EI RESORTS AND CLUBS PVT LTD ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -8(1), MUMBAI

Brief facts as culled out from the records are that the assessee is a part of the Sakseria Group of Companies. Assessee is a private limited company incorporated especially for acquisition of land in and around Kolgaon. The Company has been aggregating land parcels in and around Kolgaon for over a decade.

On 7th October, 2021, the Investigation Wing of the Department conducted a search and survey action under section 132 of the Act at the premises of the the Sakseria Group of Companies which included the assessees situated on the 4th Floor of Seksaria Chambers, Nagindas Master Road, Fort, Mumbai. The search extended over multiple days and encompassed various group entities and individuals associated with the Seksaria Group and their business concerns. During the course of the operation, certain Excel- based management information sheets were found and seized. These documents, according to the Department, contained notings suggestive of cash investment for acquisition of land at Kolgaon. Statements of Mr. Nandkumar Kudilal Seksaria (NKS), and Mr. Tarun Sekseria (TNS) were recorded contemporaneously and in the days following the search, forming the bedrock of the Assessing Officer‟s inference regarding unaccounted income in the case of Assessee.

Nandkumar Air India 04.04.2022 Q.1 to Q.12 Kudilal Building, Seksaria (Income (NKS) Tax) 4.1 The statement relates to Excel sheets which were recovered from the laptop of Mr.Tarun Sakseria[ TNS] , which indicated notings pertaining to lands situated at Kolgaon, Dhokawade, Agarsure and Dapoli. 4.2. These excel sheets which have been reproduced by the AO and the CIT[A] have the location of land mentioned on the top of these statements indicating whether these relate to Kolgaon, Dhokawade, Agarsure and Dapoli. The sheet also gives details of whether these lands are registered or E I Resorts & Clubs Pvt. Ltd. unregistered and mentions the areas thereof. There are initials like PDG, and names like Ravi Thorat and SCK Finance. Further on careful perusal of these sheets it is evidently clear that these sheets were prepared by Mr. Pratap Gambhir [PDG] who is the land aggregator and not by the Assessee company. 4.3. The statement of TNS was recorded on each of these excel sheet pertaining to these various land parcels under section 132[4] on 9.10.2021. 4.4. The current appeals concern arises from the statement pertaining to lands at Kolgaon, which are acquired by the Assessee, TNS has stated in response to Q 17 that the amounts mentioned in column „A‟ represent amounts paid by Cheque and those against col „B‟ represent cash derived from the NOCs granted by Estate for release of interest in lands in Mira, Bhayander and Ghodbunder. He has also mentioned that the quantum of cash generation was not known to him and has to be explained by his father Mr Nandkumar Sakseria 4.5. Thereafter the statement of Mr.Nandkumar Sakseria, who is the main person in charge of the Sakseria Group was recorded under section 134[4]. In Q No 20 he was asked for his comments on the statement of TNS, to which he has stated that he has to verify the facts provided by TNS and sought more time. 4.6. Thereafter, the statement of NKS was recorded post search by the ACIT under Section 131 of the Act at Room No. 2007A, 20th Floor, Air India Building, Nariman Point, E I Resorts & Clubs Pvt. Ltd. Mumbai-21 on January 4, 2022. In the statement recorded on January 4, 2022, NKS, inter alia, stated as under: 5. In Q11, NKS was asked to comment on the statement of TNS, on the excel statement seized, wherein TNS had stated that cash derived from rights/grants of NOC was deployed for purchase of various land parcels. In response to the same, NKS stated that ‘since Tarun has been suffering from various illness from time to time, to keep him busy, I assigned him with the task of land acquisition in Alibaug. All our land dealings were coordinated by local aggregator Late Pratap Gambhir. To the best of my knowledge these excel statements are estimates of the cost and profits and projections as prepared by Late Pratap Gambhir’. As mentioned to your good self above, occasionally some quantity of cash may have come from release of rights in eksali lands and may have been given to Pratap Gambhir’ 6. Both TNS and NKS have retracted their statements vide letters dated 22nd December, 2022 & 7th February, 2023 and form part of the paper book. Analysis of the above statements 7. One crucial point to be noted from the perusal of the statement is that in case of the statement of TNS he has mentioned that although the amounts stated under Col B are cash, the exact quantum of cash will be explained by his father, NKS.

