ANIL BABANLAL AGRAWAL,JALGAON vs. INCOME-TAX OFFICER,

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ITA 299/PUN/2014Status: DisposedITAT Pune08 November 2019AY 2002-034 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, following a coordinate bench's decision, found the issue required detailed factual verification. It held that if the income from the entries was declared by Mr. Chhoriya as his own, no addition should sustain in the assessee's hands, but if contrary, the addition would be sustained.

What were the facts?

The assessee challenged an addition of Rs. 1,45,000 made by the AO under Section 69 of the Income Tax Act. The addition was based on statements from search proceedings involving the 'Chhoriya Group'. The assessee argued that no opportunity for cross-examination was provided.

What were the issues?

Whether the addition made under Section 69/69A without providing an opportunity for cross-examination is valid. The need for factual verification regarding the declaration of income by the third party.

Which sections of the Income-tax Act were involved?

Section 69,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Sunil Ganoo
For Respondent: Shri S.P. Walimbe

आदेश / ORDER

PER S.S. VISWANETHRA RAVI, JM :

This appeal is filed by the assessee against the order dated 03.01.2014 passed by CIT(A)-II, Nashik for A.Y. 2002-03.

2.

Shri Sunil Ganoo, the Ld.A.R. submits that assessee has no interest to prosecute ground Nos.1, 2, 5, and 6. To that effect an endorsement was made by him and prayed to dismiss the same as not pressed.

Accordingly, ground Nos.1, 2, 5 and 6 are dismissed as not pressed.

Ground No.7 is general in nature and requires no adjudication from us.

3.

We find ground Nos.3 and 4 are inter-linked raised challenging the

action of CIT(A) in confirming the addition of Rs.1,45,000/- made by the

AO u/s 69 of the Act, without affording an opportunity of cross-

examination in the facts and circumstances of the case.

4.

Heard both parties and perused the material available on record.

The contention of Shri Sunil Ganoo, the Ld.A.R. is that the AO made

addition of Rs.1,45,000/- u/s 69 of the Act without giving opportunity to

the assessee for cross-examination of Shri Chhoriya basing on which the

AO proceeded to make addition. The Ld.A.R. referred to Para No.2 of the

assessment order and Para No.9.2 of the CIT(A)’s order and argued the

addition made by the AO and as confirmed by the CIT(A) needs to be

deleted. Alternatively, he placed on record a consolidated order dated

15.07.2019 of this Tribunal in the case of Shri Ratanlal C. Bafna Vs. DCIT

in ITA No.109 & 110/PUN/2014 and submitted that the issue raised in the

present appeal is identical to the issue decided by this Tribunal vide its

order dt.15.07.2019 (supra). He referred to Para No.13 of the said order

and argued that the present issue i.e., addition of Rs.1,45,000/- u/s 69A

of the Act raised in ground Nos. 3 and 4 may be remanded to the file of AO

for his detailed factual verification. Shri P. Walimbe, the Ld. D.R. reported

no objection in remanding the issue raised in ground Nos.3 and 4 to the

file of AO.

5.

We find in the present case the assessment was re-opened on the

basis of search said to have been conducted in the case of Chhoriya Group

and the addition of Rs.1,45,000/- made by the AO u/s 69 of the Act on

the basis of statement alleged to have been made by Shri Kanhaiyalal D.

Chhoriya in the search proceedings involving the assessee. Therefore, we

find the observations made by the Co-ordinate Bench of this Tribunal in

the case of Shri Ratanalal C. Bafna Vs. DCIT (supra) that if the income of

the entries which were found in the diary during the course of search in the

premises of Chhoriya group, had been declared by Mr. Chhoriya as his own

income, in such circumstances, no addition should sustain in the hands of

the assessee. However, if it is found that there is a contrary scenario in that

case, addition has to be sustained in the hands of the assessee and

remanded the matter to the file of AO for a detailed factual verification

which is at Para No.13 of the said order, for ready reference is reproduced

as under :

“13. We have perused the case records and heard the rival contentions on merits. We are of the considered view that if the income of the entries which were found in the diary during the course of search in the premises of Chhoriya group, had been declared by Mr. Chhoriya as his own income, in such circumstances, no addition should sustain in the hands of the assessee. However, if it is found that there is a contrary scenario in that case, addition has to be sustained in the hands of the assessee. This issue, therefore needs detailed factual verification. We therefore, set aside the order of the Ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for proper verification as hereinabove directed by us and re-adjudicate the matter in conformity with the principles of natural justice. Thus, grounds No. 5 and 7 raised in appeal by the assessee are allowed for statistical purposes.”

6.

In the light of the above observations, we deem it proper to remand

the issue of addition of Rs.1,45,000/- involving ground Nos.3 and 4 to the

file of AO for his detailed factual verification. The assessee is at liberty to

file evidences, if any, in support of his claim. Thus, ground Nos.3 and 4 are allowed for statistical purposes.

7.

In the result, the appeal of assessee is partly allowed for statistical purposes.

Order pronounced on 8th day of November, 2019.

Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER

पुणे / Pune; �दनांक / Dated : 8th November, 2019 Yamini

आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. आयकर आयु�त (अपील) / The CIT(A)-2, Nashik. 3. 4. The Commissioner of Income Tax-2, Nashik. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. //स�या�पत ��त// True Copy//

आदेशानुसार/ BY ORDER // True Copy // // True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.

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