Shri Chhaganbhai Velabhai Desai, Ahmedabad v. The ACIT.,Cent.Circle-1(2),, Ahmedabad

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.1448/AHD/2009 ASSESSMENT YEAR:2004-05 DATE OF HEARING:9.2.11 DRAFTED:14.2.11 CHHAGANBHAI VLABHAI DESAI KAKHNEJI BHAVEN 1 GOPALNAGAR VIBHAG-1 NR. ST. XAVIERS LOYALA SCHOOL MEMNAGAR AHMEDABAD PAN NO.ACVPD8607M V/S . ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1(2) AAYAKAR BHAVAN ASHRAM ROAD AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI MEHUL K PATEL AR RESPONDENT BY:- SHRI K.MADHUSUDAN SR-DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-I AHMEDABAD IN APPEAL NO. CIT[A]-I/CC.1[2]/ 487/ 06-07 DATED 10-02-2009. THE ASSESSMENT WAS FRAMED B Y DCIT CENTRE CIRCLE-1(2) AHMEDABAD U/S 153C R.W.S.153A(B) OF TH E INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 30-11-2006 FOR ASSESSMENT YEAR 2004-05. 2. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SHRI MEHUL K PATEL HAS RAISED THE ISSUE THAT WHILE PASSING ASSESSMENT ORDE R PRINCIPAL OF NATURAL JUSTICE WAS NOT FOLLOWED AND NO PROPER OPPORTUNITY OF BEI NG HEARD WAS GIVEN TO ASSESSEE. HE REQUESTED THAT EARLIER IN ASSESSEE S OWN CASE IN ITA NO.3366/AHD/2007 FOR ASSESSMENT YEAR 1998-999 VIDE ORDER DATED 14-0 5- ITA NO.1448/AHD/2009 A.Y. 2004-05 CHHAGANBHAI V DESAI V. ACIT CC-1(2) ABD PAGE 2 2010 THE TRIBUNAL VIDE PARA-5 HAS SET ASIDE THE APPEAL TO THE FILE OF ASSESSING OFFICER WHICH REPRODUCED AS UNDER:- 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE FACTS AS SUBMITTED BY THE LEARNED COUNSEL ARE NOT IN DISPUTE. THE AO RECORDED THE STATEMENT OF VAS BEHIND THE BACK OF THE ASSESSEE AND THE ASSESSEE R EQUESTED FOR CROSS-EXAMINATION OF VAS . THE AO WAS OF THE OPINION THAT IT WAS NOT POSSIBLE TO PERMIT THE ASSESSEE THE OPPORTUNITY OF ORAL CROSS- EXAMINATION THEREFORE THE OPPORTUNITY OF WRITTEN CROSS-EXAMINATION WAS GIVEN WHICH THE ASSESSEE HAS NOT AVAILED WHICH IS EVIDENT FROM THE PARA-3.3 O THE ASSESSMENT ORDER AS UNDER: 3. I ALSO REITERATE MY REQUEST FOR ORAL CROSS-EXAM INATION OF SHRI VIKAS SHAH FAILING WHICH THE RELIANCE PLACED ON HIS STATEMENT AND THE MATERIAL SEIZED FROM HIS POSSESSION AND CONTROL IS BAD IN LAW AND THE SAME HAS NO EVIDENTIARY VALUE IN THE EYES O F LAWS HELD BY VARIOUS COURTS OF LAW. IT IS SUBMITTED THAT YOUR HO NOURS OFFER FOR WRITTEN CROSS-EXAMINATION OF SHRI VIKAS SHAH BY ASK ING QUESTIONS TO HIM IN WRITING WHICH IN TURN WILL BE FORWARDED T O HIM BY YOUR HONOUR WILL NOT SERVE ANY EFFECTIVE PURPOSE SINCE I T WILL ONCE AGAIN TANTAMOUNT TO SELF SERVING STATEMENT. WITH DUE RESP ECT I FURTHER APPREHEND THAT THE SAME WILL BE A WELL THOUGHT OF A NY GUIDED STATEMENT WITH SOMEBODYS HELP AND WILL NOT BE A SP ONTANEOUS STATEMENT. HENCE IN THE INTEREST OF JUSTICE AND EQ UITY. IT WILL BE ONLY FAIR AND REASONABLE TO GRANT ORAL CROSS-EXAMIN ATION OF SHRI VIKAS SHAH TO ARRIVE AT THE TRUE FACTS. IT IS SETTLED LAW THAT WHEN A STATEMENT OF A