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TMI Blog2018 (9) TMI 1549X X X X Extracts X X X X X X X X Extracts X X X X ..... ose statements addition has been made. Under identical circumstances the Mumbai Bench of the Tribunal in the case of Shri Nikhil Vinod Aggarwal (2017 (10) TMI 1374 - ITAT MUMBAI)has deleted the addition wherein on the basis of the same pen drive the addition was made by the Assessing Officer which was deleted by the CIT(A) and on appeal by the Revenue, the Tribunal dismissed the ground raised by the Revenue - Decided in favour of assessee. - ITA No.682/Del/2018 - - - Dated:- 17-9-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER For The Assessee : Shri M. R. Sahu, CA For The Department : Shri S. L. Anuragi, Sr. DR ORDER PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 28.11.2016 of CIT(A)- 15, Delhi relating to assessment year 2007-08. 2. Facts of the case, in brief, are that the assessee is an individual and filed her return of income on 31.07.2007 declaring total income of ₹ 1,98,951/- after claiming deduction under Chapter VIA of the I.T. Act, 1961. An information was received from Director of Income Tax (Inv.)-II, Mumbai vide letter No.DIT(Inv.)-II/Time Barring/2013-14 dated 27.03.2014 in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of buyers who have paid 'on money ' are not mentioned explicitly in the data contained in the pen drive. In order to correlate this data, name, PAN address of actual purchasers of the flat/shop nos. mentioned in pen drive were obtained from the Hiranandani Group and a consolidated excel sheet was prepared. The relevant part of the excel sheet has already been forwarded to you vide Annexure A-1 of letter No.DIT(Inv.)-II/Time barring/2013-14 dated 27-03-2014. As stated above, the incriminating evidence found in this case was a pen drive which contained a 'running cash ledger' of the cash receipt by the Hiranandani Group. All the fields and description of this ledger relevant to your assessee have already been forwarded to you vide letter No.DIT(Inv.)-II/Time Barring/2013-14/ dated 27-03-2014. This annexure A-1 of letter No. DIT (Inv.)-II/Time barring/2013-14 dated 27-03-2014 is therefore the incriminating evidence found in respect of your assessee. The fact of receipt of 'on money from buyers has been admitted by the employees and directors/partners of the concerns controlled by the group in their respective statements. These statements form part of the Appraisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney paid by the assessee is also included. Rejecting the various explanations given by the assessee, the Assessing Officer made addition of ₹ 10,95,000/- to the total income of the assessee as unexplained income u/s 68 of the I.T. Act. 5. Before the ld. CIT(A), the assessee made elaborate submission challenging the addition of ₹ 10,95,000/- made by the Assessing Officer in the order passed u/s 147/148 on the basis of report of the Investigation Wing of the Department. 6. However, the ld. CIT(A) also upheld the addition made by the Assessing Officer by observing as under :- 6. I have gone through the assessment order and also the submissions made during the course of appellate proceedings. It is an undisputed fact that the appellant booked the property in Glendale Hiranandani Gardens, Powi in December 2007. Admittedly, the search was conducted as mentioned in the assessment order on 11.03.2014. The time gap in carrying out search operation according to me would not vitiate evidentiary value of the material unearthed during the course of search. As clarified by the Investigation Wing, a pen drive was seized during the course of search which contained th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no independent application of mind. Therefore, such reassessment is invalid. For the above proposition, he relied on the following decisions :- (i) United Electrical Co. (P.) Ltd. vs. CIT, 258 ITR 317. (ii) ITO vs. M/s Observer Investment Finance Pvt. Ltd., ITA No.1185 1186/Del/2009, order dated 24.02.2016. (iii) ITO vs. M/s Direct Sales (P) Ltd., ITA No.3545/Del/2010, order dated 25.02.2015. 10. He submitted that during the course of assessment proceedings, the assessee was not allowed to cross-examine the witnesses although the statements of those witnesses are the basis of the impugned addition. Thus, the principle of natural justice has been violated. Relying on the decision of the Hon'ble Supreme Court in the case of Andaman Timber Industries vs. CCE reported in 62 taxmann.com 3, he submitted that not allowing the assessee to cross-examine the witness by adjudicating authority though the statement of those witnesses were made on the basis of impugned addition, the serious flaw which makes order nullity inasmuch as it amounts to violation of principles of natural justice. Referring to various other decisions he submitted that no addition u/s 69 can be made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concern of Hiranandani group, the Assessing Officer reopened the assessment u/s 148 and thereafter made addition of the said amount to the total income of the assessee which has been upheld by the ld. CIT(A). The basis of addition made by the Assessing Officer is the contents of a pen drive which contained date-wise entry of receiving cash on various flats mentioning flats/shop-wise number. Neither the name of the buyers nor the amount of cash over and above the registered value of the flats paid by individual buyers are mentioned in the data contained in the pen drive. I find identical issue had come up before the Mumbai Bench of the Tribunal in the case of Anil Jaggi (supra) where the Tribunal under identical circumstances has deleted the addition made by the Assessing Officer and sustained by the ld. CIT(A) by observing as under :- 15. We shall now take up the case of the assessee on merits and deliberate on the validity of the addition of ₹ 2.23 crore made by the A.O on the ground that the assessee had made a payment of on money for purchase of flats from M/s Lakeview developers. We have perused the facts of the case and the material available on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereafter offered as such for tax in the petition filed before the Settlement commission. We are of the considered view that there is substantial force in the contention of the ld. A.R that mere admission of the amounts recorded in the pen drive as the additional income by Sh. Niranjan Hiranandani, falling short of any such material which would inextricably evidence payment of on money by the assessee would not lead to drawing of adverse inferences as regards the investment made by the assessee for purchase of the property under consideration. We rather hold a strong conviction that the very fact that the consideration paid by the assessee for purchase of the property under consideration when pitted against the market value _ fixed by the stamp valuation authority is found to be substantially high, further fortifies the veracity of the claim of the assessee that his investment made towards purchase of the property under consideration was well in order. We are of the considered view that though the material acted upon by the department for drawing of adverse inferences as regards payment of on money by the assessee formed a strong basis for doubting the inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings, has repeatedly requested the Assessing Officer to provide the information / adverse material in his possession, neither such adverse material was provided to the assessee nor confronted to him. Further, the statement recorded from third parties which were relied upon by the Assessing Officer for making the addition were neither confronted to the assessee nor the assessee was Shri Nikhil Vinod Aggarwal permitted to cross-examine the concerned persons. Neither in the assessment order the Assessing Officer has discussed in detail the nature of information / material available with him directly implicating the assessee for paying on-money for purchase of flat nor the learned Departmental Representative has brought on record any such material as may be available with the Assessing Officer. It is evident from the assessment order, the Assessing Officer without disclosing adverse material / information available with him to the assessee during the assessment proceedings, has simply called upon the assessee to furnish the name of persons who according to the Assessing Officer negotiated for purchase of flat between the assessee and the builder. Unless, the assessee is c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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