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TMI Blog2023 (11) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... AO. The first objection of the Ld. Sr. counsel is regarding the report/statement of DSP Lokayukt in respect of disproportionate income and asset hold by the assessee which was obtained by the AO without confronting the assessee of the said information collected behind the back of the assesse. Therefore, the said information/report of DSP Lokayukt MP used by the AO is in violation of principle of natural justice. There is no quarrel on the point that if any evidence or statement is made the basis of the assessment order without allowing the assessee to cross examine the witness or to rebut the evidence amounts to violation of principle of natural justice as held in case of Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] . The question of cross examination by the assessee of the investigating officer in the assessment proceedings does not arise as it would be a futile exercise when the said report as well as the witnesses are to be examined before the concerned court of law in the appropriate proceedings and assessee would be having its remedy under the relevant law and procedure. Assessee has a right to be confronted with the information before the same is used again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of Shri S.P. Kohli was recorded during the course of search and seizure action and post search inquiry and were very much in the knowledge of the assessee however, if the addition is made by the AO on the basis of such statements without giving opportunity of cross examination to the assessee then the same is in violation of principle of natural justice. Addition made by the AO on the basis of the statement of Shri H.M. Joshi father of the assessee recorded during the course of search u/s 132(4) which was subsequently retracted by filing an affidavit of Shri H.M. Joshi - There is nothing reflected either from the manner in which statement was recorded or the language of the question and answers recorded in the statements. To suggest any coercion from team. Therefore, in absence of any circumstances indicating any situation leading to disorientation or intimidation of Shri H.M. Joshi, the question of any coercion or undue pressure is completely ruled out. Further Shri H.M. Joshi is not a third person witness but he is one of the searched person and father of the assesse, managing all the alleged elicit income, investment and affairs of the certain concerns wherein the alleged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO and used against the assessee in the assessment proceedings but were supplied only after the assessment was completed. Since the AO has passed the composite order for all the assessment years 2004 to 2010-11 using the same evidence and statements. Therefore, the matters for assessment years 2004-05 to 2010-11 are set aside to the record of the AO for re-adjudication as per the directions above. AO made protective assessment in the hands of Smt. Tinno Joshi as the substantive addition was made in the hands of Shri Arvind Joshi. Since the matter in case of Shri Arvind Joshi where substantive addition was made is set aside to the record of the AO for fresh adjudication therefore, these matters in case of Smt. Tinno Joshi are also set aside to the record of the AO for fresh adjudication as per the outcome of the matters of Shri Arvind Joshi. Needless to say the assessee be given an appropriate opportunity of hearing before passing fresh order. - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER For the Revenue: None For the Appellant: S/Shri P.M. Choudhary, Sr. Adv. With Madhav Khandelwal, Santosh Deshmukh, Parth Jhavar P. Anand ARs ORDER Per Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings and argue the case of the department again there was no representation on behalf of the department to argue these appeals. The hearing was finally concluded on 13th September 2023. 4. First we take up the appeal of the assessee in ITANo.163 of 2014 for A.Y.2004-05 wherein the assessee has raised grounds which are common in all the assessment years. The assessee raised elaborate Grounds running into 36 pages and the same are in the nature of arguments therefore, the same are reduced in concised form as under: 1.