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Facts
Proceedings under Section 153C were initiated against the assessee based on search and seizure operations at the 'Rubberwala' group. Incriminating documents including a pen drive and excel sheets containing details of cash transactions for property purchases were found. The AO made additions based on this material and third-party statements.
Held
The Tribunal held that the additions were unsustainable as they were based on third-party information without corroboration and without providing the assessee an opportunity for cross-examination. The Tribunal emphasized that suspicion cannot replace proof and that fundamental principles of natural justice were violated.
Key Issues
Whether additions made solely on the basis of third-party information and without allowing cross-examination of witnesses, violating principles of natural justice, are sustainable.
Sections Cited
153C, 69, 132, 69B
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Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT (ACCOUNTANT & MS. KAVITHA RAJAGOPAL
ORDER Per O. P. Kant (A.M.)
These two appeals by the Assessee are directed against the common order dated 01.09.2025 passed by the Ld. Commissioner of Income Tax Appeals/National Faceless Appeal Commissioner of Income Tax Appeals/National Faceless Appeal Commissioner of Income Tax Appeals/National Faceless Appeal Center, Delhi [in short Ld. CIT (A)] for Assessment Year 201 Center, Delhi [in short Ld. CIT (A)] for Assessment Year 201 Center, Delhi [in short Ld. CIT (A)] for Assessment Year 2019- 20and 2020-21. The issue in dispute being common in both 21. The issue in dispute being common in both 21. The issue in dispute being common in both appeals, same were heard together and disposed of by way of a appeals, same were heard together and disposed of by way of a appeals, same were heard together and disposed of by way of a consolidated order for the sake of convenience and avoid consolidated order for the sake of convenience and avoid consolidated order for the sake of convenience and avoid repetition of fact. .
Firstly, we take up the appeal of the assessee for A.Y. Firstly, we take up the appeal of the assessee for A.Y. Firstly, we take up the appeal of the assessee for A.Y. 2019-20. The grounds raised
by the assessee in appeal are 20. The grounds raised by the assessee in appeal are 20. The grounds raised by the assessee in appeal are reproduced as under: reproduced as under:-
1. On the facts and circumstances of the case in On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming the stand of law, Ld. CIT(A) erred in confirming the stand of law, Ld. CIT(A) erred in confirming the stand of A.O. about that A.O. about that issuing the notice u/s 153C of issuing the notice u/s 153C of the Act without DIN. It is blatant contravention of the Act without DIN. It is blatant contravention of the Act without DIN. It is blatant contravention of the Circular No. 19/2019,dated 14 the Circular No. 19/2019,dated 14-8 8-2019 issued by the CBDT issued by the CBDT 2.
2. On the facts and circumstances of the case in On the facts and circumstances of the case in law, Ld CIT(A) erred in confirming addition law, Ld CIT(A) erred in confirming addition law, Ld CIT(A) erred in confirming addition without referring without referring to any incrementing document. to any incrementing document. Besides,he has not referred to any incriminating Besides,he has not referred to any incriminating Besides,he has not referred to any incriminating material in the satisfaction note issued to the material in the satisfaction note issued to the material in the satisfaction note issued to the Appellant. Appellant. 3.
3. On the facts and circumstances of the case in On the facts and circumstances of the case in law, Ld. law, Ld. CIT(A) erred in confirming stand of A.O. CIT(A) erred in confirming stand of A.O. for not sharing in for not sharing incrementing documents found crementing documents found during the course of search of rubberwala group during the course of search of rubberwala group during the course of search of rubberwala group which was pertained to the appellant. which was pertained to the appellant. 4.
4. On the facts and circumstances of the case in On the facts and circumstances of the case in law, Ld CIT(A) erred in confirming stand of A.O. law, Ld CIT(A) erred in confirming stand of A.O. law, Ld CIT(A) erred in confirming stand of A.O. about the not providing statement and materials about the not providing statement and materi about the not providing statement and materi used by him against the appellant used by him against the appellant 5.
5. On the facts and circumstances of the case in On the facts and circumstances of the case in law, Ld. law, Ld. CIT(A) erred in confirming stand of A.O. CIT(A) erred in confirming stand of A.O. about opportunity of cross examination of the about opportunity of cross examination of the about opportunity of cross examination of the person whose statements were used against the person whose statements were used against the person whose statements were used against the appellant appellant 6.
6. On the facts and circumstances of the case in and circumstances of the case in law, Ld. law, Ld. CIT(A) erred in confirming addition of CIT(A) erred in confirming addition of Rs. Rs. 10,12,350/ 10,12,350/- u/s 69 of the Act. 7.
7. On the facts and circumstances of the case, On the facts and circumstances of the case, the CIT(A) erred in holding that a combined the CIT(A) erred in holding that a combined the CIT(A) erred in holding that a combined satisfaction note is valid in the eyes of law, as satisfaction note is valid in the eyes of law satisfaction note is valid in the eyes of law current current current legal legal legal and and and judicial judicial judicial precedent precedent precedent overwhelmingly requires separate satisfaction overwhelmingly requires separate satisfaction overwhelmingly requires separate satisfaction notes for each assessment year and/or entity; notes for each assessment year and/or entity; notes for each assessment year and/or entity; the recording of a combined or consolidated the recording of a combined or consolidated the recording of a combined or consolidated satisfaction note has consistently been held to satisfaction note has consistently been held to satisfaction note has consistently been held to vitiate the proceedings under vitiate the proceedings under section 153C of the section 153C of the Income Tax Act. Income Tax Act.
Consequent to a search and seizure action under section Consequent to a search and seizure action under section Consequent to a search and seizure action under section 132 of the Act on 17.03.2021 in the case of the “Rubberwala” 132 of the Act on 17.03.2021 in the case of the “Rubberwala” 132 of the Act on 17.03.2021 in the case of the “Rubberwala” Group, including its flagship concern M/s Rubberwala Housing Group, including its flagship concern M/s Rubberwala Housing Group, including its flagship concern M/s Rubberwala Housing & Infrastructure Ltd. (RHIL), proceedi & Infrastructure Ltd. (RHIL), proceedings under section 153C ngs under section 153C were initiated in the case of the assessee. were initiated in the case of the assessee.
3.1 Briefly stated the facts of the case Briefly stated the facts of the case are that the Assessee are that the Assessee filed its return of income return of income for the year under consideration on the year under consideration on 28.06.2019 declaring total income of Rs.2,86,790 28.06.2019 declaring total income of Rs.2,86,790 28.06.2019 declaring total income of Rs.2,86,790/-. Consequent to a search and seizure action u/s. 132 of the Income Tax Act, 1961 search and seizure action u/s. 132 of the Income Tax Act, 1961 search and seizure action u/s. 132 of the Income Tax Act, 1961 (For short, “the Act”) was carried out on (For short, “the Act”) was carried out on “Rubberwala Rubberwala” group including its flagship concern M/s Rubberwala Housing & including its flagship concern M/s Rubberwala Housing & including its flagship concern M/s Rubberwala Housing & Infrastructure Ltd. (RHIL). Infrastructure Ltd. (RHIL). During the search action, it was During the search action, it was gathered that the hat the assessee purchased a shop in shop in “Platinum Mall”
Building, Girgaon, Mumbai and amount of Rs. 30,78,653/ Building, Girgaon, Mumbai and amount of Rs. 30,78,653/ Building, Girgaon, Mumbai and amount of Rs. 30,78,653/- was paid in cash for acquisition of the property. Further, the cash acquisition of the property. Further, the cash was paid by the assessee in A.Y. 2019 was paid by the assessee in A.Y. 2019-20 and A.Y. 2020 20 and A.Y. 2020-21 amounting to Rs. 30,37,050/ amounting to Rs. 30,37,050/- and Rs. 41,603/ and Rs. 41,603/- respectively. Thereafter, proceedings under section 153C were initiated in proceedings under section 153C were initiated in proceedings under section 153C were initiated in the case of the assessee the case of the assessee.
During the search, certain statements of key per During the search, certain statements of key per During the search, certain statements of key persons— most notably, Shri Imran Ansari, an employee handling sale most notably, Shri Imran Ansari, an employee handling sale most notably, Shri Imran Ansari, an employee handling sale and registration of shops in the “Platinum Mall” and registration of shops in the “Platinum Mall” and registration of shops in the “Platinum Mall” were recorded. A pen drive of 16 GB was retrieved from his residence, which he A pen drive of 16 GB was retrieved from his residence, which he A pen drive of 16 GB was retrieved from his residence, which he purportedly admitted contained excel files allegedly recording purportedly admitted contained excel files allegedly recording purportedly admitted contained excel files allegedly recording cash components received from various buyers. cash components received from various buyers.
