CA Prarthana Jalan
Hon’ble Delhi ITAT has in the case of DCIT v/s Heminder Kumari in ITA No. 4210-4213/Del/2013 has held that the information received by the Assessing officer from his investigation Wing, at best, be regarded as a prima-facie material, but could not be construed as conclusive for use against the assessee to fasten any tax liability, because the same was required to be corroborated by credible and independent evidence. The relevant paragraph of the order is as follows:-
“14. Considering the aforesaid factual matrix. In our considered opinion, it does not stand established that the assessee has made the impugned investment. We say so for the reason that the burden to establish the existence of impugned investment was on the Revenue, which, in the present case has not been discharged. Firstly, assessee denied the impugned transaction.
Secondly, the claim of the Assessing Officer is based on the alleged evidence found on Shrl Chetan Gupta, and quite clearly said witness has not been confronted to the assessee at any stage during the course of assessment, although the same was specifically pleaded by the assessee. The said person is the witness of the revenue because it is on the basis of his testimony, It has been held that the assessee made the impugned investment. Therefore, non-affording of cross-examination makes the use of such evidence by the Revenue, as untenable. In this connection, we may rater to the Judgment of the Hon’ble Delhi High Court In the case of CIT Vs. Ashwani Gupta, 322 ITR396 (Del), which followed Its earlier decision In the case of SMG Share Brokers Ltd. (supra). As per the Hon’ble High Court, once there was violation of the principles of natural justice, in as much as seized material was not provided to an assessee nor was cross-examination of the person on whose statement the Assessing Officer relied upon granted, then such deficiencies would amount to denial of opportunity and would be fatal to the proceedings.
Thirdly In this case, Shri Chetan Gupta has denied recovery of the pen-drive and also the impugned transactions in the statement recorded by the Assessing officer on 16.11.2009, so however, even if it is accepted that the pen-drive was recovered from shri Chetan Gupta, then, it only amounts to a third-party evidence and could not be straightaway relied upon without being tested in cross-examination or on the basis of any corroborative evidence. For the aforesaid proposition, we are fortified by the judgment of the Hon’ble Supreme Court in the case of Kisan Chand Chella Ram (supra), that of the Hon’ble Delhi High court in SMC Share Brokers Ltd. (supra) and S.M. Aggarwal (supra) and, also of the Hon’ble Punjab & Haryana High Court in the case of Chiranjil Lal Steel Rolling Mills (supra). The information received by the Assessing officer from his investigation Wing, at best, be regarded as a prima-facie material, but could not be construed as conclusive for use against the assessee to fasten any tax liability, because the same was required to be corroborated by credible and independent evidence or was required to be tested in cross-examination by the assessee, quite clearly none of these aspects have done by the Revenue in this case. Therefore, it is under these circumstances, that we have observed earlier that the Revenue has not proved that the impugned investment has been made by the assessee. In the light of above, the essential pre-requisite of Section 69 of the Act is not satisfied in this case.”