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2017 (2) TMI 904 - AT - Income TaxAssessability of advance received on relinquishment of development rights - denial of natural justice - grievance of assessee is that the addition has been made in the hands of assessee solely relying on the statement of Shri Aditya Dadhe, partner of Viraj Properties without giving the assessee an opportunity to examine him in his presence or cross-examine him in respect of statement of deponent witness being used as evidence against the assessee - Held that:- There is violation of principles of natural justice as the statement of Shri Aditya Dadhe which was made the basis for making addition was not given to the assessee by the Assessing Officer and his request to examine and cross-examine the said witness was rejected by the Assessing Officer in the remand proceedings and also by the CIT(A) when this fact was brought to his knowledge. The assessment order was passed in the present case relying on the said statement which was recorded during investigation by ADIT(Inv) and not by the Assessing Officer during assessment proceedings. The said statement was recorded at the back of assessee and copy of which was not given to assessee and assessment order was passed relying on the same. The assessee was held liable for tax on the basis of said statement. But in case the testimony of the said witness is discarded as before the Apex Court for violation of Rule of audi alteram partem, then there is no basis for making addition in the hands of assessee, since both the authorities below have made addition on the basis of statement given by Shri Aditya Dadhe. Accordingly, for violation of principles of natural justice and Rule of audi alteram partem, the addition made by the Assessing Officer and upheld by the CIT(A) is not sustainable and hence, the same is deleted. The preliminary issue raised vide ground of appeal No.3 in this regard is allowed and the issue on merits becomes academic. - Decided in favour of assessee.
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