TaxTMI 
TaxTMI 
2025 (12) TMI 1270
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...."1. The Ld. CIT(A) erred in confirming the stand of the A.O. regarding the assessment order passed u/s 153C of the Income Tax Act, 1961. The order is bad-in-law, vitiated by procedural lapses, and violates the principles of natural justice, as the materials and statements relied upon in issuing notice u/s 153C were not furnished to the appellant, and no opportunity for cross examination was provided. The order ought to be quashed on these grounds. 2. The Ld. CIT(A) erred in upholding the addition of Rs. 2,00,000/- u/s 69 as unexplained investment allegedly paid in cash towards the purchase of shop premises over and above the agreement value. The addition is bad-in-law, arbitrary, and based on surmises, conjectures, and unreliable evidence with no concrete material to substantiate the alleged cash payment. There is no corroborative evidence of actual cash payment made by the appellant. 3. The authorities failed to appreciate that there is no material on record proving that the appellant paid cash of Rs. 2,00,000/- in respect of the shop premises purchase. Reliance solely on statements or third-party documents, without independent verification or opportunity for reb....
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....ion is based merely on presumption basis. Even otherwise, of such facts were considered by coordinate bench of this Tribunal in case of Pravin Khetaramm Purohit. The ld. AR, further, submits that copy of statement or material gathered during the search action was not shared with the assessee. There is no corroborative evidence except the vague statement of key person against the assessee. There is no evidence for making such addition against the assessee. 3. On the other hand, the learned Commissioner of Departmental Representative - Departmental Representative (CIT-DR) for the revenue submits that all the material including statement of key person of Rubberwala group were provided to the assessee along with the show cause notice. All reference of statement and incriminating material was mentioned in the show cause notice itself. Once all the material information was mentioned in the show cause notice, it was a sufficient compliance. The key person of Rubberwala group accepted in their statement recorded under section 132(4) that on-money was received from various persons. On accepting such on money Rubberwala group offered 8.00% of on-money while filing of return of income afte....
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.... 132(4) of the Act and on this basis, 153C order was framed and the same was upheld by the Ld. CIT(A). 9. We noticed that Ld. CIT(A) although referred the decision of the coordinate bench in case of Rajesh Jain on identical issue but misplace its reliance. After having gone through the basic facts of Rajesh Jain case which is mentioned by Ld. CIT(A) in its order and the same is reproduced as under: 5.1. On 17.03.2021, the residential premise of the assessee was also covered by way of search action u/s 132 of the IT Act, 1961. Search action was also initiated on Rubberwala group on 17.03.2021. In such action along with premises (offices/sites/others) of Rubberwala group entities, residences of various key persons including its promoter and director Shri Tabrez Shaikh, and Shri Imran Ansari - a key employee of Rubberwala group handling sale & registration of shops in "Platinum Mall" project of RHIL were covered under section 132 of the Act. Among others, statement of these persons were recorded on oath on various dates during search as well as post search proceedings. 5.2. During the action on Rubberwala Group, among other, residence (at 109, 2nd Floor, Pra....
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....f shops in the said project, comprehensive data is being maintained in these excel sheets, and in this regard, it is important to mention that the sheet "Master" is so elaborate that the data in the said sheet is spread across 98 columns. Shri Imran Ansari has explained all 98 columns of "Master" sheet and such explanation of each and every column by Shri Imran Ansari further support the fact that the he was maintaining the said data and therefore could explain all these columns with relevance and purpose. Shri Imran Ansari in response to Question no. 22, 23 and 24, has explained in detail the meaning and relevant of each and every column. In column B, against the name of 'Raj Bhai Jain'/'Raj BhaiJain(I.S)', total 27 shops have been entered. Further, these 27 shops are stated (by Shri Imran Ansari) to be booked by the assessee only. Also, ShriTabrez Ahmed Shaikh, Director and Promoter of the RHIL, while deposing statement during post search proceedings on 19.08.2021 categorically confirmed the admission made by Shri Imran Ansari, and has confirmed the data of the said excel to be true byconfirming facts stated by Shri Imran Ansari in his statement. It is also important to note here....
