Addition towards on money in the property transactions without an opportunity of cross examination is a serious flaw and will render order as nullity

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Addition towards on money in the property transactions without an opportunity of cross examination is a serious flaw and will render order as nullity

Additions towards On money received on sale of property – the addition cannot be made in the hands of the assessee, as denial of opportunity to the assessee to cross-examine the witness whose statements were made the sole basis of the assessment is a serious flaw rendering the order as nullity
On money received on sale of property – undisclosed / un accounted sales consideration received against sale of property over and above the apparent and declared sales consideration which is as per registered sale deed – HELD THAT:- When the addition has not been made in the hands of the buyer, who is the source of the cash payment to the seller (assessee), no addition can be made in the hands of the assessee. In fact the addition should have been made in the hands of the buyer on account of cash paid to the seller and in the hands of the seller as unaccounted sale consideration subject to capital gains tax. Even otherwise the assessee has requested for the cross-examination of Sri Honey Gupta as well as the broker during the assessment proceedings however same has been denied.
The only evidence available with the Assessing Officer is the statement of Mr. Honey Gupta and the broker which has been used against the assessee for making the addition. When the assessee had specifically asked for the cross-examination and if same was not given to the assessee, the addition cannot be made in the hands of the assessee, as denial of opportunity to the assessee to cross-examine the witness whose statements were made the sole basis of the assessment is a serious flaw rendering the order as nullity in as much as it amounted to violation of the principles of the natural justice as held in ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [2015 (10) TMI 442 – SUPREME COURT] – In view of this we do not have any other alternative but to direct the learned assessing officer to delete the addition made in the hands of the assessee over and above the declared sales consideration towards the sale of the property for the computation of the capital gain – Decided in favour of assessee.
LATE HARBHAJAN SINGH MAKKAR, (THROUGH L/H GURINDER SINGH MAKKAR) VERSUS ACIT, CENTRAL KARNAL, HARYANA
ITA No.2451/Del/2015

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