TaxTMI 
TaxTMI 
2026 (6) TMI 1386
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....ng the facts, evidences and explanations placed on record and the applicable provisions of the Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in enhancing the assessed income of the appellant by a sum of Rs. 19,58,230, without accepting submission of appellant which the enhancement is illegal, arbitrary and bad in law. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the Ld. AO to initiate proceedings for alleged violation of section 269SS, which is bad in law. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the action of the Ld. AO despite the fact that the appellant was not afforded effective and meaningful opportunity of cross-examination of the person(s) and of the material relied upon by the Ld. AO, thereby violating the principles of natural justice. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in placing reliance on the basis of certain documents and information allegedly gathered behind the back of the appellant, without furnishing copies o....
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.... that the assessee has categorically denied having made any cash payment to RHIL in connection with the purchase of the said commercial property. It was further submitted that no opportunity of cross-verification was granted to the assessee in respect of the additions made by the Ld. AO. The Ld. AR respectfully placed reliance on the order of the Coordinate Bench of the ITAT, Mumbai, in the case of Ankit Jems (P.) Ltd. vs. ITO reported in (2025) 178 taxmann.com 454 (Mum-Trib), wherein it was held that an addition under section 69, made solely on the basis of information received from investigation proceedings in another group case, could not be sustained in the absence of any cogent evidence against the assessee, particularly when the assessee had denied the transactions and the purchase records did not reflect any such entries. 5. The Ld. AR further contended that an identical factual issue had already been adjudicated by the Coordinate Bench of the ITAT, Mumbai, in cases arising out of the search conducted in the Rubberwala Group. The Coordinate Bench has consistently held that additions relating to alleged cash payments for the purchase of commercial properties, based solely ....
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....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 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 scenariono addition is warranted in the case of assessee. Reliance in this regard has been placed on the decision in case of HeenaDashrathJhanglani 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:" 7. The Ld.AR advanced his argument and relied on the order of the Coordinate Bench of ITAT Mumbai 'D' Bench in the case of Dimple Shailesh Jain vs DCIT, in ITA No.6732 and 6733/Mum/2025 date of order 01.09.2025. The relevant paragraph no.12 of the said order is reproduced as below: "12. Having heard the ....
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....he search proceedings. Even otherwise, the alleged admission was vague, indicating that "Rs. 4-5 lakhs may have been paid in cash," which is inconsistent with the figures mentioned in the statement of Shri Imran Ansari. 7. Subsequently, during assessment proceedings, the assessee retracted the said statement and clarified that the entire consideration was paid through banking channels only. It is a settled position of law that a mere admission, without corroborative evidence, cannot form the sole basis for addition. 8. The Learned AO has made the addition purely on the basis of such uncorroborated admission, without bringing any independent evidence on record. Further, the Learned CIT(A) has enhanced the income based on an alleged Excel sheet, which, in the absence of authentication and corroboration, cannot be treated as conclusive evidence for making or enhancing an addition. 9. The identical issue has been considered by various Coordinate Benches of the Hon'ble Mumbai Tribunal, wherein it has been consistently held that such additions are not sustainable in law. The ratio laid down in these decisions squarely applies to the present case. 1....
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.... is contrary to settled legal principles, arbitrary in nature, and liable to be struck down. 14. In view of the above facts and legal position, the addition made by the Learned AO and enhanced by the Learned CIT(A) is arbitrary, unsupported by evidence, and liable to be deleted." 9. The Ld. DR argued and contended that the RHIL group had accepted the cash transactions with the parties. So, the cash transactions are duly accepted on basis of the recorded statement. Though the RHIL declared the cash component during the search action and declared net profit @8% and paid the tax. So, the Ld.DR supported and relied upon the orders of the revenue authorities. He respectfully relied on the order of the Hon'ble Gujrat High Court in case of Kamleshbhai Dharamshibhai Patel vs. CIT reported in [2013] 31 taxmann.com 50 (Guj). The Ld. DR invited our attention in relevant paragraph of the impugned appellate order which is reproduced as below:- "8.8 Further, at the same time, it is seen that full facts were not placed before the Hon'ble ITAT and it has also not been examined that Excel sheet clearly stated the agreement value as well cash component both. Imran Ashfaque A....
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....llant. So, the further opportunity to present the case is not tenable/required as the case is based on solid evidence and material in hand. Further the appellant in its sworn statement itself admitted that the cash was cash loan from his wife and his mother. The same was also submitted during the course of assessment proceedings. Therefore, the AO is directed to invoke section 269SS of the Act for accepting cash loan. 11 In view of the discussion made above, it is evident that the appellant has paid cash of Rs. 24,58,240/- against the said shop. The evidence of cash payment is based on corroborative digital evidence, multiple sworn depositions and voluntary admissions of developer groups on the basis of investigation carried out by the Inv. Wing. Therefore, the issues raised by the appellant against the SCN is not moreover relevant in the present case of the appellant. Therefore, the addition of Rs. 5,00,000/- made by the AO is not only sustained but also enhanced by an amount of Rs. 19,58,230/- on the basis of above discussion. In view of discussion made in preceding para the AO is directed to initiate the penalty proceeding u/s 269SS of the Act. 12. In light of ....
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....arch conducted in the case of the Rubberwala Group and certain excel-sheet data allegedly recovered from a pen drive belonging to an employee of the developer group. Admittedly, no incriminating material evidencing any cash payment has been found from the possession of the assessee, nor has any documentary evidence been brought on record establishing that the assessee paid any amount over and above the consideration disclosed in the registered agreement. The statements relied upon by the revenue were neither furnished to the assessee in entirety nor was any effective opportunity of cross-examination granted. Consequently, the addition suffers from a serious violation of the principles of natural justice. 13. We further note that the Coordinate Benches of the Tribunal, while dealing with identical additions arising from the very same search action in the Rubberwala Group, have consistently held that additions based merely on excel sheets, pen-drive data, or third-party statements, without independent corroborative evidence linking the assessee to any undisclosed investment, cannot be sustained. The decisions in Bhavana Vikram Jain (supra), Akhraj Pukhraj Chopra (supra), Kulsum Aa....