Most importantly, the person in charge of the Group affairs, NKS has categorically denied that the figures in Col „B “are cash and has mentioned that these are estimates of the costs and profits and projections prepared by Mr.Pratap Gambhir [PDG] and occasionally some cash may have come from release of rights in Eksali land of Estate. NKS in his statement has also mentioned that TNS was suffering from various ailments as was ill and therefore to keep him occupied NKS had asked him to oversee the acquisitions of lands in Alibaug and Dapoli, which include the lands at Kolgaon belonging to the assessee.

The retractions of NKS and TNS have been rejected by AO on the ground of delay. The ld. AO, in his elaborate order, narrated that during the course of the search proceedings, multiple diaries and loose sheets were found, each containing cryptic entries in the form of initials, figures, and occasional remarks. These entries, according to the Assessing Officer, chronicled cash investment made by the assessee for acquisition of lands at Kolgaon, On this premise, the Assessing Officer held that the said payment represented unaccounted investment in land and, therefore, treated them as unexplained investment under section 69A/69B of the Act.

Based on this reasoning, the Assessing Officer made substantial additions running into several crores, as unexplained under section 69A/69B. These additions were founded almost exclusively on the notings in the excel sheets E I Resorts & Clubs Pvt. Ltd. found in the laptop of TNS and the statement of TNS under section 1342[4]. 10.1. No independent verification was made from the counterparties purportedly reflected in the respective purchase agreement for purchase of Kolgaon land, nor were any corroborative documents or contemporaneous records unearthed to substantiate the alleged cash outflows. The Assessing Officer, nevertheless, inferred a pattern of some stray notings in the diaries found in the case of Estate which purported to be payments to PDG, who was the land aggregator for the Sakseria Group in Alibaug and Dapoli, 10.2. The statement of Mr.Pawan Sharma, who was the accountant of Estate and who has maintained these diaries was retracted 0n 22nd December, 2022 and the statements of TNS and NKS were later retracted on 22nd December, 2022 7th Febrauary,2023 respectively during the assessment proceedings of the assessee. Findings of CIT(A) 11. When the matter travelled in appeal before the learned Commissioner of Income Tax (Appeals) [“CIT(A)”], the assessee vehemently contested both the factual premise and the legal tenability of the additions. It was submitted that the entire edifice of the assessment rested upon the statement of TNS under section 132[4], which was retracted later. It was further urged that the statements recorded under section 132(4) lacked credibility, as they were subsequently retracted with cogent reasons, and that no corroborative evidence E I Resorts & Clubs Pvt. Ltd. whatsoever was found during the search neither cash, nor unaccounted assets so as to lend authenticity to the inferences drawn by the Assessing Officer. The assessee also emphasized that in any case the statement of TNS was debunked by the statement of NKS who was in charge of the whole group where he has categorify mentioned that the amounts against‟ Col.B‟ were mere estimation of the increase in the market values of these land parcels which was prepared by PDG, the land aggregator as a MIS statement.

The learned CIT(A), after a detailed consideration of the rival submissions and the seized material, partly accepted the assessee‟s contentions that the AO has erred in quantifying the amount of addition under section 69A/69B, by incorrectly considering the quantum of investment in Kolgaon land and accordingly the CIT(A) recomputed the unaccounted investment in Kolgaon land at Rs.2,58,00,000as against Rs.13,55,23,303 computed by the AO. The CIT(A) however ignored the fact that the statements of TNS had been debunked by NKS and therefore were contradictory and further ignored the fact that the statement of TNS and NKS were retracted. The CIT[A] has also not pondered over the AOs action in not obtaining any third-party confirmations. 12.1. However, the CIT[A] granted relief of Rs.10,97,23,303 on the basis of computational error in quantifying the unaccounted investment as per the seized excel sheet.

The Ld. CIT(A) accordingly, confirmed the addition of Rs. 2,58,00,000 made by the AO under section 69A/69B for the AY 2012-13.

The Assessee have contested the additions which were confirmed by the CIT(A). The Department has also contested the relief allowed by CIT(A), which will be taken up in the later part of this order.

Similar addition has been made in assessment year 2020- 2021 and the summary of addition which has been confirmed by the ld. CIT(A) on the same reasoning which has been contested by the assessee before this Tribunal are as under:- EI Resorts & Clubs Pvt Ltd AY 69A/69B AY 2020-21 1,33,98,747 16. Apart from the aforesaid grounds on merits of the addition, the Assessee has also raised legal grounds regarding the validity of the Notice under section 148 & validity of DIN on the Assessment Order. Submissions of the A.R: 17. The matter was argued at length before us. The Assessees have also filed detailed written synopsis covering the facts and various arguments made before us and a paper book containing a Excel sheets pertaining to purchase of land at Kolgaon and the statement of TNS/NKS as also other relevant documents, which were relied upon during the hearing. Copies of retraction statements are also filed.