WITNES S IS RECORDED BEHIND THE BACK OF THE ASSESSEE SUCH STATEMENTS COULD NOT BE USED AGAINST THE ASSESSEE UNLESS THE ASSESSEE IS ALLOWED AN OPPO RTUNITY TO CROSS- EXAMINE SUCH WITNESSES. IN OUR OPINION THE CROSS-E XAMINATION CAN ONLY BE MADE ORALLY AND SO-CALLED WRITTEN CROSS-EXAMINAT ION CANNOT SUBSTITUTE THE RIGHT OF ORAL CROSS-EXAMINATION OF T HE ASSESSEE. THE UTILIZATION OF THE STATEMENT OF VAS WITHOUT ALLOWING THE ASSESSEE TO CROSS-EXAMINE HIM IS AGAINST THE NATURAL JUSTICE. I N VIEW OF THE ABOVE WE4 SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AN D RESTORE THE MATTER BACK TO THE FILE OF THE AO. WE HOLD THAT IF THE AO WANTS TO UTILIZE THE STATEMENT OF VAS AGAINST THE ASSESSEE HE HAS TO ALLOW AN OPPORTUNITY OF ORAL CROSS-EXAMINATION OF VAS TO THE ASSESSEE. OTHERWISE THE AO MAY DISPOSE OF THE MATTER ON THE BASIS OF OTHER MATERIAL AVAILABLE ON RECORD AFTER ALLOWING ADEQUAT E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.1448/AHD/2009 A.Y. 2004-05 CHHAGANBHAI V DESAI V. ACIT CC-1(2) ABD PAGE 3 FURTHER THE LD. COUNSEL FOR THE ASSESSEE STATED TH AT IN THE PRESENT CASE THE CIT(A) VIDE PARA-5.2.2 HAS NOTED THIS FACT AS HAS BEEN POINTED OUT BY THE APPELLANT SIMILAR ASSERTION WAS ALSO MADE BY HIM D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS IN HIS CASE FOR THE ASST. YE AR 1998-99 WHICH TOO WAS DENIED BY THE THEN A.O ON THE SAME PRETEXT. THE APPELLANT WENT TO APPEAL AGAINST THE ORDER AND THE CIT(A)-IV AHMEDAB AD VIDE HIS APPEAL ORDER NO. CIT(A)-IV/35.A/CC.191)/06-0/250 DTD. 14-0 3-2007 DISMISSED THE APPEAL OF THE APPELLANT BY HOLDING IN PARA 3.1 OF H IS ORDER AS UNDER AND REPRODUCED AS UNDER THE RELEVANT FINDINGS WHICH N EED NOT BE REPRODUCED HERE FOR THE SAKE OF REPETITION. LD. COUNSEL FOR AS SESSEE STATED THAT THE ISSUE IN THIS APPEAL OF ASSESSEE IS WHETHER THE SUBSTANTI VE ADDITION IS TO BE MADE IN ASSESSMENT YEAR 1998-99 OR ASSESSMENT YEAR 2004-05 I.E. PRESENT ASSESSMENT YEAR THIS ISSUE NEEDS RE-CONSIDERATION. HE STATED THAT SINCE THE ASSESSMENT YEAR 1998-99 BEFORE THE AO THIS ISSUE IS ALSO BE SET ASIDE TO THE FILE OF AO. 3. LD. SR-DR HAS NOT OBJECTED SETTING ASIDE THIS IS SUE TO THE FILE OF ASSESSING OFFICER. 4. AFTER HEARING BOTH THE SIDES WE ARE OF THE VIEW THAT EXACTLY IN SIMILAR FACTS IN ASSESSMENT YEAR 1998-99 THE TRIBUNAL HAS S ET ASIDE THE ASSESSMENT AS NOTED ABOVE HENCE TAKING A CONSISTENT VIEW WE SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER TO RE-FRAME ASSESSMENT IN THE LIGHT OF TRIBUNALS DECISION IN ASSESSMENT YEAR 1998-99 (SUPRA). 5. IN THE RESULT ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 09/02/2011 SD/- SD/- (D.C.AGRAWAL) (MAHAVIR SING H) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD DATED : 09/02/2011 ITA NO.1448/AHD/2009 A.Y. 2004-05 CHHAGANBHAI V DESAI V. ACIT CC-1(2) ABD PAGE 4 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-I AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD