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2019 (3) TMI 1841
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....o substantiate the same. 2.1 That the CIT(A)/ assessing officer erred on facts and in law in not appreciating that no incriminating material was found during the course of simultaneous survey at the premises of the appellant and the managing director of the appellant-company repeatedly denied having received any on-money. 2.2 That the CIT(A)/ assessing officer erred on facts and in law in making the aforesaid addition on the basis of ex-parte material, in gross violation of principles of natural justice. 2.3 That the CIT(A) erred on facts and in law in holding that surrender of Rs. 9 crores by Shri Sanjeev Kumar Jhunjhunwala was unsubstantiated and based on flimsy grounds and such surrender allegedly confirms modus operand!, as mentioned by the assessing officer, used the appellant company. 2.4 Without prejudice, the CIT(A)/ assessing officer erred on facts and in law in adding sum of Rs. 9 crores assessed as income in hands of managing director of the appellant, Shri Sanjeev Kumar Jhunjhunwala, leading to double taxation of such sum. 3. That the CIT(A)/ assessing officer erred on facts and in law in charging/ computing interest under se....
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....ible material/evidence to substantiate/corroborate the same. 2.2 That the assessing officer erred on facts and in law in not appreciating that no incriminating material was found during the course of simultaneous survey at the premises of the appellant and the managing director of the appellant-company who repeatedly denied having received any on-money. 2.3 That the assessing officer erred on facts and in law in making the aforesaid addition on the basis of ex-parte material, in gross violation of principles of natural justice." 7. In its written submissions, the assessee, inter alia, submitted before the ld. CIT(A) that:- "It is, at the outset, emphatically submitted that the aforesaid huge addition of Rs. 64 crores made by the Assessing Officer is patently illegal and bad in law since the same has been made merely on the basis of presumptions, conjectures and surmises, without any credible material/corroborative evidence to establish receipt of any income/cash, outside the books of account, as explained hereunder: The Assessing Officer, as stated above, has simply primarily relied upon the contents of a diary purportedly impounded from the p....
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....e, the appellant was denied any effective opportunity to rebut the contents of the statement so made. (b) Further, no opportunity to cross-examine Mr. Anoop Asthana was ever accorded to the appellant. In absence of copy of statement being provided to the appellant and/or opportunity to cross-examine Mr Anoop Asthana, his statement could not have been taken into consideration to draw any negative inference against the appellant." 8. The ld. CIT(A) has held, inter alia, as follows:- "5.6 The incriminating document at page 163, 164 and 165 contains the details related to the Emerald Garden project being developed by the appellant company. Page No.163 of the Annexure A-4 mentions certain figures which establishes that the money was receiving sale consideration in white and black for example for a 3 BHK flats 2080 square feet, the quantum of while and black mentioned are Rs. 1,20,57,600/- and Rs. 42,12,000/- respectively. Further, another entry is made for the 3 BHK flat admeasuring 2325 sq. ft. area, wherein amount of white and black mentioned is 1,34,81,400/- and Rs. 47,08,125/- respectively. Thus, Assessing Officer has calculated the quantum of black amount at 25....
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....oss examination of Shri Anoop Asthana was ever accorded to the appellant. The contention of the appellant is hollow and are not based on the proper appreciation of the facts. it is admitted fact that Shri Anoop Asthana proprietor of AAP was acting as a property broker for the appellant company. This fact is also evident from the commission paid to Shri Anoop Asthana, wherein TDS was also deducted by appellant company. It is not denied by the ld. AR that no commission whatsoever was paid to AAP. Thus the relation between the appellant company and Shri Anoop Asthana proprietor of AAP is established as property developer and the property broker. The incriminating document found from premises of AAP establishes the fact that appellant company is engaged in receiving 25% of the sale consideration in cash, which is unaccounted in the books of the appellant. Assessing Officer has correctly extrapolated the modus operandi for calculating unaccounted income of appellant. 5.11. The contention of the ld. AR that no opportunity of cross examination to Shri Anoop Asthana was ever accorded to the appellant is far away from truth and reality of the case. The incriminating document found ....
