TMI Blog1997 (5) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee which took place regarding the purchase of land but actually no transaction was effected. Therefore the addition of Rs. 18 lakhs made by the Assessing Officer and confirmed by the CIT(Appeals) was without any basis and there is no controversial evidence on record to confirm the addition. In this view of the matter, the only point which has arisen for our consideration is whether the addition of Rs. 18 lakhs made by the Assessing Officer and confirmed by the CIT(Appeals) is just and proper. 5. To give an answer to the above posed question, it is necessary to consider the statement of an alleged broker Sri Shivkumar Vaid. His statement was recorded but no opportunity was given to the assessee to cross-examine the broker to find out the truth from the statement. The fact that the assessee was not given an opportunity of cross-examining Shri Shivkumar Vaid by the Assessing Officer cannot be ignored easily because on the basis of his statement alone, the addition of Rs. 18 lakhs was made. It was submitted that in the absence of any evidence for payment or purchase of land at Versova, the said addition should not have been made. it is a fact that Shri Shivkumar Vaid was not cross- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier ---CIT(Appeals) in his order extracted above had required to prove certain points, such as, - the assessee should identify the broker who brought him the proposal, the land and land owner, Shri Maganlal, the man who had paid Rs. 18 lakhs at that particular time and that man must prove that he had paid Rs. 18 lakhs. The Department is relying mainly on this piece of paper which is at pg. 1 of the paperbook. On the basis of that paper, the Department made an addition of Rs. 18 lakhs as income of the assessee. The assessee denied having paid the sum of Rs. 18 lakhs or having entered into any transaction. In that event it is for the Department to prove all these items and the contents to make an addition. 9. According to the CIT(Appeals), he held that except producing Shri Shivkumar Vaid, the other 4 conditions as laid down by his predecessor were not proved and if those conditions would not have been proved, the Assessing Officer was directed to delete the addition failing which the same was to be confirmed. 10. When the assessee has denied of having paid Rs. 18 lakhs, it was for the Assessing Officer to prove that the assessee paid Rs. 18 lakhs at a particular time to a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution in respect of the disputed transaction can be made to the partnership firm. AB these possibilities have not been firstly established and secondly considered. 13. We have gone through the facts and the case-law relied upon by the assessee. In the case of Prakash Chandra Mehra, a search had taken place in August 1975 and yet additions have been made for assessment year 1975-76 on the basis of dumb note and vouchers. The Revenue had chosen to make additions out of expenses for the sole reason forgetting that it was preposterous to assume that any assessee would continue to inflate on the basis of blank signed cash vouchers after search had taken place. The Tribunal held that the additions made were highly vexatious in nature and the AAC was right in deleting them, The Tribunal confirmed the action taken by the AAC and dismissed the Revenue's appeals. 14. We have heard the arguments of the rival parties. We are of the considered opinion that the addition made is not justifiable, firstly, it was for the Department to prove the ingredients of page- 1 of the paperbook (which was seized) and secondly to prove that Sri Prakash Golia acted for and on behalf of the assessee-HUF or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing discrepancies/contradictions in the said statement :--- "(a) Shri Vaid is basically an agriculturist and hails from Bikaner. The assessee also comes from Bikaner. (b) No property deal whatsoever has been finalised by Shri Vaid as broker. (c) Shri Vaid is claimed to have been earing Rs. 500 to Rs. 600 per month on account of inspection charges. However, no evidence in support of this also has been furnished. The address where Shri Vaid was staying when he was claimed to be acting as broker has not been furnished by Shri Vaid. Shri Vaid had no office. Shri Vaid has not been able to identify the land and the land owner. He also does not know anything about Shri Maganlal. (d) He has not been able to state as to on what basis the amount/ working as mentioned in the seized documents like 2 crores, 18 lakhs etc. have been arrived by him. (e) It is surprising that Shri Vaid did not pursue this proposal with Mr. Goliya although he could have earned substantial amount of brokerage and he was knowing that P.C. Goliya was interested in the proposal. This proposal was not given to anybody else by Shri Vaid. (g) Shri Vaid has not been able to give the name, address, telephone No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate order dated 10-3-1992 in which it was clearly mentioned that if the same are not produced the addition will be deemed to have been confirmed in that order, I hold that the appellant is not entitled to agitate the issue in this appeal as it is already concluded by the earlier order of CIT(Appeals) dated 10-3-1992. This ground of the appellant is, therefore, rejected as incompetent." 5. Shri Shivkumar Vaid was the witness produced by the assessee. No request seems to have been made, or was shown to have been made, by the assessee before the Assessing Officer for such cross-examination. He raised this question only before the CIT(Appeals) who rejected the same and rightly so, in my opinion, for the reasons extracted above from his order. Be that as it may, it was for the assessee to bring material on record in accordance with the direction of the CIT(Appeals) in the first order. Having accepted that order, it is now too late for the assessee to raise the objection for its non-compliance. 6. The assessee had has also raised an objection challenging the relevance of the document for making the addition on that basis. The ground taken by the assessee is that "it was not si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the point with the following observations/findings :--- "8.5 When one reads this document the natural presumption is that assessee had paid the amount stated therein. A specific project for making a profit of Rs. 3.5 crores by giving specific purchase rate per sq. ft. and sales rate per sq. ft. has been discussed in partnership with one physical person called Shri Maganlal. Obviously, the assessee is quite aware of facts of this land. The assessee is now required to prove the following :--- 1. Identify the broker who brought him this proposal; 2. Identify the land and land owner; 3. Identify Shri Maganlal; 4. Identify the man who, at that particular time, had paid Rs. 18 lacs; 5. That man must prove that he had paid Rs. 18 lacs. 8.6 After all this evidence is produced, this addition will be deleted otherwise it will be deemed to have been confirmed by me in this order." 