CIT Vs. DEV DUTT PRASAD RAJ KUMAR GARG

JUDGEMENT

(1.) THE Revenue claims to be aggrieved by the order of ITAT passed in ITA No.1522/DEL/2010 and ITA No.2727/DEL/2010. The question of law sought to be urged is whether the Tribunal fell into the error in upholding the deletion of Rs.1,01,00,000/- under Section 69A on the ground that appropriate opportunity had been denied to the assessee.

(2.) THE brief facts are that the assessment in respect of AY 2001-2002 was sought to re-opened under Section 147 on account of a raid carried out in the premises of one Sh. B.M. Gupta. After reopening of the assessment and during the course of proceedings that AO relied upon an entry which cited a numeral Rs.177' against which a sum of Rs.1,01,00,000/-, was shown and sought to be connected with the assessee. The reassessment order also referred to a statement made by one Sh. Ram Avtar Singhal, Chartered Accountant and also the statement of Sh. B.M. Gupta as well as certain documents. On the basis of these, it was held that a sum of Rs.1.01 crores ought to be added back under Section 69A and brought to tax. The assessee's appeal was accepted primarily on the ground of denial of proper opportunity by the Appellate Commissioner. The assessee and the Revenue felt aggrieved as far as question of validity of reassessment was concerned on the merits of reassessment order. The Tribunal rejected both the appeals. The assessee has not questioned the reopening of the assessment under Section 147-148. The Tribunal's reasoning as far as it upholds the Appellate Commissioner's order vis-a-vis deletion of a sum of Rs.1.01 crores is as follows:-

(3.) IN the present case, the AO has referred to certain materials. A close reading of the assessment order discloses that neither has the contentions of the assessee been discussed nor any attempt made to connect entry 177 with the assessee. It is also apparent from the Appellate Commissioner's order that these matter were not put to the assessee. Consequently, there cannot be two opinions of the fact that assessee was denied proper opportunity to deal with the materials sought to be relied upon. However, in view of the ruling of the Supreme Court in Dhakeswari Cotton Mills Ltd. V. Commissioner of Income-tax, West Bengal v. CIT, 26 ITR 775 (SC,) this Court is of the opinion that the Tribunal ought not to have merely upheld the CIT (Appeal)'s order but should have remanded the proceeding to correct the irregularities which crept in during the reassessment proceedings. Accordingly, we direct the AO to consider the entire matter afresh after giving all the necessary materials in his possession which deemed are adverse, to the assessee and also after further affording an opportunity for cross-examination of such witnesses as he seeks to rely upon, to the assessee.