TaxTMI 
TaxTMI 
2025 (11) TMI 1942
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....arty without any direct, indirect, supportive or corroborative evidence and without giving opportunity of cross examination. 2. Ld. CIT(A) erred in law as well as on facts in upholding reopening of assessment u/s. 147 based on incorrect, invalid, insufficient and vague reasons recorded for reopening based on borrowed satisfaction without due application of mind." 2.1. The assessee has raised the following grounds of appeal in ITA No.1491/Ahd/2025 for AY 2012-13: "1. Ld. CIT(A) erred in law as well as on facts in upholding an addition of Rs. 4,48,79,556/- made by Id.AO being alleged cash payment towards purchase of property, solely based on statement of third-party without any direct, indirect, supportive or corroborative evidence and without giving opportunity of cross examination. 2. Ld. CIT(A) erred in law as well as on facts in upholding reopening of assessment u/s. 147 based on incorrect, Invalid, insufficient and vague reasons recorded for reopening based on borrowed satisfaction without due application of mind." ITA No.1490/Ahd/2025 for AY 2011-12 3. The brief facts of the case are that the assessee, M/s Ratnadeep Infrastructure Pvt. Ltd., ....
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....t without any independent verification or application of mind by the Assessing Officer. The assessee argued that the statement of Shri Bharatbhai Atmaram Patel could not be relied upon since he was never a director, CMD, or authorized signatory of M/s Hytaisun Magnetics Ltd., as confirmed by the company's master data from the ROC portal. The assessee further submitted that the sale consideration of Rs. 2,50,00,000/- was duly recorded in the registered sale deed, agreement to sell (Banakhat dated 27.06.2011), and indemnity-cum-declaration dated 16.03.2012, and that the entire transaction was through banking channels. The assessee submitted that it had not paid any cash consideration either in the assessment year 2011-12 or 2012-13, and that the allegation of cash payment was fabricated by the seller to justify its own unaccounted cash deposits in another concern, Hysafe Investment Pvt. Ltd., which had no connection with the assessee. It was also submitted that the entire addition was based on a single unverified statement of a third-party without any corroborative material, and since effective cross-examination was not provided, the addition was vitiated by violation of the principl....
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.... that under section 69 of the Act read with Explanation 1, the burden of proof lies on the assessee to explain any unexplained investment, and in the absence of any books, cash flow statement, or documentary evidence disproving the cash payment, the addition was justified. Considering the totality of the facts and evidence, the CIT(A) held that the addition of Rs. 60,00,000/- made by the Assessing Officer was reasonable, lawful, and supported by circumstantial and corroborative material. The CIT(Appeals) concluded that the assessee had failed to discharge its statutory onus and that the principles of natural justice were not violated since the opportunity for cross-examination was duly provided. Accordingly, the CIT(A) confirmed the addition of Rs. 60,00,000/- as unexplained investment under section 69 and upheld the initiation of penalty proceedings under section 271(1)(c), thereby dismissing the appeal filed by the assessee in its entirety. 6. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 7. We have heard the rival contentions and perused the material available on record. The only issue for consideration ....
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....)], where it was held that no addition can be made merely on the basis of untested statements or assumptions unsupported by evidence. The Hon'ble Gujarat High Court in CIT v. Indrajit Singh Suri [(2013) 33 taxmann.com 281 (Guj.)] and PCIT v. Kanubhai Maganlal Patel [(2017) 79 taxmann.com 257 (Guj.)] reiterated that where additions are based on statements of persons who were not made available for cross-examination, such additions cannot stand in law. Likewise, in Late Harbhajan Singh Makkar v. ACIT [ITA No. 2451/Del/2015, ITAT Delhi, order dated 16.10.2019], the Tribunal held that denial of cross-examination when the statement is the sole basis of addition is a serious flaw that renders the assessment order nullity. 8. In the present case, it is an undisputed fact that no other material or documentary evidence was brought on record by the Department to establish that the assessee had made any cash payment. The registered sale deed dated 16.03.2012 (No. KAD/1382/2012), the registered Banakhat dated 27.06.2011, and the indemnity-cum-declaration executed by the seller company all confirm that the total sale consideration was Rs. 2,50,00,000/-, which was paid through banking channel....