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TMI Blog2018 (5) TMI 1694X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company) during the assessment proceedings, therefore the matter is set aside to give an opportunity to the assessee to cross examine Shri Rajesh Tambi and then adjudicate the issue of addition made by the AO - allowed for statistical purposes X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition may kindly be deleted in full. 5. The ld. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234B & C. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 6. the appellant prays your honor indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing." Ground No. 1 is regarding validity of reopening of the assessment. 2. The assessee is an Individual and derives income from business of property broking. The assessee filed his return of income for the year under consideration on 31st March, 2007 which was processed under section 143(1) of the I.T. Act. There was a survey under section 133A conducted at the business premises of M/s. Vedang Colonizers Pvt. Ltd. on 13/14.08.2012 wherein certain incriminating documents were impounded which includes Annexure AA-2 containing 69 pages. During the course of survey, statement of Shri Rajesh Tambi @ Ratan Tambi, the Director of the said company was recorded. Shri Tambi in his statement stated that Balaji Vihar- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Jurisdictional High Court in case of Mukesh Modi vs. DCIT, 366 ITR 418 (Raj.) as well as decision of Hon'ble Punjab & Haryana High Court in case of CIT vs. M/s. Sahil Knit Fab, 249 CTR 454 (P&H) and submitted that the Hon'ble High Court has held that reopening of the assessment is permissible to bring to tax escaped income and not to make investigation or verification. Thus the ld. A/R has contended that the reopening in the case of the assessee is bad as the AO has reopened on the basis of suspicion and not his belief that income assessable to tax has escaped assessment. 3.1. On the other hand, the ld. D/R has relied upon the orders of the authorities below and submitted that the AO was having tangible material impounded during the course of survey under section 133A which reveals the transactions of purchase and sale of properties which has not been disclosed by the assessee and, therefore, the entries found in the impounded material is sufficient to form the belief that the income assessable to tax has escaped assessment. 4. We have considered the rival submissions as well as the relevant material on record. We note that the return of income filed by the assessee on 31st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fiable from the assessment records of the assessee. These transactions pertains to A.Y. 2006-07. I, therefore, have reasons to believe that income chargeable to tax totaling ₹ 3,80,36,904/- (2,93,75,979+48,11,525+17,00,000+1,00,000+18,00,000+ 2,50,000) has escaped assessment within the meaning of section 147 of the IT Act. Accordingly proceedings u/s 147 are initiated by issue of notice u/s 148 of the I.T. Act 1961 after obtaining prior approval of the Addl. CIT, Range-1, Jaipur vide letter No. 2752 dated 21.03.2013. Dated : 21.03.2013. Sd/- Assessing Officer, Ward 1(3), Jaipur. 21/03/2013 Dated: 21-03-2013 Notice u/s 148 issued. Sd/- Assessing Officer, 21/03/2013" Thus the AO has recorded the reasons that as per the impounded documents the assessee had made investment of ₹ 2,93,75,979/- in the Real estate i.e. Balaji Vihar-II, Nayala road. The said investment was not disclosed in the return of income filed by the assessee. Further, an amount of ₹ 48,11,525/- was found in the impounded document as profit from the property transactions being share of assessee which was also not disclosed in the return of income. Apart from these transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of Hon'ble Supreme Court in case of Andaman Timber Industries vs. Commissioner of Central Excise, 127 DTR 241 (SC). 5.1. On the other hand, the ld. D/R has submitted that the addition was not made merely on the basis of statement of Shri Rajesh Tambi but the said statement was corroborated by the impounded material and, therefore, the AO was justified in making the addition. He has relied upon the orders of the authorities below. 6. We have considered the rival submissions as well as the relevant material on record. The AO has made the addition on account of the share of profits in the property dealing of Balaji Vihar-II Scheme along with 3 other partners as well as brokerage income earned by the assessee which was detected during the course of survey under section 133A in case of M/s. Vedang Colonizers Pvt. Ltd. on 13/14.08.2012. The impounded documents/records were confronted with Shri Rajesh Tambi, the Director of the said company, who had explained the nature of transactions and the parties involved in those transactions. Therefore, the basis of the addition is clearly the impounded material which has been explained by Shri Rajesh Tambi in the statement recorded u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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