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TMI Blog2013 (7) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... anced/taken any sum to Shri Brij Mohan Gupta or his family or their concerns, if any, in Assessment Year 2001-02, as stated by the Assessing Officer. As against this affidavit, no other evidence was brought by the Assessing Officer against the assessee - The case of the department, has been built on a non-existent edifice. There is not even an iota of evidence which may lead to a conclusion embroiling the assessee in the alleged hundi transactions and, in the absence of evidence, there was no scope for slapping the additions on the assessee for all these three years. There is no corroborative evidence regarding the alleged cash loans or hundis – Decided against the Revenue. - ITA Nos.2336 to 2338/Del/2012, C.O. Nos.261 to 263/Del/2012 - - - Dated:- 17-7-2013 - Shri G. D. Agrawal And Shri A. D. Jain,JJ. For the Petitioner : Shri Sanjay Mehra, CA For the Respondent : Shri Bhim Singh, Sr.DR ORDER Per Bench: These are Department's appeals and Assessee's Cross Objections for Assessment Years 2001-02, 2002-03 2005-06 against the orders of Ld. CIT (A)-XXV, New Delhi. The common grounds raised by the department in the appeals are as follows:- "1. On the facts and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing officer neither provided the copies of the statements nor afforded the requisite opportunity to cross examine the aforementioned persons whose statements were being relied upon by him. During the remand proceedings also, the assessing officer did not throw any light on any inquiry/ investigation carried out by him that could justify the additions made by him. 5.3 From the facts enumerated, above, it is clear that the assessing officer completely failed to establish any case against the appellant. Further inquiry/investigation was required to be carried out on the information passed by the DCIT, Central Circle 19, New Delhi, but no worthwhile or cogent work was done towards this end. 'No corroborative evidence to that found during search on Sh Brij Mohan Gupta was gathered in relation to the appellant. Despite specific request of the , appellant, copies of the averments/ statements, on the basis of which additions were made, were not provided nor the opportunity, to cross examine those persons was given to the appellant by the assessing officer. The assessing officer merely summarized the salient features of the assessment proceedings relating to Sh Brij Mohan Gupta an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. The assessee also stated that the assessee would like to examine Shri Brij Mohan Gupta to prove that the assessee had no financial or business transaction with Shri Brij Mohan Gupta and his associates. However, the Assessing Officer has made the addition by observing as under:- "Case was fixed for 17.12.2008 on which assessee was required to file all the details failing which it would be construed that it has nothing to say in the mater and the said amount shall be treated as unexplained cash transaction and income shall be assessed accordingly. a) In response to above questionnaire, the assessee vide its letter 17.12.2008 had denied of having transaction with Shri Brij Mohan Gupta and his associates and protested initiation of proceedings U/S 148 of the J. T. Act, 1961. b) In its return of income, the assessee declared an income of Rs.61,458/- filed on 15.10.2001. The assessee is a partnership firm. In response to the statutory notice, the assessee filed reply which is not. satisfactory . c) From the above, it is clear that all the facts and position has been narrated to the assessee vide this office letter dated 10.12.2008 and assessee's plea that nature and detail of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s does not efface or erase the liability to pay tax where such liability is created by distinct substantive provisions (charging sections). Any such omission or defect may render the order made irregular depending upon the nature of the provisions not complied with but certainly not void or illegal. At the worst, they are defective proceedings or irregular proceedings liable to be cured. An addition made on the basis of a statement not tested by cross-examination is invalid and it vitiated, but the invalidity is not, however, of such a nature, which goes to the root of the proceedings. It could be set aside for being re-done de novo. The CIT(A) should not have upheld the addition on the basis of such a statement. 25. The omission to allow cross-examination merely prevents the ITO from making an addition and can be corrected by allowing the cross-examination and the Assessing Officer can be directed to proceed further to examine the matter afresh on the basis of cross-examined statement. The power of setting aside the order of assessment, where it is illegal, is inherent in any Appellate Court his order would be perfectly legal order in directing the ITO to issue notice to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition made by the revenue. We order accordingly. 10. In the result, all these three appeals filed by the revenue are allowed for statistical purposes." 