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2018 (11) TMI 1841 - AT - Income TaxAdditions u/s. 69C - commission expense incurred outside the books of accounts - Addition on the basis of the statement obtained from Shri Tejas V. Shah - Non providing opportunity of cross examination of the statement obtained under the provision of Act - denial of natural justice - HELD THAT:- There was no other iota of evidence suggesting that the assessee has incurred any expenditure on account of commission paid to Shri Tejas V. Shah. The AO has not referred to any incriminating material found during the course of survey evidencing the payment by the assessee for the commission. In our considered view, for the addition made u/s 69C of the Act, the onus lies on the Revenue to prove that the assessee has incurred expenditure on account of commission expenses. The provision of Section 69C requires to make the disallowance of the expenses which has been incurred by the assessee and the assessee fails to explain the nature/ source of such expenditure. Thus, it is implied that first of all the AO has to prove whether the assessee has incurred expenditure and then the question comes for the explanation. In the instant case, the AO has not proved with the documentary evidences that the assessee has incurred expenditure on account of commission expenses. Thus, in such case the question of explanation does not arise. AO before making the addition on the basis of statement should have provided the opportunity of cross examination to the assessee. In this regard, we find support and guidance from the judgment of Hon’ble Supreme court in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] AO is directed to delete the Addition made by him. Hence, the ground of appeal of the assessee is allowed.
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