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| The Tax Publishers2020 TaxPub(DT) 3077 (Del-Trib) INCOME TAX ACT, 1961
Section 132
Any adverse material collected at the back of the assessee when not confronted and that if any statement is recorded by AO/Revenue Department at the back of the assessee and such statement is not allowed for cross-examination on behalf of the assessee, such material cannot be considered against the assessee in the Income Tax proceedings and such material/statement cannot be read in evidence against the assessee.
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Search & Seizure - - -
A search was conducted in case of a trust 'S' and Mr. 'P' , who was Chairman of the trust. During the search, certain documents/books of account were seized, which revealed receipt of donation/capitation fees over and above the regular course fees paid in cash by parents of students for taking admission in various medical courses. Further, during course of recording statement under section 132(4), 'P' accepted receipt of donation/capitation fees in cash and offered such unaccounted money for taxation in relevant assessment years. AO on the basis of such information found that the assessee paid certain cash over and above the regular course fees for admission of his son to MBBS Course. Accordingly, the AO made addition in respect of the cash amount paid by the assessee. Held: It was undisputed that the entire addition was based on statement of 'P', in which, he admitted to have received donation/capitation fees in cash. Assessee, however, denied payment of any cash on account of donation/capitation fees for admission of his son. Further, no adverse material was confronted to the assessee and also 'p' was never produced for cross-examination on the behalf of the assessee. It is settled law that any adverse material collected at the back of the assessee when not confronted and that if any statement is recorded by the AO/Revenue Department at the back of the assessee and such statement is not allowed for cross-examination on behalf of the assessee, such material cannot be considered against the assessee in the Income Tax proceedings and such material/statement cannot be read in evidence against the assessee. Thus, the statement of 'P' could not be relied upon against the assessee. Accordingly, the addition made in the hands of the assessee was deleted.
Relied:Andaman Timber Industries v. CCE (2015) 281 CTR 214 (SC) : 2015 TaxPub(DT) 5186 (SC) Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC) : 1980 TaxPub(DT) 1130 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2007-08
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