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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA
BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER Assessment Year: 2017-18 Rajesh Sharma ACIT 3rd 1245, Floor, Kucha Central Circle -14 Mahajani Chandni Chowk, Vs. Delhi Delhi -110006 PAN NO. AATPS3255Q (APPELLANT) (RESPONDENT) Appellant by Sh. Shivam Malik, CA Respondent by Sh. P.N. Barnwal, CIT DR Date of hearing: 29/11/2023 Date of Pronouncement: 29/11/2023 ORDER
PER N. K. BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the CIT(A)-28, New Delhi dated 27.12.2022 pertaining to A.Y.2017-18.
The grievance of the assessee read as under :- “1. On the facts and circumstances of the case and in law, the Ld. CITIA) wrongly interpreted the judgment, as referred to in the appellant order while dismissing the appeal and has further erred in dismissing the assessee's request for cross examination, disregarding the judgment of the Supreme Court.
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in interpreting Section 69C of the Income Tax Act and disregarded the matter on merits with regard to "presuming that the assessee had paid cash to M/s Jindal Bullion Ltd." without any cogent reason, hence the addition so confirmed by CIT(A) is arbitrary unjust and bad in law.
3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of Rs. 35,95,887/- by invoking provision of section 69C of the Act. 4. That Ld. CIT(A) erred in dismissing the ground that the mandatory approval/sanction, as contemplated u/s 153D of the Act was not accorded according to law. 5. That the appellant craves to add, amend or delete any ground of appeal at the time of hearing.”
Briefly stated the facts of the case are that a search operation u/s. 132 of the Act was carried out at various premises of Jindal Bullion Ltd. Group of cases on 05.01.2017. During the course of search various incriminating documents were found and seized from the residential / business premises of Kusharg Jindal. It came to the notice that certain documents and information contained therein pertained to Rajesh Sharma. Accordingly notice u/s.153C of the Act was issued and served upon the Rajesh Sharma.
On perusal of the seized material the AO learned that cash payments were made by the assessee to Jindal Bullion Limited for purchase of silver based upon the transactions noted in the seized document considered alongwith statement of Parul Ahluwalia the AO made the addition of Rs.35,95,887/- .
Assessee challenged the addition before the CIT(A). Before the CIT(A) it was strongly contended that the transactions pertaining to the assessee were made mostly through cheque and completely denied to have made any transactions with Jindal Bullion Limited during the year. The CIT(A) was not impressed by the statements and confirmed the addition.
Before us the Counsel for the assessee vehemently stated that the entire addition revolved around the statement of Parul Ahluwalia and the assessee was denied opportunity to cross- examine. It is the say of the Counsel that any adverse inference drawn on the basis of the statement of Parul Ahluwalia is against the principle of natural justice. The Counsel referred to the decision of this Tribunal in and 1643/Del/2021 in the case of Anoop Kumar Soni and pointed out that on similar facts from similar search the additions have been deleted.
Per contra the DR strongly supported the findings of the lower authorities.
We have carefully considered the orders of the authorities below. It is true that the entire addition has been made on the basis of presumption drawn and the statement of Parul Ahluwalia. However, on specific request of the assessee no opportunity was given of cross-examination of Parul Ahluwalia who is not even related to the assessee. This means that the assessment has been framed solely on the basis of the statement of a third unrelated party denying the right to cross-examine thereby violated the principle of natural justice.
The Counsel for the assessee prayed for the opportunity to cross-examine Parul Ahluwalia and DR fairly conceded to this request.
On such concession we restore the issue to the files of the AO. The AO is directed to allow the assessee to cross-examine Parul Ahluwalia and the assessee is directed to avail such opportunity. Thereafter the AO is directed to decide the issue afresh after affording a reasonable and adequate opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purpose.
Decision announced in the open court on 29.11.2023.