TaxTMI 
TaxTMI 
2024 (4) TMI 1273
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....venue craves leaves to add, amend, alter or withdraw any ground of appeal. 4. It is therefore prayed that the order of the CIT(A), Jamnagar may kindly be set aside and that of Assessing Officer be restored." 3. The brief facts of the case are that the assessee is an individual who was working as an assistant in State Bank of India, Kutiyana Branch, Porbandar for last several years. For the year under consideration, assessee had not filed his return of income. On account of departmental enquiry, it was alleged that the assessee used various modes to defraud the money of the customers of the bank. It was alleged that the assessee used to issue counterfoil containing the same bank signature, but the amount so received was never credited in the customer's account and was siphoned off by the assessee. Further, the assessee was accused of making entries in the pass books in his own handwriting due to which the same entries were not updated in the books of the bank and the amount so received was misappropriated. The assessee was also alleged to have fraudulently withdrawn money from the demat accounts. In some cases were the customers of the bank's gave money for issuance of term depos....
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....spite specific request. Further, even in the RTI application filed by the assessee, this information was denied to the assessee. Accordingly, Ld. CIT(A) was of the view that since the investigation is still under progress and in case on a conclusion of final enquiry, the assessee is found to be innocent, then it would be wholly erroneous to tax the aforesaid income in the hands of the assessee. Fourthly, the Ld. CIT(A) observed that various account holders, during the course of investigation have confessed and stated that there is no fraud which has been committed on them and such instances have been given by the assessee as well as recorded in the enquiry of CBI. Therefore, looking into the instant facts, the correct amount of income which could be attributable in the hands of the assessee was unknown. Fifthly, the Ld. CIT(A) also observed that it is a settled law that addition cannot be made on the basis of statement recorded and information collected, without giving an opportunity to cross-examine being given to the assessee. The Gujarat High Court in the case of Late Laxmanbhai S. Patel vs. CIT (2008) 327 ITR 290 (Gujarat) has held that the legal effect of statement recorded be....
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....o note that SBI has filed complaint before the CBI for misappropriation of money originally of approximately Rs. 5.24 Crores or 5.33 Crores or 6.76 Crores or 4.27 Crores. Later on before C.B.I. Complaint was for misappropriation of total amount of approximately Rs. 5.24 Crores. It is pertinent to note that out of total alleged misappropriation of Rs. 5.24 Crores, total addition in 4 years viz. A.Y. 2006-07 to A.Y. 2009-10 is made of Rs. 1,64,27,595 /- only. However despite specifically asking by the appellant of these figures neither AO nor SBI has given the year wise break up of this figures and its basis. AO has simply stated that based on information obtained from bank u/s 133(6) of the act the amount of additions have been made in each year. The correspondence of the bank and U/s 133(6) of the act was not provided to the appellant despite specific request. Even in RTI these information's were denied. In RTI application made by appellant on 24.06.2014 and 16.7.2014 appellant asked for specifically all the formations received from various department including SBI regarding the case of the applicant. In this response at para no 2 of the order CPIO stated that the other infor....
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.... for Industrial Research for deciding against the assessee. The report cannot be automatically accepted particularly since there is a challenge to it and the assessee had sought permission to cross-examine the analyst making the report. Since the Assessing Officer did not permit the correctness or otherwise of the report to be tested, there is a clear violation of the principles of natural justice committed by him in relying upon it to the detriment of the assessee. As observed by the Constitution Bench in C.B. Gautam v. Union of India [1993] 199 ITR 530 1 (SC) that, "The observance of principles of natural justice is the pragmatic requirement of fair play in action." Further hon. Delhi high court has in case of CIT v. Jindal Vegetables Products Ltd. [2009] 315 ITR 265 (Delhi) has also dealt with in similar manner. Therefore respectfully following that decision as well as of hon. Gujarat high court the addition in this cases cannot be. sustained in absence of opportunity of cross examination not given to the assessee. Most of the statement on which CBI and SBI has relied which were accepted by department without verification are contradictory and unreliable, no opportunity was gi....
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....find no infirmity in the order of Ld. CIT(A) so as to call for any interference. In the instant case, the entire additions have been made by the Assessing Officer on the basis of charge sheet filed by CBI and the investigation against the assessee is still underway, in the Court of Law. Further, despite specific request, the assessee was never provided the basis for making additions for respective years in his hands either by CBI or the Assessing Officer. No opportunity of cross-examination was provided to the assessee, so as to afford any opportunity for challenging the basis of making the additions. Further, while as per the initial charge sheet, as per CBI, assessee had misappropriated a sum of Rs. 5.25 crores, but while framing the assessment, the addition in the hands of the assessee was restricted to Rs. 1.64 crores for various assessment year from A.Y. 2006-07 to 2009-10. Further, as per Ld. CIT(A) the addition has been made on the basis of fraud committed by the assessee in respect of 259 bank accounts held by various depositors. However, both the CBI has submitted that many of the account holders out of this aforesaid 259 accounts have confirmed that no money had not been ....