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....he fact that incriminating material was found from the premises of AAP and SKJ wished to distance the appellant company from AAP. 10. Thus, the position obtaining is that a diary was recovered from the premises of Shri Anoop Asthana during the survey. Pages 163, 164 and 165 of the diary, Annexure A-14, have been taken to go against the assessee. These three documents, firstly, were not recovered from the possession of the assessee. Then, page 163 is undated, whereas pages 164 and 165 do not pertain to the year under consideration. It is only in the statement of Shri Anoop Asthana, that he attributed account of these documents to the assessee. 11. First and foremost, the subject diary/pages were found and impounded from the premises of Shri Anoop Asthana, a third party, and not from the appellant. Further, Shri Anoop Asthana, in his statement, had stated that entries in the said diary were made by staff member of Shri Anoop Asthana, without providing details of the so-called staff member. Thus, the author of the so-called diary in question is not even known till date. Shri Anoop Asthana nowhere stated that the diary was written by someone on his behalf and/or on his instructio....
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....to him during the relevant year. On account of the ongoing dispute between the appellant and Shri Anoop Asthana, any averment made by Shri Anoop Asthana against the appellant could not be taken at its face value. Further, the dates mentioned in the diary impounded relate back to January, 2014 (18/1/2014, 23/1/2014), which is the period when Shri Anoop Asthana booked two flats with the appellant in his personal capacity. Therefore, the recordings in the diary could not be held to be related to the other sale of flats undertaken by the appellant, without any involvement of Shri Anoop Asthana. Even the names of the individual parties appearing in the diary alongside the amounts are, statedly, completely alien to the appellant. The appellant had not sold any flat in the Emerald Garden project to the persons named in the said diary. Therefore, the very contents of the diary are suspect and are totally unreliable/unauthentic. No adverse inference can be drawn from the payment receipts (3 in number) in respect of flats in Emerald Garden project found from the premises of Shri. Anoop Asthana, particularly when nothing adverse has been stated by Shri. Asthana in this regard. 12. These fa....
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....l Prem Chand Ltd., 295 ITR 105 (Del). 23. Andaman Timber Industries vs. CCE 281 CTR 241 (SC). 13. Some decisions in this regard are discussed thus. 14. In 'Kishinchand Chellaram vs. CIT' (supra), it has been held by the Hon'ble Supreme Court that the assessment made by relying upon the statement of a third party, without giving the effected person a chance to cross-examine such third party, is liable to be held as based on no evidence and, therefore, liable to be deleted. 15. In 'Sona Electric Company vs. CIT' (supra), it has been held that the statement of a witness recorded at the back of the assessee has to be excluded, as the same was relied on without giving any opportunity to crossexamine the person giving statement; and that the assessment based on such a statement is a statement rendered as based on no evidence and, accordingly, liable to be annulled. 16. In 'Amarjit Singh Bakshi (HUF) vs. ACIT' (supra), it has been held that opportunity to cross-examine the person giving a statement of culpable nature has to be given; and that in the absence of such an opportunity being given to the affected person, the statement ceases to be material for the purpo....
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....by Assessee, however, no such opportunity was granted. Assessee contested truthfulness of statements of two witnesses and wanted to discredit their testimony for which purpose opportunity of crossexamination was sought. It was not for Adjudicating Authority to presuppose as to what could be subject matter of cross-examination and deny prayer of Assessee. In case testimony of two witnesses was discredited, there would be no material with Department to justify its action, as statement of two witnesses was only basis of issuing Show Cause Notice. Impugned order as passed by CESTAT was set aside. Appeal allowed." 19. Evidently, the three documents found during survey from the possession of Shri Anoop Asthana, in the absence of the statement of Shri Anoop Asthana, do not have any value, particularly in the face of the fact that they are not corroborated by any independent evidence. Page No. 163: This is un-dated, but name of the project 'Emerald Garden' launched by the appellant was mentioned there. With reference to this, Shri Anoop Aathana who had been examined by the Authorised Officers, stated categorically that he had been working as a broker for last 30 years and all th....
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....r section 131(1). In response to Question Nos.14, 15 and 16, he stated that he had done trading in commodity, and looking to the market conditions prevailing at that time, it was not improbable to have earned income of this volume. Further, in response to Question No.18, he was required to submit documentary evidences in support of income declared by him. In response to Question No.21, he gave complete details supported by documentary evidences relating to commodity trading. Further, in response to Question No.22, he gave complete information about income declared and income tax, wealth tax payments made by him on such income/wealth. In response to Question No.23, he gave complete information, name-wise, of the booking receipts as had been impounded during the course of survey at the office premises of Shri Anoop Asthana, and in the end, he categorically stated that it would not be proper to draw adverse inference in relation to income from commodity trading. 16. Thus, one cannot but come to the inexorable conclusion that the order under appeal suffers from the vice of not taking into consideration the assessee's contention, which contention also does not stand rebutted, that it....