Relying upon the above material and the statements of Relying upon the above material and the statements of Relying upon the above material and the statements of third parties, the Assessing Officer issued a show third parties, the Assessing Officer issued a show third parties, the Assessing Officer issued a show-cause notice to the assessee. The Assessing Officer referred to the statement to the assessee. The Assessing Officer referred to the statement to the assessee. The Assessing Officer referred to the statement of Shri Imran Ansari who of Shri Imran Ansari who stated that he had been working with stated that he had been working with Rubberwala Group of entities since 2010 and was Rubberwala Group of entities since 2010 and was Rubberwala Group of entities since 2010 and was handling sale and registration of the shops in “Platinum Mall” and also and registration of the shops in “Platinum Mall” and also and registration of the shops in “Platinum Mall” and also revealed that the total price of the shops contained cash revealed that the total price of the shops contained cash revealed that the total price of the shops contained cash component and banking channel component component and banking channel component component and banking channel component and these components are decided by Shri Tabrez Shaikh (Director/CMD components are decided by Shri Tabrez Shaikh (Director/CMD components are decided by Shri Tabrez Shaikh (Director/CMD of RHIL and Promoter of Rubberwala Group) and that such data of RHIL and Promoter of Rubberwala Group) and that such data of RHIL and Promoter of Rubberwala Group) and that such data related to shops was maintained by him in excel sheets. related to shops was maintained by him in excel sheets. related to shops was maintained by him in excel sheets.
Corroborating to the fact that data was being maintained by Corroborating to the fact that data was being maintained by Corroborating to the fact that data was being maintained by Shri Imran Ansari in excel sheet, during search proceedings at Ansari in excel sheet, during search proceedings at Ansari in excel sheet, during search proceedings at the residence of Shri Imran Ansari, a 16GB pen drive was the residence of Shri Imran Ansari, a 16GB pen drive was the residence of Shri Imran Ansari, a 16GB pen drive was retrieved from his possession which he accepted that it retrieved from his possession which he accepted that it retrieved from his possession which he accepted that it contained data maintained for the sale of shops in Platinum contained data maintained for the sale of shops in Platinum contained data maintained for the sale of shops in Platinum Mall. He also revealed that he Mall. He also revealed that he used to take the parties to Shri used to take the parties to Shri Abrar Ahmed who after receiving cash confirms back to Shri Abrar Ahmed who after receiving cash confirms back to Shri Abrar Ahmed who after receiving cash confirms back to Shri Imran Ansari to update the diaries and excel file. Imran Ansari to update the diaries and excel file. Imran Ansari to update the diaries and excel file.
The assessee categorically denied having paid any cash to The assessee categorically denied having paid any cash to The assessee categorically denied having paid any cash to any person, disputed knowledge of the individuals any person, disputed knowledge of the individuals any person, disputed knowledge of the individuals named, and specifically asserted that the purchase was in joint ownership specifically asserted that the purchase was in joint ownership specifically asserted that the purchase was in joint ownership and his share, even if assumed, could not exceed one and his share, even if assumed, could not exceed one and his share, even if assumed, could not exceed one-third. Crucially, he sought the statements and adverse material relied Crucially, he sought the statements and adverse material relied Crucially, he sought the statements and adverse material relied upon and requested opportunity to cross upon and requested opportunity to cross-examine the person examine the persons whose depositions were invoked. These requests were not whose depositions were invoked. These requests were not whose depositions were invoked. These requests were not acceded to by the Assessing Officer. acceded to by the Assessing Officer. Based on the finding of Based on the finding of search in case of RHIL Group and also the fact that RHIL Group search in case of RHIL Group and also the fact that RHIL Group search in case of RHIL Group and also the fact that RHIL Group had offered 8% of the overall unaccounted receipts. , the ld AO had offered 8% of the overall unaccounted receipts. , the ld AO had offered 8% of the overall unaccounted receipts. , the ld AO made an addition of dition of ₹30,37,050/- u/s 69 of the Act in A.Y. u/s 69 of the Act in A.Y. 2019-20, treating the same as unexplained cash investment 20, treating the same as unexplained cash investment 20, treating the same as unexplained cash investment towards the shop allegedly purchased jointly by the assessee. towards the shop allegedly purchased jointly by the assessee. towards the shop allegedly purchased jointly by the assessee.
6. Aggrieved by the order of the Assessing Officer, the Aggrieved by the order of the Assessing Officer, the Aggrieved by the order of the Assessing Officer, the assessee preferred appeal befor assessee preferred appeal before the ld. CIT(A) who confirmed e the ld. CIT(A) who confirmed the said addition to the extent of 1/3 the said addition to the extent of 1/3rd share of assessee in the share of assessee in the relevant shop amounting to Rs. 10,12,350/ relevant shop amounting to Rs. 10,12,350/- in A.Y. 2019 in A.Y. 2019-20 and Rs. 13,868/ and Rs. 13,868/- in A.Y. 2020-21. Further, aggrieved by the 21. Further, aggrieved by the addition confirmed by the ld. CIT(A), th addition confirmed by the ld. CIT(A), the assessee has preferred e assessee has preferred this appeal before us. this appeal before us.
Before us, the ld. AR of the assessee submitted that the Before us, the ld. AR of the assessee submitted that the Before us, the ld. AR of the assessee submitted that the incriminating material found in the possession of Rubberwala incriminating material found in the possession of Rubberwala incriminating material found in the possession of Rubberwala Group does not implicate the assessee. Further, the ld. CIT(A) Group does not implicate the assessee. Further, the ld. CIT(A) Group does not implicate the assessee. Further, the ld. CIT(A) has erred in confirmin has erred in confirming the stand of Assessing Officer despite g the stand of Assessing Officer despite not providing any statement of third party on which reliance not providing any statement of third party on which reliance not providing any statement of third party on which reliance was sought to be placed and even no cross examination has was sought to be placed and even no cross examination has was sought to be placed and even no cross examination has been granted. Moreover, the material or statement referred to is been granted. Moreover, the material or statement referred to is been granted. Moreover, the material or statement referred to is not an “evidence” at all agains not an “evidence” at all against the assessee in the eyes of law t the assessee in the eyes of law and hence no reliance can be placed thereon without any and hence no reliance can be placed thereon without any and hence no reliance can be placed thereon without any corroborative or cogent evidence against the assessee. corroborative or cogent evidence against the assessee. corroborative or cogent evidence against the assessee. It is vehemently argued that addition u/s. 69 of the Act cannot be vehemently argued that addition u/s. 69 of the Act cannot be vehemently argued that addition u/s. 69 of the Act cannot be made or confirmed merely on guess work or as made or confirmed merely on guess work or as made or confirmed merely on guess work or assumptions and there has to be positive evidence against the assessee which has there has to be positive evidence against the assessee which has there has to be positive evidence against the assessee which has not been brought on record. He further relied on the decision of not been brought on record. He further relied on the decision of not been brought on record. He further relied on the decision of Pravin Khetaramm Purohit v. DCIT, Central Circle, Mumbai [ITA Pravin Khetaramm Purohit v. DCIT, Central Circle, Mumbai [ITA Pravin Khetaramm Purohit v. DCIT, Central Circle, Mumbai [ITA no. 4742/4743/4744 / Mum / 2025] no. 4742/4743/4744 / Mum / 2025].
We have heard rival submission of parties and perusal the We have heard rival submission of parties and perusal the We have heard rival submission of parties and perusal the relevant material on record. We find substantial merit in the relevant material on record. We find substantial merit in the relevant material on record. We find substantial merit in the contentions of the assessee. It is a well contentions of the assessee. It is a well-settled principle of settled principle of law that where an addition is sought to be made that where an addition is sought to be made solely solely based upon the statement of a third party or upon material allegedly tement of a third party or upon material allegedly tement of a third party or upon material allegedly belonging to or relating to the assessee, the assessee must be belonging to or relating to the assessee, the assessee must be belonging to or relating to the assessee, the assessee must be confronted with such material and afforded an effective confronted with such material and afforded an effective confronted with such material and afforded an effective opportunity to cross opportunity to cross-examine the persons whose statements are examine the persons whose statements are relied upon. Failure to relied upon. Failure to do so vitiates the assessment itself. do so vitiates the assessment itself.
