TMI Blog2022 (6) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... ords 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.s. 143(3) dated 23.12.2019 wherein, the AO has made an addition of Rs. 2,00,250/- in respect of alleged commission income in the hands of the assessee. 4. Aggrieved with the above order, the assessee preferred an appeal before the CIT(A) on the following grounds: - 1. On the facts and the circumstances of the appellant s case and in law the Ld. AO erred in issuing notice u/s. 153C despite the fact that no satisfaction was recorded by the AO of the searched party and the AO of the appellant and therefore, the notice, u/s. 153C and consequent order pass by the AO u/s. 143(3) r.w.s. 153C is bad-in-law, illegal or otherwise void for want of jurisdiction. 2. On the facts and the circumstances of the appellant s case and in law the Lad. AO erred in not providing opportunity to cross examine Shri Jayesh Zanani. 3. On the facts and the circumstances of the appellant s case and in law the Ld. AO erred in relying upon the statement of appellant, Shri Navin Nishar and Shri N.K. Sodhani despite the fact that it has been retracted by them. , 4. On the facts and the circumstances of the appellant's case and in law the Ld. AO erred in making the addition of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the rate of 0.15% of the amount of total donation in nature of bogus accommodation entries provided to the Podar group. Thus, it cannot be said that there was no incriminating material found against the assessee. Hence, the Ld. CIT(A) confirmed the addition of Rs. 2,00,250/- on merits. 8. Aggrieved the assessee is in appeal before us raising following grounds of appeal: - 1. On the facts and the circumstances of the appellant s case and in law, the Ld. CIT(A) erred in holding that that the notice issued u/s 153C is a valid notice despite the fact that no satisfaction as mandated by law was recorded by the AO of the searched party and the AO of the appellant, thereby rendering the notice u/s 153C and the consequent assessment order vitiated by lack of jurisdiction and thus are void, illegal and bad in law. 2. On the facts and the circumstances of the appellant s case and in law, the Ld. CIT(A) erred in confirming the addition made by the AO in respect of commission, solely relying upon statements recorded in the course of search, without any bringing on record any corroborative material and despite the fact that no incriminating material was found either during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. The Ld. AR has brought to our notice, the very basis of such addition being the alleged donation has been deleted by the Hon ble ITAT in the case of Hemadri Machine Tools Private Limited (ITA No 714/M/20) [placed at page number 141 of paper book]. As such the addition in the nature of commission made in the hands of the assessee has no legs to stand on and hence has to be deleted. 10. Additionally, it was further submitted that no incriminating material or corroborative evidence was found. Hence the statement recorded u/s.131, even assuming it may bind an assessee, cannot be independently used for making addition unless corroborated by evidences. Further, the Ld. CIT(A) has deleted similar addition made on same set of facts in the cases of Shri Navin Nishar and Shri N K Sodhani which is quite evident from para 8.2, 8.3 and para 7.1, 7.2 of their respective CIT(A) orders [placed at page number 81 and page number 73 of their respective CIT(A) orders]. 11. On the other hand, the Ld. DR relied on the findings of Ld. CIT(A) and stated that the assessee in his own statement recorded during the survey action has accepted that he was getting commission income at the rate of 0.15% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lates to receipt of commission income in the hands of the assessee herein. In any case, the Assessing Officer has made addition only on the basis of the statement of the assessee recorded u/s 131 during survey in the premises of M/s Suba Co. In the similar situation, the Hon ble Madras High Court in case of CIT vs. P. Balasubramanian (354 ITR 116 - order placed on record) held that the statement recorded during survey operation u/s 133A may be relevant material, but in the absence of further materials to substantiate the same, such statement recorded u/s 133A can hardly be the basis for assessment. In our considered view the statement recorded u/s 131 during the course of proceedings u/s 133A does not have any evidentiary value and becomes void-ab-initio. Without prejudice, it is observed that these statements were eventually retracted thus revoking them completely. Besides, as mentioned earlier, the statements relied on by the AO in the nature of admissions are bereft of corroborative material to justify or implicate the additions on the assessee. 14. In our further view of the matter, we have observed that the assessee was not provided an opportunity of cross examination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 18. 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. 19. Coming to the appeals relating to other assessment years, since facts in these cases are mutatis mutandis, therefore the decision taken in A.Y. 2012-13 is applicable to these Assessment Years also. Accordingly, these appeals are also allowed. 20. In result, the assessee s appeals for AY 2012-13, AY 2013- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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