(i)The Ld. CIT(A) erred in rejecting plea of the assessee that the assessment order was passed by the AO in violation of Principles of natural justice due to non-supply of material and evidence used against the assessee. Particularly the information gathered by the AO from the State Government Department, Police report, inquiry report, report of handwriting experts which were supplied only after the assessment order as made Annexure-2 to assessment order. (ii) The CIT(A) erred in not appreciating the fact that the order passed by the AO is not sustainable in law as the assessee was not given opportunity to cross examine the witnesses whose statement, report e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement largely is a replica of the Bank Statement and all the entries therein are explained by way of narrations and other documentary evidences. The cash transactions made by the Appellant Assessee were satisfactorily explained with documentary evidence; therefore it was not open to the Ld.Commissioner of Income Tax Appeal to reject claim of the Appellant Assessee summarily with out any material to the contrary produced by the Assessing Officer. Addition of Rs. 3,50,700/- and Rs. 8,818/- for 2004-05; Rs. 2496 for 205-06; Rs. 1,84,769 for 2006- 07; Rs. 3.14,412/- for 2007-08: Rs. 62.262/- for 2008-09: Rs. 2,01,359/- for 2009-10 and Rs. 95.164/- for 2010-11 made need to be deleted; 3. That Ld. Commissioner of Income Tax Appeal as per para 5.7 of the Appeal Order was not justified in confirming the addition made by the Assessing Officer of Rs. 112.00.000/- for the period 2006-07 to 2010- 11 on account of sale / advance money received from Shri Subhash Sharma against sale of agricultural land of the Appellant Assessee; and that in the face of the fact when the Appellant Assessee has produced overwhelming evidence in support of the sale transaction; the Appellant Assessee took all the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant Assessee and the said concern. Not having done so the Assessing Officer was grossly incorrect and so also the Ld.Commissioner of Income Tax - Appeal who has with out dealing with the specific grounds raised by the Appellant Assessee conceded with what the Assessing Officer has stated; the said addition needs to be deleted. 6. That the Ld.Commissioner of Income Tax Appeal was not justified in confirming an addition of Rs. 300,81,850/- on account of cash found from the residential premises of the Appellant Assessee when it was proved with documentary evidence that the same represented the part sale consideration of house received by the Appellant Assessee's father Shri H M Joshi; the Ld.Commissioner of Income Tax - Appeal failed to appreciate that the Assessing Officer has through out the assessment proceedings and the Investigation Wing at the time of post search investigation have deliberately resorted to unfair practices. It was brought to the notice of the Ld.Commissioner of Income Tax - Appeal that the Assessing Officer himself has admitted in the Impugned Assessment Order that the enquiry is incomplete. The Assessing Officer repeatedly refrained form examination of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Commissioner of Income Tax Appeal has taken certain documents and informations as proved without making an effort to so prove them. The addition made on presumption may please be deleted. 12. That the Ld.Commissioner of Income Tax - Appeal was not justified in para 14.2 to uphold the addition of Rs. 17.000/- to the income of Appellant Assessee on account of Passport Expenses. It was proved before the Ld.Commissioner of Income Tax - Appeal as also the Assessing Officer that the Appellant Assessee had sufficient cash flow and personal withdrawals to warrant for an expense of Rs. 17,000/-. 13. That the Ld. Commissioner of Income Tax Appeal was not justified in para 15 in confirming an addition of Rs. 51,25,00,000/- on account of gratification received from contractors as per LPS 3 page 18. The Assessing Officer has gathered information which is totally incorrect and misleading. The reliance placed only on the presumption available u/s 292C of the Income Tax Act, 1961. The addition made on the basis of pure suspicion and estimation without any documentary basis or information that proves the contents of the seized papers and builds a positive nexus beyond doubt with the Appellant A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant Assessee. The Assessing Officer has solely relied on the statement made by Shri S.P. Kohli before the investigation wing: this statement has no evidentiary value in view of the first ground of appeal raised here. 20. That the Ld. Commissioner of Income Tax - Appeal was not justified in para 33.2 to confirm in addition of Rs. 61,00,000/- being alleged payment to Shri Pawan Agarwal. The addition being made purely on dumb documents without giving a cogent reason for the same cannot be sustained. 