TaxTMI 
TaxTMI 
2024 (3) TMI 1551
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....in the building named 'Bhagwati Imperia', while the agreement value of the said property is Rs..87,74,000/-. Accordingly, Assessing Officer issued notice under section 148 of the Act on 31.03.2021 after taking approval u/s. 151(1) of the Act from the competent authority. The reasons recorded for re-opening of the assessment are reproduced as under: "1. Brief details of assessee-It is seen from the e-filing portal of department that the assessee has filed return of income for A.Y.2017-18 on 14.07.2017 declaring total income of Rs. 18,886/- The Return has been processed u/s 143(1) on 30-05-2018 at the Returned Income. 2. Brief details of information received - Vide email dated 25-02- 2021, information was received from A.C.I.T. Central Circle-1(3), Mumbai that a search and survey action was conducted in the case of M/s Bhagwati Developers and its group concern on October 15, 2018. The main concerns of the group are M/s. Bhagwati Developers, M/s Shree Bhagwati Enterprises, M/s. Shanti Enterprises, M/s Patel Developers, M/s. Patel Enterprises, M/s Bhagwati Infra, M/s. Shree Hari Enterprises and key persons are Manji Karman Patel, Bhogilal M. Vora, Kulin Shanti....
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....thin the meaning of section 147 of the Income Tax Act, 1961. A notice u/s 148 r.w.s 147 of the Act, is being proposed to be issued to assess such income and also any other income chargeable to tax which has escaped assessment, which comes to my notice subsequently in the course of assessment proceedings for A. Y. 2017-18." 3. In response to the notice, assessee has filed the return of income filed in response to the notice u/s 148 on 29.04.2021. Therefore, for the purpose of proceedings u/s 148, this return was considered as return of income filed on 29.04.2021. Accordingly, notices 143(2) and 142(1) of the Act were issued and asked the assessee to furnish the details(s)/evidences in support of his claim made in the return. In response, assessee filed his reply on ITBA portal. 4. During the course of assessment proceedings, Assessing Officer observed that as per the records mentioned in the reasons recorded for initiation of proceedings u/s 147, the assessee had paid Rs..11,33,000/- (for purchase of the FLAT NO. H-702, in 7th floor in the building named 'Bhagwati Imperia', to the builder M/s. Bhawati Developers. in cash during the financial year under consideration). ....
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....lue of the said property is Rs..87,74,000/- and the cash amount of Rs..11,33,000/- was not disclosed in his books of account. Assessing Officer by relying on various case law completed the assessment by treating the payment of Rs..11,33,000/- as unexplained investment. 8. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) and filed detailed submissions. After considering the detailed submissions of the assessee, Ld. CIT(A) dismissed the ground raised by the assessee by observing as under: - "6. Ground No.2 is regarding source of cash payment from cash withdrawals. .... 6.2 The facts recorded in the assessment order and the submission of the appellant has been considered. As mentioned in para 5.3 of this appellate order that a search operation carried out in the case of M/s. Bhagwati Developers & Group revealed that the appellant had cash of Rs.11,33,000/- for purchase of flat No. H-702 in Bhagwati Imperia building. This fact was admitted by Shri Kulin Shantilal Vora in the statement recorded u/s.132(4) dated 19.10.2018. At the first instance, the appellant had denied of making any cash payment of Rs.11,33,000/- to M/s. Bhagwati Deve....
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....33,000/- u/s.69 of the Act and the addition made by the A.O. is upheld. Accordingly, ground no.2 is dismissed." 9. Aggrieved, assessee is in appeal before us raising following grounds in his appeal: - 1. The learned CIT appeals-55, Mumbai has erred in accepting the additions made by assessing officer without providing opportunity to cross examine the witness and not following the principles of natural justice. 2. The learned CIT appeals, has erred in not accepting and discussing the additional grounds taken during the appeal proceedings, which should have considered and disposed on merits and as such denied justice to the appellant. 3. The authority to assess the cases where search is initiated under section 132 is provided under section 153A or 153C and not under section 148 of the income tax act. The re-opening under section 148 was made without jurisdiction. 4. The learned assessing officer has made addition without any documentary evidence in his procession and relied on information provided by investigation department and hence the order is passed as per the satisfaction of investigation officer and not own satisfaction. Such ord....
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....t evidence may not be read against a party until the same has not been subjected to cross examination or at least an opportunity has not been given for cross examination. Thus the provisions of section 138 of Indian Evidence Act are not only a technical rule but it is a rule of essential justice. 14. Further, Ld. AR submitted that assessee vide letter dated 14.02.2022 has further requested the Assessing officer to provide evidences and also cross examination of witness. The copy of letter is annexed in 'Exhibit B'. The relevant extract of the letter is given below: "Therefore, the above cited judicial pronouncements have clearly stated that cross examination is an essential for justice and would amount to violation of natural justice. The assessee has called upon the learned assessing officer to produce the documentary evidence received from the impugned builder based on which the proceedings are initiated against the assessee, the same is not yet received." 15. Ld.AR of the assessee submitted that since the documentary evidences are not made available to the assessee and no cross examination of the builder are provided in this case, the assessment order is a....
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....vidence act and using of such evidence cannot be made without giving proper cross examination of such witness by the aggrieved assessee. 12. The apex court and various high courts have held that assessment made without providing opportunity to cross examine the witness is against the principle of natural justice and such additions should be rightfully deleted. The appellant relies on following case laws: • KALRA GLASS FACTORY VS SALES TAX TRIBUNAL SUPREME COURT 167 ITR 488 OF 1987 • DHAKESWARI COTTON MILLS LTD. vs. C.LT., 26 ITR 775 (SC) • KRISHNA CHAND CHELA RAM V CIT 125 ITR 713 SUPREME COURT • AMITABH BANSAL, DELHI V. ITO, [ITA 7804/DEL/2018] DATED 11.02.2019 • CHARTERED MOTORS PVT. LTD. V/S ACIT (ITA NO. 26/AHD/2012) DATED 29.08.2014 • ALOK AGRAWAL V. DCIT, 67 TTJ 109 • LAXMANBHAI S. PATEL V. CIT 327 ITR 291 (2010) • FIRE ARCOR INFRASTRUCTURE PVT. LTD. VS. COMMISSION OF INCOME TAX, CENTRAL CIRCLE COURT, 23.07.2019, ITA NO. 30 OF 2018 2(1), NAGPUR, BOMBAY HIGH COURT, 23.07.2019, ITA No. 30 OF 2018. 13. Even Mumbai tribunal in case of Shri Rajesh Ravjibhai Pat....
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.... for the assessee to bring the Mr. Kulin S Vora before Assessing Officer. Therefore, he submitted that the findings of the lower authorities are within the legal frame and justified. 18. Considered the rival submissions and material placed on record, we observe that there was a search action in the case of the builder Shri Kulin S Vora and in that case the builder has accepted that they have received on-money from the various projects conducted by them and he has disclosed the name of all the flat owners. The Tax Authorities proceeded to make the addition based on the above declaration of receipt of on-money in the hands of the Flat Owners. Assessee being one of the flat purchaser, the assessment was reopened. However, no cross examination opportunity was given to the assessee. In this case, no such opportunity was granted to the assessee and only the statement recorded were supplied to the assessee and in fact, it was asked the assessee to bring the builder before the Assessing Officer. After careful consideration, we observe that the assessee is or will never in a position to bring any builder before the tax authorities, it is the duty of the tax authorities if they want to re....