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2022 (9) TMI 517 - AT - Income TaxAddition u/s 68 - receipt of share application money - reliance on statement of third parties - retracted statements - HELD THAT:- Parties were cross examined by the assessee during the course of assessment proceedings in the presence of the ld. AO, all these parties confirmed the contents stated in their retraction affidavits. Subsequently all these parties were again re-examined by the ld. AO before the completion of assessment. Even in that re-examination proceedings, all the parties reiterated the contents stated in the retraction affidavits. Hence we categorically hold that no addition could be made in the hands of the assessee company by placing reliance on the statements recorded from aforesaid parties, which stood subsequently retracted. With regard to statement of Shirish Shah relied upon by the ld. AO, it is a fact on record that the said statement was never furnished to the assessee for its rebuttal. Hence it has resulted in gross violation of principles of natural justice as it strikes the very foundation of the assessment. The statements of third parties i.e. two angadias relied upon by the ld. AO are totally unrelated to the assessee company and there is absolutely no linkage of the said parties with the assessee company. Hence we hold that no addition could be made in the hands of the assessee by placing reliance on the statements of third parties. As decided in M/S HEMADARI MACHINE TOOLS PVT. LTD. [2021 (8) TMI 851 - ITAT MUMBAI] under similar circustances share premium received by the assessee during the year under consideration could not be held as an unexplained cash credit within the meaning of Sec. 68 - Decided in favour of assessee.
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