TaxTMI 
TaxTMI 
2025 (8) TMI 538
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....grounds of appeal: "1) The Ld. CIT(A) has erred in deleting the addition of Rs. 5,30,00,000/-u/s 69 of the Act on account of unexplained cash investment towards purchase of land by accepting the alternate plea of the assessee for telescoping the undisclosed income declared under IDS, 2016, while upholding the addition towards payment of on-money for purchase of land, not appreciating that no such explanation had been given by the assessee before the A.O. and such additional evidence is unverified and also not in accordance with Rule 46A of Income Tax Rules". 2) The Revenue craves leave to add/alter/armed and/or substitute any or all of the grounds of appeal" 3. The assessee in its Cross Objection has raised the following grounds: "1. In law and facts and circumstances of the case, the Ld. CIT(A) has erred in stating that reassessment proceedings as well as reassessment order is valid in nature despite the fact that notice issued under section 148 of the Act dated 17/11/2022 is invalid, without valid jurisdiction and bad in law. 2. In law and facts and circumstances of the case, the Ld. CIT(A) has erred in upholding the addition of Rs. 5,30,00,....
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....ng notice under section 148, after recording reasons and obtaining sanction under section 151. 6. The AO rejected the assessee's explanation that the ledger was a third-party document not maintained by it and was allegedly prepared for educational purposes. The assessee's plea that the data was uncorroborated, and its request for cross-examination of the person who prepared the ledger, were also denied. The Assessing Officer, in this respect, observed that the right of the assessee to cross-examine the parties from whom the evidence relating to the aforesaid unaccounted deal relating to land was recovered, was not absolute. He observed that the principles of natural justice were duly met as the evidences collected, which were to be used against the assessee were duly put and confronted with to the assessee. The Assessing Officer. Further observed that it was a fact on record that the assessee had actually purchased Makarba land 752/4 from Manoj S. Vadodaria by executing purchase-deed on 30/04/2016. That the cheque payment mentioned in the recovered material duly tallied with the Bank statement of the assessee as well as with the Registered purchase deed of the land in question. ....
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..... On merits, the assessee submitted that the alleged cash transactions recorded in the seized material did not relate to the assessee. The assessee denied having paid anything over and above the cheque payments of Rs.3.20 crore. It was contended that the Tally ledger was created by a third party for educational or illustrative purposes and had no legal sanctity. The assessee stressed that the AO had not conducted any independent inquiry, nor was there any confirmation from the seller. Further, the AO failed to allow cross-examination of the CFO of the Sambhaav-Nila Group, from whose possession the data was recovered. 7.4. The Ld.CIT(A), however, did not agree with the both the contentions of the assessee. He observed that the ledger in question was not a casual or generic document. That it contained detailed narration of cheque and cash payments, spanning several dates, and the cheque entries were admitted by the assessee and matched with the bank statement and registered deed. The fact that the ledger bore the assessee's name, was maintained in regular Tally format, and was retrieved from the CFO of the searched group, gave it substantial evidentiary value. The Ld. CIT(A), ....
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....f the Ld.CIT(A), the Revenue has come in appeal assailing the order of the CIT(A) deleting the additions made by the Assessing Officer observing that the taxes upon the impugned cash payments were already paid by the assessee under IDS-2016, whereas, the assessee has filed cross-objections assailing the action of the CIT(A) in upholding the validity of the reopening of the assessment u/s. 147 of the IT Act, and further that the Ld. CIT(A) erred in holding that the unaccounted cash payments were made by the assessee for purchase of land in question. 11. We have heard the rival contentions of the Ld. Representatives of the parties and gone through the record. First, we take up the Cross-Objections of the assessee. Cross Objection No.42/Ahd/2024 (in ITA No.1836/Ahd/2024) 12. The first Cross-Objection raised by the assessee is relating to the validity of the reopening of the assessment. So far as the observation of the CIT(A) that the AO had reasonable belief that the income of the assessee for the year under consideration had escaped assessment and, therefore, he was justified in reopening the assessment u/s. 147 rt.w.s.148 of the Act, we do not find any infirmity in the orde....
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....e assessee was given due opportunity to rebut the aforesaid entries before both the lower authorities. The cheque entries mentioned in the seized documents as well as tally data duly matched with the accounts of the assessee as well as bank statement of the assessee. The ledger was not a testimonial statement but a contemporaneous electronic record retrieved from the system of a person associated with the transaction. The AO did not rely upon any confessional statement or affidavit in isolation. The assessee has not demonstrated, either before the AO, CIT(A), or this Tribunal, as to how the absence of cross-examination of the CFO or author of the ledger caused any prejudice to its defence. There is no specific factual claim or inference of prejudice, other than a bald plea that cross-examination was denied. The Hon'ble Calcutta High Court in Principal Commissioner of Income Tax vs. Swati Bajaj, (2022) 446 ITR 56 (Cal) has extensively dealt with the issue of whether denial of cross-examination per se renders the assessment invalid. After reviewing multiple precedents including the Hon'ble Supreme Court decisions in State Bank of Patiala v. S.K. Sharma [AIR 1966 SC 1669], SBI vs. M.J....