9911796707
TMI Blog2023 (6) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s. 148 on 18.02.2013, on the ground that during the search action carried on 19.01.2009 certain materials seized from the office premises of Mr. Chirag H. Patel, Proprietor of Chirag Construction, that he received Rs. 1,69,50,000/- on various dates from the assessee and he admitted the same as his undisclosed income. However the assessee has not declared in his Return of Income this amount, which is escaped assessment, therefore the assessment was reopened. 2.1. In response to the notice, the assessee filed the same income as in the original return and sought for reasons recorded for reopening of assessment. During the course of re-assessment proceedings, the statement of the assessee was recorded u/s. 131 wherein he admitted that he has purchased an immovable property Bunglow No. B/18 at Surya Vallay Scheme for a consideration of Rs. 36.50 Lakhs and also filed the Purchase Deed, Land Development Agreement, Construction Agreement and Construction Bills and Money receipts issued by Jeenal Construction. During the assessment proceedings, the assessee requested to supply the certificate copy of documents and statements relied by the Assessing Officer of Chirag H Patel and also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g assessment proceedings, assessee has sought these vide letters dated 09/01/15, 25/02/15, 19/03/15 & 27/03/15. The copies of these letters were placed before me and were also sent to the A.O. during remand proceedings. However, the A.O. never bothered to supply the same to the assessee. Even these are not submitted with remand report. What A.O. has supplied to the assessee is the statement of the assessee himself. The A.O. has observed in para 3 of assessment order that as per office letter dated 16/03/15, assessee was supplied copy of his statements recorded by ITO (Inv) Baroda & DCIT, CC-1, Baroda. Thus, I am in full agreement with the Authorized Representative that the documents demanded by assessee were never supplied & even the A.O. has acknowledged this fact indirectly. The assessee had also demanded cross examination of Shri Chirag H. Patel on several occasions by filing letters in the office of the A.O. which are duly acknowledged by putting stamp with date. In remand proceedings, the A.O. has made a passing reference that the assessee was offered cross examination of Shri Chirag H. Patel during assessment proceedings but the A.O has not been able to substantiate this in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in very casual manner and has completely ignored the plea of the appellant to grant him opportunity to defend his case by providing him impugned documents. In this case, the "reasons to believe" are in three para but the order of the A.O. making huge addition of Rs. 1,69,50,000/- (para 4 of the assessment order) is only 10-11 lines. Rest of almost 6 pages are faithfully devoted by the A.O. to reproduce the "reasons to believe", provisions of section 147 and "show cause letter" issued to the assessee. Nowhere in the order of the assessment there is any mention of some reliable evidence against the assessee. In show cause letter, the A.O. has referred to the investment in "Surya Valley" bungalow but Ld. Authorized Representative has rightly pointed out that the Ld. Assessing Officer failed to appreciate the explanation offered by the assessee including evidences produced before him about the nature and source of investment for purchase of property, comparison of valuation and rates applicable of similar properties purchased in the vicinity by other buyers, valuation of the property as per Stamp Duty Valuation and such other related aspects while passing order u/s 143(3) of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, vindictive & arbitrary attitude of Assessing Officer. In view of these facts, no addition can be made to the income of assessee on the basis of statement of Shri Chirag H. Patel. The Authorized Representative has also placed reliance on following decisions of jurisdictional Gujarat High Court & ITAT Ahmedabad Bench in which it is clearly held that if Assessing Officer fails to provide opportunity assessee, addition cannot be made to the income of assessee on the basis of statement of third party:- v) ACITV. GovindbhailM. Patel-215 Taxman 575(Guj) vi) CITV. Indrajit Singh Suri-85 CCH 140 (Guj) vii) DOT V. Mahendra Ambalal Patel - 40 DTR 243 (Guj) viii) Hitesh B. Patel V. ACIT-47 CCH 48 (Ahd Trib) Ratio of above decisions is directly applicable to the facts of instant case & thus, addition is required to be deleted as addition made by Assessing Officer is completely in violation of the principles of natural justice, equity & fair play. In the case of Hitesh B. Patel V. ACIT in ITA No.2778/Ahd/2012, the plea of the assessee was as under:- "5. On the strength of the Hon'ble Supreme Court decision in the case of CBI Vs. V.C. Shukla, (1998) 3 SCC 410, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, on merits of the case he has grossly failed to give any cogent reason for making such addition to the income of assessee. 3.3.6. The facts of the present case are also identical with the case of Ashokkumar Bhailal Vs. ITO, where ITAT Ahmedabad in ITA 489/Ahd/2005, vide order dated 12/06/2015, deleted the additions made on the basis of a diary written by a third person found at the premises of the third person. It was not written by assessee. The assessee repeatedly asked to bring the author of the diary and give him an opportunity to cross-examine which was not granted. It was held that the department ought to have collected some other corroborative evidences which could establish the payment of moneys. It was further has held that "The evidence collected by the department is not worthy of credence, more particularly in view of the judgment of Hon'ble Supreme Court in the case of CBI vs. V.C. Shukla & others reported in 1998 35 SSC page 410. There is no independent evidence on the record, therefore, we are of the view that addition with the help of this much information cannot be made. We allow all the three appeals and delete the additions." Very recently Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act to make any enquiry of any sort from any quarter including the person on whose statement he has relied for reopening of the assessment. Thus, the facts of the present case are identical with that of V.C. Shukla (Supra) and Common Cause (Supra). 