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2016 (5) TMI 1585 - AT - Income TaxAddition based on income surrendered - addition on the basis of statement recorded of Mr. DN Taneja wherein he surrendered the said amount on company’s account to buy peace of mind - Addition based on third party - assessee’s submissions that addition cannot be made on the basis of the statement recorded of third party and without providing opportunity of cross examination of the witness to the assessee - HELD THAT:- Addition was made by the AO on the basis of statement recorded on 7.1.2009 of Mr. DN Taneja wherein he surrendered the said amount on company’s account to buy peace of mind, in doing so, he ignored the basic fact that Sh. DN Taneja had no locus standi with respect to the assessee company, as he was never a Director nor a share holder in the assessee company and thus no reliance could have been placed on such general statement and as such, the reasons recorded by the AO were merely based on suspicion, surmises and conjectures and are hence not sustainable in the eyes of law. We find considerable cogency in the Ld. Counsel of the assessee’s submissions that addition cannot be made on the basis of the statement recorded of third party and without providing opportunity of cross examination of the witness to the assessee, in view of the Hon’ble Delhi High Court decision in the case of CIT vs. Pradeep Kumar Gupta & Anr. [2006 (11) TMI 184 - DELHI HIGH COURT] We are of the considered opinion that the addition made on the basis of the statement in the present case is not sustainable in the eyes of law, because the right of cross examination to the assessee was not provided, hence, we delete the addition made by the AO and confirmed by the Ld. CIT(A) and allow the Appeal of the Assessee.
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