Ratnadeep Infrastructure Pvt. Ltd. Vs ITO (ITAT Ahmedabad)
Suspicion Isn’t Evidence – Addition Based on Third-Party Statement Without Cross-Examination Quashed – ITAT Ahmedabad Deletes ₹60 Lakh On-Money Allegation
Assessee, a construction & development company, filed its returns declaring loss. Based on information from the case of Hytaisun Magnetics Ltd. (HML), AO reopened the assessment u/s 147 on the basis of a statement given by Shri Bharat A. Patel, who claimed that HML sold land & factory to Assessee for ₹7.58 crore—₹2.50 crore by cheque & ₹5.08 crore in cash. For AY 2011–12, ₹60 lakh was alleged to have been paid in cash. The sale deed, however, recorded only ₹2.50 crore as consideration. Assessee denied any cash payment & submitted that the transaction was fully through banking channels, supported by a registered Banakhat & indemnity-cum-declaration. It argued that Shri Bharat Patel was not a director or authorized person of HML & that his statement-recorded u/s 131-was uncorroborated. Despite requests, cross-examination was not allowed as the witness cited medical reasons. AO treated ₹60 lakh as unexplained investment u/s 69, & CIT(A)/NFAC confirmed the addition, holding that the sworn statement, difference in stamp duty valuation, & HML’s revised return offering the same amount as income formed adequate corroboration. It was further held that denial of cross-examination did not vitiate the assessment since an opportunity was technically granted.
