TaxTMI 
TaxTMI 
2021 (5) TMI 149
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....hip (P) Ltd., ('EHTPL'), Hyderabad i.e. Plot No.B2 admeasuring 597 sq.yards and that there was an investigation by the CBI into the affairs of EHTPL and connected group of cases and has filed a charge sheet. The outcome of the investigation by the CBI and the charges framed thereon is that the villa plots were sold at a price higher than what is recorded in the MOU/Allotment letter of Registered Document. It was observed that the recorded price is Rs. 5000/- per sq. yard but the amount paid in cash were over and above the recorded price of Rs. 4000/- per sq. yard to Rs. 45,000/- per sq. yard. Therefore, the Assessing Officer reopened the assessment u/s 148 of the Act. During the reassessment proceedings, the Assessing Officer relied upon th....
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.... mainly relying upon the material gathered as a result of investigation made during the assessment proceedings of EHTPL, particularly on the basis of statement recorded from Shri T.Ranga Rao, the Assessing Officer has come to the conclusion that the assessee has paid on money to the extent of Rs. 1,99,20,000 over and above the recorded sale consideration. Of course, besides the statement of Shri T.Ranga Rao, it is seen that the department has gathered information in exercise of power under S.133(6) from some other buyers, who agreed to have paid on-money towards purchase of plots/villas from EHTPL. It is relevant to note that when the assessee was called upon to explain whether he has paid on-money, he stoutly denied the same and insisted t....
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....nsaction or income, at the same time, it is salutary principle of law that any adverse material gathered by him, which he proposes to utilise against the assessee, must be confronted to the assessee for allowing him an effective opportunity of rebuttal. This is in keeping with the principle of natural justice that no person should be condemned without giving a fair opportunity of hearing. In the present case, though the basis for addition is the statement recorded from Shri T. Ranga Rao, admittedly, the Assessing Officer has neither supplied a copy of the statement to the assessee nor allowed him an opportunity to cross examine him, though the assessee in his letter dated 13.3.2014 has specifically asked for cross examination of Shri T.Rang....
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....ch crossexamination would not have improved the assessee's case. Hon'ble Supreme Court held, as the demand raised against assessee was solely relying upon the statement of witness, denial of cross examination to assessee vitiated the order. Unlike the case of Adaman Timber Industries (supra) in assessee's case statement of Shri T.Ranga Rao is not the only piece of evidence relied upon by the Assessing Officer. It is relevant to note that apart from the statement of Shri T.Ranga Rao, there are other information gathered by the department by taking recourse to S.133(6) as per which some of the buyers of the plots have admitted of having paid on- money. Further, through a process of investigation, CBI has found irregularities in th....