1997 (5) TMI 76 - AT - Income Tax

Appeal withdrawn & dismissed; contested addition of Rs. 18,00,000 deemed insufficient. Dissent over compliance.

Udeyraya Goliya (Huf). Versus Assistant Commissioner Of Income-Tax

Udeyraya Goliya (Huf). Versus Assistant Commissioner Of Income-Tax - ITD 064, 021, Issues Involved:1. Withdrawal of ITA No. 4073/Bom/92.2. Addition of Rs. 18,00,000 u/s 143(3) read with section 250.3. Competency of the assessee to raise the ground of cross-examination.4. Validity of the seized document as evidence.5. Compliance with CIT(Appeals) directions.6. Adequacy of the evidence for confirming the addition.Issue 1: Withdrawal of ITA No. 4073/Bom/92At the hearing, the representative for the assessee requested the withdrawal of the appeal in ITA No. 4073/Bom/92. This appeal was treated as withdrawn and dismissed for want of prosecution.Issue 2: Addition of Rs. 18,00,000 u/s 143(3) read with section 250The only ground challenged by the assessee in ITA No. 4448/Bom/94 was the confirmation of the addition of Rs. 18,00,000. The Assessing Officer made this addition based on a statement from an alleged broker, which was not cross-examined by the assessee. The CIT(Appeals) upheld the addition, relying on a document seized during a search operation.Issue 3: Competency of the Assessee to Raise the Ground of Cross-ExaminationThe assessee argued that no opportunity was given to cross-examine the broker, which was crucial since the addition was based solely on his statement. The Tribunal noted that the assessee was competent to raise this ground as the assessment was against the assessee, making them an aggrieved party.Issue 4: Validity of the Seized Document as EvidenceThe CIT(Appeals) relied on a document seized during a search operation, which did not bear any signatures and contained rough notings. The Tribunal questioned whether this paper could be treated as a valid document since it lacked identifiable signatures and adequate evidence to prove the payment of Rs. 18,00,000.Issue 5: Compliance with CIT(Appeals) DirectionsThe CIT(Appeals) had earlier directed the assessee to provide specific evidence, such as identifying the broker, the land, the landowner, and the person who paid Rs. 18,00,000. The Tribunal noted that the assessee did not comply with these directions, and the CIT(Appeals) upheld the addition due to non-compliance.Issue 6: Adequacy of the Evidence for Confirming the AdditionThe Tribunal found that the Department did not provide adequate evidence to prove that the assessee paid Rs. 18,00,000. The paper seized could not be treated as a reliable document, and the broker's statement was recorded without giving the assessee an opportunity for cross-examination. The Tribunal concluded that the addition was not justifiable and allowed the appeal.Separate Judgment by Accountant Member:The Accountant Member disagreed with the Judicial Member on allowing the appeal in ITA No. 4448/Bom/94 and proposed upholding the addition of Rs. 18,00,000. He argued that the assessee did not comply with the CIT(Appeals) directions and did not raise the objection of cross-examination timely.Third Member's Decision:The Third Member concluded that there was insufficient evidence to confirm the addition of Rs. 18,00,000. The statement of the broker could not be relied upon as it was recorded without the assessee's opportunity for cross-examination. The seized paper did not provide adequate proof of payment by the assessee-HUF. The matter was referred back to the regular Bench for final disposal.