TaxTMI 
TaxTMI 
2025 (12) TMI 1858
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....s on merits, however, we intend to proceed on merits and, if warranted, the legal issues would be considered. 4. Briefly, the facts are, the assessee is a resident individual. In the assessment year under dispute, the assessee had filed his return of income on 30.07.2014, declaring income of Rs.1,87,59,370/-. Assessment in case of the assessee was completed u/s. 143(3) of the Act, vide order dated 23.09.2016, accepting the income returned. Subsequently, on 17.04.2018, a search and seizure operation u/s. 132(1) of the Act was done in case of Jatia Group and assessee was also covered under such search action. As a result of such search and seizure operation, proceedings u/s. 153A of the Act were initiated on the assessee. In response to the notice issued u/s. 153A of the Act, the assessee filed a return of income, declaring income of Rs.1,07,34,660/-. The reduction in income was due to the fact that assessee's employer had recovered an amount of Rs.80,24,710/- towards excess remuneration paid. 5. Be that as it may, a search action was undertaken in case of Firestar International Pvt. Ltd., in course of which, a statement was recorded on 15.01.2017 from Mr. Saurabh J. Shah, work....
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....out bringing on record any other corroborative evidence to demonstrate the actual payment of cash by the assessee. He submitted, while dealing with identical nature of additions made in case of other assessee's, relying upon the materials found in course of search and seizure operation conducted in case of Firestar International Pvt. Ltd., the Tribunal has deleted the addition made by the A.O. In this context, ld. Counsel relied upon the following decisions: 1. Shri Avinash Nivrutti Bhosale vs. DCIT (in ITA Nos. 529 & 530/Mum/2021 vide order dated 18.11.2023) 2. Smt. Rekha Ganesh vs. ACIT (in ITA No. 1275/Bang/2024 vide order dated 20.09.2024)(Bang)(Trib) 9. The ld. Departmental Representative (ld. DR for short) strongly relied upon the observations of the A.O. and ld. first appellate authority. 10. We have considered rival submissions and perused the materials available on record. A careful reading of the assessment order reveals that based on the statement recorded from an employee of Firestar International Pvt. Ltd. and some materials found in course of search and seizure operation conducted in case of the said company, the A.O. has concluded that in addi....
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....t. No corroborative evidence found in the hands of the assessee during the search action initiated in the case of assessee however, assessee had repeatedly asked for the documents and statements recorded from the search conducted in the case of Nirav Modi Group but it was never provided to the assessee. It is well settled procedure that the addition cannot be made in the hands of the assessee by relying on the material or statement of third parties without giving an opportunity to the assessee to rebut or cross examin the other parties. It is held in the case of Sant Lal (supra) held as under: 11. We have perused the impugned order and notice that the ITAT has given a finding of the fact that the case of the respondent is covered with the decision of the ITAT in the cases of Mahabir Prasad Gupta (supra) and Ashok Prasad (supra). The relevant portion of the impugned order read as under: "4. In the circumstances and fact of the case, we are of the view that the case is fully covered with the decision of ITAT in the cases of Mahabir Prasad Gupta (supra) and Ashok Prasad Gupta (supra) and further observed that Revenue could lay its hands on the diary of Sh. Brij Mohan....
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....different case of there having been a bag seized from the premise of the Assessee which according to the Revenue contained incriminating material against the Assessee." 13. In view of the aforesaid facts and the concurrent findings given by the CIT (A) and ITAT, it is evident that the Revenue has not been able to produce any cogent material which could fasten the liability on the respondent. The CIT(A) has also examined the assessment record and has observed that the AO did not make any further inquiry/investigation on the information passed on by the DCIT, Central Circle-19, New Delhi. No attempt or effort was made to gather or corroborate evidence in this relation. From the above, it is clear that the information found in the case of third party cannot be relied without giving proper opportunity to the assessee and even the evidence found from the third party could not be traced or no cogent material was unearthed during the search conducted in the premises or establishment of the assessee. Therefore, there is no merit in the submissions of the tax authorities to substantiate the above additions. We are not inclined to further in the other submissions made by th....