Sunil Kumar Agarwal Vs ACIT (ITAT Jaipur)
ITAT Jaipur held that addition made on the basis of documents found from the third party without providing any opportunity of cross-examination is liable to be deleted on the ground of violation of principles of natural justice.
Facts- A search and seizure action u/s 132 of the Act was carried out by the Income Tax Department on the members of Narnoli Group on 28-06-2019 of which the assessee is one of the members. The present appeal has been filed mainly contesting that CIT(A) has erred in confirming the action of AO in applying the GP rate of 10% on following unaccounted sales declared by the assessee against 5% declared by the assessee Rs. 20,35,000/-; Rs. 45,30,000/-; Rs. 5,10,380/- and Rs. 11,14,200/-. It is also contested that CIT(A) has erred in confirming the action of AO treating the interest income Rs. 20,34,000/- on the basis of rough calculation and estimation.
Conclusion- Gujarat High Court in the case of HEIRS AND LRs OF LATE LAXMANBHAI S PATE VS COMMISSIONER OF INCOME TAX has held that the legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross-examination, is that if the addition is made, the same is required to be deleted on the ground of violation of the principles of natural justice.
