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2022 (12) TMI 936 - AT - Income TaxUnexplained investment u/s 69 - Reliance on un-signed, unstamped, Satakhat, which has not been registered and is found from CD of computer of a person not connected with the assessee - violation of principle of natural justice - additions made in absence of providing opportunity of cross-examination of the persons - HELD THAT - Hon'ble Supreme Court of India, in the case of Krishnachand Chelaram 1980 (9) TMI 3 - SUPREME COURT and Andaman Timber Industries Vs. Commissioner of Central Excise 2015 (10) TMI 442 - SUPREME COURT has held that additions without providing the opportunity of cross examination is in violation of natural justice. We note that additions made in absence of providing opportunity of cross-examination of the persons, whose statement has been relied upon for making the additions is violation of principle of natural justice. We also note that not allowing the assessee to cross examine the witness by the adjudicating authority though the statements of those witness were made the basis of the impugned order is a serious flaw which makes the order nullity. We note that same view was expressed in the case of Eastern Commercial Enterprises 1993 (12) TMI 26 - CALCUTTA HIGH COURT wherein it was held that it is a trite law that cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against the party unless the party is put on notice of the case made out against him. The documents, which were found in the possession of other person, does not bear the name of the assessee, that is, the name of the assessee is not mentioned in the statement of another person. No addition can be made, if documents impounded during survey are unsigned and incomplete. No addition of unaccounted investment can be sustained when Assessing Officer had not made any further investigation. No statement recorded of land owners or purchasers as mentioned in the sale deed by AO to corroborate contents of impounded Satakhat. No specific query raised in respect of impounded Satakhat or the assessee to Turmish or Meera Kama by investing wing or AO. No addition can be made in respect of un-signed, unstamped, Satakhat, which has not been registered and is found from CD of computer of a person who is not connected with the assessee. In view of these facts and circumstances and in law, the addition so made by the AO is without any basis, without any corroborating evidences and without allowing due opportunity of cross-examination to the assessee and is therefore, unsustainable in law. Therefore, we delete these additions. Appeals filed by the assessee are allowed.
Issues Involved:
1. Addition of unexplained investment under Section 69 of the Income Tax Act, 1961. Issue-Wise Detailed Analysis: 1. Addition of Rs. 12,50,000/- for AY 2011-12: The Assessing Officer (AO) made an addition of Rs. 12,50,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 09-10-2010 for land at Bamroli, Block No. 45. The AO found that the assessee had made a cash payment of Rs. 25,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. 2. Addition of Rs. 10,00,000/- for AY 2011-12: The AO made an addition of Rs. 10,00,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 09-10-2010 for land at Bamroli, Block No. 45. The AO found that the assessee had made a cash payment of Rs. 20,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. 3. Addition of Rs. 50,00,000/- for AY 2011-12: The AO made an addition of Rs. 50,00,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 16-08-2010 for land at Bamroli, Block No. 45. The AO found that the assessee had made a cash payment of Rs. 1,00,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. 4. Addition of Rs. 17,50,000/- for AY 2011-12: The AO made an addition of Rs. 17,50,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 12-10-2010 for land at Bamroli, Block No. 45. The AO found that the assessee had made a cash payment of Rs. 35,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. 5. Addition of Rs. 1,00,000/- for AY 2011-12: The AO made an addition of Rs. 1,00,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 14-03-2012 for land at Jiav, R.S. No. 358/1 & 358/2, Block No. 437. The AO found that the assessee had made a cash payment of Rs. 1,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. 6. Addition of Rs. 1,00,000/- for AY 2011-12: The AO made an addition of Rs. 1,00,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 25-10-2011 for land at Jiav, R.S. No. 358/1 & 358/2, Block No. 437. The AO found that the assessee had made a cash payment of Rs. 1,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. 7. Addition of Rs. 25,00,000/- for AY 2012-13: The AO made an addition of Rs. 25,00,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 25-10-2011 for land at Jiav, R.S. No. 358/1 & 358/2, Block No. 437. The AO found that the assessee had made a cash payment of Rs. 25,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. 8. Addition of Rs. 25,00,000/- for AY 2012-13: The AO made an addition of Rs. 25,00,000/- as unexplained investment under Section 69 based on a Satakhat deed dated 25-10-2011 for land at Jiav, R.S. No. 358/1 & 358/2, Block No. 437. The AO found that the assessee had made a cash payment of Rs. 25,00,000/- for the purchase of this land. The AO noted that the assessee denied signing the Satakhat and purchasing the land. However, the AO relied on the notary register of Meera Kania, which showed that the assessee had notarized the Satakhat. The AO concluded that the assessee had made the unexplained investment based on the Satakhat found during the survey. Judgment: The Tribunal noted that the assessee was not given an opportunity to cross-examine Turmish Kania, whose statement was relied upon for making the additions. The Tribunal emphasized that any additions made without providing the opportunity of cross-examination are in violation of natural justice and cannot be sustained. The Tribunal referred to the Supreme Court judgments in Krishnachand Chelaram Vs. CIT and Andaman Timber Industries Vs. Commissioner of Central Excise, which held that additions without providing the opportunity of cross-examination are in violation of natural justice. The Tribunal also noted that the documents found in the possession of other persons did not bear the name of the assessee, and no addition can be made if the documents impounded during the survey are unsigned and incomplete. The Tribunal observed that no further investigation was made by the AO, and no statements of landowners or purchasers were recorded to corroborate the contents of the impounded Satakhat. The Tribunal concluded that the additions made by the AO were without any basis, without any corroborating evidence, and without allowing due opportunity of cross-examination to the assessee. Therefore, the Tribunal deleted all the additions made by the AO. Conclusion: Both appeals filed by the assessee for AY 2011-12 and AY 2012-13 were allowed, and the additions made by the AO were deleted.
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