8.1 In the case alleged incriminating material i.e. In the case alleged incriminating material i.e. In the case alleged incriminating material i.e. pen drive, excel sheets and statements, have excel sheets and statements, have emanated exclus emanated exclusively from third-party premises and n party premises and no document evidencing payment of o document evidencing payment of on-money by the assessee like any r by the assessee like any receipt of cash payment eceipt of cash payment issued by the assessee etc issued by the assessee etc was found from the possession of the was found from the possession of the searched person. . In our opinion, mere entries in a third ere entries in a third-party excel sheet cannot, by themselves, constitute substantive excel sheet cannot, by themselves, constitute substantive excel sheet cannot, by themselves, constitute substantive evidence unless duly corroborated, authenticated evidence unless duly corroborated, authenticated evidence unless duly corroborated, authenticated, and linked to the assessee by independent and cogent material. No the assessee by independent and cogent material. No the assessee by independent and cogent material. No corroborative evidence of actual cash payment by the assessee corroborative evidence of actual cash payment by the assessee corroborative evidence of actual cash payment by the assessee exists. Neither the pen drive nor the statements of Shri Imran exists. Neither the pen drive nor the statements of Shri Imran exists. Neither the pen drive nor the statements of Shri Imran Ansari or Shri Tabrez Shaikh were supplied to Ansari or Shri Tabrez Shaikh were supplied to the assessee. the assessee. The CIT(A)’s approach of merely restricting the addition to 1/3rd CIT(A)’s approach of merely restricting the addition to 1/3rd CIT(A)’s approach of merely restricting the addition to 1/3rd does not cure the fundamental infirmity of absence of legally does not cure the fundamental infirmity of absence of legally does not cure the fundamental infirmity of absence of legally admissible evidence against the assessee. admissible evidence against the assessee. It is trite law that It is trite law that suspicion, however strong, cannot take the place of proof. suspicion, however strong, cannot take the place of proof. suspicion, however strong, cannot take the place of proof. Third-party admissions, untested and uncorroborated, cannot ty admissions, untested and uncorroborated, cannot ty admissions, untested and uncorroborated, cannot form the sole basis of an addition under section 69. The form the sole basis of an addition under section 69. The form the sole basis of an addition under section 69. The Revenue has failed to discharge the burden cast upon it to Revenue has failed to discharge the burden cast upon it to Revenue has failed to discharge the burden cast upon it to bring on record credible, independent, and cogent material bring on record credible, independent, and cogent material bring on record credible, independent, and cogent material establishing that the assessee establishing that the assessee made any payment in cash over made any payment in cash over and above the recorded consideration. and above the recorded consideration. The coordinate Bench of The coordinate Bench of Tribunal in the case of assessee Tribunal in the case of assessee Pravin Khetaramm Purohit v. Pravin Khetaramm Purohit v. DCIT (supra) held that : held that :-
“8. We have heard the arguments for both the parties and have also We have heard the arguments for both the parties and have also We have heard the arguments for both the parties and have also perused the material placed on record, judgements cited before me and he material placed on record, judgements cited before me and he material placed on record, judgements cited before me and the orders passed by the revenue authorities. From the records, we the orders passed by the revenue authorities. From the records, we the orders passed by the revenue authorities. From the records, we noticed that the assessment was completed u/s 153C on account of the noticed that the assessment was completed u/s 153C on account of the noticed that the assessment was completed u/s 153C on account of the fact that a search and seizure action was conducted on 17.0 fact that a search and seizure action was conducted on 17.0 fact that a search and seizure action was conducted on 17.03.2021 on Rubberwala group. In search action, premises of M/s. Rubberwala Rubberwala group. In search action, premises of M/s. Rubberwala Rubberwala group. In search action, premises of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL), its promoter and director Housing & Infrastructure Ltd (RHIL), its promoter and director Housing & Infrastructure Ltd (RHIL), its promoter and director-Shri Tabrez Shaikh, and a key employee of Rubberwala group Shri Imran Tabrez Shaikh, and a key employee of Rubberwala group Shri Imran Tabrez Shaikh, and a key employee of Rubberwala group Shri Imran Ansari, who was handling sale & registration of s Ansari, who was handling sale & registration of shops in “Platinum Mall” hops in “Platinum Mall” project of RHIL were covered. Among others, statement project of RHIL were covered. Among others, statement project of RHIL were covered. Among others, statement of these persons were recorded on oath onvarious dates during the course of persons were recorded on oath onvarious dates during the course of persons were recorded on oath onvarious dates during the course of search as well as post search proceedings. The employee of Rubberwala search as well as post search proceedings. The employee of Rubberwala search as well as post search proceedings. The employee of Rubberwala group confirmed that the c group confirmed that the cash has been collected from the respective ash has been collected from the respective buyers of the shops. However, on the other hand, the assessee denied buyers of the shops. However, on the other hand, the assessee denied 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 payment of cash. We noticed that during the search a pendrive with the payment of cash. We noticed that during the search a pendrive with the details of cash transactions with respect to Rubberwala group was details of cash transactions with respect to Rubberwala group was details of cash transactions with respect to Rubberwala group was found, which was confirmed through statement of Shri Imran Ansari which was confirmed through statement of Shri Imran Ansari which was confirmed through statement of Shri Imran Ansari recorded U/s 132(4) of the Act and on this basis, 153C order was recorded U/s 132(4) of the Act and on this basis, 153C order was 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). framed and the same was upheld by the Ld.CIT(A).
We noticed that Ld. CIT(A) although referred the decision of the We noticed that Ld. CIT(A) although referred the decision of the We noticed that Ld. CIT(A) although referred the decision of the coordinate ben coordinate bench in case of Rajesh Jain on identical issue but misplace ch in case of Rajesh Jain on identical issue but misplace its reliance. After having gone through the basic facts of Rajesh Jain its reliance. After having gone through the basic facts of Rajesh Jain 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 case which is mentioned by Ld. CIT(A) in its order and the same is case which is mentioned by Ld. CIT(A) in its order and the same is reproduced as under: reproduced as under:
5.1. On 17.03.2021, the residential On 17.03.2021, the residential premise of the assessee was also premise of the assessee was also covered by way of search action u/s 132 of the IT Act, 1961. Search action covered by way of search action u/s 132 of the IT Act, 1961. Search action 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 was also initiated on Rubberwala group on 17.03.2021. In such action was also initiated on Rubberwala group on 17.03.2021. In such action along with premises (offices/sites/others) of Rubberwala group entities, along with premises (offices/sites/others) of Rubberwala group entities, along with premises (offices/sites/others) of Rubberwala group entities, residences of various key persons including its promoter and director Shri nces of various key persons including its promoter and director Shri nces of various key persons including its promoter and director Shri Tabrez Shaikh, and Shri Imran Ansari Tabrez Shaikh, and Shri Imran Ansari - a key employee of Rubberwala a key employee of Rubberwala group handling sale & registration of shops in “Platinum Mall” project of group handling sale & registration of shops in “Platinum Mall” project of group handling sale & registration of shops in “Platinum Mall” project of RHIL were covered under section 132 of the Ac RHIL were covered under section 132 of the Act. Among others, statement t. Among others, statement of these persons were recorded on oath on various dates during search as of these persons were recorded on oath on various dates during search as of these persons were recorded on oath on various dates during search as well as post search proceedings. well as post search proceedings. 5.2. During the action on Rubberwala Group, among other, residence During the action on Rubberwala Group, among other, residence During the action on Rubberwala Group, among other, residence (at 109, 2nd Floor, Prabhat Sadan, 109/120 RBC Marg, Ag (at 109, 2nd Floor, Prabhat Sadan, 109/120 RBC Marg, Ag (at 109, 2nd Floor, Prabhat Sadan, 109/120 RBC Marg, Agripada, Mumbai Central - 400011) of Shri Imran Ashfaque Ansari was covered under 400011) of Shri Imran Ashfaque Ansari was covered under section 132 of the I.T. Act, 1961. His statement was also recorded on oath section 132 of the I.T. Act, 1961. His statement was also recorded on oath 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, at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, Shri Imran Ansar Shri Imran Ansari was questioned about his roles and responsibilities in i was questioned about his roles and responsibilities in M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, Shri M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, Shri M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, Shri Imran Ansari stated that he has been working with Rubberwala group of Imran Ansari stated that he has been working with Rubberwala group of Imran Ansari stated that he has been working with Rubberwala group of entities since 2010 and inter entities since 2010 and inter-alia handling sale and regis alia handling sale and registration of the shops shops shops in in in “PlatinumMall” “PlatinumMall” “PlatinumMall” Project Project Project of of of M/s. M/s. M/s. Rubberwala Rubberwala Rubberwala Housing Housing Housing & & & Infrastructure Ltd (RHIL). Infrastructure Ltd (RHIL). 