10 June 2024


Judgments

Income Tax Appellate Tribunal

Sunita Gadde, New Delhi vs. Income Tax Officer, New Delhi

MANU/ID/0356/2021

13.05.2021

Direct Taxation

Any material collected at the back of the assessee cannot be read in evidence against the assessee

Present appeal by Assessee has been directed against the Order of the Learned Commissioner of Income Tax CIT(A) challenging the reopening of the assessment under Section 147 of the Income Tax Act, 1961 (I.T. Act) and addition of Rs.1,05,00,000 on account of purchase of property.

Revenue has made an addition of Rs.1.05 crores against the assessee solely relying upon statement of Jaya Sharma-Seller recorded under Section 131 of the IT Act, in which she has admitted to have received cash from the assessee and her husband on account of sale of property at Dera Mandi, Chattarpur, New Delhi. It is a fact that, later on Counsel of Jaya Sharma vide letter denied from such statement recorded under Section 131 of the IT Act. It is, therefore, established on record that, Jaya Sharma has retracted from her statement which was made the sole basis for making the addition against the assessee.

Assessee has made several requests before Assessing Officer (AO) in writing at different stages that, all the material collected at the back of assessee may be provided to the assessee. It is, therefore, clearly established that, the AO has not supplied any adverse material to the assessee which was collected at the back of the assessee. It is also established that, the request of the assessee to allow cross- examination to the statement of Jaya Sharma was not allowed by the A.O. and she was never produced at re- assessment proceedings for cross-examination on behalf of Sunita Gadde.

It is well settled Law that, any material collected at the back of the assessee or any statement recorded at the back of the assessee cannot be read in evidence against the assessee, unless the same is confronted to the assessee and that assessee should be allowed to cross-examine to such statements. In this case, the AO has failed to produce Jaya Sharma before assessee for cross-examination on behalf of the assessee particularly when Jaya Sharma has retracted from her statement. Therefore, in these circumstances, it was the duty of the AO to produce Jaya Sharma at the re- assessment proceedings to allow cross-examination to her statement on behalf of the assessee. Therefore, such statement and material collected at the back of the assessee, cannot be read in evidence against the assessee. The Learned CIT(A) without any justification has rejected the contention of assessee that is not an absolute right of assessee to cross-examine the statement of Jaya Sharma. These facts clearly disentitle the Revenue to use the statement of Jaya Sharma recorded under Section 131 of the IT Act in evidence against the assessee. Therefore, the Orders of the authorities below are set aside and it is directed that such statement cannot be read in evidence against the assessee.

The A.O. also referred to statement of husband of the assessee recorded during the course of survey in which he has admitted to have sold the property to Mapple Destination Dreambuilt P. Ltd., and received the cash amount. The present case is with respect to purchase of property of Dera Mandi, Chattarpur, New Delhi from the Seller-Smt. Jaya Sharma. Therefore, the statement of husband of assessee is not relevant to the matter in issue. Further the A.O. has referred to statement of Rakesh Sejwal, Manager of Lingaya's Society who was assigned various works with reference to transactions of different properties who have confirmed collecting cash of Rs.5.41 crores on sale of property on behalf of the assessee and her husband. This statement is also not relevant to the matter in issue because transaction is a different one. There was no basis for the AO to make any addition against the assessee of Rs.1.05 crores. The Orders of the authorities below are set aside and the addition are deleted. Appeal of Assessee Partly Allowed.

Tags : Assessment Additions Legality

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