2018 (11) TMI 1487 - AT - Income Tax

Addition merely on the strength of statement of third party - denial of natural justice - non providing opportunity to cross examine - Held that - Respectfully following the order of the Tribunal, SMC Bench, Delhi in the case of Smt. Jyoti Gutpa vs. ITO 2018 (11) TMI 1353 - ITAT NEW DELHI and in view of the law settled in the case of Andaman Timber vs. CIT (2015 (10) TMI 442 - SUPREME COURT), on identical facts and circumstances, the addition in dispute is deleted and the appeal of the assessee is allowed.

Summary

Issues Involved:
Appeals against orders of Ld. Commissioner of Income Tax - Assessment year 2014-15 - Grounds of appeal common - Assessee's request for cross-examination not considered - Violation of principle of natural justice.

Detailed Analysis:

Issue 1: Grounds of Appeal
The appeals were filed against orders of the Ld. Commissioner of Income Tax for the assessment year 2014-15. The grounds of appeal were common and identical, leading to a joint hearing and disposal for convenience.

Issue 2: Assessee's Case
The assessee initially declared income and later revised it. The case was selected for scrutiny based on suspicion of long-term capital gain. The Assessing Officer (AO) issued notices under relevant sections, and after due process, assessed the income at a higher amount. The Ld. CIT(A) upheld this assessment, prompting the appeal to the Tribunal.

Issue 3: Lack of Cross-Examination Opportunity
During the hearing, the assessee's representative highlighted the failure to provide an opportunity for cross-examination. The AO and Ld. CIT(A) did not consider the request, leading to a violation of natural justice principles. The reliance on a statement without allowing cross-examination was challenged, citing a similar precedent where such an addition was deemed unjustified.

Issue 4: Tribunal's Decision
After reviewing the records and arguments, the Tribunal found merit in the assessee's contentions. The failure to allow cross-examination and reliance on a single statement for the addition were considered serious flaws. Citing a Supreme Court decision on natural justice principles, the Tribunal set aside the additions and directed the AO to allow the exemption claimed by the assessee.

Issue 5: Precedent and Deletion of Addition
Following the precedent set in a similar case, the Tribunal deleted the disputed addition, aligning with the law established by the Supreme Court. The consistent view taken in previous cases further supported the decision to allow the appeals and delete the additions made by the authorities.

In conclusion, based on the principles of natural justice and legal precedents, the Tribunal allowed the appeals, deleted the additions, and directed the AO to grant the exemption claimed by the assessee.