facts stated above clearly indicate that no question of law arises in this appeal. The findings recorded by the Tribunal are findings of fact affirming the earlier finding of fact recorded by the Commissioner of Income-Tax (Appeals). Apparently when the loose papers by itself did not indicate receipt of the alleged undisclosed income by the assessee and peripheral reliance on the document was not earlier countenanced in absence of opportunity of cross examination of the person from whose possession the loose papers were recovered. The fact that the Assessing Officer has not made any efforts to serve the said Sh. A.K. Chhajer and secure his presence by invoking powers under the Income-tax Act for securing presence of any witness also goes to show that the Assessing Officer has not really made efforts to give effect to the directions of the Commissioner of Income-tax (Appeals) for making available opportunity of cross-examining Sh. A.K. Chhajer by the assessee. 6. We have heard learned counsel for the parties. 7. Taking into consideration the observation made by the Tribunal regarding not allowing c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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