7. In the second round, vide orders dated 29.12.2011, the Assessing Officer again made the additions, observing as follows:- "Keeping in view the directions of the ITAT the assessee was provided with the copy of the statement of Sh. B. M. Gupta his son Sh. Rejesh Gupta and Sh. Ramavtar Singhal, his accountant, recorded at the time of search and also the atime of preparing appraisal report, u/s 131 of the I. T. Act. Fresh notices U/S 131 were issued to these three person. The assessee was asked to being present for cross examining these three persons and also to confront the statements and the documents recorded originally in the course of search proceedings. On 21/12/2011, Sh. Ramavatar Singhal accountant and Sh. Rajiv Gupta son of the assessee appeared. Their statements were recorded. Sh. Rajiv Gupta in his fresh statements stated that his father Sh. B. M. Gupta died in July 2011 and hence cannot be present. In response to the summons U/S 131, a copy of the death certificate of Sh. B. M. Gupta has been filed. In the fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons to deny the existence of any evidence. The basic evidence is the name of M/s. Amar Nath Virender kumar in regular books of accounts kept in regular course of business and then confirmed at the time of search and follow up investigations done by the department. Hence, there is no force in plea of the assessee that it has neither been recognized by the son and accountant nor his name appears in coded words in the seized material. Both Sh. Rajiv Gupta and Sh. Ram Avtar Singhal were deeply involved in the business which is proved by the original statements made of oath and involvement at the time of search operation conducted by the department. The assessee and Sh. Rajiv Gupta and Accountant cannot be allowed to take advantage of death of Sh. B. M. Gupta by claiming now that they do not have any knowledge of business of Late Sh B. M. Gupta. The statement and assertions are contrary to the facts circumstances and statement made earlier. Accordingly it is held that the additions originally were correctly made and are being done here also again." 8. By virtue of the impugned orders, dated 26.03.2012, 25.09.2009 and 26.03.2012, respectively, the CIT (A) deleted the additions made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book before us; that there is no other corroborative evidence against the assessee on record; and that therefore, the Ld. CIT (A) has correctly deleted the additions wrongly made. The ld. counsel for the assessee has sought to place reliance on 'M/s Dev Dutt Prasad Raj Kumar Garg vs. ITO' 2011-(ID1)- GJX-0529-TDEL and 'ITO vs. Ashok Prasad Gupta', 2011-(ID2)-GJX- 3553-TDEL, copies of both of which decisions have been placed on record before us. Further, the ld. counsel for the assessee has contended that in case the appeals of the Department are dismissed, the Cross Objections would not be pressed. 11. We have heard the parties and have perused the material on record. In the first round, the Tribunal had remitted the matter with regard to the three years before us to the file of the Assessing Officer to be decided afresh in accordance with the law on affording opportunity to the assessee to cross-examine the persons whose statements had been used against the assessee. The Assessing Officer was also directed to make further necessary inquiry. The assessee was put at liberty to produce further evidence in support of its case and in rebuttal of the addition made by the department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hundi/loan business; that in some places full details of the parties were mentioned whereas in some other papers, the details were mentioned in a coded form; that the coded entries were written by Shri Ram Avtar Singhal, Accountant of the group; that he decoded these entries by giving the correct details of the transactions and parties along with corresponding coded entries/transactions; that in the statement recorded on oath, he had explained the complete modus operandi of the group, as adopted while conducting the hundi/business/unaccounted cash loan transactions; that the decoded information was further confirmed and verified by Shri Rajiv Gupta; and that Shri B.M. Gupta admitted having his involvement in the unaccounted cash hundi/transactions/cash loan transaction on behalf of various parties and also disclosed the brokerage income earned by him in such transactions. However, as to what are the actual contents of these alleged statements of Shri Brij Mohan Gupta, Shri Ram Avtar Singhal and Shri Rajiv Gupta, made at the time of search, as to what is the encrypted material found and seized and what is the decoded material, none of this alleged evidence has ever seen the light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the above, I am left with no alternative but to add the same to the total income of the assessee as unexplained transactions. ......." 13. Coming to the issue of S/Shri Rajiv Gupta, Mukesh Kumar Gupta and Ram Avtar Singhal having allegedly retracted from the earlier stand taken, firstly, as to what establishes the alleged earlier stand, as discussed, is entirely absent. Then, these three persons have filed their respective affidavits in the second round before the Assessing Officer. Copies thereof are at APB 80-81, 76-77 and 78-79, respectively. Shri Rajiv Gupta, in his affidavit, has categorically stated, inter alia, that: "2. That to the best of my memory and belief we have never met or dealt in any hundi or other transactions with M/s Amar Nath Virender Kumar, 6687, Khari Baoli, Delhi or its owners specifically during financial years 2000-01, 2001-02 and 2004-05. 3. That similar facts were also conveyed during my cross examination conducted on 21.12.2011 by M/s Amar Nath Virender Kumar, in the presence of and in the office of the Income Tax Officer, Ward 28(3), Room No.214, Drum Shaped Building, IP Estate, New Delhi - 110 002." 13.1 Shri Mukesh Kumar Gupta, in his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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