TaxTMI 
TaxTMI 
2026 (9) TMI 1242
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.... additions worth Rs. 12,50,000 u/s 69 of the Income Tax Act, 1961. 2. Whether the department is correct in making addition u/s 69 when it is mentioned that the appellant is not mandated to maintain books of accounts u/s 44AA. 3. Whether the approach of the officer of making addition in the case of the appellant was appropriate when no addition or proceedings have been made in the hands of the co-owner of the property Mr. Dheeraj Ashok Bhambhani. 4. Whether the approach of the officer of making addition in the case of the appellant was appropriate when the department have accepted the transaction of another adjacent flat bearing flat no 1705 of which the appellant is the co-owner and the registration of both flats -1701 and 1705 have been made on same day and whereas flat no 1705 is of a higher value and there is no suspicion raised in that transaction. 5. Whether the addition made was correct considering the fact that there is no acknowledgement receipt bearing the name of appellant or bearing the signature of appellant. 6. That the Learned Assessing Officer erred in treating Rs. 12,50,000 as unexplained investment under section 69 witho....
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....the unaccounted transactions (both receipts and payments) undertaken by the Omaxe group entities were found recorded in the MAIN REPORT excel files. The data in the excel files was substantiated with bank account statements of different entities of Omaxe group, oral evidence of its employees and statements recorded under oath of its customers. Further, it was ascertained/correlated that information contained in documents/digital data seized from different premises related with Omaxe group across different states was found included in the MAIN REPORT excel files under consideration. Importantly, substantiation of the information contained in the MAIN REPORT excel files with bank account statements, statements of employees and customers of Omaxe group and its correlation with the evidence seized from various other premises during the post search proceedings led to the consolidation of certain important findings. It lead to the identification of Annexure A35 which is a hard disk found and seized during the search proceedings at 14 Local Shopping Centre, Kalkaji, New Delhi (Office of Omaxe Limited). Also, its forensic image was made and the same was seized as Annexure A27. Examination ....
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....established escapement of income in the hands of assessee by way of paying unaccounted cash to the builder. From the statement of financial submitted by the Omaxe Ltd., it was seen that the assessee along with her minor son Dheeraj Ashok Bhambani (natural Guardian for him was his mother Harsha Ashok Bhambhani, the assessee, had purchased the property Flat No.1701. The first payment of Rs. 1,50,000/- as booking amount was made on 01.09.2018 vide cheque No 00002 (Kotak Mahindra Bank). On careful perusal of the above information, it was seen that ERP Id HRL/364 and Unit No. HRL/Seventeenth/1701 as mentioned in the excel sheet exactly matched with the letter submitted by the Omaxe Ltd as the case No. HRL/364 and property No. HRL/Seventeenth/1701 respectively. 3.3 In view of the above, the AO concluded that it was established fact that the property details found during the search action in the excel sheet were exactly matched with the property details submitted by the assessee and Omaxe Ltd. Therefore, the statement under section 132(4) of the Act was an important piece of evidence. Further, the documents were seized as per process laid down under law. From these, it was evident that....
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....ng the undisclosed cash payment as a credible and taxable event. In case of assessee, key employee of the Omaxe group had accepted receipt of such payments. The evidences (excel sheets) were found during the search proceedings and seized in presence of two independent witnesses. Further, the evidences had been seized strengthened from statement of Shri Manish Kumar, President of Omaxe Group (aka Manish Garg) and Shri Hemant Mittal, key employee of the group recorded on oath u/s 132(4) of the Act during search. Shri Manish Kumar, President of Omaxe Group (aka Manish Garg) admitted in his statement that he supervises, maintains and updates the accounts of unaccounted cash transactions of Omaxe group. 3.5 The statement under section 132(4) of the Act is an important piece of evidence. In this regard, reliance is placed on the following: The Hon'ble Supreme Court in the case of Pullangode Rubber Produce Co. Ltd. vs. State of Kerala 1972 CTR (SC) 253, Dr. SC Gupta Vs CIT (Allahabad High Court) 248 ITR 782, where the Hon'ble Apex Court again confirmed its own decision in the case of Pullangode Rubber Produce Co. Ltd. Vs. State of Kerala. The Honb"le Apex Court, in the case of Union of....
