High Court Of Delhi
CIT vs. SMC Share Brokers Ltd.
Section 158BC, 158BD
Block period 1st April, 1990 to 3rd Aug., 2000
Madan B. Lokur & Vipin Sanghi, JJ.
IT Appeal No. 1221 of 2006
29th August, 2006
Counsel Appeared :
R.D. Jolly, for the Appellant : None, for the Respondent
JUDGMENT
By the court :
The Revenue is aggrieved by an order dt. 27th Jan., 2006, passed by the Tribunal, Delhi Bench “B”, in ITA No. 250/Del/2005 relevant for the block assessment period 1st April, 1990, to 3rd Aug., 2000.
2. A search was carried out in the premises of one Manoj Aggarwal, a director of M/s Friends Portfolio (P) Ltd. The search was carried out on 3rd Aug., 2000, on which date various documents and books of account, etc. were discovered. On the basis of the documents discovered and the statements of Manoj Aggarwal, a block assessment was made in respect of Manoj Aggarwal and M/s Friends Portfolio (P) Ltd. on 29th Aug., 2002, under the provisions of s. 158BC of the IT Act. Subsequently, the block assessment proceedings were initiated against the assessee and completed on 28th Nov., 2004, under the provisions of s. 158BD of the Act.
During the assessment proceedings, the assessee requested the AO time and again to permit him to cross-examine Manoj Aggarwal on the basis of whose statement proceedings had been launched and from whose possession the documents were recovered, so that the assessee could prove its case. The request was not acceded to by the AO and the Tribunal has found that this was in complete violation of the principles of natural justice.
The Tribunal held that the AO was functioning as a quasi-judicial authority and was under an obligation to adhere to the principles of natural justice. Several requests were made by the assessee, but Manoj Aggarwal was not made available for cross-examination. On this basis, the Tribunal set aside the block assessment and that is why the Revenue is before us in an appeal under s. 260A of the Act.
Learned counsel for the Revenue relied upon One-up Shares & Stock Brokers (P) Ltd. vs. R.R. Singh, CIT (2003) 183 CTR (Bom) 254 : (2003) 262 ITR 275 (Bom) to contend that the statement of Manoj Aggarwal had evidentiary value, as observed by the Bombay High Court. There is no doubt that the statement of Manoj Aggarwal had evidentiary value but weight could not be given to it in proceedings against the assessee without it being tested under cross-examination. In the absence of the statement being tested, it cannot be said that it should be believed completely to the prejudice of the assessee. Under the circumstances, we do not think that the judgment relied upon by learned counsel carries him any further.
We are of the opinion that the Tribunal was right in its view that in the absence of Manoj Aggarwal being made available for cross-examination, despite repeated requests by the assessee, his statement could not be relied upon to his detriment.
No substantial question of law arises for our consideration. Dismissed.
[Citation : 288 ITR 345]
