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2022 (6) TMI 1144 - AT - Income TaxAssessment u/s 153C - Denial of natural justice - no copy of satisfaction note was provided by the Assessing Officer in the course of assessment proceedings - HELD THAT:- It is fact on record that apart from the statements recorded u/s 131 from the assessee and from Shri Navin Nishar, Shri N K Sodhani and Shri Jayesh Zanani and relied upon by the Assessing Officer, there was no incriminating material found in support of the addition towards receipt of the purported alleged commission receipt. We also notice that though the Ld. CIT(A) has also relied on the statements of Shri Navin Nishar, Shri N K Sodhani and Shri Jayesh Zanani, the assessee was never provided with an opportunity to cross examine Shri Jayesh Zanani. It is also a fact that the statements of these parties were later retracted. We also notice that no new material was ever brought on record by the Assessing Officer to corroborate the allegation of commission receipt even despite the fact that the statements u/s 131 of the Acts relied upon by the Assessing Officer stood retracted. From perusal of the records and order of the lower authorities it is abundantly clear that there is no corroborative evidence or incriminating material to support the allegation on the assessee having received commission income. We have observed that the assessee was not provided an opportunity of cross examination of Shri Jayesh Zanani, whose statements were relied upon by the AO for passing the order. Without prejudice, there is no mention in the statement of Shri Jayesh Zanani that the assessee has been paid commission at the rate of 0.15 percent by the companies stated to be entry providers. When no opportunity for cross examination is given, it is not proper to rely on such statements and fatal to the order passed. There has been gross violation of the principles of natural justice and bearing in mind the above judicial precedents, we have no hesitation in holding that there was gross violation of principles of natural justice and fair play as the additions has been made without providing an opportunity to the assessee to cross examine those persons whose statements has been relied upon by the AO. And as regards merits of the case, we find that the issue is covered in favour of the assessee by the decision of the Coordinate bench in assessee’s group case of M/s Hemadri Machine Tools Private Limited wherein the alleged bogus donation on which the commission is alleged to have been earned was deleted. Thus in view of above findings and also considering the merits of the case in that there is no incriminating material/corroborative evidence to affirm the receipt of commission income, all the grounds stand allowed. The addition made by AO accordingly stands deleted.
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