3.3.7. ITAT, Ahmedabad in the case of DCIT Vs Abhalbhai Arjanbhai Jadeja, ITA No.174, 175 & 176/Ahd/2009 (A.Y. 2003-04, 2004-05 & 2005-06) has also deleted additions on identical facts where the A.O. had relied on third party statements and neither cross examination was allowed to the assessee nor there was any corroborative evidence gathered by the A.O. during assessment as well as remand proceedings. In their order, ITAT has referred to the order of the CIT(A) who adjudicated the matter as under :- "7. In so far as the second aspect is concerned, I have considered the submissions made on behalf of the appellant. It is an accepted fact that there was no search in the case of the appellant and no document was seized. The seizure was in the case of Vikas Shah. In the circumstances, the decision of the jurisdictional ITAT in the case of Prarthana Construction and Prabhat Oil Mills referred to above are squarely applicable to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cs and this valuation has not been challenged by the Stamp Duty Authority and, therefore, there is no reason for presumption that the assessee has made any payment in excess of the said purchase price of Rs. 9 lacs. Finally, Ld. CIT(A) has deleted this addition by stating that in the absence of any other corroborative evidence and in view of the fact that in the remand proceeding also, no further corroborative evidence have been gathered to justify the addition, the addition cannot be made on the basis of presumption and on the basis of the statement of any third party and particularly when seized document was recovered form third party's premises. Considering all these facts, we are of the considered opinion, no interference is called for in the order of Ld. CIT(A) in respect of the addition made by the A.O. of Rs.91.50 lacs on account of alleged on money payment by the assessee or in respect of addition of Rs.44.80 lacs ultimately not made by the A.O. in respect of receipt of dalali/brokerage by the assessee from Shri Vikas A Shah. Hence, in this year also, we decline to interfere in the order of Ld. CIT(A). On further appeal, Hon'ble Gujarat High Court has affirmed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, when in the case of the co-purchaser, similar addition came to be deleted by the CIT(A), which came to be confirmed up to this Court, it cannot be said that the tribunal has committed any error in dismissing the appeal preferred by the revenue and consequently confirming the order passed by the CIT(A) deleting the addition of Rs.92,00,000/- made on account of unaccounted investment. No question of law, much less substantial question of law arises in the present Tax Appeal. Hence, the present Tax Appeal deserves to be dismissed and is accordingly dismissed." 3.3.8, Thus, the case of the appellant is directly covered by the decisions of jurisdictional Ahmedabad Tribunal as well as by the decisions of Hon'ble Gujarat High Court as mentioned in para above. There are several other decisions which support the case of the appellant. In Unique Organisers & Developers (P.) Ltd. v. Dy. CIT [2001] 70 TTJ 131 (Ahd), ITAT, Ahmedabad underlined the legal proposition that the presumption u/s. 132 (4A) would not be applicable to a third party from whose possession such document had not been recovered by the Revenue. In the absence of any evidence of passing of "on money" and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 16/03/2015. It has been submitted by the A/R that "The assessing officer in remand report has referred to para 8 & 10 of our earlier submissions in which it is contended that when assessee vide various letters asked assessing officer to supply copy of relevant materials seized during the search action in case of Shri Chirag H. Patel & copy of the statement of Shri Chirag H. Patel, A.O vide letter dated 16/03/15, supplied copy of assessee's statements recorded by ITO (Inv) Baroda & DCIT, CC-1, Baroda. Here, the observation in remand report is incorrect because what was given to assessee was the assessee's own statement recorded by above authorities & not the statement of Chirag H. Patel & various annexures which has been made the basis for making, addition in assessee's case. Further, the letter dated 16/03/2015 is reproduced in assessment order & it is evident on perusal of this letter that no such materials were provided with such letter. In fact only statement of assessee was provided. It is thus clear that copy of such materials were never provided to assessee. Now when relevant materials are not supplied to assessee, no addition can be made to the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue is in appeal before us raising the solitary Grounds as follows: 1. "The Ld. CIT(A) has erred in law and on facts in deleting the addition for want of cross examination of Shri Chirag H. Patel by the assessee and ignoring the fact that the Assessing Officer made addition on the basis of relevant, cogent and concrete evidence found during the course of search at the business premises of Shri Chirag H. Patel and the same amount, which was received from the assessee was offered for taxation by Shri Chirag H. Patel for the A.Y. 2009-10." 4.1. The Ld. Sr. D.R. appearing for the Revenue produced before us copies of the seized documents as well as statements recorded u/s. 131 of the assessee, Mr. Chirag H Patel and prayed that the addition made by the Assessing Officer is to be sustained and the revenue appeal is to be allowed. 4.2. Per contra Ld. A.R. Mr. Chetan Agarwal appearing for the assessee submitted before us a Paper Book wherein specific request by the assessee vide letter dated 25.02.2015 and 09.01.2015 which are at page no. 51 to 54 asking for the copies of the statements recorded under 131 of Mr. Chirag H Patel and others, entire Anneuxures in A/3 and A/2 and also g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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