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....efore us, the copy of balance sheet of the companies of M/s. Sugam Commodeal Pvt. Ltd., and M/s. Chandelier Tracon Pvt. Ltd., were filed and as per the schedule B, it is evident that M/s. Chandelier Tracon Pvt. Ltd., had acquired shares of Rs. 31,12,00,000/- of Jagati Publications Ltd., and M/s. Sugam Commodeal Pvt. Ltd., had also acquired 28,58,00,000/- shares at the face value of Rs. 10/-. Therefore, the total investment in shares by these companies in Jagati Publications Ltd., comes to Rs. 52 crores but not 60 crores as alleged by the Revenue. It is the responsibility of the AO to dig out the truth about the source of investment in Jagati Publications Ltd., by M/s. Chandelier Tracon Pvt. Ltd., and M/s. Sugam Commodeal Pvt. Ltd. It is also an undisputed fact that during assessment year 2009 10 relevant to financial year 2008-09 the assessee was neither a shareholder nor connected in any manner with these companies and to controvert the stand of the assessee nothing has been brought by the Revenue on record. They were simply harping upon the statement recorded by the CBI without bringing any evidence from any corner. The Revenue has also taken a stand that shares of Jagati Publica....
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....nts. In the case of Manoj Prabhakar Vs. Asst. CIT reported in 84 TTJ 625, the Tribunal has held that "whether addition, made only on basis of figures noted on slip of paper found from possession of assessee and statement of 'P', could not be sustained because no direct evidence was available on record to corroborate fact regarding passing of consideration beyond and above consideration mentioned in sale deeds". Similarly in the case of Ajay Sharma Vs. ACIT 101 TTJ 1065 (Delhi), the Tribunal has also held that where no cogent evidence was collected during the search to show that the assessee was taking money for fixing cricket matches, the reports of the CBI and Madhavan Commission on match fixing could not be relied upon for making additions as they were not evidence found during the search. 14. In the case of ITO Vs. Balram Jakhar, 8 SOT 1 (Amritsar), the reopening of the assessment on the basis of the CBI report was examined and the Tribunal has held that merely on the basis of the CBI report, the reopening is not possible, as in the criminal proceedings, the assessee was acquitted by the court. The facts of that case was that assessee filed his return upon which assessment was....
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.... upon diary and charge-sheet framed by the CBI. The whole case of the revenue would collapse the moment assessee was discharged of the sole allegation of receipt of Rs. 17 lakhs. The abbreviated form allegedly recorded in diaries was not explained by any material. It could resemble to name of other person also who was having similarity in name. Unless it was proved through corroborative evidence that entries were having any nexus with the assessee, addition could not be made in the hands of the assessee. Material on record was not enough to conclude findings against the assessee. It, therefore, appeared that findings of the Assessing Officer were, based on suspicion which could not take place of legal proof. The Assessing Officer admitted before the Commissioner (Appeals) that the Department had no other evidence except those diaries. Therefore, it was a case of no evidence against the assessee as whatever evidence was available was not considered by the High Court and the Supreme Court to have any evidentiary value. No corresponding entries in the books of account or in the form of accretion in assets were found or proved by the Assessing Officer. The Assessing Officer never p....
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....ther KNJ was intercepted by DRI officials and contraband gold bars were found in this possession, the Customs Collector confiscated gold as being improperly imported into India from abroad and imposed penalties under Customs Act, 1962 and Gold Act, 1968 on assessee and his brother KNJ. Based on the order of the Customs Collector as well as the statement of KNJ and the assessee recorded by DRI officials, the AO made addition under section 69A on account of value of unexplained valuable article being gold, not recorded in books of account of assessee. On appeal, the Commissioner deleted the addition finding that the AO merely relied on the orders of the Customs Collector having had conducted the inquiry and having ascertained the facts and having passed his order under the Customs Act, the AO for framing assessment under the Act and for that purpose for making addition under section 69A in the hands of the assessee in respect of value of gold seized by officials was not required to make any inquiry. The Tribunal had held that though the AO while making as assessment does not strictly act as a court of law but he acts in quasi judicial capacity and the proceedings before the AO are in....
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....icial authority has to, while framing assessment, discharge his duty/function judicially and in that process, has to apply his own mind independently to the facts of the case, ascertained by him and then draw his own conclusion/ decision by appreciating the evidence/material brought/available on record before him; the Assessing Officer cannot base his conclusion/decision on the finding of any authority under any other Act/law and, thus, adopt the finding/conclusion of that authority. The decision to be drawn by the Assessing Officer has to be his own and independent one. It is clear from the provision of section 143(3) that the Assessing Officer could not base his decision on the findings/conclusions of Customs Collector drawn in his order under the Customs Act. [Para 21] As regards the statement of KNJ: the same too was not recorded by the Assessing Officer during assessment proceedings but was recorded by the Customs officials. The said statement was recorded at the back of the assessee and the assessee had not been allowed an opportunity to cross examine 'KNJ' as regards the said statement. Besides, whatever be contained in the said statement of KNJ: the same had been ....
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.... through hawala channel. In this connection, the Enforcement Directorate had recorded statement of one AS who in his statement had pointed out that he made the payment on behalf of the assessee. Addition to the assessee's income had been made on the ground that AS had arranged the remittance of 1,25,000 dollars to FGM Ltd., on behalf of the assessee. Having examined the facts in the light of legal propositions, the Tribunal has held that if some amount is remitted to foreign company by any person how it can lead the authority to believe that amount was remitted only by the assessee. The Department could not find out who contacted AS and how that person was related to the assessee. There should be some more corroboration for putting the assessee under a burden of tax for the income of Rs. 61,87,500/-. Simply on the basis of statement of a third person, it could not be held that the amount had been remitted by the assessee from undisclosed sources, more so when an opportunity to cross examine said person was not granted to the assessee. 17. In the case of K.T.M.S. Mohammed Vs. Union of India reported at 197 ITR 196 (SC), the Hon'ble Apex Court have examined the scope of section 193....
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....iven by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the o....