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.... the books of accounts of the Omaxe Group and the same was over and above the agreement value. The assessee failed to substantiate the source of the Rs. 12,50,000/- unaccounted cash payment or counter the evidence found during the search. Based on the seized documents, corroborative statements, and the assessee's inability to provide a plausible explanation, the payment was treated as Unexplained Investment under section 69 of the Act and added to the total income of the year and taxed as per the section 115BBE of the Act. 4. Aggrieved, the assessee filed appeal before the ld.CIT(A) contesting the impugned addition. After hearing the assessee, the appellate authority observed that the primary contention of the assessee was that the reassessment proceedings were initiated merely on the basis of third-party information emanating from a search conducted in the case of Omaxe Group and that no independent inquiry was carried out by the Assessing Officer. It is also argued that the assessee had purchased the property through registered documents and made all payments through banking channels and, therefore, no addition could be made merely on the basis of seized Excel sheets and s....
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....nation of the assessee is found to be unsatisfactory, the addition is justified. The assessee placed reliance on certain judicial precedents to argue that additions could not be made merely on the basis of third-party material. However, those decisions were clearly distinguishable on facts. In the present case, the seized material specifically named the assessee and quantified the unaccounted cash payment, which had been corroborated by statements and third-party confirmations. On the contrary, the facts of the case are squarely covered by the decision of the Hon'ble Delhi High Court in CIT v. NDR Promoters Pvt. Ltd. (2019) 410 ITR 379 (Del), wherein it was held that additions based on search material and statements revealing accommodation entries and unaccounted transactions are fully justified. The assessee had also challenged the addition under section 69 of the Act. It is noted that she failed to explain the source of cash payment of Rs. 12,50,000/- despite being confronted with specific evidence. The explanation furnished merely reiterated that no cash payment was made, which stands contradicted by seized material and corroborative evidence. Therefore, the AO was fully justifi....
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....d to have made. In such a situation, there can be a reasonable inference that the said materials rightly relied by the AO for making the impugned addition. Moreover, one of the key employees of Omaxe group as also the President Sri Manish Garg in their statements u/s 132(4) of the Act had also admitted such unaccounted payments. During search operation. Therefore, the addition made is not a figment of imagination but based on seized materials from the premises of the seller and the evidentiary value thereof cannot be discounted and simple denial by the assessee cannot be accepted in its face value. The statement of the persons u/s 132(4) of the Act during search operation cannot be brushed aside lightly. 6.1 In respect of the issue relating to cross examination, we find that the lower authorities have rightly rejected the same as discussed in details and duly supported by various court decsions. We find that the addition has been made basically on the basis of incriminating materials unearthed during search operations in the case of the seller i.e. Omaxe Ltd. and not on the basis of the statement alone. Therefore, the emphasis on lack of cross examination is insignificant in the....
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....uld be taken into consideration cannot be laid down on an" strait racket basis. It depends on the nature of the right involved and nature of the power sought to he exercised in a particular situation. It is true that there is discrimination between power and right but whether the State on the instrumentality of a State has the right to function in public field or private field is a matter which, in our opinion, depends upon the facts and circumstances of the situation, but such exercise of power cannot be dealt with by the State or the instrumentality of the State without informing and taking into confidence, the party whose rights and powers arc affected or sought to be affected, into confidence." (21) The Court further observed that in cases where the instrumentality of the State enters the contractual field, it should. be governed by the incidence of the contract and held that in the field of this nature, it may not be necessary to give reasons, but fairness must be to the parties concerned. (22) Applying the principles laid down in Mahabir's case (supra) we are of the considered opinion that in the present case the petitioner had been duly taken into confi....
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....ich action against it was sought to be taken and we feel on the fact, and circumstances of the case, nothing more was to be done. (24) Lastly, it is urged by Mr. Jaitley that the principles of natural justice demand that an opportunity should be given to the petitioners to cross-examine Mr. S. A. Khan, DLW's Inspector, to elicit the truth as to which of the two inspection reports is genuine. We do not feel persuaded to do so. As is observed by the Supreme Court in State of J&K and others v. Bakshi Gulam Mohammad & anr.,, a right of hearing does not include a right to cross-examine and the right to cross-examine must depend upon the circumstances of each case. As already observed, there is no difference in both the reports on the crucial point of filing of TRW's works test certificate, which is sufficient to support respondents action." 6.2 The Hon'ble Supreme Court has also held that the right of hearing does not necessarily include right of cross examination. The right of cross examination must depend upon the circumstances of each case and also on the statute concerned (State of J&K vs. Bakshi Gulam Mohammad AIR 1967 SC).The question whether the assessee i....