5.3. Shri Imran Ansari in his response to question no. 13 & 14 of the Shri Imran Ansari in his response to question no. 13 & 14 of the Shri Imran Ansari in his response to question no. 13 & 14 of the said statement explained the complete procedure of the of the sale of said statement explained the complete procedure of the of the sale of said statement explained the complete procedure of the of the sale of shops in the shops in the “Platinum Mall” project. While explaining further about the “Platinum Mall” project. While explaining further about the price structure of the shops, Shri Imran Ansari in response to Q. no. 15 price structure of the shops, Shri Imran Ansari in response to Q. no. 15 price structure of the shops, Shri Imran Ansari in response to Q. no. 15 categorically revealed that the total price of the shops contains cash categorically revealed that the total price of the shops contains cash categorically revealed that the total price of the shops contains cash component and banking channel component, and these c component and banking channel component, and these c component and banking channel component, and these components are decided by Shri Tabrez Shaikh (Director/CMD of RHIL and Promoter of decided by Shri Tabrez Shaikh (Director/CMD of RHIL and Promoter of decided by Shri Tabrez Shaikh (Director/CMD of RHIL and Promoter of Rubberwala Group). On probing further, Shri Imran Ansari, in response to Rubberwala Group). On probing further, Shri Imran Ansari, in response to 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 Q. no. 16, stated that these prices, as decided by Shri Tabrez Shaikh, are Q. no. 16, stated that these prices, as decided by Shri Tabrez Shaikh, are communicated to him orally communicated to him orally. He also revealed in response to Q. no. 17 of . He also revealed in response to Q. no. 17 of the said statement that data related to shops is maintained by him in excel the said statement that data related to shops is maintained by him in excel 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 sheets. Corroborating to the fact that data is being maintained by Shri sheets. Corroborating to the fact that data is being maintained by Shri Imran Ansari in excel sheet, during search proceedings at the Imran Ansari in excel sheet, during search proceedings at the Imran Ansari in excel sheet, during search proceedings at the residence of Shri Imran Ansari, a 16GB Pendrive was retrieved from his possession. The Shri Imran Ansari, a 16GB Pendrive was retrieved from his possession. The 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 said pen drive is accepted by Shri Imran Ansari belonging to him and he 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 also accepted that this pen drive is containing data maintained for the sale also accepted that this pen drive is containing data maintained for the sale of shops in Platinu of shops in Platinum Mall. Shri Imran Ansari explained that this data is m Mall. Shri Imran Ansari explained that this data is prepared by him. Shri Imran Ansari’s this acceptance also corroborates with prepared by him. Shri Imran Ansari’s this acceptance also corroborates with 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 the fact that the said data was retrieved from the residential premises of the fact that the said data was retrieved from the residential premises of Shri Imran Ansari and not from any office of Rubber Shri Imran Ansari and not from any office of Rubberwala Group. wala Group.
5.4. It was ascertained that the data is being maintained by Shri It was ascertained that the data is being maintained by Shri 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 Imran Ansari in an excel file namely “consolidated 1 2 3 balance”. In the 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” said file sheets with different name viz “Master”, “Payment” and “Cheque” said file sheets with different name viz “Master”, “Payment” and “Cheque” etc. are found to be maintaine etc. are found to be maintained. It is also found out that in respect of the d. It is also found out that in respect of the sale of shops in the said project, comprehensive data is being maintained sale of shops in the said project, comprehensive data is being maintained 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 in these excel sheets, and in this regard, it is important to mention in these excel sheets, and in this regard, it is important to mention that the sheet “Master” is so elaborate that the data i that the sheet “Master” is so elaborate that the data i 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 spread across 98 columns. Shri Imran Ansari has explained all 98 columns 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 of “Master” sheet and such explanation of each and every column by Shri 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 Imran Ansari further support the fact that the he was maintaining the said Imran Ansari further support the fact that the he was maintaining the said data and therefo data and therefore could explain all these columns with relevance and re could explain all these columns with relevance and purpose. Shri Imran Ansari in response to Question no. 22, 23 and 24, has purpose. Shri Imran Ansari in response to Question no. 22, 23 and 24, has 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 explained in detail the meaning and relevant of each and every column. In explained in detail the meaning and relevant of each and every column. In column B, against the name of ‘Raj Bhai Jain’/‘Raj Bha column B, against the name of ‘Raj Bhai Jain’/‘Raj Bha 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 shops have been entered. Further, these 27 shops are stated (by Shri shops have been entered. Further, these 27 shops are stated (by Shri Imran Ansari) to be booked by the assessee only. Also, ShriTabrez Ahmed Imran Ansari) to be booked by the assessee only. Also, ShriTabrez Ahmed Imran Ansari) to be booked by the assessee only. Also, ShriTabrez Ahmed Shaikh, Director and Promoter of the RHIL, while deposing statement Shaikh, Director and Promoter of the RHIL, while deposing statement Shaikh, Director and Promoter of the RHIL, while deposing statement during post search procee during post search proceedings on 19.08.2021 categorically confirmed the dings on 19.08.2021 categorically confirmed the admission made by Shri Imran Ansari, and has confirmed the data of the admission made by Shri Imran Ansari, and has confirmed the data of the admission made by Shri Imran Ansari, and has confirmed the data of the said excel to be true byconfirming facts stated by Shri Imran Ansari in his said excel to be true byconfirming facts stated by Shri Imran Ansari in his said excel to be true byconfirming facts stated by Shri Imran Ansari in his statement. It is also important to note here that the phone n statement. It is also important to note here that the phone n 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 mentioned above i.e., 9892196071 against all 27 shops, is of Shri Rajesh 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, Regarding the frequency of updating the said excel file/sheet, Regarding the frequency of updating the said excel file/sheet, Shri Imran Ansari, in response to Q. no. 25, stated that this sheet is Shri Imran Ansari, in response to Q. no. 25, stated that this sheet is Shri Imran Ansari, in response to Q. no. 25, stated that this sheet is updated on the same day when a p updated on the same day when a payment is received either in cash or ayment is received either in cash or cheque (or banking channel). The column A to AR of the sheet “Master” are cheque (or banking channel). The column A to AR of the sheet “Master” are 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 stated to be updated till 16.03.2021 and other sheets of the said excel file 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 are also stated to be updated till 16.03.2021. It is revealed in the 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 response that he takes the parties to ShriAbrar Ahmed (who during the response that he takes the parties to ShriAbrar Ahmed (who during the search established to be a person handing cash for the Rubberwala Group). search established to be a person handing cash for the Rubberwala Group). search established to be a person handing cash for the Rubberwala Group). ShriAbrar Ahmed, after receiving the cash confirms to Shri Imran Ansari ShriAbrar Ahmed, after receiving the cash confirms to Shri Imran Ansari ShriAbrar Ahmed, after receiving the cash confirms to Shri Imran Ansari who update the diariesand the sai who update the diariesand the said excel file. Such detailed mechanism in d excel file. Such detailed mechanism in place further upholds the facts stated by Shri Imran Ansari on oath. It is place further upholds the facts stated by Shri Imran Ansari on oath. It is place further upholds the facts stated by Shri Imran Ansari on oath. It is also important to note here that Shri Imran Ansari also used to call and also important to note here that Shri Imran Ansari also used to call and 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 follow up with the buyers on the numbers saved in his data. As 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 ementioned, the number, for the shops for which the assessee has paid ementioned, the number, for the shops for which the assessee has paid the cash component, is mentioned as 9892196071, which is the assessee’s the cash component, is mentioned as 9892196071, which is the assessee’s 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 own number. Thus, it makes clear that for the cash payment part, for all own number. Thus, it makes clear that for the cash payment part, for all the above mentioned 27 shops, Shri Imran the above mentioned 27 shops, Shri Imran Ansari used to follow up with Ansari used to follow up with Shri Rajesh Jain/assessee only………………… Shri Rajesh Jain/assessee only…………………
10. We also noticed that the decision of the Coordinate Bench of ITAT We also noticed that the decision of the Coordinate Bench of ITAT We also noticed that the decision of the Coordinate Bench of ITAT in the case of Rajesh Jain in 3841 & the case of Rajesh Jain in 3841 & ITA No. in the case of Rajesh Jain in ITA No. 3842& 3841 & ITA No. 3954,3952,3951 and3950/Mum/2023 on the ident 3954,3952,3951 and3950/Mum/2023 on the ident 3954,3952,3951 and3950/Mum/2023 on the identical facts is reproduced herein below: reproduced herein below: 12. The appeal filed by the revenue for AY 2020 The appeal filed by the revenue for AY 2020 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 relief granted by Ld CIT(A) holding that the cash payments relating 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 the shops purchased by others cannot be assessed in the hands of the the shops purchased by others cannot be assessed in the hands of the assessee. The decision rendered by us in AY 2018 ssee. The decision rendered by us in AY 2018-19 and 2019 19 and 2019-20 on an identical issue on merits in the earlier paragraphs would apply in this year identical issue on merits in the earlier paragraphs would apply in this year 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 also. Following the same, we affirm the order passed by LdCIT(A) on this also. Following the same, we affirm the order passed by LdCIT(A) on this issue.
