TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 240
X X X X Extracts X X X X
X X X X Extracts X X X X
....147 r.w.s. 148 of the Act is applicable and not the provisions of section 153C. The issuance of the said notice and consequent assessment farmed u/s.153C is bad in law, illegal, without jurisdiction and void ab-initio; 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the AO has not referred to any incriminating material in the satisfaction note issued to the Appellant; 4. The Ld. CIT(A) erred in confirming the assessment order by not appreciating that the Assessing Officer (AO) had failed to provide the opportunity for cross-examination of the third party whose statement and/or material was relied upon to frame the assessment. Under the circumstances and in law, the Assessment Order passed u/s.153C is against the principal of natural justice, bad-in-law and liable to be quashed; 5.1 The Ld. CIT(A) erred in confirming the addition of Rs. 4,90,350/- u/s.69 of the Income Tax Act, 1961 as unexplained investments on account of alleged cash payment towards the purchase of shop premises over and above the agreement value of shop. The Ld. CIT(A) failed to appreciate that the addition is based solely on the uncorro....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the same as additional income @ 8% by M/s. RHIL. The assessee being one of the purchasers of shops from the said project was also assessed as to the nature and source of the said investment amounting to Rs. 14,01,560/- made during the year under consideration. After duly considering the assessee's submission the Ld. AO passed the assessment order dated 29.03.2024 u/s 153C of the Act determining the total income at Rs. 26,76,500/- after making an addition of Rs. 4,90,350/- as unexplained investment u/s 69 of the Act towards on money receipt alleged to have been paid to M/s. RHIL. 4. The assessee was in appeal before the first appellate authority who vide order dated 11.10.2025 upheld the addition made by the Ld. AO on similar ground as that of the Ld. AO. 5. The assessee is in appeal before us, challenging the order of the Ld. CIT(A) on the above mentioned grounds. 6. The Learned Authorised Representative ('Ld. AR' for short) for the assessee commenced his arguments stating that there was no seized material pertaining to the assessee and the Ld. AO merely relied on the material seized from the third party which did not establish any nexus with regard to the assessee. The L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....relied upon by the Ld. AR, we do not find any justification in deciding this issue against the assessee. The relevant extract of the decision of the co-ordinate Bench in the case of Pravin Khetaramm Purohit vs. DCIT in ITA No.4742/M/2025 & Ors. order dated 15.10.2025 relied upon by the Ld. AR is cited hereinunder for ease of reference: "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 authorities. From the records, we noticed that the assessment was completed u/s 153C on account of the fact that a search and seizure action was conducted on 17.03.2021 on Rubberwala group. In search action, premises of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL), its promoter and director-Shri Tabrez Shaikh, and a key employee of Rubberwala group Shri Imran Ansari, who was handling sale & registration of shops in "Platinum Mall" project of RHIL were covered. Among others, statement of these persons were recorded on oath on various dates during the course of search as well as post search proceedings. The employee of Rubberwala group confirmed that the cash has been c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ps, 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 is maintained by him in excel sheets. Corroborating to the fact that data is being maintained by Shri Imran Ansari in excel sheet, during search proceedings at the residence of Shri Imran Ansari, a 16GB Pendrive was retrieved from his possession. The said pen drive is accepted by Shri Imran Ansari belonging to him and he also accepted that this pen drive is containing data maintained for the sale of shops in Platinum Mall. Shri Imran Ansari explained that this data is prepared by him. Shri Imran Ansari's this acceptance also corroborates with the fact that the said data was retrieved from the residential premises of Shri Imran Ansari and not from any office of Rubberwala G....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mran 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 also noticed that the decision of the Coordinate Bench of ITAT in the case of Rajesh Jain in ITA No. 3842& 3841 & ITA No. 3954,3952,3951 and 3950/Mum/2023 on the identical facts is reproduced herein below: 12. The appeal filed by the revenue for AY 2020-21 is with regard to the relief granted by Ld CIT(A) holding that the cash payments relating to the shops purchased by others cannot be assessed in the hands of the assessee. The decision rendered by us in AY 2018-19 and 2019-20 on an identical issue on merits in the earlier paragraphs would apply in this year also. Following the same, we affirm the order passed by LdCIT(A) on this issue. 13. In the appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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, 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. 11. From the above we find that the Coordinate bench has consider the same facts and rightly decided the issue in favour of the assessee and since the facts of the present case are also identical with the facts of Rajesh Jain's (supra) case, therefore the said decision will be application on the facts of the present case as well. Moreover, the assessee categorically denied having paid any amount in cash over and above the agreement value. The AO has neither confronted assessee wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 concerns are mentioned and further, in the statement recorded under section 132(4) of the Act on 14th March 2014, Shri Niranjan Hiranandani, has admitted receipt of on-money in cash towards sale of flats / shops. Thus, it is clear that except these two pieces of evidences the Assessing Officer had no other evidence on record which demonstrates that the assessee had paid on-money in cash for purchase of the flat. It is further relevant to observe, from the assessment stage itself the assessee has requested the Assessing Officer to provide him with all adverse materials and full text of the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranand....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ause 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 of further corroborative evidence to establish that the contents of the pen drive are correct and authentic to the extent that the assessee paid on-money in cash, no addition can be made under section 69B of the Act. Further contention of the assessee is that in the statement recorded under section 132(4) of the Act, Shi Niranjan Hirandani has not made any reference to the assessee, therefore, in absence of any other corroborative evidence to establish that assessee has paid on-money in cash, no addition can be made. I find substantial merit in the aforesaid submissions of the assessee. In my view, neither the information contained in the pen drive nor the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....zed 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 allowed. 17. For the above proposition, we place reliance upon the decision in the case of ITO Vs. Vinod Aggarwal, ITA No. 2573/Mum/2017, ITO Vs. Nikhil Vinod Aggarwal, ITA No. 2574/Mum/2017 Heena Dashrath Jhanglani Vs. ITO, ITA No.1665/M/2018, Padmashrree Dr. D.Y. Patil University Vs. DCIT, ITA Nos. 3264 to 3268/Mum/2022. 18. From the records we also noticed that no statement was provided to the assessee, and none of the persons, whose statements were relied upon were produced for cross- examination. Even the extract of the statement mentioned in the assessment order does not indicate the name of the assessee. 19. Apart, the AO during the co....