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TMI Blog2023 (6) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether on the facts and in law, the ld. CIT(A) was justified in ignoring the fact while granting relief to the assessee that the payer of 'On money' have also approached the Income Tax Settlement Commission for the settlement of the tax disputes on these unaccounted transactions? (iii) On the basis of the facts and circumstances of the case, the ld. CIT(A) ought to have upheld the order of the Assessing Officer." 2. The assesse has also filed an application for admission of additional ground under Rule 27 of Income tax (Appellate Tribunal) Rules 1963. In the application the assessee has contended that they support the order of ld CIT(A) and request to consider their application while hearing the appeal. The assesse has raised following ground; " On the facts and circumstances of the case as well as on the subject, the ld CIT(A) has erred in not entertaining the plea of the assessee that the addition could not be made as income from the project had been declared under IDS-2016." 3. Brief facts of the case are that the assessee is a company engaged in the business of construction and dealer of Indian Oil Corporation (IOC). The assessee filed its return of income for the A.Y. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner have received any cash payment as alleged. The reference to Mr. Gheewala has no connection whatsoever with the assessee. The assessee also explained the code word "GC" means "Gupt code" having been claimed by one Shri Narendra Lunkad in his statement, the assessee submitted that neither the assesse nor any of its partner have any dealing with Shri Narendra Lunkad. Statement of Narendra Lunkad has no relevance. Copy of such statement is not provided to the assessee. The assessee asked for supply of full statement of Narendra Lunkad and submitted that the statement relied upon should be provided to the person against whom it is to be used otherwise it has no evidentiary value. The assessee also explained the page No. 18 and 19 of Annexure-A1 and submitted that it can be seen that there is no mentioned of word Gupta Code as claimed by Assessing Officer so they required cross examination of Shri Narendra Lunkad. The assesse also denied and explained other contents of show cause notice. On the request of assessee, summon under Section 131 of the Act was issued to Shri Narendra Lunkad for his cross examination on 28/12/2017. The Assessing Officer recorded that Narendra Lunkad fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of all the units sold by the assessee, their size, name of purchaser, documents number of registration at registrar office with date of 5th February 2015 and the sale consideration. It was also stated that the assessing officer in his finding referred the name of Narendra Lunkad, but the assessee has not done any dealings with Narendra Lunkad. Further cross examination of Narendra Lunkad was not allowed to the assessee. Even otherwise, statement recorded during course of survey has no evidentiary value. To support their various submissions, the assessee relied on various case laws including in CIT Vs Kadar Khan and Sons (2012) 254 CTR 228 and Andaman Timber Private Limited Vs Commissioner of Central Excise (2015) 62 taxmann.com and in CBI Vs V C Shukla (1998) 3 SCC 410. 5. The ld CIT(A) after considering the assessment order and submissions of the assessee deleted the entire additions by taking view that the documents which was the basis of addition was not recovered from the possession of assessee, the documents were recovered from Mahotsav Creation Private Limited. Such documents are the computer printout, which is not in the hand writings of anyone including of assessee. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice to the assessee, the assessee simply denied such receipt of on money. During the assessment the Assessing Officer find that the assessee made declaration of Rs. 3.00 crores in the project Sakar Textile House and by giving set off of such declaration, made addition of Rs. 10.84 crores. The ld CIT(A) allowed the relief to the assessee on the basis of the submissions of assessee that the addition is based on the evidence found at the third party premises and that assessee was not allowed cross examination of Narendra Lunkad. The ld CIT-DR for the revenue submit that there was clear and unambiguous evidence against the assessee about receiving on money on sale of unit/ shops to Mahotsav Creation Private Limited. The ld CITDR for the revenue prayed for restoring the order of assessing officer by reversing the order of ld CIT(A). 7. On the other hand, the ld AR of the assessee supported the order of ld CIT(A). The ld AR for the assessee submits that there is no direct evidence against the assessee about the receipt of unaccounted money/ on money. The ld CIT(A) in his order clearly held that documents which was the basis of addition was not recovered from the possession of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 18- 19 of Annexure A-1, there was certain date wise details of on money paid for purchasing the six shops at Sahakar Textile Market developed by the assessee. On page no. 18-19 name 'Gheewala' was written, on the basis of such word the name of partner of assessee was detected. As per the said documents Mahotsav Group paid 'on money' of Rs. 13.84 Crore to assessee for purchase of six shops/ units. The assessing officer also relied on the statement of Narendra Lunkad recorded during survey. The assessing officer held that on issuing show cause, the assessee denied about such cash transaction. The assesse also took stand that they have declared Rs. 3.00 Crore in IDS-2016 for the impugned assessment year. The assessing officer by giving setoff of the income declared in IDS-2016 made addition of Rs. 10.84 Crore. We find that during the assessment, neither the statement of Narendra Lunkad was provided to the assessee, no he attended the proceedings for his cross examination. The assessing officer also held that he is not under legal obligation to provide cross examination of Narendra Lunkad. 9. As recorded above that before ld CIT(A) the assessee filed detailed written submissions. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which is prima facia reliable and that too, supported with some other circumstances pointing out that in particular third person against whom the allegation is made was involved in the matter or has done something during that period. In Andaman Timber Industries Vs CIT (supra) the Hon'ble Apex Court also held that when the statements of witness are made basis of demand, not allowing assessee cross examination of witness is a serious flaw which makes order nullity, as it amounts to violation of principles of natural justice. In Dhakeswari Cotton Mills Vs CIT (supra) it was held by Hon'ble Apex Court that though, the assessing officer is not fettered with technical rules of evidence and pleadings and he is entitled to act on material which may not be accepted as evidence on account of law, but in making assessment he is not entitled to make a pure guess and make assessment without reference to any material at all. 12. Further, Hon'ble Jurisdictional High Court in CIT Vs Interject Singh Suri (supra) also held that additions made on the basis of statements of persons who were not allowed to be cross examined by the assessee is not sustainable. In CIT Vs Lavanya Land (P) Ltd (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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