TaxTMI 
TaxTMI 
2025 (10) TMI 1336
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....tances of the case in law, Ld. CIT(A) erred in confirming addition without referring to any incrementing document. Besides, he has not referred to any incriminating material in the satisfaction note issued to the Appellant 3. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. for not sharing incrementing documents found during the course of search of rubberwala group which was pertained to the appellant. 4. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. about the not providing statement and materials used by him against the appellant 5. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. about opportunity of cross examination of the person whose statements were used against the appellant. 6. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming addition of Rs. 2,00,000/- u/s 69 of the Act. 7.The Appellant keeps his right reserve to add/ modify/ delete any ground of appeal during the appellant proceedings. 2. The brief facts of the case are that the assessee purchased Shop....
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.....50 sq. ft., in Platinum Mall constructed by Rubberwala Housing & Infrastructure Put. Ltd. for a total consideration of Rs. 17,75,025/-. Payments towards the purchase were made through proper banking channels- Rs. 5,00,000/- on 13.08.2019, Rs. 9,20,000/- on 27.08.2019, and the balance amount of Rs. 3,55,005/- at the time of execution of the agreement. 2. The market value of the shop, as determined by the Stamp Duty Authority, was Rs. 19,77,000/-. Accordingly, the assessee paid stamp duty of Rs. 1,18,700/- and documentation charges of Rs. 19,800/-, making the total cost of acquisition Rs. 19,13,525/-. 3. While passing the assessment order u/s. 153C of the Act, the ld. AO had held that Rs. 2,00,000/- were paid by the Appellant to the seller of the shop in cash. The said allegation was made on the basis of the statement of Mr. Imran Ansari and the excel sheet found from Imran Ansari. 4. It is respectfully submitted that the assessee has made the entire payment to Rubberwala Housing & Infrastructure Put. Ltd. only through banking channels. No part of the consideration was paid in cash 5. At the outset, it is respectfully submitted that the assessee p....
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....ry on their part and cannot bind the assessee. The assessee has no role or control in the builder's disclosure and cannot be penalized for the same. 10. Apart from the uncorroborated excel sheet and third-party statements, the Ld. A.O. has brought no independent evidence on record to establish that the assessee made any cash payment. On the contrary, the assessee has conclusively demonstrated that all payments were routed through banking channels, stamp duty was paid as per the market value determined by the Stamp Authority, and the transaction is fully accounted for in the books. 11. In the case of Hoshang J. Mohta vs. ITO (ITA No. 36/Mum/2023, ITAT Mumbai order dated 31.03.2023), the Hon'ble Tribunal held that an "on-money" addition made solely on the basis of the developer's statement recorded under section 132(4) and an excel sheet is not sustainable in law when the assessee has categorically denied making such payments and no opportunity of cross-examination of the concerned parties was afforded to the assessee. 12. In the case of Mrs. Mamta Sharad Gupta vs. ITO (ITA No. 1553/Mum/2021, ITAT Mumbai, order dated 16.06.2022), the Tribunal he....
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....o draw your attention to the judgment of the Hon'ble Supreme Court delivered in the case of Andaman Timber Industries Vs. CCE reported in (2015) 281 CTR 241 (SC) wherein it has been held that, failure to give the assessee the opportunity to cross examine witness, whose statements are relied upon, results in breach of principles of Natural Justice. It is a serious flaw which renders the order a nullity. 17. I would also like to refer to the judgment of the Hon'ble Apex Court delivered in the case of CIT Vs. Odeon Builders Put. ltd. (418 ITR 315) wherein also it was held that the addition/ disallowance made solely on third party information without subjecting it to further scrutiny and denying the opportunity of cross examination of the third party renders the addition/ disallowance bad in law. 18. Finally, I would like to refer to the decision delivered in case of H.R. Mehta v/s Assistant Commissioner of Income- tax, Mumbai 72 taxmann.com 110 (Bombay) delivered by the Hon'ble Bombay High Court and the same reads as under. In the light of the fact that the money was advanced apparently by the account payee cheque and was repaid vide account payee cheque ....
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.... that where a search conducted on a third party yielded documents such as an excel sheet and statements indicating alleged cash consideration for sale of shops, but those documents pertained only to financial year 2016-17 and not to the assessee's relevant assessment year 2018-19, the same could not be treated as incriminating material for that year. Since section 153C can be invoked only when incriminating material directly relatable to the assessee and to the relevant assessment year is found during search, the Court held that issuance of notice under section 153C for A.Y. 2018-19 was invalid. Consequently, the impugned notice and assessment order were quashed, reinforcing that jurisdiction under section 153C cannot be assumed merely on the basis of third-party excel sheets or statements not pertaining to the assessee's year of assessment. 22. In light of the above submissions, it is respectfully prayed that the addition made by the Ld. A.O. merely on the basis of unsubstantiated third-party documents/ statements, without providing copies of evidence or opportunity of cross- examination, is unsustainable in law as well as on facts. The assessment order, therefore....