13. In the appeal filed by the as In the appeal filed by the assessee, the addition of alleged cash sessee, the addition of alleged cash payment of Rs.18,64,200/ payment of Rs.18,64,200/- in respect of purchase of shop confirmed by Ld in respect of purchase of shop confirmed by Ld CIT(A) is being assailed.
14. We noticed earlier that the assessee had CIT(A) is being assailed.
We noticed earlier that the assessee had CIT(A) is being assailed.
14. We noticed earlier that the assessee had purchased a shop in the commercial premises developed by Rubberwala purchased a shop in the commercial premises developed by Rubberwala purchased a shop in the commercial premises developed by Rubberwala group. During the course of search conducted in their hands, incriminating During the course of search conducted in their hands, incriminating During the course of search conducted in their hands, incriminating documents containing details of cash collected on sale of various shops documents containing details of cash collected on sale of various shops documents containing details of cash collected on sale of various shops were found. The employee of Rubberwala group confirmed that the cash were found. The employee of Rubberwala group confirmed that the cash were found. The employee of Rubberwala group confirmed that the cash has been collected from the buyers of shops. Ho has been collected from the buyers of shops. However, the assessee denied wever, the assessee denied payment of cash. However, the AO relied upon the materials found in the payment of cash. However, the AO relied upon the materials found in the 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/ case of Rubberwala group and accordingly made addition of Rs.18,64,200/ case of Rubberwala group and accordingly made addition of Rs.18,64,200/- in AY 2020-21. The LdCIT(A) also confirmed the same.
21. The LdCIT(A) also confirmed the same.
The LdCIT(A) also confirmed the same.
The ld A.R submitted that t 15. The ld A.R submitted that the addition was made on the basis of third he addition was made on the basis of third party statement and documents found from the premises of third party. As party statement and documents found from the premises of third party. As party statement and documents found from the premises of third party. As per the deposition made by the employee of Rubberwala group, the buyers per the deposition made by the employee of Rubberwala group, the buyers per the deposition made by the employee of Rubberwala group, the buyers were given a diary, in which, the details of cash received were were given a diary, in which, the details of cash received were 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 owledged. The Ld A.R submitted the search officials did not find any owledged. The Ld A.R submitted the search officials did not find any such diary with the assessee during the course of search operation such diary with the assessee during the course of search operation such diary with the assessee during the course of search operation conducted in his hands. Hence the statement so given by the employee conducted in his hands. Hence the statement so given by the employee conducted in his hands. Hence the statement so given by the employee stands disproved. He submitted that the AO has simp stands disproved. He submitted that the AO has simp stands disproved. He submitted that the AO has simply relied upon third party statement without bringing any independent material to support the party statement without bringing any independent material to support the party statement without bringing any independent material to support the same. The AO also did not provide the opportunity of cross examination same. The AO also did not provide the opportunity of cross examination same. The AO also did not provide the opportunity of cross examination despite being asked by the assessee. Accordingly, by placing reliance on despite being asked by the assessee. Accordingly, by placing reliance on despite being asked by the assessee. Accordingly, by placing reliance on various cas various case laws, the Ld A.R submitted that this addition should be e 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 deleted.
We heard Ld D.R and perused the record. We notice that the 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 AO has made the addition on the basis of evidence found in the premises of AO has made the addition on the basis of evidence found in the premises of third party and also on the basis of deposition mad third party and also on the basis of deposition made by the employee of the e by the employee of the third party. No corroborative material was brought on record to support the third party. No corroborative material was brought on record to support the third party. No corroborative material was brought on record to support the statement so given, which is mandatory when the assessee denies any statement so given, which is mandatory when the assessee denies any statement so given, which is mandatory when the assessee denies any such payment. Further, the AO also did not provide opportunity of cross such payment. Further, the AO also did not provide opportunity of cross such payment. Further, the AO also did not provide opportunity of cross examination to examination to the assessee, even after the said request was made by the 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 assessee. Under these set of facts, we are of the view that the impugned assessee. Under these set of facts, we are of the view that the impugned addition of Rs.18,64,200/ addition of Rs.18,64,200/- cannot be sustained. In this regard, we may cannot be sustained. In this regard, we may take support from the decision rendered by SMC bench o take support from the decision rendered by SMC bench o take support from the decision rendered by SMC bench of Mumbai Tribunal in in in the the the case case case of of of Naren Naren Naren Premchang Premchang Premchang Nagda Nagda Nagda vs. vs. vs. ITO ITO ITO (IT (IT (IT Appeal Appeal Appeal No.3265/Mum/2015 dated 08 No.3265/Mum/2015 dated 08-07-2016), wherein an identical issue was 2016), wherein an identical issue was decided as under: decided as under:- 17. We also notice that the AO did not provide opportunity to cross 17. We also notice that the AO did not provide opportunity to cross 17. We also notice that the AO did not provide opportunity to cross examine the persons from Rub examine the persons from Rubberwala group, on whose statements the AO berwala group, on whose statements the AO had placed reliance upon. The Hon had placed reliance upon. The Hon‟ble Supreme Court has held in the case ‟ble Supreme Court has held in the case of Andaman Timber Industries vs. Commissioner of Central Excise of Andaman Timber Industries vs. Commissioner of Central Excise of Andaman Timber Industries vs. Commissioner of Central Excise (2015)(62 taxmann.com 3)(SC) that not providing opportunity to cross (2015)(62 taxmann.com 3)(SC) that not providing opportunity to cross (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 is a serious flaw and it will make the order nullity, as it amounts to 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 violation of principle of natural justice. We are of the view that the above violation of principle of natural justice. We are of the view that the above said decision of Hon said decision of Hon‟ble Supreme Court shall apply to the facts of the ‟ble Supreme Court shall apply to the facts of the present case. present case.
11. From the above we f From the above we find that the Coordinate bench has consider ind that the Coordinate bench has consider the same facts and rightly decided the issue in favour of the assessee the same facts and rightly decided the issue in favour of the assessee 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 and since the facts of the present case are also identical with the facts 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 of Rajesh Jain’s (supra) case, therefore the said decision will be of Rajesh Jain’s (supra) case, therefore the said decision will be application on the facts of the present case as well. Moreover, the pplication on the facts of the present case as well. Moreover, the pplication on the facts of the present case as well. Moreover, the assessee categorically denied having paid any amount in cash over and assessee categorically denied having paid any amount in cash over and assessee categorically denied having paid any amount in cash over and above the agreement value. The AO has neither confronted assessee above the agreement value. The AO has neither confronted assessee above the agreement value. The AO has neither confronted assessee with any of the material found during the search o with any of the material found during the search o with any of the material found during the search on Rubberwala group and even noevidence or seized document has been referred to group and even noevidence or seized document has been referred to group and even noevidence or seized document has been referred to where any name of the assessee has been explicitly mentioned on where any name of the assessee has been explicitly mentioned on where any name of the assessee has been explicitly mentioned on account of paying any ‘on account of paying any ‘on-money’.