Before us, the learned Authorised Representative (AR) for the assessee opened his arguments with characteristic E I Resorts & Clubs Pvt. Ltd. precision, asserting that the entire assessment proceedings were vitiated by a fundamental misconception of fact and law. He submitted that the Assessing Officer had elevated mere notings in a an excel sheet into conclusive proof of undisclosed income, without undertaking the most rudimentary verification or establishing any nexus between such notings and real-world transactions. The so-called incriminating excel sheet, he stressed, was merely a management information statement (MIS) prepared by PDG, who was the land aggregator and this fact was specifically mentioned by NKS and was not at all cash paid by the assesse for purchase of these lands as mentioned by TNS in his statement. The AR also mentioned that TNS in his statement has stated that he was not aware of the quantum of „cash‟ generated and this would be explained by NKS and therefore the statement of NKS prevails over the statement of TNS. Consequently, the AR contended that in the absence of corroborative material or supporting evidence the reliance placed by the Assessing Officer upon these excel sheets and the contradictory statements of TNS and NKS , was wholly misplaced and is unsustainable in law, especially considering the fact that the TNS and NKS have retracted their statements during the course of assessment proceedings.

The AR further pointed out that the only foundation on which the Assessing Officer sought to ascribe meaning to these noting in the excel sheet was the statement of TNS recorded on 09/10/2021.The learned counsel invited our attention to the transcript of TNS‟s statement to demonstrate that it was riddled with conjecture and bereft of any factual E I Resorts & Clubs Pvt. Ltd. basis. He emphasized that the Assessing Officer‟s action in cherry picking a part of the statement of TNS was an exercise that was, in his words, “factually perverse and legally impermissible.”

The learned counsel also reiterated his submission that the statement of TNS was of no real consequence as it had been categorically denied by NKS the principal person in charge of the company, in his statement dated 4th October, 2022 in Q no 11 where he had stated that TNS had been suffering from various ailments and he had assigned him the job of coordinating with PDG for lands to keep him busy and most importantly the figures in the excel sheets which were stated to be „cash‟ were in fact a MIS report prepared by PDG to show comparison of the cost and projections of the potential profits [market values] in these lands. The AR also contended that in any case NKS had stated that ‘occasionally some cash may have come and given to PDG’ which does not mean that all the figures under Col „B‟ are cash as presumed by the AO.

The AR then highlighted that both TNS and NKS had formally retracted their statements during the course of assessment proceedings, through written communications dated 22nd December, 2022 and 7th February, 2023 respectively, giving cogent reasons for such retraction. Despite this, the Assessing Officer had summarily brushed aside these retractions, branding them as “afterthoughts,” without affording either individual an opportunity for cross- examination or further clarification. This, he contended, E I Resorts & Clubs Pvt. Ltd. amounted to a flagrant violation of the principles of natural justice. Once a statement is retracted, the law requires the Department to establish its truth through independent corroboration; in the absence of such corroboration, the statement cannot be treated as binding evidence. The AR placed reliance on an array of judicial precedents to fortify his argument that a retracted statement, standing alone and unsupported by any tangible material, lacks evidentiary sanctity and cannot form the sole basis of addition.

