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2015 (11) TMI 286 - DELHI HIGH COURTAddition on account of cash seized from one of the employees of the assessee - assessment completed under Section 158 BC (1) - Held that:- In the present case, the Assessee had an explanation for not retracting the statement earlier. He also furnished an explanation for the cash that was found in the hands of his employee and this was verifiable from the books of accounts. In the circumstances, it was unsafe for the AO to proceed to make additions solely on the basis of the statement made under Section 132(4) of the Act, which was subsequently retracted. Consequently, the Court is unable to find any legal infirmity in the conclusion reached by the ITAT that the addition of ₹ 86 lakhs to the income of the Assessee was not justified. Question (B) is answered in the affirmative, i.e., in favour of the Assessee and against the Revenue. Addition on total export realisation - Held that:- Court finds that indeed no opportunity was given to the Assessee to cross-examine Mr. Sant Kumar Sharma, whose statement was the principal basis for making the addition of ₹ 1,38,41,971. The Court finds that in the present case the basis for making the addition of ₹ 1,38,41,971 was the statement of Mr. Sant Kumar Sharma. He had furnished various details which were incriminating as far as the Assessee was concerned. It was incumbent on the AO, in those circumstances, to afford the Assessee an opportunity of cross-examination of Mr. Sant Kumar Sharma. The ITAT also noted that the Assessee could not be said to have not cooperated at all in the assessment proceedings. The Court further notes that in M. Pirai Choodi’s case (2010 (11) TMI 26 - Supreme Court of India) the Assessee had not availed the statutory remedy of filing an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] against the order of the AO but had approached the High Court directly by way of a writ petition. In those circumstances, the Supreme Court held that the High Court ought to have required the Assessee to avail the remedy of a statutory appeal instead of quashing the assessment proceedings on the ground of violation of natural justice. The Supreme Court, in fact, permitted the Assessee to approach the CIT (A). As almost two decades have elapsed since the date of the search. There must be some finality to proceedings that seek to cover a block period beginning 1st April 1986. Consequently, Question (A) is also answered in the affirmative, i.e., in favour of the Assessee and against the Revenue.
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