Although it has been claimed in the order of assessment that the Although it has been claimed in the order of assessment that the Although it has been claimed in the order of assessment that the assessee had paid on money, but again no such statement has been ssee had paid on money, but again no such statement has been ssee had paid on money, but again no such statement has been confronted, neither the seized material /documents /pendrive was confronted, neither the seized material /documents /pendrive was confronted, neither the seized material /documents /pendrive was confronted to the assessee nor the copy of statement of Key person was confronted to the assessee nor the copy of statement of Key person was confronted to the assessee nor the copy of statement of Key person was confronted.
Therefore, in our view, the information if any found in the Therefore, in our view, the information if Therefore, in our view, the information if pendrive etc., cannot be considered as ‘credible evidence’, unless they pendrive etc., cannot be considered as ‘credible evidence’, unless they pendrive etc., cannot be considered as ‘credible evidence’, unless they have been corroborated with any other evidence. Since the assessee have been corroborated with any other evidence. Since the assessee have been corroborated with any other evidence. Since the assessee was not provided with the adverse material, if any, based on which was not provided with the adverse material, if any, based on which was not provided with the adverse material, if any, based on which notice u/s153 of the Act notice u/s153 of the Act, was issued, in our view, it hampers the , was issued, in our view, it hampers the primary and fundamental requirement of natural justice. primary and fundamental requirement of natural justice. primary and fundamental requirement of natural justice.
14. As far as the information claimed in pendrive is concerned, the As far as the information claimed in pendrive is concerned, the As far as the information claimed in pendrive is concerned, the same was not found from the possession of the assessee but was found same was not found from the possession of the assessee but was found same was not found from the possession of the assessee but was found as per order of as per order of assessment, during the search and seizure conducted in assessment, during the search and seizure conducted in the case of third party therefore, in the absence of corroborative the case of third party therefore, in the absence of corroborative the case of third party therefore, in the absence of corroborative evidence to establish that the contents of pendrive are correct and evidence to establish that the contents of pendrive are correct and evidence to establish that the contents of pendrive are correct and authenticated to the extent assessee paid ‘on authenticated to the extent assessee paid ‘on- money’ in cash, no money’ in cash, no addition can be made and even otherwise during the entire addition can be made and even otherwise during the entire addition can be made and even otherwise during the entire reassessment proceedings the veracity and reliability of the data reassessment proceedings the veracity and reliability of the data reassessment proceedings the veracity and reliability of the data recorded in the pendrive was not checked or tested. Therefore, in recorded in the pendrive was not checked or tested. Therefore, in recorded in the pendrive was not checked or tested. Therefore, in such a scenariono addition is warranted in the case of asse such a scenariono addition is warranted in the case of asse such a scenariono addition is warranted in the case of assessee. Reliance in this regard has been placed on the decision in case of Heena Reliance in this regard has been placed on the decision in case of Heena Reliance in this regard has been placed on the decision in case of Heena Dashrath Jhanglani ITA no.1665/Mum./2018 (Assessment Year : 2007 Dashrath Jhanglani ITA no.1665/Mum./2018 (Assessment Year : 2007 Dashrath Jhanglani ITA no.1665/Mum./2018 (Assessment Year : 2007– 08) wherein the Coordinate Bench of ITAT had decided the issue in 08) wherein the Coordinate Bench of ITAT had decided the issue in 08) wherein the Coordinate Bench of ITAT had decided the issue in favour of assessee and the relevant portion is favour of assessee and the relevant portion is being reproduced herein being reproduced herein below: 10. I have considered rival submissions and perused material on I have considered rival submissions and perused material on I have considered rival submissions and perused material on record. Undisputedly, the genesis of the addition made of 42 lakh on record. Undisputedly, the genesis of the addition made of 42 lakh on record. Undisputedly, the genesis of the addition made of 42 lakh on account of alleged payment of on account of alleged payment of on–money in cash towards purchase of a flat money in cash towards purchase of a flat lies in a search lies in a search and seizure operation conducted in case of Hiranandani and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing Group and related persons. Though, in the assessment order the Assessing Group and related persons. Though, in the assessment order the Assessing Officer has not discussed in detail the nature of incriminating material/ Officer has not discussed in detail the nature of incriminating material/ Officer has not discussed in detail the nature of incriminating material/ evidence available on record to indicate payment of on evidence available on record to indicate payment of on 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 the assessee to M/s. Crescendo Associates, however, from the show cause the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th March 2015, which is reproduced by the Assessing Officer notice dated 4th March 2015, which is reproduced by the Assessing Officer notice dated 4th March 2015, which is reproduced by the Assessing Officer in the assessment order, it appears that the incriminating materials are in in the assessment order, it appears that the incriminating materials are in in the assessment order, it appears that the incriminating materials are in the form of pen the form of pen drive found and seized from the residence of one of the drive found and seized from the residence of one of the employees of Hiranandani Group and a statement recorded under section employees of Hiranandani Group and a statement recorded under section employees of Hiranandani Group and a statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani, Director and Promoter of 132(4) of the Act from Shri Niranjan Hiranandani, Director and Promoter of 132(4) of the Act from Shri Niranjan Hiranandani, Director and Promoter of the Group, wherein, the details of on the Group, wherein, the details of on– money paid by bu money paid by buyers / prospective buyers to Hiranandani Group concerns are mentioned and further, in the buyers to Hiranandani Group concerns are mentioned and further, in the buyers to Hiranandani Group concerns are mentioned and further, in the statement recorded under section 132(4) of the Act on 14th March 2014, statement recorded under section 132(4) of the Act on 14th March 2014, statement recorded under section 132(4) of the Act on 14th March 2014, Shri Niranjan Hiranandani, has admitted receipt of on Shri Niranjan Hiranandani, has admitted receipt of on Shri Niranjan Hiranandani, has admitted receipt of on–money in cash towards sale of flats / sho towards sale of flats / shops. Thus, it is clear that except these two pieces ps. Thus, it is clear that except these two pieces of evidences the Assessing Officer had no other evidence on record which of evidences the Assessing Officer had no other evidence on record which of evidences the Assessing Officer had no other evidence on record which demonstrates that the assessee had paid on demonstrates that the assessee had paid on–money in cash for purchase of money in cash for purchase of the flat. It is further relevant to observe, from the asses the flat. It is further relevant to observe, from the asses 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 the assessee has requested the Assessing Officer to provide him with all the assessee has requested the Assessing Officer to provide him with all adverse materials and full text of the statement recorded under section adverse materials and full text of the statement recorded under section adverse materials and full text of the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also requested the Assess requested the Assessing Officer for allowing her to cross ing Officer for allowing her to cross–examine Shri Niranjan Hiranandani and other parties whose statements were relied upon. Niranjan Hiranandani and other parties whose statements were relied upon. Niranjan Hiranandani and other parties whose statements were relied upon. Apparently, this request of the assessee was not accededto by the Apparently, this request of the assessee was not accededto by the Apparently, this request of the assessee was not accededto by the Assessing Officer. When the assessee took up the aforesaid issue Assessing Officer. When the assessee took up the aforesaid issue Assessing Officer. When the assessee took up the aforesaid issue before the first appellate authority, the learned Commissioner (Appeals) in letter the first appellate authority, the learned Commissioner (Appeals) in letter the first appellate authority, the learned Commissioner (Appeals) in letter dated 18th July 2016, had clearly directed the Assessing Officer to provide dated 18th July 2016, had clearly directed the Assessing Officer to provide dated 18th July 2016, had clearly directed the Assessing Officer to provide the assessee all adverse materials / documentary evidences available with the assessee all adverse materials / documentary evidences available with the assessee all adverse materials / documentary evidences available with him indicating payment him indicating payment of on–money. However, on a perusal of the remand money. However, on a perusal of the remand report dated 23th June 2017, a copy of which is at Page report dated 23th June 2017, a copy of which is at Page 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 book, it is very much clear that the Assessing Officer has completely book, it is very much clear that the Assessing Officer has completely avoided the issue and there is no mention whether the assessee wa avoided the issue and there is no mention whether the assessee wa 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 with all the adverse material and if, not so, whether he has 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 provided them to the assessee as per the directions of the learned provided them to the assessee as per the directions of the learned Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of ` 42 lakh made obvious that the addition of ` 42 lakh made on account of on on account of on–money payment in cash is without complying with the primary and fundamental payment in cash is without complying with the primary and fundamental payment in cash is without complying with the primary and fundamental requirement of rules of natural justice. It is well settled proposition of law requirement of rules of natural justice. It is well settled proposition of law 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 that if the Assessing Officer intends to utilize any adverse material for 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 n issue against the assessee he is required to not only confront n issue against the assessee he is required to not only confront such adverse materials to the assessee but also offer him a reasonable such adverse materials to the assessee but also offer him a reasonable such adverse materials to the assessee but also offer him a reasonable opportunity to rebut / contradict the contents of the adverse material. opportunity to rebut / contradict the contents of the adverse material. opportunity to rebut / contradict the contents of the adverse material. Further, the assessment order reveals that the A Further, the assessment order reveals that the A Further, the assessment order reveals that the Assessing Officer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, heavily relied upon the statement recorded from Shri Niranjan Hiranandani, heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for making the disputed addition. However, it is the allegation of the for making the disputed addition. However, it is the allegation of the for making the disputed addition. However, it is the allegation of the assessee, which prima assessee, which prima–facie appears to be correct, that the Assessing facie appears to be correct, that the Assessing Officer has not pro Officer has not provided the full text of such statement recorded and has vided the full text of such statement recorded and has also not allowed the assessee an opportunity to cross also not allowed the assessee an opportunity to cross also not allowed the assessee an opportunity to cross–examine Shri Niranjan Hiranandani, and other persons whose statements were relied Niranjan Hiranandani, and other persons whose statements were relied Niranjan Hiranandani, and other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural upon. This, in my view, is in gross violation of rules of natural 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 against the basic principle of law. In this context, I may refer to the 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). decision of the Tribunal, Mumbai Bench, in Nikhil Vinod Agarwal (supra). decision of the Tribunal, Mumbai Bench, in Nikhil Vinod Agarwal (supra). Thus, for the aforesaid reason, the addition made cannot be sustained. Thus, for the aforesaid reason, the addition made cannot be sustained. Thus, for the aforesaid reason, the addition made cannot be sustained.
