J&K&L High Court: Illegal Occupation of Shamilat Land Cannot Become Legal Right  ||  Bombay HC: Land Reservation Lapses if No Acquisition Within 24 Months of Purchase Notice  ||  Gujarat High Court: Conditional Sale Mortgage Differs From Sale with Repurchase  ||  Calcutta High Court: Transfer to Commercial Court No Bar to Counterclaim with Leave  ||  Calcutta High Court: FIR Delay Not Fatal; Insurer Must Prove Policy Breach for Recovery  ||  Madras High Court: State Temple Festivals Must Not Perpetuate Caste, Aim to Annihilate it  ||  Calcutta HC: Economic Abuse Enables DV Case at Current Residence  ||  Calcutta HC: Economic Abuse Enables DV Case at Current Residence  ||  Bom.HC: Courts have no Discretion to Award Lesser Sentence When Law Prescribes Minimum Punishment  ||  Bombay HC: Single Mother Recognized as Complete Parent for Child’s Identity    

Shri Bhavish Harilal Moradia, M. N. Manvar & Co. vs. Income Tax Officer - (Income Tax Appellate Tribunal) (02 Aug 2023)

Affidavit given by the third party cannot be used against the assessee without affording the opportunity of cross examination

MANU/IR/0131/2023

Direct Taxation

The assessee is engaged in the business of manufacturing and trading of PSC sale. The assessee in the year under consideration has purchased a residential house from the builder namely Parijat Residency on the payment of Rs. 20,50,000 as per the sale deed. However, the Assessing Officer was of the view that, the assessee has made payment in cash for Rs. 8,50,000 without recording the same in the books on account. Thus, as per the Assessing Officer the assessee has made the payment of on-money for the purchase of residential property for Rs. 8,50,000 only. The Assessing Officer made the addition to the total income of the assessee. The Learned CIT(A) after considering all the facts was of the view that, the assessee has made the payment of on-money and accordingly confirmed the addition made by the Assessing Officer. Being aggrieved by the order of the Learned CIT(A), the assessee is in appeal.

In the present case, the entire thrust of the Revenue was based on the affidavit for the impugned addition which was not corroborated by any documentary evidence suggesting that the assessee has made payment by way of on-money in the purchase of the residential property. The affidavit given by the third party cannot be used against the assessee without affording the opportunity of cross examination. It is equally important to note that the assessee has also furnished the affidavit dated 1st October, 2016 stating that there was no investment of on-money in the purchase of residential property but the authorities below without pointing out any defect or infirmity in such affidavit of the assessee as relied on the affidavit of the third party for making the impugned addition.

It was the onus upon the Revenue to disprove the affidavit furnished by the assessee based on cogent reasons. It is the trite law that affidavit is written statement and a statement given by the third party cannot bind the assessee as held by the Bombay High court in the case of Aditi construction vs. DCIT.

The addition made by the authorities below based on the third-party statement is not sustainable. Hence, the finding of the Learned CIT(A) is set aside and the Assessing Officer is directed to delete the addition made by him. The appeal of the assessee is partly allowed.

Tags : ASSESSMENT   ADDITION   LEGALITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved