AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 961
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....rchase 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 an individual. The assessee filed its 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 28.03.2022. In response to the notice, the assessee filed its 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 his statement recorded during the course of the search, Shri Imran Ansari stated that he has been working with the Rubberwala Group of ....
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....o-ordinate 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 years under consideration and upheld the additions made by the AO. Being aggrieved, the assessee is in appeal before us. 7. During the hearing, the learned Authorised Representative ("learned AR") reiterated the submissions made by the assessee before the learned CIT(A) and submitted that no cash payment was made to the developers/builders for the purchase of the shops, and the entire payment was made by way of account payee cheques. As regards the statement of Shri Imran Ansari and the details found in the pen drive seized during the course of the search, the learned AR submitted that neither the statement nor the seized material/document/pen drive was confronted with the assessee. Further, it was submitted that the Excel sheet and third-party statement were relied upon by the Revenue without corroborating the same with any independent evidence. The learned AR submitted that, in a ....
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....wala group confirmed that the cash has been collected from the respective buyers of the shops. However, on the other hand, the assessee denied payment of cash. We noticed that during the search a pendrive with the details of cash transactions with respect to Rubberwala group was found, which was confirmed through statement of Shri Imran Ansari recorded U/s 132(4) of the Act and on this basis, 153C order was framed and the same was upheld by the Ld. CIT(A). 9. We noticed that Ld. CIT(A) although referred the decision of the coordinate bench in case of Rajesh Jain on identical issue but misplace its reliance. After having gone through the basic facts of Rajesh Jain case which is mentioned by Ld. CIT(A) in its order and the same is reproduced as under: 5.1. On 17.03.2021, the residential premise of the assessee was also covered by way of search action u/s 132 of the IT Act, 1961. Search action was also initiated on Rubberwala group on 17.03.2021. In such action along with premises (offices/sites/others) of Rubberwala group entities, residences of various key persons including its promoter and director Shri Tabrez Shaikh, and Shri Imran Ansari - a key employee of Rubb....
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....Ansari and not from any office of Rubberwala Group. 5.4. It was ascertained that the data is being maintained by Shri Imran Ansari in an excel file namely "consolidated 1 2 3 balance". In the said file sheets with different name viz "Master", "Payment" and "Cheque" etc. are found to be maintained. It is also found out that in respect of the sale of shops in the said project, comprehensive data is being maintained in these excel sheets, and in this regard, it is important to mention that the sheet "Master" is so elaborate that the data in the said sheet is spread across 98 columns. Shri Imran Ansari has explained all 98 columns of "Master" sheet and such explanation of each and every column by Shri Imran Ansari further support the fact that the he was maintaining the said data and therefore could explain all these columns with relevance and purpose. Shri Imran Ansari in response to Question no. 22, 23 and 24, has explained in detail the meaning and relevant of each and every column. In column B, against the name of 'Raj Bhai Jain'/'Raj BhaiJain(I.S)', total 27 shops have been entered. Further, these 27 shops are stated (by Shri Imran Ansari) to be booked by the assessee onl....
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....) on this issue. 13. In the appeal filed by the assessee, the addition of alleged cash payment of Rs. 18,64,200/- in respect of purchase of shop confirmed by Ld CIT(A) is being assailed. 14. We noticed earlier that the assessee had purchased a shop in the commercial premises developed by Rubberwala group. During the course of search conducted in their hands, incriminating documents containing details of cash collected on sale of various shops were found. The employee of Rubberwala group confirmed that the cash has been collected from the buyers of shops. However, the assessee denied payment of cash. However, the AO relied upon the materials found in the case of Rubberwala group and accordingly made addition of Rs. 18,64,200/- in AY 2020-21. The LdCIT(A) also confirmed the same. 15. The ld A.R submitted that the addition was made on the basis of third party statement and documents found from the premises of third party. As per the deposition made by the employee of Rubberwala group, the buyers were given a diary, in which, the details of cash received were acknowledged. The Ld A.R submitted the search officials did not find any such diary with the assessee....