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....onducted in their hands, incriminating documents containing details of cash collected on sale of various shops were found. The employee of Rubberwala group confirmed that the cash has been collected from the buyers of shops. However, the assessee denied payment of cash. However, the AO relied upon the materials found in the case of Rubberwala group and accordingly made addition of Rs.18,64,200/- in AY 2020-21. The Ld. CIT(A) also confirmed the same. 15. The ld A.R submitted that the addition was made on the basis of third party statement and documents found from the premises of third party. As per the deposition made by the employee of Rubberwala group, the buyers were given a diary, in which, the details of cash received were acknowledged. The Ld A.R submitted the search officials did not find any such diary with the assessee during the course of search operation conducted in his hands. Hence the statement so given by the employee stands disproved. He submitted that the AO has simply relied upon third party statement without bringing any independent material to support the same. The AO also did not provide the opportunity of cross examination despite being asked by the as....
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....d on money, but again no such statement has been confronted, neither the seized material /documents /pendrive was confronted to the assessee nor the copy of statement of Key person was confronted. 13. Therefore, in our view, the information if any found in the pendrive etc., cannot be considered as 'credible evidence', unless they have been corroborated with any other evidence. Since the assessee was not provided with the adverse material, if any, based on which notice u/s 153 of the Act, was issued, in our view, it hampers the primary and fundamental requirement of natural justice. 14. As far as the information claimed in pendrive is concerned, the same was not found from the possession of the assessee but was found as per order of assessment, during the search and seizure conducted in the case of third party therefore, in the absence of corroborative evidence to establish that the contents of pendrive are correct and authenticated to the extent assessee paid 'on money' in cash, no addition can be made and even otherwise during the entire reassessment proceedings the veracity and reliability of the data recorded in the pendrive was not checked or tested. Therefor....
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....rst appellate authority, the learned Commissioner (Appeals) in letter dated 18th July 2016, had clearly directed the Assessing Officer to provide the assessee all adverse materials / documentary evidences available with him indicating payment of on-money. However, on a perusal of the remand report dated 23th June 2017, a copy of which is at Page-53 of the paper book, it is very much clear that the Assessing Officer has completely avoided the issue and there is no mention whether the assessee was provided with all the adverse material and if, not so, whether he has provided them to the assessee as per the directions of the learned Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of Rs. 42 lakh made on account of on-money payment in cash is without complying with the primary and fundamental requirement of rules of natural justice. It is well settled proposition of law that if the Assessing Officer intends to utilize any adverse material for deciding an issue against the assessee he is required to not only confront such adverse materials to the assessee but also offer him a reasonable opportunity to rebut / contradict the contents of t....
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.... record the relevant fact and material to conclusively prove the payment of on-money by the assessee over and above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / material on record to prove the payment of on- money by the assessee. More so, when the assessee from the very beginning has stoutly denied payment of on-money in cash. Notably, while dealing with a case involving similar nature of dispute concerning similar transaction with another concern of Hiranandani Group, the Tribunal in case of Shri Anil Jaggi v/s ACIT (supra) has held as under:- .......... 15. Reliance has also been placed in the case of Monika Anand Gupta I.T.A. No. 5561/Mum/2018 (A.Y. 2011-12) whereas coordinate bench held as under 6. I have heard both the parties and perused the record. I find that the addition for on-money payment has been done in this case without any corroborative material found from assessee. The addition is solely based upon some statement of the builder. Such additions are not sustainable on the touchstone of Hon'ble Supreme Court decision in the case of CIT vs P.V Kalyana sundasram 164 Taxman 78 (....
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....Andaman Timber Industries Vs. CCE reported in (2015)281 CTR 241 (SC) wherein it has been held that 'failure to give the assessee the opportunity to cross examine witness, whose statements are relied upon, results in breach of principles of Natural Justice. It is a serious flaw which renders the order a nullity'. 20.In the case of CIT Vs. Odeon Builders Pvt. ltd. (418ITR 315), it was held that the 'addition/disallowance made solely on third party information without subjecting it to further scrutiny and denying the opportunity of cross examination of the third party renders the addition/disallowance bad in law'. 21. In the case of H.R. Mehta v/s Assistant Commissioner of Income tax, Mumbai 72 taxmann.com110 (Bombay) wherein it was held as under In the light of the fact that the money was advanced apparently by the account payee cheque and was repaid vide account payee cheque the least that the Assessing Officer should have done was to grant an opportunity to the assessee to meet the case against him by providing the material sought to be used against him in arriving before passing the order of assessment. This not having been done, the denial of such oppor....