Smt. Rekha Ganesh Vs ACIT (ITAT Bangalore)
ITAT Bangalore held that granting an opportunity to cross examine essential when addition is made on the basis of 3rd party statements. Non-granting any opportunity of cross examination violates the principle of natural which vitiates the validity of addition.
Facts- Based on the search conducted in the case of the Nirav Modi Jewellery Store and excel sheet found thereof, AO treated Rs. 5.73 crore as unexplained income of the assessee u/s. 69A of the Income Tax Act and added to the total income of the assessee. CIT(A) upheld the findings of AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that an opportunity of cross examination becomes essential since the AO is placing the reliance on the statement of 3rd parties for making the addition in the hands of the assessee. Therefore, 3rd parties become the witness of the Department and accordingly, it is the duty of the Department to call both the parties for cross verification but the same has not been done by the AO in the given facts and circumstances. As such the AO only stated that the assessee may avail the opportunity of cross examination before him on or before 31st May 2019 without fixing any date of cross examination on which day the assessee and the witness may present personally for such cross examination. Therefore, in our considered opinion, non-granting any opportunity of cross examination in the given set of facts violates the principle of natural which vitiates the validity of addition.