21. That the Ld. Commissioner of Income Tax - Appeal was not justified in para 34.2 in making an addition of Rs. 85 lacs in the year 2009-10 and Rs. 165 Lacs in the year 2010-11 on account of alleged investment in the business of Shri Pawan Agarwal. The addition been made solely on the basis of dumb document without proving the contents thereof and establishing a positive nexus between the alleged transaction and the Appellant Assessee is illegal. 22. That the Ld.Commissioner of Income Tax - Appeal was not justified in para 35.2 in making an addition of Rs. 303 lacs in the year 2010-11 on account of alleged investment in the business of Shri Pawan Agarwal. The addition been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was duly disclosed to the Government at the time of purchase and at the time of sale. 28. The Ld.Commissioner of Income Tax - Appeal was not justified in confirming in addition of Rs. 20.50 lacs in 2007-08. Rs. 69.75 lacs in 2006-07, Rs. 54.59 lacs in 2006-07. Rs. 4.13 lacs in 09-10, Rs. 4,61,400/- in 2009-10. Rs. 7 lacs in 2008-09 and Rs. 75 lacs in the year 2009-10. The said addition has been made on account of alleged sale of properties in the name of Appellant Assessee's sisters. The Appellant Assessee has proved before the Ld.Commissioner of Income Tax - Appeal that these properties do not belong to the Appellant Assessee: nor has the Assessing Officer placed any document on record to prove the nexus of the Appellant Assessee with the properties. 29. That the Ld.Commissioner of Income Tax - Appeal was not justified in considering the property belonging to M/S Ethos Exports Pvt. Ltd. as the property of the Appellant Assessee. The addition made by the Assessing Officer is based purely on estimate, suspicion without there being any connectivity between the Appellant Assessee and the said company. The addition made Rs. 9.89 lacs in 2006-07. Rs. 12.03 lacs in 2006-07 and Rs. 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustified in confirming the addition of Rs.2.65 lacs in the year 2008- 09 on account of cash deposited in Bank A/c No.15026. The Appellant Assessee proved the source of these cash deposits and the Assessing Officer during the assessment proceedings and also at the time of appeal refrained from examining the documents and the witnesses produced by the Appellant Assessee. This fact has been recorded by the Ld.Commissioner of Income Tax Appeal prominently in the appeal order. The Assessing Officer, instead relied upon documents collected behind the back of the assessee. As at other places the Assessing Officer here also states that the Appellant Assessee was confronted with the documents while all through the proceedings the assessee has never been confronted with any document. 34. That the Ld.Commissioner of Income Tax - Appeal was not justified in confirming the addition of Rs.25,000/- in the year 2003- 04 on account of cash deposited in Bank A/c in PPF A/C. The Appellant Assessee proved the source of these cash deposits and the Assessing Officer during the assessment proceedings and also at the time of appeal refrained from examining the documents and the witnesses produced by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.5501029336 amounting to Rs.29.40 lacs in the year 2008-09, Rs.6.50 lacs in 2007-08 and Rs. 52.59 lacs in the year 2009-10. The Appellant Assessee proved before the Ld.Commissioner of Income Tax - Appeal the source of this deposits. Even at the appeal stage the Assessing Officer refrained from examining the documents and the witness produced by the Appellant Assessee. The Appellant Assessee prepared a complete cash flow comprising of all the entries appearing in the various bank statements and investment made in shares through Khambata Securities and CFS. 39. That the Ld.Commissioner of Income Tax - Appeal was not justified in upholding the addition of Rs. 12.43.669/- on account of investment in Khambata Securities in 2010-11 and Rs. 11 lacs in 2007-08 in CFS Financial Services. The Appellant Assessee proved before the Ld.Commissioner of Income Tax - Appeal the source of these deposits. Even at the appeal stage the Assessing Officer refrained from examining the documents and the witness produced by the Appellant Assessee. The Appellant Assessee prepared a complete cash flow comprising of all the entries appearing in the various bank statements and investment made in shares through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction. 