TMI Blog2024 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... of Wadhwa group but no such documents in support of contention have been supplied to the assessee. Therefore, in view of the decision in the case of CIT v. Ashwani Gupta [ 2010 (2) TMI 42 - DELHI HIGH COURT] the action of the AO being in violation of principle of natural justice, the deletion of the addition by the CIT(A) is justified. We do not find any infirmity in the order of the Ld. CIT(A) in deleting the addition. The grounds of the appeal of the Revenue are accordingly dismissed. - SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) For the Appellant : Mr. Mani Jain/Pratik Jain For the Respondent : Mr. H M Bhatt, DR ORDER PER BENCH These appeals by the Revenue and cross-objections by the assessee are directed against two separate orders, both dated 28.03.2023, passed by the Ld. Commissioner of Income-tax (Appeals) National Faceless Appeal Centre, Delhi [in short the Ld. CIT(A) ] for assessment years 2015-16 and 2016-17 respectively. As common issue in dispute, permeating from same set of facts is involved in these appeals , therefore same were heard together and disposed off by way of this consolidate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise. 4. On the facts and circumstances of the cross-objector's case and in law, the Ld. AO erred in making an addition of Rs. 14,81,00,000/- on account of alleged unsecured loan given to Wadhwa Group, ignoring the fact that the assessee had not entered into any such transaction, for the reasons mentioned in impugned order or otherwise. 5. On the facts and circumstances of the cross-objector's case and in law, the Ld. AO erred in making an addition of Rs. 1,86,41,120/- on account of alleged interest income, for the reasons mentioned in impugned order or otherwise. 4. Briefly stated, facts of the case are that the assessee filed return of income for the year under consideration on 24.08.2015 declaring total income at Rs. 44,61,910/-. The return of income was processed u/s 143(1) of the Income-tax Act, 1961 (in short the Act ) on 08.03.2016. Thereafter, on receipt of information from the Dy. Commissioner of Income-tax that the assessee had given cash loans to M/s Wadhwa Group and also received interest income in cash, the Assessing Officer after recording reasons to believe that income escaped assessment, he issued notice u/s 148 of the Act on 19.03.2020. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h cash loan and therefore, disposed off collectively as under. The learned AO carried out this adjustment based on information received from office of DCIT, CC5(4), Mumbai. Apparently search and seizure proceedings were carried out at the premises of Wadhwa Group on 16-12-2015 and as per information retrieved from cloud based software which was maintained by a third party Shri. Arun Nagar. Pursuant to such data the learned AO contested that appellant's name was revealed by Wadhwa group before settlement commission for accepting cash loan of Rs. 14.81 crores. 5.2 In view of the above the learned AO reopened the assessment proceedings u/s 147. In response to the same the appellant denied any cash dealings with Wadhwa Group and requested learned AO to provide material available within and relied by him for alleged cash loan of Rs. 14.81 crores. The appellant also requested for opportunity to cross examination. However, the appellant was neither provided material available basis which such addition carried out nor he was provided opportunity of cross examination. In this regard the extract from AO's order is reproduced as under: The next contention raised is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be placed on following judicial precedents wherein it has been upheld those additions based on seized material found from premises of third party cannot be considered for making additions unless the AO has carried out independent finding based on such material. - Add. CIT Vs Lata Mangeshkar (97 ITR 696) - CBI VS V. C. Shuka (3 SCC 410) DEPARTMEN - Shri Mustafamiya H. Sheikh (Vide ITA NO. 2588/Ahd/2012) - DCIT Vs H.S. Chadramouli (ITA No. 1551/Bang/2012) - M/s Mohd. Ayub Mohd. Yakub Perfumers Pvt. Ltd (ITA NO.388/LKW/2013) - DCIT Vs Pawan Kumar Agarwal (ITA 413 LKW/2012) - MIs Bhola Nath Radha Krishan 9ITA 5149/Del/2012) - Pradeep Amrutial Runwal (149 |TR 548). 5.4 In view of the above facts of the case and judicial pronouncement by Honourable Supreme Court it is observed that the learned AO has grossly erred in passing an order which Is against principle of natural justice by not granting opportunity of cross examination and by not sharing the material available with him basis which he has carried out the addition. Therefore, the order of learned AO is bad in law and the addition on account of cash loan (Rs.14,81,00,000/-) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stify for addition under section 68 of the Act. Thus, in our opinion, there no circumstances evidences, which indicate or establish that the assessee would have extended cash loan to Wadhwa group except the statement of Wadhwa group but no such documents in support of contention have been supplied to the assessee. The Hon ble Delhi High Court in the case of CIT v. Ashwani Gupta (supra), held as under: 7 In view of the foregoing circumstances, we feel that no interference with the impugned order /s called for. The Tribunal has correctly understood the law and applied it to the facts of the case. Once there is a violation of the principles of natural justice inasmuch as seized material is not provided to an assessee nor is cross examination of the person on whose statement the Assessing Officer relies upon, granted, then, such deficiencies would amount to a denial of opportunity and, consequently, would be fatal to the proceedings. Following approach adopted by us in SMC Share Brokers Ltd.'s case (supra), we see no reason to interfere with the impugned order. No substantial question of law arises for our consideration. The appeal is dismissed. 8.3 Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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