The AR pointed out that the AO did not bother to analyze and evaluate other entries in the excel sheet and merely considered the amount mentioned in Column B as cash investment by relying on the uncorroborated statement of TNS which was later retracted. 22.1. The AR also made without prejudice submission that AO has cherry picked the statement of TNS to suit his narrative. Had the statement been fully considered, the AO would have been required to take cognizance of the fact that the cash investment was not made by the assesse company and therefore no addition could have been made in its hands. The AR vehemently argued that the Assessee company has no capacity to generate cash and that the cash was never invested by the Assessee company. The AR also pointed out that these facts have been duly accepted by the AO and CIT(A). 22.2. The AR also pointed out that this statement does not mention the years to which it pertains and the action of the AO to extrapolate the total to various assessment years on the E I Resorts & Clubs Pvt. Ltd. basis of the amounts paid by cheque is devoid of any logic or legal sanctity. 22.3. The learned Authorised Representative continued his submissions with a meticulous reference to jurisprudence, weaving together a formidable chain of precedents that underscored the impermissibility of making additions solely on the strength of uncorroborated and subsequently retracted statements. He first drew our attention to the decision of the Hon’ble Bombay High Court in CIT v. Reliance Industries Ltd. [(2020) 261 Taxman 358 (Bom)], where the Court had categorically held that a statement recorded during search cannot be relied upon as conclusive evidence unless supported by independent material. In that case, as in the present one, the Assessing Officer had based additions merely on the confession of a third party without any corroboration, which was later retracted. The High Court, affirming the Appellate Tribunal, ruled that when a statement is retracted and no other evidence is adduced, such a statement cannot, by itself, justify the addition. The learned counsel submitted that the ratio of this judgment was directly applicable to the present facts, where the Assessing Officer, resting solely on the statements of TNS, had proceeded to frame the assessment without any verification or corroboration from the alleged payers or any independent third-party evidence.

The learned AR next placed reliance on the judgment of the Hon’ble Jharkhand High Court in Shree Ganesh Trading Co. v. CIT [(2012) 214 Taxman 262 (Jharkhand)], wherein it was held that though a statement recorded under E I Resorts & Clubs Pvt. Ltd. section 132(4) constitutes evidence, its reliability and probative worth depend on the surrounding circumstances and corroboration. The Court observed that a bald statement, made without contemporaneous recovery of cash or assets and later retracted, could not be used to fasten liability. Drawing a parallel, the learned counsel emphasized that in the assessee‟s case, no incriminating cash or valuables had been discovered in the course of search; yet, the Assessing Officer had proceeded as though the excel sheet were self- proving instruments of truth. Such an approach, he argued, stood condemned by judicial authority.

The learned counsel further fortified his argument by citing the judgment of the Hon’ble Gujarat High Court in Kailashben Chokshi v. CIT [(2010) 328 ITR 411 (Guj.)], where it was held that an admission recorded under section 132(4), if retracted, cannot form the sole basis for addition unless supported by corroborative material. The High Court noted that statements extracted under stressful or coercive circumstances, particularly during search at odd hours, often lack voluntariness and hence must be treated with circumspection. The learned AR submitted that this principle had been reiterated in several later pronouncements, including by the coordinate benches of the Tribunal, and represents the settled position of law that mere confessional statements, in the absence of corroboration, are insufficient to sustain additions. He also drew our attention to the Mahadhan Agritech Ltd. v. ACIT (ITA No. 2227/Mum/2024) decision, wherein this very Bench had, following the dictum of Harjeev Aggarwal (Delhi High Court) and Jagdish prasad Joshi E I Resorts & Clubs Pvt. Ltd. (Supreme Court), held that retracted statements under section 132(4) lose all probative value unless independently substantiated by evidence.

The learned counsel, to reinforce the argument, also referred to the official guidelines issued by the Central Board of Direct Taxes (CBDT) itself specifically, Instruction No. 286/2/2003 dated 10th March 2003 and the subsequent Circular F. No. 286/98/2013 dated 18th December 2014 both of which explicitly caution the Department against obtaining confessions of undisclosed income during search or survey operations. These circulars direct that assessments must be founded upon material evidence rather than unverified admissions. The counsel submitted that these instructions, being binding on the revenue authorities under section 119 of the Act, constitute a clear administrative mandate that confessional statements, without corroboration, are not to be made the sole foundation of assessment. He therefore urged that the action of the Assessing Officer in the present case anchoring the entire addition upon the retracted statements of TNS was in flagrant violation not only of settled judicial doctrine but of the Board‟s own directives.

The learned Authorised Representative then turned to what he termed the “central infirmity” of the entire assessment the treatment of the seized excel sheet as conclusive documentary evidence. He contended that even if, arguendo, the statements under section 132(4) were to be disregarded or viewed with circumspection, the excel sheets themselves, in the absence of any corroboration, were nothing E I Resorts & Clubs Pvt. Ltd. but “dumb documents” incapable of independent evidentiary value. They were not part of the books of account, bore no authentication, and were admittedly prepared by PDG and not by any of the Directors of the assessee. The presumption under section 132(4A), he submitted, applies only to documents found to “belong to” the assessee and does not extend to the private MIS statements of an outsider like PDG . It was emphasised that the Department itself had not demonstrated that the seized excel sheets were maintained under the assessee‟s instruction or supervision and on the contrary a plain reading of the statements also indicate that these were not prepared by them as the words‟ Received from EI Group’ would not have been mentioned had the statement been prepared by the assessee. The AR pointed out that this fact corroborates with the statement of NKS that this statement was prepared by PDG.