43. That the Ld.Commissioner of Income Tax - Appeal was not justified in upholding the addition made on account of alleged investment by the Appellant Assessee in the concerns of Mr. Pawan Agarwal, being Rs. 64.64.400/- in 2004-05. Rs. 5.33.571/- in 2005-06. Rs. 39.03.328/- in 2006-07 and Rs. 36 lacs in 2007-08. The Appellant Assessee has not been found connected with any of the concerns of said Shri Pawan Agarwal at any time in any manner. 44. That the Ld.Commissioner of Income Tax - Appeal was not justified in upholding the addition of Rs. 5.50 crores alleged to have been made in the concern J.K. Resort. It was proved before the Ld.Commissioner of Income Tax - Appeal and also the Assessing Officer that the said resort belongs to Mr.S.P. Kohli, in support of which the building permission and the building completion certificate was produced; the said documents also proved that the said J.K. Resort was constructed in the year 1998. Shri S.P. Kohli is a regular assessee under the Income Tax Act, 1961 for past many years and has been showing income from J.K. Resort. 45. That the Appellate Order passed by the Ld.Commissioner of Income Tax Appeal and the Impugned Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situated at D-19,74, Bunglows, T.T. Nagar, Bhopal. At the time of search the assessee was out of station and was in Delhi and returned only after the proceedings of search had commenced. The search proceedings were continuing for two days i.e. from 04.02.2010 to 05.02.2010. Apart from the official residence of the assessee search was also conducted at the residence of the father of the assessee at E-5/3, Arera Colony, Bhopal. 5.1 Ld. Sr. counsel has submitted that the assessment u/s 153A in case of the assessee as well as other family members were completed and huge additions were made in the hands of the assessee vide order dated 30.12.2011. He has pointed out that the assessment order is running into more than 1500 pages and Annexures in 8 volumes marked as Annexure- A to H each comprising of about 250 to 300 pages. He has submitted that after the search and seizure action u/s 132 of the Act conducted on 4 5.02.2010, the Lokayukt MP also conducted search at the premises of the assessee and his wife on 10.12.2010. Pursuant to search conducted by the Lokayukt M.P., the DSP, Lokayukt has prepared a statement of disproportionate income and assets held by the assessee at Rs. 41,87,35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and choose adopted by AO by ignoring favourable statements is against principle of natural justice and fair play. The AO has heavily relied upon the retracted statements of Shri S.P. Kohli recorded by the Investigation Wing of the department without supplying copy of the statements to the assessee despite specific request made in this respect. He has further contended that there is a violation of principle of natural justice on the part of the AO when he has obtained the report of the so called handwriting experts and relying upon the same to reach conclusion that the notings in the loose papers and diaries are in handwriting of the assessee without giving an opportunity to the assessee to cross examine as well as without considering the objections raised by the assessee to the report of the said handwriting experts which was supplied to the assessee only on 27.12.2011 and assessee filed objections vide letter dated 28.12.2011 but the AO has passed the impugned order without considering objections of the assessee as well as without giving opportunity to cross examine the handwriting experts. 5.3 He has also questioned the qualification and competence of the alleged handwriting ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersely affected. He has also relied upon the decision of Hon ble Supreme Court in case of State of Kerala vs. K.T. Shduli yusuff (1977) 39 STC 478 and submitted that the principles of natural justice requires that no man should be condemned unheard. In another judgment in case of R.B. Shreeram Durga Prasad Fatehchand Nursinghdas vs. Settlement Commission reported 176 ITR 169 it was held that an order passed in violation of principles of natural justice is nullity. He has also relied upon the following judgments: a. C Vasantlal Co vs. CIT 45 ITR 206 b. Kishanchand Chelaram vs. CIT 125 ITR 713 (SC) c. Udairaj Golia (HUF) vs. CIT 64 ITD 21 (ITAT, Mumbai) d. Dhakeshwari Cotton Mills Ltd. vs. CIT 26 ITR 775 (SC) e. Gargin Din Jwala Prasad vs. CIT 96 ITR 97 (HC All) f. R.W. Promotions Pvt. Ltd. vs. ACIT 61 taxman.com 54 (Bombay HC) 5.6 Thus, the Ld. Sr. Counsel has submitted that the present case is a fit case where the order of the Ld. CIT(A) is to be set aside and the matter be restored back to the AO for fresh disposal after complying with the principle of natural justice by affording an opportunity of cross examination of adverse witnesses to the assessee. 