Income Tax Appellate Tribunal - Ahmedabad
Niranjan D. Agarwal, Ahmedabad vs The Dcit, Circle-6(1),, Ahmedabad on 27 May, 2019
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ 'ए', अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL " A " BENCH, AHMEDABAD सव ी राजपाल यादव, या यक सद य एवं द प कुमार के डया, लेखा सद य के सम । BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No.980/Ahd/2018 ( नधा रण वष / Assessment Year : 2010-11) Niranjan D. Agarwal बनाम/ The Dy.CIT Ashokumar S.Gupta & Co. Vs. Circle-6(1) Chartered Accountants Ahmedabad 203, New Cloth Market 1 s t Floor,Ahmedabad-380002 थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : ADFPA 1858 G (अपीलाथ% /Appellant) .. ( &यथ% / Respondent) अपीलाथ% ओर से /Appellant by : Shri Chetan Agrawal, AR &यथ% क( ओर से/Respondent by : Shri S.K. Dev, Sr.DR ु वाई क( तार ख / सन Date of Hearing 01/05/2019 घोषणा क( तार ख /Date of Pronounce ment 27/05/2019 आदे श / O R D E R PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the Assessee against the appellate order of the Commissioner of Income Tax(Appeals)-6, Ahmedabad [CIT(A) in short] dated 07/03/2018 arising in the assessment order passed under s.143(3) r.w.s. 147 of the ITA No.980/Ahd/2018 Niranjan D. Agarwal vs. DCIT Asst.Year - 2010-11 -2- Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 28/11/2017 relevant to Assessment Year (AY) 2010-11.
2. The grounds of appeal raised by the Assessee read as under:-
1. Ld. CIT(A) erred in law as well as on fact in confirming addition of Rs.2,79,46,000 being made by ld. Assessing Officer on account of unexplained investment based on entries mentioned in loose papers seized/found in search action u/s.132 on M/s.Devdeep Malls & Developers Pvt.Ltd.
without providing copies of alleged loose papers, copy of statement of Shri Bhupendra D. Thakkar alleging receipt of cash from appellant and opportunity of cross examination.
2. Ld. CIT(A) erred in law as well as on fact in confirming addition of Rs.2,79,46,000 being made by ld. Assessing Officer on account of unexplained investment in six shops, though only one shop was purchased.
Additional Grounds of Appeal
1. Ld.AO erred in law as well as on fact in issuance of notice u/s.148 of the Income Tax Act, 1961 (the Act) and making assessment under section 143(3) r.w.s. 147 of the Act considering documents seized in search action u/s.132 of the Act on a third party which ld. Assessing Officer held that it belongs to or information contained therein relates to the Appellant and thus on these facts of the case the ld. Assessing Officer in law could only initiate action under section 153C of the Act.
ITA No.980/Ahd/2018Niranjan D. Agarwal vs. DCIT Asst.Year - 2010-11 -3-
3. As per captioned appeal, the assessee has impugned the action of the lower authorities in confirming addition of Rs.2,79,46,000/- as unexplained investment in law as well as on merits.
4. When the matter was called for hearing, the Ld.AR for the assessee, at the outset, submitted that the addition towards unexplained investment for booking of shops hinges on the alleged statement of the builder/recipient (Dev Group). It was submitted that from the perusal of the orders of the lower authorities, it would appear that the Developer and Builder M/s.Dev Group have made some confession before the Settlement Commission that they have inter alia received the aforesaid amount in cash from assessee for investment in shops which was not reflected in the books of accounts of the assessee. The Ld.AR took an oral plea and submitted that the copy of statement of Shri Bhupendra D.Thakkar, Director of Dev Procon Ltd. was not provided to the assessee despite specific requests. The particular of cross-examination of the witness of the department was also not provided while charging the assessee with expropriatory transactions.
5. The Ld.AR relied the decision of Hon'ble Supreme Court in the case of Andaman Timber Industries vs. CIT (2015) 62 taxmann.com 3 (SC) to support its contention. The Ld.AR for the assessee accordingly submitted that the orders of the lower authorities suffers from serious ITA No.980/Ahd/2018 Niranjan D. Agarwal vs. DCIT Asst.Year - 2010-11 -4- infirmity towards breach of natural justice and accordingly urged for setting aside the orders of the lower authorities with appropriate directions.
6. The Ld.DR for the revenue relied upon the orders of the lower authorities.
7. We have carefully considered the rival submission. It is contended on behalf of the assessee that the additions made towards unexplained investment have been made primarily on the basis of oral evidence of the third party; namely Dev Developers. The assessee denies to have made any payment in cash to Dev Developers and therefore considered it necessary to cross-examine the witness who deposed before the Income Tax Authorities to the prejudice of the assessee. Needless to say, the statement of the third party which is made the basis for addition is required to be provided to the assessee to enable him to appreciate the contents thereof and qualifies its position. The Hon'ble Supreme Court in the case of Andaman Timber Industries (supra) has assailed the action of the Revenue and observed that not allowing the assessee to cross- examine witness is serious flaw which makes order nullity as it amounts to violation of principles of natural justice. It is the contention of the assessee that such opportunity to cross-examine the witness is a must to enable it to discredit the testimony of the witness. The breach of ITA No.980/Ahd/2018 Niranjan D. Agarwal vs. DCIT Asst.Year - 2010-11 -5- sacrosanct principles of natural justice is fundamental and goes to the root of the issue. Hence, the plea of the assessee merits acceptance. We accordingly set aside the order of the CIT(A) and restore the issue back to the file of the Assessing Officer for de novo assessment in accordance with law after following principles of natural justice. It shall be open to the assessee to place all the evidences and contentions as it consider expedient before the Assessing Officer to enable him to frame the assessment in accordance with law.
8. In the result, appeal of the assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 27/ 05/2019
Sd/- Sd/-
(राजपाल यादव) ( द प कुमार के डया)
या यक सद य लेखा सद य
(RAJPAL YADAV) ( PRADIP KUMAR KEDIA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 27/ 05 /2019
ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS
आदे श क ! त#ल$प अ%े$षत/Copy of the Order forwarded to :
1. अपीलाथ% / The Appellant
2. &यथ% / The Respondent.
3. संब5ं धत आयकर आय7 ु त / Concerned CIT
4. आयकर आय7 ु त(अपील) / The CIT(A)-6, Ahmedabad
5. 8वभागीय त न5ध, आयकर अपील य अ5धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स&या8पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad