TaxTMI 
TaxTMI 
2026 (3) TMI 675
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....eals under adjudication. 3. Coming to ITA No. 5492/M/2025, it is observed that a search and seizure action under Section 132 of the Act was carried out on 17.03.2021 on Rubberwala group and its associates, including in the residence of Shri Imran Ashfaque Ansari, wherein his statement was recorded on oath at his residence and a 16 GB pen drive was also retrieved from his possession. Mr. Ansari in his statement stated that he has been working with Rubberwala group since 2010 and inter-alia holding sales and registration of the shops in Platinum Mall project of M/s. Rubberwala Housing and Infrastructure Ltd. (RHIL). Mr. Ansari also explained the complete procedure of the sale of shops in the "Platinum Mall" project and revealed that total price of shops contains cash component and banking channel component, which were decided by Shri Tabrez Shaikh (Director of RHIL and promoter of Rubberwala Group). Mr. Ansari also stated that data related to shops is maintained by him in Excel sheets and stored in Pen drive. 4. Thus, the AO on the basis of aforesaid search and seizure proceedings carried out under section 132 of the Act, issued a notice under section 153 (c) of the Act to the ....
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....69 of the Act. The AO ultimately added the said amount of Rs. 10 Lakhs to the income of the Assessee, vide assessment order dated 06.03.2024 under section 153C of the Act. 9. The Assessee, thus, being aggrieved against the decision of the AO in making the addition of Rs. 10,00,000/-, preferred first appeal before the Ld. Commissioner by raising various grounds including challenging the validity of the notice issued under section 153C of the Act by contending that the notice should have been issued by following the provisions of section 147 read with section 148 of the Act but not section 153C of the Act. 10. The Ld. Commissioner, by taking refuge of the judgment of the Hon'ble jurisdictional High Court in the case of Sejal Jewellary v. Union of India [[2025] 171 taxmann.com 846 (Bombay)], wherein it has been held that once search action under section 132 of the Act is the foundation of the case, the assessment could be initiated only under section 153A/153C of the Act, rejected the aforesaid ground raised by the assessee. 11. The Ld. Commissioner also considered another ground of the assessee, such as not providing an opportunity for cross-examination of certain individual....
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....he Assessing Officer is based solely on third party statements and excel sheets saved on pen drive recovered from the premises of the third party and without any direct documentary evidence or proof of cash transaction relating to the Assessee. Further, no statement of the Assessee was recorded and the entire exercise was conducted behind her back, thereby violating the principles of natural justice. 16. The Ld. Commissioner, by considering the pen drive recovered from the premises of Mr. Ansari, wherein Excel sheets titled "consolidated 1 2 3 balance" were saved, including detailed information qua sale of shops in the Platinum Mall project, the statement of Mr. Ansari, and the fact that Mr. Tabrej Shaikh, Director and Promoter of RHIL, in his post search deposition dated 19.08.2021, had accepted the Excel Sheets and the statement made by Mr. Ansari as true and offered income @ 8% of the said cash component, as unaccounted receipts and while relying on various judgments, ultimately affirmed the aforesaid addition on merits as well. 17. Thus, the Assessee, being aggrieved, has preferred the instant appeal, which is under consideration before us. 18. Heard the parties and pe....
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....tion for a consideration/value, more than the value determined by the Stamp Duty Valuation Authority. Further, the Assessing Officer also failed to brought on record any comparable case in the same shopping mall, so as to ascertain the actual rate of transactions made . 23. Thus, in the aforesaid facts and circumstances, as no incriminating material directly connected with the assessee, such as cash voucher, receipt, ledger or any document signed by the Assessee, was ever found during the search or post-search proceedings, either from the Rubberwala Group or Mr. Ansari, whose statement has been made the foundation for making the addition, in that eventuality, the onus shifts upon the Revenue Department to substantiate/corroborate the evidence collected during the search proceedings and to offer an opportunity for confrontation or cross-examination of the witnesses, whose statements were relied upon, while making the addition. Which the Revenue failed to substantiate the evidence collected and also failed to give any opportunity of cross examinations of the witnesses whose statements were relied on and/or made a foundation for making the addition. 24. We further observe that i....
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....a serious flaw and it will make the order nullity, as it amounts to violation of principle of natural justice. We are of the view that the above said decision of Hon'ble Supreme Court shall apply to the facts of the present case. 18............................................................................................................. .................................................................................................................. .............................................................................................. 19. In view of the foregoing discussions, we are of the view that the addition of Rs.18,64,200/- made by the AO cannot be sustained. Accordingly, we set aside the order passed by Ld CIT(A) and direct the AO to delete this addition." 26. The Hon'ble co-ordinate Bench of the Tribunal in Pravin Khetaramm Purohit (or Parveen Kheta Ram) vs. DCIT (ITA Nos. 4742 to 4744/M/2025, decided on 15.10.2025) also dealt with identical addition based on the same search and seizure and material recovered and statements recorded and ultimately deleted the identical addition by observing and holding as under: ....
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....king into consideration the entire facts and circumstances and legal prepositions as discussed by us above, we direct the AO to delete the addition." 27. We further observe that the Tribunal in case of Heena Dashrath Jhanglani ITA no.1665/Mum./2018 (Assessment Year: 2007-08) has also dealt with identical addition made on the basis of Pen drive recovered during the search and without any corroborative material qua alleged cash / on money and ultimately deleted the addition by observing and holding as under: "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, i....
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....erse 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 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 ....
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....carefully perused the records and have also taken note of the rival submissions. We are of the considered view that there is no authenticity of the impugned screenshot which does not bear any signature of government authority. It appears to be a rough calculation only. Moreover, we find that the AO has also not brought on record any comparable case of the said locality so as to ascertain the actual rates of transactions made. The market rate adopted by the AO is contrary the Stamp Duty rate which is government fixed rate of the property under consideration that has been brushed aside by the AO without finding any infirmity in the same. Moreover, no investigation has been made with the Registration office/Stamp Duty authorities in this regard but he made the addition of such a huge sum without making any effort to corroborate his findings. The WhatsApp chat/post is nothing more than rough working communication between buyer's son and his accountant. It does not specifically mention either the name of the assessee or even the impugned property transaction. The assessee was searched by the Department. However, no corroborative evidence of receipt of any cash over and above the dis....