5.7 Ld. Sr. Counsel further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the second night of search and interrogation. He has also referred to the judgment of Hon ble Allahabad High Court in case of CIT vs. Radhakishan Goel 278 ITR 454 and submitted that the Hon ble High Court has made a serious observations of the manner in which search being conducted with complete team of officers with police force disconnecting telephone and all other connections as well as in gross and egress are blocked. A person was so tortured, harassed and put to a mental agony that he loses his normal state of mind and at that stage it cannot be expected from a person to pre-empt the statement required to be given in law as part of his defense. Thus, the Ld. Counsel has submitted that it is gross violation of principle of natural justice. He has also relied upon the following judgments: i) Decision of Supreme Court in the case of Mehta Parikh Co v/s CIT reported in (1956) 30 ITR 181. ii) Vasanji Ghela Co v/s CST reported in (1977) 40 STC 544 (Bom) He has submitted that affidavits tendered by person could not rejected without cross examining the deponents thereof. 5.9 Ld. Counsel has then pointed out that the matter is also required a fresh verification and examination becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Asmi Joshi R-5/3 Area Colony Bhopal 4.2.2010 DIT(inv) MP CG 3 Shri H.M. Joshi, Tinno Joshi Locker No.51/41 State Bank of India PBB. Bhopal 8.2.2010 Add. DIT (Inv.) Bhopal 4 Shri H.M. Joshi, Nirmala Joshi Locker No.126, Sadguru Nagrik Sahkari Bank,E-5/13, Arera Colony Bhopal 9.2.2010 Add. DIT (Inv.) Bhopal 5 Shri H.M. Joshi, Nirmala Joshi Locker No.128, Sadguru Nagrik Sahkari Bank,E-5/13, Arera Colony Bhopal 9.2.2010 Add. DIT (Inv.) Bhopal 6 Shri H.M. Joshi, Nirmala Joshi, Tinno Joshi Locker No.204, Sadguru Nagrik Sahkari Bank,E-5/13, Arera Colony Bhopal 9.2.2010 Add. DIT (Inv.) Bhopal 7 Rajiv Joshi Anuradha Joshi Locker No.224, Sadguru Nagrik Sahkari Bank,E-5/13, Arera Colony Bhopal 3.3.2010 Add. DIT (Inv.) Bhopal 8 S.P. Sharma Locker No.179, Sadguru Nagrik Sahkari Bank,E-5/13, Arera Colony Bhopal 19.2.2010 Add. DIT (Inv.) Bhopal 7. All the cases of assessee, family members and other related/associates persons were centralized vide order u/s 127 of the Act passed by the CIT. The AO consequently issued notices u/s 153A of the Act for A.Ys.2004-05 to 2009-10 and u/s 143(2) for A.Y.2010-11. A composite assessment order was passed on 30.12.2011 whereby the AO has made various additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 226) Rs. 37838000 As Per Para (10.17) Rs. 19000 As Per Para (10.31) Bank Rs. 10000 As Per Para (10.35(iv)) Bank Rs. 351000 As Per Para (10.35(x)) Bank Rs. 135000 As Per Para (10.35(xi) Bank Rs. 88000 As Per Para (10.35(xii) Bank Rs. 25000 As Per Para (10.35(xiii) Bank Rs. 180000 As Per Para (10.35(xviii) Bank Rs. 10000 As Per Para (10.35(xix) Bank Rs. 115000 As Per Para (10.35(xxi) Bank Rs. 102000 As Per Para (10.35(xxii) Bank Rs. 141000 As Per Para (10.35(xxiii) Bank Rs. 305000 As Per Para (10.35(xxiv) Bank Rs. 30000 As Per Para (10.35(xxvi) Bank Rs. 57000 As Per Para (10.35(xxix) Bank Rs. 351000 As Per Para (10.35(xxxii) Bank Rs. 336000 As Per Para (10.35(xxxiv) Bank Rs. 1085000 As Per Para (10.35(xxxviii) Bank Rs. 925000 As Per Para (10.35(xxxix) Bank Rs. 1160000 As Per Para (13.4) Rs. 533571 As Per Para (14.2 a.) Rs. 393660 As Per Para (14.2 b.) Rs. 393660 As Per Para (14.3) Rs. 495691 As Per Para (15.4) Rs. 7500000 Income Assessed Rs. 87498880 Round Off Rs. 87498880 Assessed as above. Charged interest U/s 234A, 234B. 234C 234D as per rules. Give credit of taxes paid. Issue demand notice and challan. Penalty u/s 271(1)(c) is being initiated separately . A.Y. 2006-07 1. Income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41280 Add: Income Surrendered Rs. 0 As Per Para (4.1) Cash Flow Arvind Joshi Rs. 2496412 As Per Para (4.2) Cash Flow H.M. Joshi Rs. 6550400 As Per Para 6-a Kamrup Housing Rs. 43800000 As Per Para 6-b Business investment in Shridev Sharma Rs. 11444000 As Per Para 6-f Purchases Rs. 268763 As Per