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....arch proceedings. 5.2. During the action on Rubberwala Group, among other, residence (at 109, 2nd Floor, Prabhat Sadan, 109/120 RBC Marg, Agripada, Mumbai Central - 400011) of Shri Imran Ashfaque Ansari was covered under section 132 of the I.T. Act, 1961. His statement was also recorded on oath at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, Shri Imran Ansari was questioned about his roles and responsibilities in M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, Shri Imran Ansari stated that he has been working with Rubberwala group of entities since 2010 and inter-alia handling sale and registration of the shops in "PlatinumMall" Project of M/ s. Rubberwala Housing & Infrastructure Ltd (RHIL). 5.3. Shri Imran Ansari in his response to question no. 13 & 14 of the said statement explained the complete procedure of the of the sale of shops in the "Platinum Mall" project. While explaining further about the price structure of the shops, Shri Imran Ansari in response to Q. no. 15 categorically revealed that the total price of the shops contains cash component and banking channel component, and these components are decided by....
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....irmed the data of the said excel to be true by confirming facts stated by Shri Imran Ansari in his statement. It is also important to note here that the phone number mentioned above i.e., 9892196071 against all 27 shops, is of Shri Rajesh Jain. 5.5. Regarding the frequency of updating the said excel file/ sheet, Shri Imran Ansari, in response to Q. no. 25, stated that this sheet is updated on the same day when a payment is received either in cash or cheque (or banking channel). The column A to AR of the sheet "Master" are stated to be updated till 16.03.2021 and other sheets of the said excel file are also stated to be updated till 16.03.2021. It is revealed in the above response that he takes the parties to Shri Abrar Ahmed (who during the search established to be a person handing cash for the Rubberwala Group). Shri Abrar Ahmed, after receiving the cash confirms to Shri Imran Ansari who update the diaries and the said excel file. Such detailed mechanism in place further upholds the facts stated by Shri Imran Ansari on oath. It is also important to note here that Shri Imran Ansari also used to call and follow up with the buyers on the numbers saved in his data. As aforeme....
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....ng any independent material to support the same. The AO also did not provide the opportunity of cross examination despite being asked by the assessee. Accordingly, by placing reliance on various case laws, the Ld A.R submitted that this addition should be deleted. 16. We heard Ld D.R and perused the record. We notice that the AO has made the addition on the basis of evidence found in the premises of third party and also on the basis of deposition made by the employee of the third party. No corroborative material was brought on record to support the statement so given, which is mandatory when the assessee denies any such payment. Further, the AO also did not provide opportunity of cross examination to the assessee, even after the said request was made by the assessee. Under these set of facts, we are of the view that the impugned addition of Rs. 18,64,200/- cannot be sustained. In this regard, we may take support from the decision rendered by SMC bench of Mumbai Tribunal in the case of Naren Premchang Nagda vs. ITO (IT Appeal No. 3265/ Mum/ 2015 dated 08-07-2016), wherein an identical issue was decided as under :- 17. We also notice that the AO did not provide oppo....
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....erwise during the entire reassessment proceedings the veracity and reliability of the data recorded in the pendrive was not checked or tested. Therefore, in such a scenario no addition is warranted in the case of assessee. Reliance in this regard has been placed on the decision in case of Heena Dashrath Jhanglani ITA no. 1665/Mum./2018 (Assessment Year : 2007-08) wherein the Coordinate Bench of ITAT had decided the issue in favour of assessee and the relevant portion is being reproduced herein below: 10. I have considered rival submissions and perused material on record. Undisputedly, the genesis of the addition made of Rs. 42 lakh on account of alleged payment of on-money in cash towards purchase of a flat lies in a search and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing Officer has not discussed in detail the nature of incriminating material / evidence available on record to indicate payment of on-money in cash by the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th March 2015, which is reproduced by the Assessing Officer in the assessment order, it appears ....
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....quired to not only confront such adverse materials to the assessee but also offer him a reasonable opportunity to rebut / contradict the contents of the adverse material. Further, the assessment order reveals that the Assessing Officer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for making the disputed addition. However, it is the allegation of the assessee, which prima-facie appears to be correct, that the Assessing Officer has not provided the full text of such statement recorded and has also not allowed the assessee an opportunity to cross-examine Shri Niranjan Hiranandani, and other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural justice and against the basic principle of law. In this context, I may refer to the decision of the Tribunal, Mumbai Bench, in Nikhil Vinod Agarwal (supra). Thus, for the aforesaid reason, the addition made cannot be sustained. 11. Even otherwise also, the addition made is unsustainable because of the following reasons. As discussed earlier in the order, the basis for addition on account of on-money is the information contained in the pen drive found duri....
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....h additions are not sustainable on the touchstone of Hon'ble Supreme Court decision in the case of CIT us P.V Kalyana sundasram 164 Taxman 78 (SC). Moreover there is nothing on record to suggest that so called electronic evidence collected by revenue at the builder's office is compliant with the requirement of section 65B of Evidence Act regarding admissibility of electronic evidence. Hence, I set aside the orders of the authority below and direct that the addition be deleted. 16. In the case of Mrs. Mamta Sharad Gupta, ITA No.1553/M/2021 Assessment Year: 2011-12, wherein the coordinate bench has held as under: 9. Since the sole issue raised in this appeal is covered by the order (supra) passed by the co-ordinate Bench of the Tribunal addition made in this case is not sustainable. Because the addition is made merely on the basis of statement made by one Mr. Suraj Parmar, one of the promoters of Cosmos Group under section 132(4) of the Act without any corroboration. Moreover, statement or any material seized during the course of search under section 132(4) of the Act can only be used against Mr. Suraj Parmar of Cosmos Group and not against the assessee without an....