MRS. POOJA RAMESH BULANI,MUMBAI vs. I.T.O WARD 3 ( 2 ) THANE, THANE

Aforesaid appeals have been filed by the assessee challenging two separate orders, both dated 3rd October 2017, passed by the learned Commissioner (Appeals)–2, Pune, pertaining to the assessment years 2009–10 and 2010–11.

The only common dispute in the present appeal is with regard to the additions made on account of payment of on–money in cash towards purchase of property.

Brief facts more or less common in both the appeals are, the assessee is an individual. Pursuant to a search and seizure operation conducted under section 132 of the Income–tax Act, 1961 (for short "the Act") in the case of Mayur Suchak Group on 13th July 2011, certain incriminating documents were found revealing that the assessee along with one Veena G. Bulani, have purchased a warehouse by paying on–money in cash over and above the declared sale consideration. On the basis of such information, the Assessing Officer re–opened the assessment for the impugned assessment years under section 147 of the Act. In course of assessment proceedings, the Assessing Officer found that as per the information gathered during the search and seizure operation, the assessee along with another person had paid ` 16 lakh towards on–money in the 3 Smt. Pooja Ramesh Bulani assessment year 2009–10 and ` 5,38,500 in the assessment year 2010–11. Therefore, he called upon the assessee to explain why 50% out of the on–money paid in both the assessment years should not be added to the income of the assessee. In response to the show cause notice issued, though, the assessee filed her revised return of income stating that apart from the amount paid in cheques while booking the warehouse, the assessee had not paid any on–money and further, the booking amount paid was also returned back to the assessee due to cancellation of deal, however, the Assessing Officer did not find merit in the submissions of the assessee. The Assessing Officer observed that the incriminating materials found during the search and seizure operation clearly reveals payment of on–money by the assessee and another person over and above the booking amount. Accordingly, he added back 50% out of the alleged on–money paid at the hands of the assessee which worked out to ` 8 lakh in A.Y. 2009–10 and ` 2,69,250 in A.Y. 2010–11.

Though, the assessee challenged the aforesaid additions before the first appellate authority on various grounds, however, the learned Commissioner (Appeals) sustained the additions made by the Assessing Officer.

The learned Authorised Representative submitted, though the Assessing Officer had relied upon incriminating materials found in 4 Smt. Pooja Ramesh Bulani course of a search and seizure operation conducted in case of a third party, however, such material was not confronted to the assessee. He submitted, though, the statement of third parties were relied upon for making the additions, however, the assessee was neither confronted with such statement nor was allowed opportunity to cross examine the person whose statement was relied upon. He submitted, wholly relying upon the information received from DDIT (Inv.) and books of account relating to third parties, the Assessing Officer has made the additions which are legally unsustainable. In support of his contention, learned Authorised Representative relied upon the following decisions:–

The learned Departmental Representative drawing our attention to the impugned assessment orders submitted, full opportunity was granted to the assessee in the course of assessment proceedings and the Assessing Officer has provided copy of seized documents to the assessee. Thus, he submitted, assessee’s allegation that adverse materials were not confronted to the assessee is incorrect. He submitted, if still the Bench feels that adverse materials are required to be furnished to the assessee, the matter may be restored back to the Assessing Officer for de novo adjudication.

We have considered rival submissions and perused materials on record. Learned Authorised Representative has challenged the additions made by the Assessing Officer primarily on the ground that adverse materials seized from the possession of third parties and statement recorded from third parties were neither confronted to her nor she was given opportunity to cross–examine the person whose statement was relied upon. Qua the aforesaid contention of the learned Authorised Representative, it is observed that in Paragraph–6 of the assessment order the Assessing Officer has specifically stated that at the request of the assessee not only the reasons for re– opening of assessments were provided but copies of seized documents were also provided to the assessee. Further, on perusal of the assessment order and, more specifically, Paragraph–11 of the assessment order, it is observed that the Assessing Officer has neither referred to nor relied upon any third party statement but he has only referred to incriminating documents seized from Mayur Suchak Group including the cash book of the said concern. Therefore, in view of the aforesaid, we are unable to fully accept the contention of the learned Authorised Representative that the Assessing Officer has relied upon third party statement without confronting them to the assessee nor allowing her to cross–examine them. That being the case, the ratio laid down in the decisions relied upon by the learned Authorised Representative are not be applicable to the facts of the present

In the result, appeals are allowed for statistical purposes. Order pronounced in the open Court on 22.03.2019