Para (6-j) Neelanchal Payments Rs. 20200 As Per Para (6-m) Progressive Travel Rs. 180890 As Per Para (6-n) TA/DA Rs. 241832 As Per Para (6-t) Payment to SH T, EMB Rs. 2500000 As Per Para (6-u) Payment to NS, ABH MAN etc. Rs. 300000 As Per Para (8-c) Jewellery at H.M. Joshi Rs. 116765 As Per Para (9.65) Property Rs. 1600000 As Per Para (9.97) Investment, Rs. 277000 As Per Para (9.101) Investment Rs. 4301000 As Per Para (9.102) Investment Rs. 500000 As Per Para (9.110) Investment Rs. 2550000 As Para (9.226) Rs. 37838000 As Per Para (10.4) Bank Rs. 314000 As Per Para (10.17) Bank Rs. 32000 As Per Para (10.30) Bank Rs. 281000 As Per Para (10.35(ii)) Bank Rs. 4685000 As Per Para (10.35(v)) Bank Rs. 695000 As Per Para (10.35(vii)) Bank Rs. 460000 As Per Para (10.35(viii)) Bank Rs. 60000 As Per Para (10.35(x)) Bank Rs. 152000 As Per Para (10.35(xi) Bank Rs. 1479500 As Per Para (10.35(xii) Bank Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (10.7) Bank Rs. 265000 As Per Para (10.17) Bank Rs. 281716 As Per Para (10.34) Bank Rs. 1593940 As Per Para (10.35(i)) Bank Rs. 550000 As Per Para (10.35(ii)) Bank Rs. 1490000 As Per Para (10.35(v)) Bank - Rs. 350000 As Per Para (10.35(vii)) Bank Rs. 79565 As Per Para (10.35(viii)) Bank Rs. 455000 As Per Para (10.35(ix)) Bank Rs. 1405000 As Per Para (10.35(x)) Bank Rs. 120000 As Per Para (10.35(xi) Bank Rs. 253000 As Per Para (10.35(xvi) Bank Rs. 17764800 As Per Para (10.35(xvii) Bank Rs. 20000 As Per Para (10.35(xix) Bank Rs. 65000 As Per Para (10.35(xxi) Bank Rs. 30000 As Per Para (10.35(xxiv) Bank Rs. 85000 As Per Para (10.35(xxv) Bank Rs. 71000 As Per Para (10.35(xxx) Bank Rs. 350000 As Per Para (10.35(xxxii) Bank Rs. 100000 As Per Para (10.35(xxxiii) Bank Rs. 30000 As Per Para (10.35(xxxv) Bank Rs. 609500 As Per Para (10.35(xxxvii) Bank Rs. 86000 As Per Para (10.35(xxxx) Bank Rs. 35000 As Per Para (10.35(xxxxi) Bank Rs. 606000 As Per Para (10.35(xxxxii) Bank Rs. 365000 As Per Para (10.35(xxxxv) Bank Rs. 515644 As Per Para (10.35(xxxxvi) Bank Rs. 580100 As Per Para (11.9) Rs. 3010000 As Per Para (11.15) Rs. 2448302 As Per Para (11.16) Rs. 1497239 As Per Para (12.26) Rs. 2996000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para (10.35(xxx) Bank Rs. 320000 As Per Para (10.35(xxxii) Bank Rs. 185000 As Per Para (10.35(xxxiii) Bank Rs. 20000 As Per Para (10.35(xxxvii) Bank Rs. 32000 As Per Para (10.35(xxxx) Bank Rs. 150000 As Per Para (10.35(xxxxii) Bank Rs. 1088000 As Per Para (10.35(xxxxiii) Bank Rs. 278000 As Per Para (10.35(xxxxv) Bank Rs. 100000 As Per Para (10.35(xxxxvi) Bank Rs. 1200000 As Per Para (11.9) Rs. 5409000 As Per Para (11.9) Protectively Rs. 1163700 As Per Para (11.15) Rs. 132550 As Per Para (11.15) Rs. 267497 As Per Para (11.16) Rs. 796449 As Per Para (12.26 A) Rs. 2081200 As Per Para (12.26 B) Rs. 4099000 As Per Para (12.26 C) Rs. 998000 As Per Para (12.26 D) Rs. 6697000 As Per Para (14.1) Agriculture Rs. 195140 As Per Para (14.1) Protectively Rs. 105000 As Per Para (14.2 a.) Rs. 600000 As Per Para (14.2 b.) Rs. 600000 As Per Para (14.3) Rs. 495691 As Per Para (15.4) Rs. 7500000 Income Assessed Rs. 230805111 Round Off Rs. 230805110 Assessed as above. Charged interest U/s 234A, 234B. 234C 234D as per rules. Give credit of taxes paid. Issue demand notice and challan. Penalty u/s 271(1)(c) is being initiated separately. A.Y. 2010-11 Income as per Original return Rs. 1595972 Add:- 0 As P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief to the assessee in respect of some of the addition made by the AO which is purely based on assumption and not based on the seized material or other tangible material. Thus, both the assessee as well as department have filed these cross appeals. 9. Ld. Sr. counsel for the assessee has restricted his arguments only on the point of violation of principle of natural justice. Most of the additions were made by the AO on the basis of the seized material revealing the investments made in various properties and other assets. These investments were found to be Benami transactions made by the assessee in the name of his family members including father and sisters. Thus, the main objection of the assessee as emphasized by the Ld. Sr. Counsel during the course of hearing is that the AO has relied upon various documents without confronting the assessee and therefore, the assessee was not given an opportunity to revert those documents relied upon by Ld. AO. The first objection of the Ld. Sr. counsel is regarding the report/statement of DSP Lokayukt in respect of disproportionate income and asset hold by the assessee which was obtained by the AO without confronting the assessee of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise 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. 