Natural justice requires disclosure of third-party material before assessment additions are sustained; Bombay HC declined to entertain that issue.

Where an assessment addition is proposed on the basis of third-party material in the Assessing Officer's possession, natural justice requires that the assessee be furnished with all relied-upon evidence before the addition is sustained. The Tribunal's direction for denovo adjudication reflected this fairness requirement, and the High Court agreed that the assessee must be given an opportunity to test the correctness and reliability of the material. The Court did not entertain that question because no substantial question of law arose, while the appeal was admitted on the remaining issue.

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Issues: Whether the Tribunal was justified in restoring the assessment for denovo adjudication after directing that the assessee be furnished with all evidence collected by the Assessing Officer relied upon for the proposed addition.

Analysis: The order records that the Assessing Officer had made additions on the basis of material obtained from third parties, without furnishing that material to the assessee. The Tribunal held that the Assessing Officer must supply all materials proposed to be relied upon before making an addition, so that the assessee may test their correctness and reliability. The High Court agreed that the requirement flows from the principles of natural justice.

Outcome: The question was not entertained as no substantial question of law arose.

Final Conclusion: The order accepted the Tribunal's approach on supply of material and limited the appeal by declining to entertain that question, while admitting the appeal on the remaining question.

Ratio Decidendi: Where an addition is proposed on the basis of material in the Assessing Officer's possession, fairness requires that the assessee be confronted with that material before the addition is sustained.

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