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....as neither confronted assessee with any of the material found during the search on Rubberwala group and even no evidence or seized document has been referred to where any name of the assessee has been explicitly mentioned on account of paying any 'on-money'. 12. Although it has been claimed in the order of assessment that the assessee had paid on money, but again no such statement has been confronted, neither the seized material /documents /pendrive was confronted to the assessee nor the copy of statement of Key person was confronted. 13. Therefore, in our view, the information if any found in the pendrive etc., cannot be considered as 'credible evidence', unless they have been corroborated with any other evidence. Since the assessee was not provided with the adverse material, if any, based on which notice u/s 153 of the Act, was issued, in our view, it hampers the primary and fundamental requirement of natural justice. 14. As far as the information claimed in pendrive is concerned, the same was not found from the possession of the assessee but was found as per order of assessment, during the search and seizure conducted in the case of third party therefo....
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....ct from Shri Niranjan Hiranandani. The assessee had also requested the Assessing Officer for allowing her to cross-examine Shri Niranjan Hiranandani and other parties whose statements were relied upon. Apparently, this request of the assessee was not acceded to by the Assessing Officer. When the assessee took up the aforesaid issue before the first appellate authority, the learned Commissioner (Appeals) in letter dated 18th July 2016, had clearly directed the Assessing Officer to provide the assessee all adverse materials / documentary evidences available with him indicating payment of on-money. However, on a perusal of the remand report dated 23th June 2017, a copy of which is at Page-53 of the paper book, it is very much clear that the Assessing Officer has completely avoided the issue and there is no mention whether the assessee was provided with all the adverse material and if, not so, whether he has provided them to the assessee as per the directions of the learned Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of Rs. 42 lakh made on account of on- money payment in cash is without complying with the primary and fundamental re....
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....ned in the pen drive nor the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani are enough to conclusively establish the factum of payment of on-money by the assessee. At best, they can raise a doubt or suspicion against the conduct of the assessee triggering further enquiry / investigation to find out and bring on record the relevant fact and material to conclusively prove the payment of on-money by the assessee over and above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / material on record to prove the payment of on-money by the assessee. More so, when the assessee from the very beginning has stoutly denied payment of on-money in cash. Notably, while dealing with a case involving similar nature of dispute concerning similar transaction with another concern of Hiranandani Group, the Tribunal in case of Shri Anil Jaggi v/s ACIT (supra) has held as under:- ........ 15. Reliance has also been placed in the case of Monika Anand Gupta I.T.A. No. 5561/Mum/2018 (A.Y. 2011-12) whereas coordinate bench held as under. 6. I have heard both the parties and perused the record.....
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.... 19. Apart, the AO during the course of assessment also failed to provide the opportunity to cross examine of the witnesses, whose statements were relied upon by the revenue which resulted in 'breach of principles of natural justice'. In this regard, reliance is being placed upon the decision of Hon'ble Supreme Court 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'. 20. In the case of CIT Vs. Odeon Builders Pvt. ltd. (418ITR 315), 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' 21. In the case of H.R. Mehta v/s Assistant Commissioner of Income-tax, Mumbai 72 taxmann.com110 (Bombay) wherein it was held as under In the light of the fact that the money was advanced apparently by the acco....
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..... 8. It is observed, while explaining the modus operandi Shri Imran Ansari in response to Question No.26 had submitted that at the time of booking of shop the buyer is informed about the component of payment to be made in cash or through cheque. In case of cash payment Shri Imran Ansari verified the amount of cash to be accepted from the buyer and takes the buyer to Mr. Abrar Ahmad (cashier working in Rubberwala Housing and infrastructure Ltd. who received the cash from the buyers. After receiving confirmation from Mr. Abrar Ahmad regarding the cash received, Shri Imran Ansari makes necessary entries in the diary given to the buyer at the time of booking of shop mentioning the cash amount along with date of payment and also puts his signature against each entry. Surprisingly, though, shops have been sold to number of buyers however not a single diary has been recovered from any of the buyers to demonstrate the fact that against the cash payment entries have been made in the diary and initiated by Shri Imran Ansari. In fact, except the pen drive containing the excel sheet, the AO has not referred to any other incriminating material. 9. Further in response to Questi....