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TMI Blog2019 (8) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the maker of the document or the third person who made the statement has to be given to the assessee as held by the Hon ble Supreme Court in Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] . AO has not made any endeavour to give a copy of the statements purportedly recorded during search u/s. 132(4) of the Act or recorded u/s 131 of the Act which the AO claims to contain adverse statements against the assessee, which action is in gross violation of natural justice for the simple reason that the AO cannot use a material which is adverse against the assessee without confronting him with that to say in other words the AO cannot keep the assessee in dark and draw adverse inference without confronting the assessee with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by Night Company. According to the ld. AR the appellant had issued 6,25,00,000 equity shares of ₹ 10/- each at a premium of ₹ 30/- per share during the year by way of preferential allotment. According to the ld. AR, the objective of making the issue of share capital was as under: As part of its expansion program, the company proposes to increase its manufacturing capacity in two phases. Under 1st phase, the company proposes to install a 350 TPD Sponge Iron Plant, the Company proposes to install a 350 TPD Sponge Iron Plant, 15 MT induction furnace, 100,000 TPA Wire Rod Mill and a 33 MW Captive Power Plant with the total capital outlay of ₹ 311 crores. In the 2nd Phase, the company proposes to install 0. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 10 of the shareholders which the AO acknowledges at page 6 of his order. However, we note that the AO has relied upon certain statements of Shri Janardhan Chokhani Shri Anand Sharma which were recorded on oath by the department. Likewise Shri Dinesh Kumar Dhandhania s statement recorded on oath u/s 131 of the Act dated 19.11.2014 was used to draw adverse inference against the assessee. Likewise the statement of Shri Narendra Jain recorded on oath u/s 131 on 11.04.2014 was also relied upon before drawing adverse inference against the assessee. Likewise Shri Sandeep Sharma statement under oath u/s 131 recorded on 08.04.2008 was also used against the assessee. However, it was brought to our notice that the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given to the assessee as held by the Hon ble Supreme Court in Andaman Timber Industries (supra). We note that the AO has not made any endeavour to give a copy of the statements purportedly recorded during search u/s. 132(4) of the Act or recorded u/s 131 of the Act which the AO claims to contain adverse statements against the assessee, which action is in gross violation of natural justice for the simple reason that the AO cannot use a material which is adverse against the assessee without confronting him with that to say in other words the AO cannot keep the assessee in dark and draw adverse inference without confronting the assessee with the materials/third parties statement which the AO intends to use against the assessee and an opportu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Incometax Officer had not given a proper opportunity of hearing to the assessee ? In our opinion, there can only be one answer to this question which is inherent in the question itself : in the negative and in favour of the assessee. The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated. Therefore in the light of the aforesaid decision of the Hon ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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