SC Halts NCDRC Order Granting Compensation to Rajasthan Royals for Sreesanth, Citing No Match Played  ||  SC Warns TN Police Media Statements May Affect Impartiality of Karur Stampede Probe  ||  SC: Challenge to State Consent for CBI Probe Must be Raised Soon After FIR  ||  SC: Magistrates Can Order Voice Samples From Witnesses, Not Just Accused, No Article 20(3) Breach  ||  Orissa HC: Informant Can be Made Accused if Involved, No Separate FIR Needed  ||  Gujarat HC Directs CBDT to Extend ITR Filing Deadline to Nov 30 for Audit Assesses  ||  Bombay HC Awards ?6 Lakh for Pothole Deaths, Urges Accountability for Civic Bodies  ||  Delhi HC: Call Records & Locations Admissible under NDPS Act If Privacy is Protected  ||  Delhi HC: Trial Court Barred from Reopening Limitation Once HC Condoned Delay  ||  Delhi High Court: Tenant Cannot Dispute Landlord's Title During Tenancy    

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 2025 - All Rights Reserved