Appeal success: Cross-examination right upheld in Income Tax Act dispute.

The appeal challenged the order under section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals)-57, Mumbai for the assessment year 2015-16. The appellant contested the denial of cross-examination of documents and disputed the addition under section 69B of the Act. The Tribunal found the denial of cross-examination to be a violation of natural justice, setting aside the order and remanding the matter to the Assessing Officer for re-examination with directions to provide the appellant with the opportunity for cross-examination. The appeal was allowed for statistical purposes, granting both parties a fair opportunity to present their claims.

---

---

Issues:
The appeal challenges the order passed under section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals)-57, Mumbai, for the assessment year 2015-16.

Issue 1: Opportunity of Cross Examination
The appellant contended that the Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer of not granting the cross-examination of documents relied on while assessing the income. The appellant sought to have the orders passed without providing the opportunity for cross-examination declared null and void.

Issue 2: Unexplained Investment u/s 69B
The appellant disputed the addition of Rs. 22,70,750 under section 69B of the Act, alleging that the Assessing Officer erred in making the addition based on cash payments for the acquisition of a flat. The appellant argued that the action of the lower authorities should be deleted.

Issue 3: General
The appellant sought leave to add, alter, or amend the grounds of appeal.

The brief facts of the case are as follows: The appellant, an individual working in the Merchant Navy, filed a return of income declaring a total income of Rs. Nil. Subsequently, proceedings were initiated under section 147 of the Act based on information that the appellant had made cash payments towards the purchase of a residential flat. The Assessing Officer treated the cash payment as income of the appellant and added it under section 69B of the Act. The Commissioner of Income Tax (Appeals) dismissed the appeal, leading to the current appeal.

During the hearing, the Authorized Representative argued that the appellant was not granted the opportunity to cross-examine the builder, whose statement was relied upon by the Assessing Officer. The Departmental Representative contended that the appellant chose not to avail the opportunity for cross-examination.

The Tribunal noted that the appellant's grievance was related to the addition of Rs. 22,70,750 as on-money paid in cash. The Tribunal observed that the appellant was not provided with the opportunity to cross-examine the builder, which was a serious flaw violating the principles of natural justice. Citing legal precedents, the Tribunal set aside the impugned order and directed the Assessing Officer to re-examine the matter, providing the appellant with all relied-upon documents and the opportunity to cross-examine the relevant party.

Consequently, the appeal by the appellant was allowed for statistical purposes, and the matter was remanded to the Assessing Officer for fresh adjudication, with directions to provide a fair opportunity for both sides to present their claims.

---