Tribunal allows appeal under section 69 of Income Tax Act due to lack of cross-examination

The appeal was allowed for statistical purposes as the Tribunal found that the addition under section 69 of the Income Tax Act, 1961 was made based on the seller's statement without giving the assessee an opportunity for cross-examination. The matter was remanded to the Assessing Officer for proper verification and cross-examination, ensuring the assessee's right to present their case.

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Issues involved: Addition u/s. 69 of the Income Tax Act, 1961 and denial of opportunity for cross-examination.

Summary:

Issue 1: Addition u/s. 69 of the Income Tax Act, 1961
The appeal was against the CIT(A)-I, Nashik's order confirming the addition u/s. 69 amounting to Rs. 41,15,000. The assessee purchased agricultural land for Rs. 13,85,000 and it was revealed that additional cash of Rs. 41,15,000 was paid to the sellers. The AO made the addition as unexplained investment based on the seller's statement. The CIT(A) directed the AO to provide a copy of the statement for examination. The AO reiterated the addition, stating that Rs. 55,00,000 was received, with Rs. 13,85,000 by cheque and Rs. 41,15,000 in cash. The CIT(A) upheld the addition, leading to the appeal.

Issue 2: Denial of opportunity for cross-examination
The assessee contended that no opportunity for cross-examination of the seller was given by the AO. The matter was restored to the AO with a direction to verify the extra money received by the sellers and to allow the assessee to cross-examine the seller. The appeal was allowed for statistical purposes.

The Tribunal found that the addition was based on the seller's statement without affording the assessee an opportunity for cross-examination. In the interest of justice, the matter was remanded to the AO for proper verification and cross-examination, allowing the assessee a fair chance to present their case. The appeal was allowed for statistical purposes.

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