2019 (1) TMI 1270 - AT - Income Tax

Initiating of proceedings u/s 153C - Admission of additional ground - Held that - Since the assessee has raised a legal ground, which was not before the Ld. CIT(A) and moreover the judgement of the Hon ble jurisdictional High Court was rendered in the case of CIT Vs. Mechmen 2015 (7) TMI 538 - MADHYA PRADESH HIGH COURT was not available at the time of passing of impugned order. By way of additional ground, assessee has raised an issue related to jurisdiction for making assessment u/s 153C of the Act by the assessing officer. Therefore, we set aside the impugned order to the file of the Ld. CIT(A) for decision on additional ground. Addition on on money payments - assessee was not granted cross examination - Held that - Department has recorded the statements and entertained affidavits on the back of the assessee and used the same against the assessee without confronting the same, all the 3 land owners who claimed to have received the alleged on money and the persons who have claimed to have made the alleged on money payments to them may, in the interest of justice, be allowed to be cross examined by the assessee/his counsel. AO may accordingly be directed to facilitate such cross examination of the above witnesses of the Department at the earliest where after the assessee shall furnish his further defence/submissions in the matter failing which, the entire addition made by the learned Assessing officer on account of the alleged on money payments in the assessment years involved deserves to be deleted in toto in the interest of justice - set aside the order of the Ld. CIT(A) as the assessee has not been provided opportunity to cross examination of the person on the basis of whose statement and the affidavit additions were made.

Summary

Issues:
1. Appeal against CIT(A) orders for assessment years 2007-08, 2011-12 & 2012-13.
2. Dispute over short-term and long-term capital gains.
3. Challenge to provisions of section 50C.
4. Addition of income under section 69C.
5. Denial of natural justice and cross-examination rights.
6. Additional legal ground raised on jurisdiction under section 153C.

Issue 1: Appeal against CIT(A) orders for assessment years 2007-08, 2011-12 & 2012-13:
The appellant contested various aspects of the CIT(A) orders for different assessment years, including the treatment of capital gains and additions made by the Assessing Officer. Specific grounds of appeal were raised challenging the decisions of the CIT(A) on these matters.

Issue 2: Dispute over short-term and long-term capital gains:
The appellant disputed the attribution of short-term capital gains to the individual appellant instead of the AOP, claiming the gains belonged to the AOP. Additionally, challenges were made against the addition of long-term capital gains by the Assessing Officer, seeking their deletion in the interest of justice.

Issue 3: Challenge to provisions of section 50C:
The appellant contested the application of section 50C in the case, arguing that it should not be applicable. The disagreement with the CIT(A) on this matter was a significant point of contention in the appeal.

Issue 4: Addition of income under section 69C:
The appellant challenged the addition made under section 69C by the Assessing Officer, seeking its deletion as unjustified and in the interest of justice. The CIT(A) decision to sustain this addition was a key issue raised in the appeal.

Issue 5: Denial of natural justice and cross-examination rights:
The appellant raised concerns regarding the denial of natural justice by the CIT(A) in not allowing cross-examination of relevant parties whose statements were used against the appellant. This lack of opportunity for cross-examination was a significant point of contention in the appeal.

Issue 6: Additional legal ground raised on jurisdiction under section 153C:
An additional legal ground related to the jurisdiction for making assessments under section 153C was raised by the appellant. The Tribunal allowed this ground for further consideration by the CIT(A) due to its legal nature and relevance to the assessment process.

In conclusion, the Tribunal partially allowed the appeals for statistical purposes, setting aside the CIT(A) orders on various grounds, including the denial of cross-examination rights and the additional legal ground related to jurisdiction under section 153C. The cases were remanded to the CIT(A) for further consideration and providing the appellant with the opportunity for cross-examination as requested.