Assessee engaged a contractor for construction and devlopment of peroperties and an amount against the bills. AO summoned and recorded contractor's statement that he had not worked for assessee. High Court remanded matter back to AO as statement recorded behind assessee's back and no cross-examination by assessee. -MB-10951
1. The assessee was engaged in construction and development of properties, and had engaged one P who had worked for the assessee and amount of Rs. 3.34 lakhs was due against his bills.
2. The Assessing Officer summoned P and recorded his statement, who P stated that he had not worked for the assessee.
3. The assessee filed a copy of the order passed in the suit filed by P, as per which P had worked for the assessee, and placed on record some documents, which included agreement for construction entered into by the assessee with P.
4. The assessee took a plea before the Assessing Officer that the statement made by P was incorrect, and requested to produce P as his statement was recorded at the back of the assessee and he also desired to cross-examine P. The Assessing Officer, without acceding to the aforesaid request or even supplying the copy of the statement of P, added the amount of Rs. 3.34 lakhs to the income of the assessee and taxed the same.
5. The Commissioner (Appeals) as well as the Tribunal dismissed the appeals of the assessee.
6. The High Court on appeal held as under:
It was found that the statement of P was recorded behind the back of the assessee; it was not supplied to the assessee; specific requests were made by the assessee for production of P and for his cross-examination and that no such opportunity was provided to the assessee to cross-examine P.In view thereof, the order of the assessing authority adding the amount of Rs. 3.34 lakhs shown as the amount due by the assessee to P was not proper.In view of the aforesaid, the orders of the authorities below were to be quashed. The matter was to be remitted back to the Assessing Officer to make fresh assessment limited to the aforesaid issue after providing due opportunity to the assessee.