Question And Answer
Subject: Sec. 153C
Querist: CA. Disha Shah
Answered by:
Tags: , , , ,
Date: December 2, 2021
Query asked by CA. Disha Shah

Assessee has purchase flat from developer. During the course of search at the premises of developer one excel sheet was found in which data regarding name of person flat no, agreement value and cash consideration was mentioned. Accountant and developer accepted in the statement recorded that they have collected on money from flat purchasers. Developer went to settlement commission and also submitted about on money as source . Assessing Officer has issued notice u/sec. 153C for 6 years to assessee on this information.

Assessee has filed the returns in response to notice U/sec. 153C of the Act and submitted that the paper relied up on by the AO is dump paper as it does not bear signature and no addition can be made on the basis of third party statement and asked for cross examination of the person’s whose statements he has relied up on . However AO is saying the acceptance by the developer is sufficient and no opportunity of cross examination is required and if assessee wants cross examination then first will record the statement of assessee and then opportunity of cross examination will be given.

Whether the paper found and relied upon is dumb paper?

Whether AO action of denying cross examination and contention of recording of statement of assessee is legally correct and justified

Whether AO can make addition in the hands of assessee on the basis  of Excel sheet found during the search with developer and statement of developer and his accountant and submissions made by developer  before Settlment Commission .

Please guide

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Answer given by

: The assessee should ask for copy of the documents seized , copy of statement recorded and also an opportunity of cross examination . If opportunity of cross examination is not given the order in bad in law . Andaman Timber Industies v CCE ( 2015 ) 281 CTR 241 (SC) , Kishanchand Chellarm v .CIT ( 1980) 125 ITR 713 ( SC) . In Sonali Hemant Bhavsar v .PCIT ( ITA No, 742/M/ 2019 dt 17 -5 -2029 Bench “G “ ( AY. 2015 -16 ) the addition was deleted .

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