Loading judgment…
No AI summary yet for this case.
O R D E R This appeal is filed by the assessee against the order of ld. CIT(A)-I, Indore dated 17.04.2019 pertaining to Assessment year 2010-11. The assessee has raised following grounds of appeal:
“Grounds of Income tax appeal before the honourable Income Tax Appellate Tribunal, Indore Bench, Indore against the order u/s 143(3)/147/250 passed by the learned Commissioner of Income Tax (Appeals)-1, Indore for assessment year 2010-11 1.Addition of Rs. 8,88,000/- on account of on money paid is unjustified That the confirmation of addition of Rs. 8,88,000/- on account of on money allegedly paid by the appellant for purchase of plot at Golf Green is on the facts and in the circumstances of the case unjustified, improper, arbitrary, erroneous and bad in law. (Tax Effect Rs. 223863/-) 2.Presumption can be raised u/s 132(4A) against person whose premises are searched and not against other person. That presumption under Section 132(4A) of the Act can be raised only against the person whose premises were searched and the SMC –Sushma Nahar 2 of 2019 documents seized. Since the documents were found from Garha Group, therefore, no presumption could be raised against the appellant. (Tax Effect Rs. 223863/-) 3.Evidentiary Value of loose sheets is doubtful. That documents showing receipt of on money recovered from Garha Group were not in form of account books maintained in regular course of business. They were random sheets and loose papers and their correctness and authenticity was un-reliable having no evidentiary value. There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and that too, supported by some other circumstances pointing out that particular third person against whom allegations has been leveled is in fact involved in matter. (Tax Effect Rs. 223863/-) 4.Provisions of sec. 153C were applicable which excludes the application of sections 147 and 148 of the Act. That without prejudice to above, it is argued it is an admitted fact, as also evident from the reasons recorded and the assessment order that the initiation of reopening proceedings was made by the Assessing Officer on the basis of information received from the Directorate of Income-tax (Inv.) on the basis of search and seizure operation conducted at the premises of Garha Group. Thus, provisions of sec. 153C of the Act were applicable in the present case, which excludes the application of sec. 147 of the Act. Hence, notice issued under sec. 148 and assessment framed in furtherance. thereto under sec. 147 read with section 143(3) are void ab initio and liable to be quashed. (Tax Effect Rs. 223863/-) 5.Addition to income without cross examination is unjustified. That no addition should be made based on documents found from third parties without confronting material and allowing opportunity of cross examination to assessee. The appellant specifically requested the learned AO for cross examination of Garha Group persons but cross examination was not allowed. Since the assessee has not been provided, necessary material including their statements, opportunity of cross examination and hearing based thereon, addition to income is thus unjustified and improper. (Tax Effect Rs. 223863/-) 6.Any other ground may be permitted to be taken later That the appellant further craves leave to add, to alter and/or to amend any of the foregoing grounds of appeal as and when necessary. (No Tax Effect)
SMC –Sushma Nahar 3 of 2019
At the outset of hearing, Ld. counsel for the assessee submitted that no addition should have been made based on documents found from third parties without confronting material and allowing opportunity of cross examination to assessee. The assessee specifically requested the AO for cross examination of Garha Group persons but cross examination was not allowed.
Since the assessee has not been provided, necessary material including their statements, opportunity of cross examination and hearing based thereon, addition to income is thus unjustified and improper.
On the other hand, Ld. Sr. DR relied upon the orders of the revenue authorities but could not controvert the submission made by the ld. counsel for the assessee by bringing any contrary material on records.
I have heard the rival submissions, perused the materials available on records. I find that the AO made the addition based on documents found from third parties. In spite of specific request made by the assessee the AO did not allow the assessee to confront the material and opportunity of cross examination to assessee. Therefore, I am of the view that since the assessee has not been provided necessary material and opportunity of cross
SMC –Sushma Nahar 4 of 2019 examination, it would be in the interest of justice if the matter is reconsidered by the AO after allowing confrontation of the material and cross examination of the third party to the assessee.
Thereafter, the AO would frame assessment afresh. Needless to mention here that the due opportunity shall be provided to the assessee and the assessee is also at liberty to file evidence if any in support of the claim.
In result, appeal filed by the assessee is allowed for the statistical purposes.
Order was pronounced in the open court on 03.06.2020.