4. Against the aforesaid order of the CIT(Appeals) dated 18th March, 1992, the assessee had preferred an appeal. before the Tribunal, which was registered as IT Appeal No. 4073/Bom/92. Variety of grounds were raised in this appeal but the ground relating to the addition of Rs. 18 lacs was to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to state as to on what basis the amount/ working as mentioned in the seized documents like 2 crores, 18 lakhs etc. have been arrived by him. (e) It is surprising that Shri Vaid did not pursue this proposal with Mr. Goliya although he could have earned substantial amount of brokerage and he was knowing that P.C. Goliya was interested in the proposal. (f) This proposal was not given to anybody else by Shri Vaid. (g) Shri Vaid has not been able to give the name, address, telephone No. of any other broker who is known to him. (h) After this proposal Shri Vaid suddenly stopped his brokerage business and went back to home town. (i) Shri Vaid has stated that he has now come from Bikaner and is staying in Flat No. 11, Siddharth Apartment, Adarsh Colony, Malad (W). This Flat is stated to be belonging to one Shri Chandulal Shah. It was stated by Shri Vaid that Shri Chandulal Shah is staying somewhere else and he does not know, the address or Telephone No. of Shri Chandulal Shah though he was staying in his Flat. 7. The Assessing Officer further observed as follows and repeated the addition of Rs. 18 lacs :--- "On enquiry, Ward inspector has reported that this flat belongs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven the opportunity of cross-examining the broker, I hold that as the appellant failed to comply to the conditions mentioned in the appellate order dated 10-3-1992 in which it was clearly mentioned that if the same are not produced the addition will be deemed to have been confirmed in that order, I hold that the appellant is not entitled to agitate the issue in this appeal as it is already concluded by the earlier order of CIT(Appeals) dated 10-3-1992. This ground of the appellant is, therefore, rejected as incompetent." 9. Against the above findings of the CIT(Appeals), the present appeal was filed by the assessee. It was contended by the assessee that there was only a discussion between the broker and the assessee, which took place regarding the purchase of land but actually no transaction was effected and, therefore, the addition is not justified. It was also contended that no opportunity was provided to the assessee to cross-examine the broker. The learned Judicial Member has observed that it is a fact that Shri Shivkumar Vaid was not cross examined by the assessee. He has also noted that the seized paper does not bear any signatures. He has also observed that when the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the broker. The learned counsel for the assessee had also stated that Shivkumar Vaid was not produced by the assessee. According to her, the assessee had only furnished the address of the broker and the broker was examined by the Assessing Officer behind the back of the assessee. She has also stated that the Assessing Officer never intimated the assessee about the date on which the broker was to be examined by him. She has also stated that the copy of the statement of the broker was never given to the assessee. 13. The learned counsel has also pointed out that the assessee is an HUF and not an individual. She has also invited our attention towards the seized paper, a copy of which is available on record, and has pointed out that the document in question has been written on the letter head of 'Udey Instruments'. It was stated that Udey Instruments is a partnership firm wherein some members of the assessee-HUF are partners. She has also highlighted the point that this paper was seized from the possession of Shri P.C. Goliya who is a partner in the said firm and it was not seized from the possession of the Karta of the HUF. It was further submitted that Karta of the HUF was ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the CIT (Appeals) dated 18th March 1992 has become final and it is no longer open to the assessee to challenge its correctness at this stage. It was further argued that where a part of the order has not been appealed against, it would become final. In that connection, reference was made to the decision of the Madras High Court in V. Ramaswamy Iyengar v. CIT [1960] 40 ITR 377 and of the Bombay High Court in Jivatlal Purtapshi v. CIT [1967] 65 ITR 261. Referring to the decision in CIT v. Sundaram Co. (P.) Ltd. [1964] 52 ITR 763 (Mad.), it was contended that the subject matter of an appeal is the relief sought by the appellant in the appeal and objected to by the respondent. It is not proper to circumscribe the subject matter of appeal by taking into account the rival contentions or the reasons on the grounds which are put forward either by the department or by the assessee. The learned departmental representative had also referred to the decision in CED v. Smt. Ila Das [1981] 132 ITR 720/7 Taxman 325 (Cal.) and had argued that unlike civil courts the powers of the appellate authorities under the Income-tax Act are circumscribed by the subject matter of an appeal. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s counsel, the assessee was never intimated of the date on which broker was to be examined nor any opportunity was provided to him to cross-examine the broker. Since it is stated in the assessment order that the broker was produced by the assessee, I had directed the learned departmental representative to intimate whether the Assessing Officer had intimated the assessee the date on which he broker was to be examined, whether the assessee or his representative was present at the time of examination of the broker and whether the assessee was provided an opportunity to cross-examine the broker. The learned departmental representative did not provide any information on the point. In the circumstances, there appears force in the stand of the assessee that the statement of the broker was recorded at the back of the assessee and the assessee had no opportunity to cross examine the broker. In C. Vasantlal Co. v. CIT [1962] 45 ITR 206, the Hon'ble Supreme Court has held that the Income-tax Officer is not bound by any technical rules of the law of evidence. It is open to him to collect materials to facilitate assessment even by private enquiry. But if he desires to use the material so coll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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