11. Even otherwise also, th Even otherwise also, the addition made is unsustainable because e addition made is unsustainable because of the following reasons. As discussed earlier in the order, the basis for of the following reasons. As discussed earlier in the order, the basis for of the following reasons. As discussed earlier in the order, the basis for addition on account of on addition on account of on–money is the information contained in the pen money is the information contained in the pen drive found during the search and seizure operation and the statemen drive found during the search and seizure operation and the statemen drive found during the search and seizure operation and the statement recorded under section 132(4) of the Act. As regards the information recorded under section 132(4) of the Act. As regards the information 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 contained in the pen drive, it is the contention of the assessee that the 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 said pen drive was not found from the possession of the assessee but in said pen drive was not found from the possession of the assessee but in course of search and seizure operation course of search and seizure operation conducted in case of a third conducted in case of a third party. Therefore, in absence of further corroborative evidence to establish party. Therefore, in absence of further corroborative evidence to establish 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 contents of the pen drive are correct and authentic to the extent that the contents of the pen drive are correct and authentic to the extent that the assessee paid on that the assessee paid on–money in cash, no addition can be made und money in cash, no addition can be made under section 69B of the Act. Further contention of the assessee is that in the section 69B of the Act. Further contention of the assessee is that in the 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 statement recorded under section 132(4) of the Act, Shi Niranjan Hirandani 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 has not made any reference to the assessee, therefore, in absence of any has not made any reference to the assessee, therefore, in absence of any other corroborative evidence to other corroborative evidence to establish that assessee has paid on establish that assessee has paid on–money in cash, no addition can be made. I find substantial merit in the aforesaid in cash, no addition can be made. I find substantial merit in the aforesaid 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 submissions of the assessee. In my view, neither the information contained submissions of the assessee. In my view, neither the information contained in the pen drive nor the statement recorded under section 132( in the pen drive nor the statement recorded under section 132( 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 from Shri Niranjan Hiranandani are enough to conclusively establish the from Shri Niranjan Hiranandani are enough to conclusively establish the factum of payment of on factum of payment of on–money by the assessee. At best, they can raise a money by the assessee. At best, they can raise a doubt or suspicion against the conduct of the assessee triggering further doubt or suspicion against the conduct of the assessee triggering further doubt or suspicion against the conduct of the assessee triggering further enquiry / investigation enquiry / investigation to find out and bring on record the relevant fact and to find out and bring on record the relevant fact and material to conclusively prove the payment of on material to conclusively prove the payment of on–money by the assessee money by the assessee over and above the declared sale consideration. Apparently, the Assessing over and above the declared sale consideration. Apparently, the Assessing over and above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / material Officer has failed to bring any such evidence / material Officer has failed to bring any such evidence / material on record to prove the payment of on the payment of on–money by the assessee. More so, when the assessee money by the assessee. More so, when the assessee from the very beginning has stoutly denied payment of on from the very beginning has stoutly denied payment of on from the very beginning has stoutly denied payment of on–money in cash. Notably, while dealing with a case involving similar nature of dispute Notably, while dealing with a case involving similar nature of dispute Notably, while dealing with a case involving similar nature of dispute concerning similar transa concerning similar transaction with another concern of Hiranandani Group, ction with another concern of Hiranandani Group, the Tribunal in case of Shri Anil Jaggi v/s ACIT (supra) has held as under: the Tribunal in case of Shri Anil Jaggi v/s ACIT (supra) has held as under: 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 Reliance has also been placed in the case of Monika Anand Gupta Reliance has also been placed in the case of Monika Anand Gupta (A.Y. 2 coordinat 12)whereas coordinate bench held as under.
6. I have heard both the parties and perused the record. I find thatthe 6. I have heard both the parties and perused the record. I find thatthe 6. I have heard both the parties and perused the record. I find thatthe addition for on addition for on-money payment has been done in thiscase without any money payment has been done in thiscase without any corroborative material found from assessee. The addition is solely based corroborative material found from assessee. The addition is solely based corroborative material found from assessee. The addition is solely based upon some statement upon some statement of the builder. Such additions are not sustainable on 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 the touchstone of Hon'ble Supreme Court decision in the case of CIT vs P.V 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 Kalyana sundasram 164 Taxman 78 (SC). Moreover there is nothing on Kalyana sundasram 164 Taxman 78 (SC). Moreover there is nothing on record to suggest that so called electronic evidence collect record to suggest that so called electronic evidence collect 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 the builder’s office is compliant with the requirement of section 65B of the builder’s office is compliant with the requirement of section 65B of Evidence Act regarding admissibility of electronic evidence. Hence, I set Evidence Act regarding admissibility of electronic evidence. Hence, I set Evidence Act regarding admissibility of electronic evidence. Hence, I set aside the orders of the authority below and direct that the addition be aside the orders of the authority below and direct that the addition be aside the orders of the authority below and direct that the addition be deleted.
16. In the case of Mrs. Mamta Sharad Gupta, case of Mrs. Mamta Sharad Gupta, case of Mrs. Mamta Sharad Gupta, Assessment Year: 2011 Assessment Year: 2011-12, wherein the coordinate bench has held as 12, wherein the coordinate bench has held as under: 9. Since the sole issue raised in this appeal is covered by the order (supra) 9. Since the sole issue raised in this appeal is covered by the order (supra) 9. Since the sole issue raised in this appeal is covered by the order (supra) passed by the co passed by the co-ordinate Bench of the Tribunal addition made in this case ition made in this case is not sustainable. Because the addition is made merely on the basis of is not sustainable. Because the addition is made merely on the basis of 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 Cosmos statement made by one Mr. Suraj Parmar, one of the promoters of Cosmos statement made by one Mr. Suraj Parmar, one of the promoters of Cosmos Group under section 132(4) of the Act without any corroboration. Group under section 132(4) of the Act without any corroboration. Group under section 132(4) of the Act without any corroboration. Moreover, statement or a Moreover, statement or any material seized during the course of search ny material seized during the course of search under section 132(4) of the Act can only be used against Mr. Suraj under section 132(4) of the Act can only be used against Mr. Suraj 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 Parmar of Cosmos Group and not against the assessee without any Parmar of Cosmos Group and not against the assessee without any corroboration. Excel sheet alleged to have been recovered from t corroboration. Excel sheet alleged to have been recovered from t 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 of builders is also not admissible being not proved under section 65 of the 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 Evidence Act. So in view of the matter, addition made by the AO and 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 sustained by the Ld. CIT(A) is not sustainable in the eyes of law, hence sustained by the Ld. CIT(A) is not sustainable in the eyes of law, hence ordered to be deleted. Conseq ordered to be deleted. Consequently, appeal filed by the assessee is uently, appeal filed by the assessee is allowed.
