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TMI Blog2014 (12) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee - mere resemblance of name in a loose, unsigned hand written sheet found and seized from a third party, having no connection with the assessee, cannot be the basis to fasten a burden on the assessee, so as to explain the source of such purported investment - the AO was duty bound to provide opportunity of cross-examination of the witness who have alleged that there was investment by the assessee - there is nothing which implicates the assessee. -The only nexus as emanating from the said statement is restricted to an oblique reference to one “Hari Sanker Khemka, narayana, in the statement of Shri Ram Avtar Gupta, accountant of BM Group - There is nothing to establish that the person is the assessee, who during the assessment proceedings have denied that he is not the person referred by Ram Avatar Gupta - the assessee is not from Narayana, but from cloth market Delhi – Decided in favour of assessee. - ITA No. 4044/Del/2014, ITA No. 4045/Del/2014 - - - Dated:- 2-12-2014 - Shri G. D. Agarwal And Shri A. T. Varkey,JJ. For the Appellant : B.K. Tulian, FCA For the Respondent : Satpal Singh, Sr. DR ORDER Per A. T. Varkey, Judicial Member These appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellant made incorrect statements of facts. There was sufficient material in existence in the form of the statements of Sh Rajeev Gupta, Sh Ram Avatar Singhal, Sh Ram Avatar, Sh Brij Mohan Gupta, reasons recorded on 18/3/2008 for action u/s 148 and the list of 300 entries containing the names and addresses of persons, who advanced cash loans in crores of rupees. In addition to the above, annexures-A5 A-50 containing the details of dubious clandestine transactions also existed suggesting escapement of income in the case of the appellant for the impugned AY. It has been held in a number of cases that the existence of reasons and not the sufficiency or adequacy thereof is material for initiating u/s 147 of the Act. In the instant case, there was judicially noticeable facts in the form of the seized documents reflecting the involvement of the appellant. Besides, all the conditions for reopening an assessment were satisfied in the case at hand. The Id.AO formed a tentative or prima facie opinion on the basis of seized material containing imputations against the appellant suggesting escapement of income. On the basis of the same he recorded the opinion prima facie. The opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearing in the returned income, there was reason to believe that income had escaped assessment and therefore action u/s 147 was inevitable. Therefore, prima facie there was some material on the basis of which the assessment could be re-opened. As held in the case of Raymond Woolen Mills Ltd v ITO (1999) 236 ITR 34 (SC), the correctness or sufficiency of the material' is not a thing to he considered at the stage of re-opening the assessment. 4.3. In conclusion, in view (If the facts of the case, the legal position and the interpretation of section 147 by the Hon ble Supreme Court, it is beyond doubt that the assessing officer was justified in law in initiating action u/s 147 of the Income Tax Act. Therefore, grounds No.5 and 6 of the appeal are dismissed. 9. We find that no appeal was preferred by the assessee challenging the above finding before the Tribunal. And the Tribunal, in the earlier order, after noting the above finding of the ld CIT(A) while disposing off the revenue s appeal on merits of the additions had held that action u/s 147 of the Act was inevitable and held as under:- Based on the information given by the DCIT, Central Circle-19, New Delhi, the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was actively involved in such unaccounted hundi and cash loan transactions. The decoded information was further confirmed and verified by Sh. Rajiv Gupta. 15. The AO during the remand proceedings provided the following documents on the direction of the ITAT:- (i) Statements of Sh Rajeev Gupta (ii) Statements of Sh Ram Avatar Singhal (iii) Statements of Sh Ram Avatar (iv) Statement of Sh Brij Mohan Gupta (v) Reasons recorded on 18/3/2008 for action u/s 148 (vi) List of 300 entries containing the names and addresses of persons, who advanced cash loans in crores of rupees. 16. Further the AO noted that the seized documents marked as A-50 and A-5 reveal that entries at serial No.141, 229 and 281 show advances made by the assessee. The details of the entries are as under:- S No. Name address period Amount (in lacs) 141 Hari Shankar Cloth Market, Fatehpuri, Delhi May, 2000 28 229 Khemka Hari Shankar Khemka Cloth Market, Delhi May, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayana was not the same as the appellant in question. (vi) The jottings etc were successfully deciphered by the authorized officers while recording the statement of Sh Brij Mohan Gupta. In the course of the statements all the entries made in coded language were decoded and confronted to Sh Brij Mohan Gupta which resulted in bringing to task the beneficiaries of cash loans through hundis numbering 135 and 313 others for cash loans in crares of rupees. On the basis of above incriminating information Sh Brij Mohan Gupta paid the taxes on the entire amount detected in this fashion i.e. in the form of jottings and dottings later on expanded while giving the statements. (vii) That the proceedings were not based on jottings and dottings as alleged by the appellant. The annexures provided to the appellant did not reveal jottings and dottings but were written in such a form which had a scientific and systematic design which were corroborated by Sh Ram Avatar Gupta and Sh Brij Mohan Gupta. (viii) The appellant's explanation on the statements of the various persons, whose copies were supplied to him and the annexure A-5 A- 50 seized from the search premises was not at all convin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to say that the assessee should be given a reasonable opportunity to have his say and to give his reply against the various documents and papers or the statements, of the persons that may be relied upon by the Assessing Officer for the assessment. The assessee shall be at liberty to furnish or produce any such other evidence or material available with him to support his case, which shall be examined and verified by the AO while deciding the matter afresh. The A.O. shall pass a reasoned and speaking order after analyzing and considering all the evidences and materials available with him. 20. From the above directions, it is evident that the AO was duty bound to provide opportunity of cross-examination of the witness who have alleged that there was investment by the assessee. However, admittedly no such cross-examination has been provided to the assessee. Moreover, even from the statement as supplied to the assessee (Pg 11 to 43 of PB) we find that there is nothing which implicates the assessee. The only nexus as emanating from the said statement is restricted to an oblique reference to one Hari Sanker Khemka, narayana, in the statement of Shri Ram Avtar Gupta, accountant of B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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