Case Law Details
Ram Niwas Gupta Vs. DCIT (ITAT Delhi)
The fact shows that sale deed was found during the course of search where the transaction value of the property was shown at INR 2,420,000 and market value of the property was INR 7,865,000. On the basis of this evidence revenue carried out post search enquiries with the sellers. The sellers in their statement on oath stated that along with the above sale deed another agreement was entered on 16/12/2009 with other parties where the sale consideration was stated to be of INR 5,700,000. The sellers also confirmed having received the cash amount and also deposited the same in their bank accounts. However agreement dated 16/12/2009 was executed by the sellers with 3rd parties and not with the assessee. The main contention of the assessee is that assessee was not a party to the agreement. Assessee further explained reason why there is a difference in the value of the property compared to market rate as there was no approachable road to the land. In the Consolidated reply filed by the assessee on 30/7/2014 to the assessing officer vide para number 2 of that letter, placed at page number 109 onwards in the paper book, clearly shows that assessee submitted that no opportunities was provided to cross examine any of the sellers or the persons who have signed the agreements with the sellers. Admittedly, there is no opportunity of the cross-examination granted to the assessee despite specific request made by the assessee before the assessing officer and therefore the moot question is that whether in suh a situation addition can be made without granting opportunity of cross examination to the assessee.
Hon Supreme court in 2015 (324) E.L.T. 641 (SC), 2017 (50) S.T.R. 93 (SC), 2016 (15) SCC 785 ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II held that when additions are solely based on the statement of third parties, the additions are not sustainable unless their cross examination is granted. In the present case also the statement of the sellers were taken in post search inquiries and based on their statement where they have also submitted an MOU showing sales consideration of Rs 57 lakhs, Admittedly in the MOU assessee is neither a signatory nor witness. Therefore the addition is solely based on the statement of sellers. Assessee requested for cross examination of those sellers but same was not granted. Hence, without granting such an opportunity, addition is made. Therefore according to us the same is not in conformity with the decision of the Honourable Supreme Court in Anadaman Timbers case (supra) where it is held that such an action renders the addition a nullity.
We do not have any hesitation is holding that when the addition is made solely on the basis of statement the third party and revenue does not have any other evidences, then without granting opportunity of cross examination , such addition cannot be made.
FULL TEXT OF THE ORDER OF ITAT DELHI
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