Question And Answer
Subject: Assessment u/sec.153C of the Act.
Querist: Disha shah
Answered by:
Tags: , ,
Date: December 24, 2021
Query asked by Disha shah

Assessee is lady who purchase a shop from the developer. During the search action with the developer certain loose papers found which include receipt of cash payment signed by husband of the assesee. Which states that amount is paid against purchase of of some flat and number of flat is also mentioned . Assessee submitted that said flat is not purchased by the assessee and also submitted the evidence in support of the same by producing the index II which shows that the said unit is purchase by other person. AO has issued show cause to tax said amount in the hands of assessee on the ground of these seized papers and statement of develoer given at the time search u/Sec 132(4) and his stand at His application before ITSC and order of ITSC. Assessee has asked for cross examination of Deveeloper, who do not come for the same. Can assesee take stand :

1. on seized paper his name is not mentioned though the name of husband is mentioned . This paper is dumb paper so far assessee is concern as it does not name of assessee

2. assessee has not purchased the unit which is mentioned in seized papers

3. since developer has not came for cross examination, his statement should not relied up on

4. His stand taken before ITSC and order of ITSC is not binding at the assesseement of assessee

please guide .


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Answer given by

The assessee can challenge the notice issued and assessment made u/s 153C of the Act . Merely on the basis of documents seized from third party premises or on the basis of statement of third party notice u/s 153C of the cannot be issued . The assesssee should request for the copies of documents seized and also copies of the statement recorded . The assessee should also ask for cross examination of the builder who has given the statement . . If an opportunity for cross examination is not given the entire addition may be held to be bad in law . Refer Andaman Timber Industries v.CCE ( 2015 ) 281 CTR 241 (SC) and Kishanchand Chellaram v. CIT ( 1980) 125 ITR 713 (SC). In following cases the addition made on the basis of statement of the builder was deleted , Runal Homes Pvt Ltd v. DCIT (Mum ) ( Trib) ( ITA No. 5621 /Mum/ 2017 dt. 20-12 -2017 .) , Sonali Bjhavsar v. PCIT ( ITA No 742 /M/ 2019 dt .17 -5 2019 ) .

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