2017 (9) TMI 1895 - AT - Income Tax

Validity of assessment - non-considering the objections for reopening as well as non issuance of notice u/s 143(2) - HELD THAT - There should not be any grievance to the assessee.There being due opportunity of hearing has been given to the assessee. Even if there is any lapse on the part of the AO, it is only procedural ir-regularity, the provision of Sec.292BB of the Act takes care of it. More so, in the case of Areva T D India Ltd. vs. ACIT 2006 (11) TMI 166 - MADRAS HIGH COURT wherein held that non-considering the objections for reopening as well as non- issuance of notice u/s 143(2) are mere procedural irregularities and will not make the reassessment a nullity in law. Accordingly, this ground of the appeal of the assessee is dismissed. Opportunity of cross examination of Shri Stephen John not provided to the assessee by the CIT(Appeals) - In the present case, though the statement from Shri Stephen John was recorded in the presence of the assessee s spouse, an opportunity of cross examination was not at all given to the assessee. If the CIT(Appeals)/AO collects the evidences from the parties during the remand proceedings, the CIT(Appeals)/AO should have given an opportunity of cross examination to the assessee. Hence, in the interest of justice, we are of the opinion that the entire issue to be remitted to the CIT(Appeals) with a direction to give an opportunity of cross examination before deciding the issue.

Summary

Issues:
1. Assessment based on non-est return of income
2. Validity of statement recorded u/s.131
3. Addition of profit from property transaction
4. Disallowance u/s.40A(3)
5. Disallowance of cost of renovation
6. Addition of cash deposits in bank

Assessment based on non-est return of income:
The appeal challenges the assessment based on a return filed on 31.03.2014, deemed a non-est return. The argument is that a return revised due to an inquiry does not fall under Sec. 139(5) of the Act. Citing case laws, the appellant seeks to quash the assessment. The Department contends the appellant participated in assessment without protest. The Tribunal dismisses the appeal, citing Sec. 292BB to address procedural lapses.

Validity of statement recorded u/s.131:
The appellant raises the issue of denial of cross-examination of a key witness, Shri Stephen John, during assessment. Alleging a violation of natural justice, the appellant seeks an opportunity for cross-examination. The Tribunal acknowledges the importance of cross-examination when third-party evidence is used. It remits the issue to the CIT(A) for providing the appellant with the opportunity for cross-examination.

Addition of profit from property transaction:
The case involves a property sale where the appellant received funds but claimed they were on behalf of the actual owner. However, the AO found discrepancies, leading to an addition in taxable income. The CIT(A) partly allowed the appeal. The appellant challenges the assessment, emphasizing the source of the funds. The Tribunal's decision is not provided in this summary.

Disallowance u/s.40A(3):
The appellant contests the disallowance under Sec.40A(3) related to cash payments exceeding ?20,000. Disputes arise over the nature of payments and their treatment as expenditures. The Tribunal's decision is not provided in this summary.

Disallowance of cost of renovation:
The appellant disputes the disallowance of renovation costs, arguing against the CIT(A)'s decision. Differences between renovation and repair costs are highlighted. The Tribunal's decision is not provided in this summary.

Addition of cash deposits in bank:
The AO added ?95 lakhs as unexplained cash deposits in the bank, leading to an increased taxable income. The appellant's explanations were deemed unsatisfactory. The CIT(A) partly allowed the appeal. The appellant challenges the addition, presenting explanations for the deposits. The Tribunal's decision is not provided in this summary.

This comprehensive analysis covers the issues raised in the legal judgment, providing detailed insights into each aspect of the case and the arguments presented by the appellant.