TaxTMI 
TaxTMI 
2026 (1) TMI 43
X X X X Extracts X X X X
X X X X Extracts X X X X
....ged on-money payment in cash for the purchase of shops by the assessee. 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 engaged in the trading of healthcare products through his proprietary concern, M/s Shivam Enterprises. The assessee filed his original return of income for the assessment years under consideration. 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 failed to file his return of income for the years 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 6. The learned CIT(A), vide common impugned order for the assessment years under consideration before us, rejected the contentions of the assessee both on jurisdiction as well as on merits and held that the details available in the pen drive are duly corroborated by the statement of Shri Imran Ansari recorded during the course of search proceedings. The learned CIT(A) vide impugned order also rejected the reliance placed by the assessee on the decision of the Coordinate Bench of the Tribunal in Rajesh Jain, in ITAs No.3842 and 3841/Mum./2023, wherein, as per the assessee, 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. 7. During the hearing, the learned Authorized Representative ("learned AR"), at the outset, submitted that the shops 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 for both shops was paid on 11.12.2018, and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch only suggests that the transaction between the assessee and the builder took place in the financial year 2018-19, relevant to the assessment year 2019- 20. Therefore, we do not find any merits in the impugned additions made under section 69 of the Act for the assessment years 2017-18 and 2018-19, as the purchase transaction itself took place in the assessment year 2019-20. 10. As regards the addition made in the assessment year 2019-20, it is evident from the record that the Revenue's sole reliance is on the statements of Shri Imran Ansari recorded during the search and the Excel sheet found from the pen drive retrieved from 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 det....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rector Shri Tabrez Shaikh, and Shri Imran Ansari - a key employee of Rubberwala group handling sale & registration of shops in "Platinum Mall" project of RHIL were covered under section 132 of the Act. Among others, statement of these persons were recorded on oath on various dates during search as well as post search 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... shops are stated (by Shri Imran Ansari) to be booked by the assessee only. Also, ShriTabrez Ahmed Shaikh, Director and Promoter of the RHIL, while deposing statement during post search proceedings on 19.08.2021 categorically confirmed the admission made by Shri Imran Ansari, and has confirmed 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 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 upd....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mitted the search officials did not find any such diary with the assessee during the course of search operation conducted in his hands. Hence the statement so given by the employee stands disproved. He submitted that the AO has simply relied upon third party statement without bringing 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uring the search and seizure conducted in the case of third party therefore, in the absence of corroborative evidence to establish that the contents of pendrive are correct and authenticated to the extent assessee paid 'on- money' in cash, no addition can be made and even otherwise 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 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 incrimin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... payment in cash is without complying with the primary and fundamental requirement of rules of natural justice. It is well settled proposition of law that if the Assessing Officer intends to utilize any adverse material for deciding an issue against the assessee he is required 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 addi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under. 6. I have heard both the parties and perused the record. I find that the addition for on-money payment has been done in this case without any corroborative material found from assessee. The addition is solely based upon some statement of the builder. Such additions are not sustainable on the touchstone of Hon'ble Supreme Court decision in the case of CIT vs 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the light of the fact that the money was advanced apparently by the account payee cheque and was repaid vide account payee cheque the least that the Assessing Officer should have done was to grant an opportunity to the assessee to meet the case against him by providing the material sought to be used against him in arriving before passing the order of assessment. This not having been done, the denial of such opportunity goes to root of the matter and strikes at the very foundation of the assessment and, therefore, renders the orders passed by the Commissioner (Appeals) and the Tribunal vulnerable. The assessee was bound to be provided with the material used against him apart from being permitting him to cross examine the deponents whose statements were relied upon by him. Despite the request seeking an opportunity to cross examine the deponents and furnish the assessee with copies of statements and disclose material, these were denied to him. 22. Taking into consideration the entire facts and circumstances and legal prepositions as discussed by us above, we direct the AO to delete the addition, consequently these grounds raised by the assessee are allowed." 11. During t....