TaxTMI 
TaxTMI 
2025 (12) TMI 1274
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....money payment in cash for the purchase of a shop. 4. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual having income from business and profession, and interest income. Pursuant to the search and seizure action carried out under section 132 of the Act on Rubberwala Group, wherein the premises of M/s Rubberwala Housing and Infrastructure Ltd. ("RHIL"), its promoters and Director- Shri Tabrez Shaikh, and a key employee of the Group, Shri Imran Ansari, who was handling sale and registration of shops in "Platinum Mall" project of RHIL were covered, notice under section 153C of the Act was issued to the assessee on 28.03.2023. In response to the notice, the assessee filed her return of income for the year under consideration. During the search and seizure action on Rubberwala Group, the residence of Shri Imran Ansari at 109, 2nd Floor, Prabhat Sadan, 109/120 RBC Marg, Agripada, Mumbai Central, Mumbai - 400011, was covered. In his statement recorded during the course of the search, Shri Imran Ansari stated that he has been working with Rubberwala Group of entities since 2010 ....
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...., a similar addition on the basis of the search conducted on Rubberwala Group was deleted. Accordingly, the learned CIT(A), vide impugned order, dismissed the assessee's appeal for the assessment years 2017-18 to 2019-20 and upheld the additions made by the AO. Being aggrieved, the assessee is in appeal before us. 6. During the hearing, the learned Authorized Representative ("learned AR"), at the outset, submitted that the shop in "Platinum Mall" was booked by the assessee in the financial year 2018-19, relevant to the assessment year 2019-20 and the booking amount was paid on 01.01.2019, and therefore, no transaction in respect of the shop was carried out by the assessee during the assessment years 2017-18 and 2018-19. As regards the assessment year 2019-20, the learned AR submitted that the shop was purchased at a consideration of Rs. 21,58,425/-, which was higher than the ready reckoner rate of Rs. 16,31,691/-. The learned AR reiterated the submissions made by the assessee before the lower authorities and submitted that no cash payment was made to the developers/builders for the purchase of the shop, and the entire payment was made by way of an account pay cheque. As rega....
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....his possession during the search. We find that on the basis of identical statements and information in the pen drive, a similar addition was deleted by the Co-ordinate Bench of the Tribunal in Praveen Khetaramm Purohit vs DCIT, in ITAs No. 4742 to 4744/Mum/2025, vide its order dated 15.10.2025. From the perusal of the said order, which was relied upon by the learned AR during the hearing, we find that the Co- ordinate Bench also took note of the earlier decision of the Tribunal in Rajesh Jain (supra). The Co-ordinate Bench of the Tribunal, finding the details found from the possession of Shri Imran Ansari as uncorroborative with any independent evidence and relying upon various judicial precedents, directed the AO to delete the addition made under section 69 of the Act in the hands of the taxpayer on the basis of a search and seizure action conducted on the Rubberwala Group and its employee. The relevant findings of the Co-ordinate Bench in Praveen Khetaramm Purohit (supra) are reproduced as follows: - "8. We have heard the arguments for both the parties and have also perused the material placed on record, judgements cited before me and the orders passed by the revenue aut....
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....ide 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 Shri Tabrez Shaikh (Director/CMD of RHIL and Promoter of Rubberwala Group). On probing further, Shri Imran Ansari, in response to Q. no. 16, stated that these prices, as decided by Shri Tabrez Shaikh, are communicated to him orally. He also revealed in response to Q. no. 17 of the said statement that data related to shops ....
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....ponse 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 ShriAbrar Ahmed (who during the search established to be a person handing cash for the Rubberwala Group). ShriAbrar Ahmed, after receiving the cash confirms to Shri Imran Ansari who update the diariesand 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 aforementioned, the number, for the shops for which the assessee has paid the cash component, is mentioned as 9892196071, which is the assessee's own number. Thus, it makes clear that for the cash payment part, for all the above mentioned 27 shops, Shri Imran Ansari used to follow up with Shri Rajesh Jain/assessee only..................... 10. We ....
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....he 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 opportunity to cross examine the persons from Rubberwala group, on whose statements the AO had placed reliance upon. The Hon'ble Supreme Court has held in the case of Andaman Timber Industries vs. Commissioner of Central Excise (2015)(62 taxmann.com 3)(SC) that not providing opportunity to cross examine is a serious flaw and it will make the order nullity,....
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....007-08) 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 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 that the incriminating materials are in the form of pen drive found and seized from the residence of one of the employees of Hiranandani Group and a statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani, Director and Promoter of the Group, wherein, the details of on- money paid by buyers / prospective buyers to Hiranandani Group conc....
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....e 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 during the search and seizure operation and the statement recorded under section 132(4) of the Act. As regards the information contained in the pen drive, it is the contention of the assessee that the said pen drive was not found from the possession of the assessee but in course of search and seizure operation conducted in case of a third party. Therefore, in absence ....
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....y 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 any corroboration. Excel sheet alleged to have been recovered from the office of builders is also not admissible being not proved under section 65 of the Evidence Act. So in view of the matter, addition made by the AO and sustained by the Ld. CIT(A) is not sustainable in the eyes of law, hence ordered to be deleted. Consequently, appeal filed by the assessee is al....