For the above proposition, we place reliance upon the decision in For the above proposition, we place reliance upon the decision in For the above proposition, we place reliance upon the decision in the case of ITO Vs. Vinod Aggarwal, ITO Vs. the case of ITO Vs. Vinod Aggarwal, ITO Vs. the case of ITO Vs. Vinod Aggarwal, ITO Vs. Nikhil Vinod Aggarwal, ITA No. 2574/Mum/2017 Heena Dashrath Nikhil Vinod Aggarwal, ITA No. 2574/Mum/2017 Heena Dashrath Nikhil Vinod Aggarwal, ITA No. 2574/Mum/2017 Heena Dashrath Jhanglani Vs.ITO, ITA No.1665/M/2018, Padmashrree Dr. D.Y. Patil ani Vs.ITO, ITA No.1665/M/2018, Padmashrree Dr. D.Y. Patil ani Vs.ITO, ITA No.1665/M/2018, Padmashrree Dr. D.Y. Patil University Vs. DCIT, ITA Nos. 3264 to 3268/Mum/2022. University Vs. DCIT, ITA Nos. 3264 to 3268/Mum/2022. University Vs. DCIT, ITA Nos. 3264 to 3268/Mum/2022.
From the records we also noticed that no statement was provided From the records we also noticed that no statement was provided From the records we also noticed that no statement was provided to the assessee, and none of the persons, whose statements were relied to the assessee, and none of the persons, whose statements were relied to the assessee, and none of the persons, whose statements were relied upon were produced for cross were produced for cross-examination. Even the extract of the examination. Even the extract of the statement mentioned in the assessment order does not indicate the statement mentioned in the assessment order does not indicate the statement mentioned in the assessment order does not indicate the name of the assessee. name of the assessee.
Apart, the AO during the course of assessment also failed to Apart, the AO during the course of assessment also failed to Apart, the AO during the course of assessment also failed to provide the opportunity to cross examine provide the opportunity to cross examine of the witnesses, whose of the witnesses, whose statements were relied upon by the revenue which resulted in ‘breach of statements were relied upon by the revenue which resulted in ‘breach of statements were relied upon by the revenue which resulted in ‘breach of principles of natural justice’. In this regard, reliance is being placed principles of natural justice’. In this regard, reliance is being placed principles of natural justice’. In this regard, reliance is being placed upon the decision of Hon'ble Supreme Court in the case of Andaman upon the decision of Hon'ble Supreme Court in the case of Andaman upon the decision of Hon'ble Supreme Court in the case of Andaman Timber Industries Vs. Timber Industries Vs. CCE reported in (2015)281 CTR 241 (SC) wherein CCE reported in (2015)281 CTR 241 (SC) wherein it has been held that ‘failure to give the assessee the opportunity to it has been held that ‘failure to give the assessee the opportunity to it has been held that ‘failure to give the assessee the opportunity to cross examine witness, whose statements are relied upon, results in cross examine witness, whose statements are relied upon, results in cross examine witness, whose statements are relied upon, results in breach of principles of Natural Justice. It is a serious flaw which r breach of principles of Natural Justice. It is a serious flaw which r breach of principles of Natural Justice. It is a serious flaw which renders the order a nullity’. the order a nullity’.
In the case of CIT Vs. Odeon Builders Pvt. ltd. (418ITR In the case of CIT Vs. Odeon Builders Pvt. ltd. (418ITR In the case of CIT Vs. Odeon Builders Pvt. ltd. (418ITR 315), it was held that the ‘addition/disallowance made solely on third 315), it was held that the ‘addition/disallowance made solely on third 315), it was held that the ‘addition/disallowance made solely on third party information without subjecting it to further scrutiny and denying party information without subjecting it to further scrutiny and denying party information without subjecting it to further scrutiny and denying the opportunity the opportunity of cross examination of the third party renders the of cross examination of the third party renders the addition/disallowance bad in law’ addition/disallowance bad in law’ 21. In the case of H.R. Mehta v/s Assistant Commissionerof Income- In the case of H.R. Mehta v/s Assistant Commissionerof In the case of H.R. Mehta v/s Assistant Commissionerof tax, Mumbai tax, Mumbai 72taxmann.com110 (Bombay) wherein it was held as 72taxmann.com110 (Bombay) wherein it was held as under In the light of the fact that the mo In the light of the fact that the money was advanced apparently by the ney was advanced apparently by the account payee cheque and was repaid vide account payee cheque the least account payee cheque and was repaid vide account payee cheque the least 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 that the Assessing Officer should have done was to grant an opportunity to 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 the assessee to meet the case against him by providing the material sought 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. to be used against him in arriving before passing the order of assessment. 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 This not having been done, the denial of such opportunity goes to root of 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, the matter and strikes at the very foundation of the assessment and, the matter and strikes at the very foundation of the assessment and, therefore, renders the orders passed therefore, renders the orders passed by the Commissioner (Appeals) and by the Commissioner (Appeals) and the Tribunal vulnerable. The assessee was bound to be provided with the the Tribunal vulnerable. The assessee was bound to be provided with the the Tribunal vulnerable. The assessee was bound to be provided with the material used against him apart from being permitting him to cross material used against him apart from being permitting him to cross material used against him apart from being permitting him to cross examine the deponents whose statements were relied upon by him. Despite examine the deponents whose statements were relied upon by him. Despite examine the deponents whose statements were relied upon by him. Despite the request the request seeking an opportunity to cross examine the deponents and seeking an opportunity to cross examine the deponents and furnish the assessee with copies of statements and disclose material, these furnish the assessee with copies of statements and disclose material, these furnish the assessee with copies of statements and disclose material, these were denied to him. were denied to him. 22. Taking into consideration the entire facts and circumstances and Taking into consideration the entire facts and circumstances and Taking into consideration the entire facts and circumstances and legal prepositions as discussed legal prepositions as discussed by us above, we direct the AO to delete by us above, we direct the AO to delete the addition, consequently these grounds raised
by the assessee are the addition, consequently these grounds raised by the assessee are the addition, consequently these grounds raised by the assessee are allowed.”
9. In view of the foregoing discussion, the absence of In view of the foregoing discussion, the absence of In view of the foregoing discussion, the absence of confrontation, lack of cross confrontation, lack of cross-examination, absence of any examination, absence of any incriminating incriminating material material bel belonging onging to to the the assessee, assessee, and and respectfully following the decision of the co espectfully following the decision of the co-ordinate bench of ordinate bench of this Tribunal, we delete the addition confirmed by the ld. CIT(A) this Tribunal, we delete the addition confirmed by the ld. CIT(A) this Tribunal, we delete the addition confirmed by the ld. CIT(A) and the ground no. 6 and 7 raised by the assessee are allowed and the ground no. 6 and 7 raised by the assessee are allowed and the ground no. 6 and 7 raised by the assessee are allowed on merits. In view of the fact that on merits. In view of the fact that the addition has already been the addition has already been deleted on merits, therefore all other grounds rendered deleted on merits, therefore all other grounds rendered deleted on merits, therefore all other grounds rendered academic and require no adjudication. academic and require no adjudication.
Since the facts and circumstances of the case are identical Since the facts and circumstances of the case are identical Since the facts and circumstances of the case are identical for A.Y. 2020-21, the decision rendered for A.Y. 2019 21, the decision rendered for A.Y. 2019 21, the decision rendered for A.Y. 2019-20 above shall apply mutatis mutandis to A.Y. 2020 ll apply mutatis mutandis to A.Y. 2020-21 as well and the 21 as well and the addition confirmed confirmed by the ld. CIT(A) is deleted.
In the result, appeal In the result, appeals of the assessee are allowed. allowed.