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TMI Blog2017 (7) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... being on money' received with respect to subject land of the assessee from Unique Group, which was evidence by the document seized during search u/s 132 of the Act? (ii) Whether on the premises that Ravindra Singh Thakkar on whose testimony the present assessee was also fasten the tax liability supposed to be afforded opportunity of cross-examination in the facts of the instant case and what would be the effect of the opportunity of cross-examination if not been afforded?" Income Tax Appeal No.199/2012 admitted on 30.08.2016. (i) Whether the Tribunal was justified in deleting the addition of Rs. 7,50,00,000/- made by the Assessing Officer and confirmed by CIT (A), on substantive basis, being on money received with respect to land of the assessee from Unique Dream Builders Pvt. Ltd. (UBD), which was evidenced by document seized during search u/s 132 of the Act. Income Tax Appeal No.198/2012 admitted on 30.08.2016 "(i) Whether the Tribunal was justified in deleting the addition of Rs. 7,50,00,000/- made by the Assessing Officer and confirmed by CIT(A), on substantive basis, being 'on money' received with respect to land of the assessee from Unique Dream Builders Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de hores without having any specific material on hand. The said property at Hanuman Nagar D is not identifiable as the Hanuman Nagar D is the name of the colony. The ld. A/R submitted that the assessee is not owning any property in Hanuman Nagar D nor he had sold any property during the assessment year under consideration. 11. From the AO's order, it appears that he has not brought any evidence to establish the ownership of the assessee or to identity the property. It was expected from the AO to verify the ownership of the property or the transaction done by the assessee through the Sub- Registrar's office. When assessee has categorically denied any involvement, then it was expected at least from the first appellant authority to ask for the remand report from the AO. We are satisfied that in the instant case the addition was made merely on the basis of presumption, surmises and conjectures. No addition can by made on the basis of presumption in the block assessment. Therefore, by taking into consideration the ration laid down in the case of Union of India vs. Ajit Jain And Another, 260 ITR 80, we set aside both the orders of the lower authorities and delete the addition of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1997-98 and addition of Rs. 35,000/- for the years 1998-99 are deleted as the same are de hors without any material. 23. After hearing rival submissions and considering the material available on record, it appears that in the previous ground the AO made the addition for taking the advances from Shri Ashok Kumar Jain on interest. But in this ground, the AO made the addition for giving the advances to Shri Ashok Kumar Jain. Both the facts are contradictory to each other. It appears that the additions were made merely on the basis of presumption and surmises. Neither any statement was recorded of Shri Ashok Kumar Jain nor any admission was obtained from the assessee regarding the said advances. No corroborative evidence was collected by the lower authorities to justify the additions. No specific circumstances like admission, signature, statement etc. were mentioned before making the presumption pertaining to the said additions. For the similar reasons mentioned above, we find no justification for upholding the orders of the lower authorities. 5. The judgment which has been cited by the counsel for the appellant in the case of P.R. Metrani Vs. Commissioner of Income Tax, Bangalo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be 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. In view of 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 statement of the aforesaid two witnesses was the only basis of issuing the Show Cause Notice. We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal." 9. He has also relied upon another decision in case of Gopal Saran vs. Satyanarayan reported in AIR 1989 Supreme Court 1141 wherein in para 5 it has been held as under:- "5. On the basis of the aforesaid, it was contended that it was the definite case of the defendant in Examination-in-chief, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendantappellant to carry on the business. It was legally permissible to use the said shop room and also use the roof thereof and earn as much as could be done and as such it is not parting with possession." 10. In view of the above, the view taken by the CIT(A) which was confirmed by the Tribunal is just and proper though the amount which has taken as income from commission is taken on a reasonable side." He has also relied on the following decisions:- "3. Common Cause (A Registered Society) and Ors. vs. Union of India (UOI) and Ors. "22. In case of Sahara, in addition we have the adjudication by the Income Tax Settlement Commission. The order has been placed on record along with I.A. No. 4. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen drive etc. do not comply with the requirement of the Indian Evidence Act and are not admissible evidence. It further observed that the department has no evidence to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the alternative gave him the option to take back the sum of Rs. 5,00,000/- with interest. Neither the State Commission, nor the National Commission has given any sustainable reason for differing from the conclusion of the District Forum. A mere suspicion that builders in the country are prone to take a part of the sale amount in cash, is no ground to accept the story of payment of Rs. 4,00,000/- especially when such a payment had not even been set up in the complaint before the District Forum. Not only that, there was no independent evidence to support the payment of such a sum of Rs. 4,00,000/- except the ipse dixit of the respondent. The affidavit of the bank employee filed in the State Commission cannot certainly be accepted as evidence of such a payment. Payment of such a sum had clearly been denied by the company. The respondent had, therefore, to prove such a payment. His case that the purchase price was Rs. 9,00,000/-, itself stands discredited by the recitals in the agreement dated 27.7.1997 in which the purchase price was recited as Rs. 7,75,000/-. Not only that the respondent did not have a receipt for evidencing the payment of Rs. 4,00,000/- and if the amount was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ram partem. 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government, is that the government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inquiry is held. The government servant should be given an opportunity to deny his guilt and establish his innocence. He can do so only when he is told what the charges against him are. He can therefore, do so by cross-examining the witnesses produced against him. The object of supplying statements is that, the government servant will be able to refer to the previous statements of the witnesses proposed to be examined against him. Unless the said statements are provided to the government servant, he will not be able to conduct an effective and useful crossexamination. 