Amey Madhav Baitule Vs ITO (ITAT Mumbai)
Mumbai ITAT Quashes ₹1.60-Crore Property Additions: Reassessment Material and Cross-Examination Denied to Assessee
Following a search on the GNP Group, the assessee’s case was reopened based on seized records and statements allegedly indicating payment of cash or “on-money” for purchasing a commercial unit. The AO added ₹46.40 lakh as on-money and a further ₹1.13 crore as unexplained investment under section 69 in respect of another property.
The assessee denied making any cash payment and contended that the entire recorded consideration was paid through banking channels. He repeatedly sought copies of the seized documents and statements of the GNP Group’s accountant and promoter, besides requesting an opportunity to cross-examine them. However, the relied-upon material was not supplied and cross-examination was refused.
The Mumbai ITAT held that where reassessment is founded on material collected during a third-party search or investigation, such material must be furnished to the assessee to permit an effective response under section 148A(b). Failure to provide the seized documents and statements, coupled with denial of cross-examination, constituted a serious violation of the principles of natural justice and struck at the root of the reassessment jurisdiction. ([TaxGuru][1])
The Tribunal further observed that the CIT(A) wrongly expected the assessee to prove the negative fact that no on-money had been paid. The burden could not be discharged by demanding negative evidence from the assessee when the Revenue itself withheld the underlying material.