10. A similar view has been taken by the various High Courts on this point in the cases as relied upon by the assessee. For sake of brevity we are not multiplying the case law precedence on this point. However, it is pertinent to note that the report/statement of DSP Kokayukt MP cannot be subject matter of scrutiny in the proceedings under income Tax Act as the said report of investigation agency is subject to the scrutiny by the concerned court of law/authority and the veracity of the same cannot be questions in the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information/evidence proposed to be used by the AO against the assessee then it would amount to violation of principle of natural justice. 11. The second contention and objection of the Ld. Sr. counsel is regarding the addition made by the AO on the basis of the statement of Shri S.P. Kohli without affording an opportunity of cross examination of the evidences. There is no dispute that the statement of Shri S.P. Kohli has been made the basis of some of the addition while framing the assessment order. Though the statements of Shri S.P. Kohli was recorded during the course of search and seizure action and post search inquiry and were very much in the knowledge of the assessee however, if the addition is made by the AO on the basis of such statements without giving opportunity of cross examination to the assessee then the same is in violation of principle of natural justice. 12. The next objection of the assessee is regarding the addition made by the AO on the basis of the statement of Shri H.M. Joshi father of the assessee recorded during the course of search u/s 132(4) of the Income Tax Act which was subsequently retracted by filing an affidavit of Shri H.M. Joshi. Ld. Sr. Counsel h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writing expert. Therefore, in absence of any contrary fact or material a mere objection of the assessee to the competence, qualification and expertise of the hand writing expert is without any substance or merit. However, since the AO has used the report of the handwriting expert to give a finding that the handwriting on the seized material is of the assessee then it is in the fair play to give an opportunity to the assessee to cross examine the handwriting expert or produce any contrary material. 15. The CIT(A) has considered this issue of violation of principle of natural justice in para 62 62.1 as under: 62. The appellant has also raised common grounds of appeal that A.O. is not justified in not providing him with the documents and third party statements relied on by him in framing the assessment order under appeal. Further proper, reasonable and meaningful opportunity has not been provided by the A.O. and assessment has been made in violation of principles of natural justice. And that all the findings and conclusion of the A.O. are contrary to the material on record. As per the appellant submissions have been made at various portions while discussing various additions made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is a violation of principle of natural justice in respect of various statements as well as reports and documents made the basis of the assessment without confronting the assessee and without giving the assessee an opportunity to cross examine the witness whose statements were recorded during the proceedings under the Income Tax Act. Accordingly in the interest of justice we set aside the impugned composite order of the CIT(A) and remand the matter to the record of the AO to allow the assessee to cross examination of the witnesses whose statements were recorded in the proceedings under the income Tax Act including the assessment proceedings and also give the opportunity to the assessee to revert and meet the reports and other evidences collected by the AO and used against the assessee in the assessment proceedings but were supplied only after the assessment was completed. Since the AO has passed the composite order for all the assessment years 2004 to 2010-11 using the same evidence and statements. Therefore, the matters for assessment years 2004-05 to 2010-11 are set aside to the record of the AO for re-adjudication as per the directions above. In ITANo.151 to 157/Ind/2014 in C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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