Harbhajan Singh will not face any action over claims he allegedly made racist taunts to sections of the crowd in Sydney during the first match of the CB Series finals against Australia.
Harbhajan was alleged to have made monkey gestures and spat at fans during India's six-wicket win at the SCG.
But match referee Jeff Crowe said in statement: "After reviewing all available information, I conclude that there is no need to take any action against Harbhajan Singh."
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India were adamant Harbhajan had not done anything wrong.
India manager Bimal Soni told BBC Sport: "These stories, I do not believe them and strongly condemn them. I think it is wrong."
Former Australia skipper Allan Border came out in defence of Harbhajan, saying: "I was on that side of the ground and Harbhajan was copping a fair bit of stick from the crowd.
"I didn't notice any gestures at all and I thought he handled himself quite well to be honest."
Harbhajan was banned for three matches after he was found guilty of racially abusing Andrew Symonds, but the suspension was subsequently overturned on appeal.
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