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2021 (1) TMI 883 - AT - Income TaxReopening of assessment - Addition on misuse of client code - statemet of third party relied upon - Whether there is document or material which could established that the client code modification was made which allegedly resulted in shifting of profit.? - HELD THAT:- Where the assessee so desires, an opportunity to cross examine the persons whose statements are recorded be provided to the assessee. However, in the instant case, we find that the AO has not shared such information/statements and an opportunity to cross-examine these persons was also not provided and therefore, the principle of natural justice is clearly violated in the instant case which renders the order so passed by the AO as invalid in the eyes of law. Even during the appellate proceedings, the assessee was not made available any such statements and even the right of cross examination was denied by the ld CIT(A) who exercises the co-terminus powers as that of the AO. Thus, in view of the decision in case of CCE vs. Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] the assessment based on statement of third party without giving an opportunity to the assessee is not sustainable in law. The statement of a third party cannot be sole basis of the assessment without given an opportunity of cross examination and consequently it is a serious flaw which renders the order a nullity. In light of the same, we don’t deem necessary to examine other contentions raised by the ld AR. The order so passed by the AO is hereby set-aside. The appeal of the assessee is thus allowed.
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