9911796707
TMI Blog2024 (8) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... violates the natural justice, and therefore, we do not countenance such an action of the AO and for that we rely on the decision of the Hon ble Supreme Court in the case of Kishan Chand Chellaram v[ 1980 (9) TMI 3 - SUPREME COURT] and also the decision of M/s Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] wherein, their Lordships are held omission to cross-examination of third party statement would make the statement null in the eyes of law. It would be gainful to refer to the order of Naresh Pamnani [ 2019 (3) TMI 1787 - ITAT DELHI] which has been referred in the subsequent order in the case of Shri Manjit Singh Gahlot [ 2022 (10) TMI 399 - ITAT DELHI] - Thus we held that the AO s action of omission to allow assessee cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter in short the Act ) on 18.03.2009. Later, he issued notice u/s. 148 of the Act on 20.03.2015 to the assessee, informing him, his desire to re-open the assessment based on the information that assessee had paid capitation fees for securing admission for his son in PG (Ortho) in M/s. Santhosh Medical College; and during the re-opening proceedings AO noted that pursuant to search u/s. 132 of the Act conducted at the premise of M/s. Santhosh Medical College/Dr. P. Mahalingam on 27.06.2023, the department seized various documents and registers in respect of collection of capitation fees regular fee (received from the students of the said college). According to the AO, from the seized records, it revealed that Dr. M. Kumanan (son of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 directed the AO to proceed on the basis of evidences available with him (AO) and asserted that there was no requirement to allow assessee cross-examination of witness by observing as under: Therefore, AO is directed to proceed in this case on the basis of evidences available with him and no requirement is there to allow assessee any cross-examine of witness. However, AO must give sufficient opportunity to the assessee to refute the claims made by the witness and assessee also may disprove all evidences available with AO by submitting contrary evidences 4. Thereafter, the AO noted that the assessee objected to the proposal of the AO to make addition of Rs. 50 lakhs, but he rejected the same and held that assessee paid Rs. 50 lakhs to M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the AO failed to supply the copy of statement of Dr. P.Mahalingam and no cross-examination was allowed, which omission according to the Tribunal vitiated the addition. It is noted that in the present case also, the addition of Rs. 50 lakhs was made based on the statement of Dr. P.Mahalingam, and even though, assessee requested for cross-examination by filing an application before the Addl.CIT, the same was denied which act of omission on the part of the AO/ACIT violates the natural justice, and therefore, we do not countenance such an action of the AO and for that we rely on the decision of the Hon ble Supreme Court in the case of Kishan Chand Chellaram v. CIT reported in [1980] 125 ITR 713 (SC) and also the decision of the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of Dr P Mahalingam to him for rebutting his statement and no cross-examination to his statement have been allowed at any stage, therefore, this statement cannot be read in evidence against the assessee. He has referred to the statement of assessee recorded at assessment stage, copy of which is filed on record, in which he has denied to have paid any amount to Dr P Mahalingam or the above college as capitation fees. He, therefore, submitted that since no material has been confronted to assessee, therefore, no addition could be made against the assessee. 6. On the other hand, Ld. D.R. relied upon orders of the authorities below. 7. After considering the rival submissions, I am of the view that addition on merit is wholly unjustified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, statement of third party, cannot be used against the assessee unless assessee has been allowed a right to cross-examine such statement. The AO in the assessment order also did not mention, if any, material found during the course of search, was confronted to the assessee. Thus, assessee was justified in denying in making any cash payment to Dr. P Mahalingam at any stage. There is no material available on record to justify the addition against the assessee on merits. In the absence of any material on record against the assessee and in the absence of cross examination to the statement of Dr P Mahalingam on behalf of the assessee, such material cannot be used against the assessee so as to make the impugned addition. I, accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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