29. In Rajiv Arora v. Union of India and Ors. AIR 2009 SC 1100, this Court held: Effective cross-examination could have been done as regards the correctness or otherwise of the report, if the contents of them were proved. The principles analogous to the provisions of the Indian Evidence Act as also the principles of natural justice demand that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material which would not be in possession of the Appellant themselves to explain as to why their exfactory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the Appellant wanted to cross-examine those dealers and what extraction the Appellant wanted from them. 6. As mentioned above, the Appellant had contested the 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 crossexamination 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 17-3-2005 [2005 (187) E.L.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the ld. CIT (A) that there is no sufficient material including LP-4, which could lead to the conclusion that the assessee has received any undisclosed money from employer towards his income i.e. salary. On the other hand, the explanations and submissions of the assessee clearly established that the same were placed before the AO and were not appreciated by him due to lack of concluding enquiry and examination of other relevant persons in this behalf. Considering the entire facts and circumstances of the present case, we do not see any infirmity in the findings of the ld. CIT (A) on this issue. In our view, the ld. CIT (A) has passed a well-reasoned order after appreciating the facts of the present case as well as the settled legal position and therefore, we decline to interfere with his order." "9. Commissioner of Income Tax-V vs. Indrajit Singh Suri "The entire issue is based on factual matrix presented before the authorities. We are in complete agreement with the findings of the Tribunal that the Assessing Officer had largely proceeded on the basis of the statement of one Shri Gajjar in whose books of account, the said transaction of Ninad Co-op. Housing Society ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f undisclosed investment in purchase of agricultural lands. The AO had carried out investment and had collected statements of the sellers of the lands in question to establish that they had received cash payments from the assessee towards sale consideration. The assessee, however, strongly disputed the contents thereof and requested for crossexamination of the authors of such statements. The AO refused to grant such cross-examination on the premise that the sale deeds were executed. CIT (A) deleted the addition. Tribunal found that the AO proceeded to make addition on the basis of enquiries conducted behind the back of the assessee without giving any opportunity of being heard or without giving any opportunity to cross examine the statements of the sellers. The CIT(A) was, therefore, justified in holding that the addition could not be sustained on that ground itself. Revenue filed appeal against the order of Tribunal. Held: The AO had made additions on two basis firstly, that some of the lands in the village were sold at a higher price, and sellers had given statements to the AO of having received higher sale consideration. Both the grounds were knocked down by the CIT(A) and Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant time, his resources had disproportionately increased, which obviously was on account of the above consideration. Likewise, the aforesaid three witnesses viz; Amar Chand, Bhanwarlal and Radhey Shyam, have also clearly given out, that the land was sold for Rs. 61 lacs and, thus, there was no occasion for deleting the additions. 6. On the other hand, learned Counsel for the assessees submitted that none of the witnesses were examined by the AO, and even Suresh Kumar Soni had given varying statements at different occasions, apart from the fact that he was also not examined by the AO, nor did the assessee have any opportunity to cross examine on the version of Suresh Kumar Soni, so as to test his veracity or reliability, and the statements of the said witnesses, recorded by the other authority, could not be looked into, as they are not even relevant, in view of the provisions of Section 32 of the Evidence Act. It was also contended that even an independent enquiry was got conducted, wherein the learned Dy. CIT had found, that the valuation of the land was not above the one, as shown in the sale deed, and thus, no interference is required to be made. 7. We have conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome. It is also an admitted fact that the statement of the assessed was not recorded at any stage during the assessment proceedings. The only conclusion which can be drawn about the nature and contents of the document is that it is a dumb document and on the basis of the entry of nothings or figure etc. in this document, it cannot be concluded that this represents the undisclosed income of the assessed. 10. It is well settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or hand writing of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities, i.e., Commissioner of Income Tax (Appeals) and the Tribunal. 15. in the present case as already held above, the documents recovered during the course of search from the assessed are dumb documents and there are concurrent findings of Commissioner of Income Tax (Appeals) and the Tribunal to this effect. Since the conclusions are essentially factual, no substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought remand report and even at that stage the genuineness of the statement has not been established by allowing cross examination of the person whose statement was relied upon by the revenue. In these circumstances, the decision of the Tribunal being based on the fact, no substantial question of law can be said to arise from the order of the Tribunal. The appeal is dismissed with no order as to costs." "19. Commissioner of Income Tax vs. Anil Khandelwal (21.04.2015 - DELHC) "6. This Court further notices that the ITAT independently examined the evidence which the CIT (A) had scrutinized. It also took note of the paper book which had been furnished to the lower authorities and was satisfied that the amounts attributed to the assessee in fact had not been established and that in the given circumstances, the reference to Section 132(4A) and Section 292C was not justified. Having regard to the factual nature of the dispute - and having examined the findings of the lower authorities on this account which we do not consider unreasonable, this Court holds that no substantial question of law arises for consideration. "20. Commissioner vs. Motabhai Iron and Steel Industries (03. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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