In support of this proposition, the learned AR drew strength from the celebrated decision of the Hon’ble Supreme Court in Central Bureau of Investigation v. V.C. Shukla & Ors. [Criminal Appeal Nos. 247–256 of 1998], wherein it was held that loose sheets or diaries, not being books of account regularly kept in the course of business, are not admissible evidence under section 34 of the Indian Evidence Act. The Court observed that entries made by one person in such documents, unless corroborated by independent evidence, cannot fasten liability on another. This, the AR submitted, was directly applicable to the present case, where the Assessing Officer sought to tax the assessee company on the strength of the personal notings of PKS, without E I Resorts & Clubs Pvt. Ltd. establishing authorship, authenticity, or relevance. He also placed reliance on the judgment of the Hon’ble Supreme Court in Common Cause (A Registered Society) v. Union of India [(2017) 394 ITR 220 (SC)] the celebrated “Birla–Sahara Diaries” case wherein the Court had categorically held that uncorroborated third-party records found in the course of search have no evidentiary value whatsoever.

The learned counsel further cited a line of decisions from the jurisdictional and coordinate benches to reinforce the “dumb document” principle. Reference was made to Principal CIT v. Umesh Ishrani [(2019) 108 taxmann.com 437 (Bom)], where the Hon‟ble Bombay High Court upheld the Tribunal‟s finding that rough, unauthenticated notings in seized diaries, unaccompanied by corroborative evidence, could not justify addition under sections 68 or 69A. He also drew our attention to Harish Textile Engineers Ltd. v. DCIT [(2015) 63 taxmann.com 66 (Bom)], and DCIT v. Padmashree Dr. D.Y. Patil University [(2024) 159 taxmann.com 353 (Mum Trib)], both reiterating that such scribbled records, unless validated through substantive inquiry, are mere dumb documents. The AR thus submitted that the legal landscape on this issue is unequivocal: dumb documents, being self-serving, incomplete, or untested, cannot by themselves be a foundation for addition, particularly when the statements accompanying them have been retracted and no further corroboration is forthcoming.

Having thus traversed the legal authorities, the learned AR concluded that the entire assessment was built on E I Resorts & Clubs Pvt. Ltd. conjecture and surmise. The Assessing Officer, he submitted, had not summoned or examined any of the alleged receivers of cash, though their details were available. No corroboration, direct or circumstantial evidence was adduced; and yet, the assessee was visited with enormous additions merely on the strength of what were, at best, an MIS statement. To uphold such additions, he urged, would be to elevate suspicion to the level of proof, an approach that has been consistently disapproved by Courts. The learned AR therefore prayed that the additions sustained by the CIT(A) of Rs.2,58,00,000 under section 69A/69B, be deleted in toto, and that the assessment itself, founded on invalid notice and manual DIN, be declared void ab initio.

These submissions were made in respect of the additions under section 69A/69B in all the above appeals.

On the legal grounds, the summary of the ld. Counsel submissions are as under:- A) Manual DIN (i) The AR pointed out that the DIN mentioned on the following assessment order was not in accordance with the CBDT Circular No. 19/2019 dated August 14, 2019 and therefore the Order passed is bad in law and is liable to be quashed:

The Assessee further submit that none of the above decisions have been stayed by Hon‟ Supreme Court and therefore the same has the binding force on the lower appellate authorities. In this connection the Assessee relies on the decision of Jurisdictional Bombay High Court in the case of Bank of India vs ACIT [2025] 170 taxmann.com 422 (Bombay). C) Defective Notice issued under section 148 E I Resorts & Clubs Pvt. Ltd. The AR argued that the reassessment proceedings are invalid in law, as the notice issued under section 148 of the Income Tax Act in the case of E I Resorts & Clubs Pvt Ltd. for AY 2012-2013 and 2020-2021 is fundamentally defective.

The learned Departmental Representative (DR), on his part, sought to defend the orders of the Assessing Officer and E I Resorts & Clubs Pvt. Ltd. the learned CIT(A) with considerable fervour. He submitted that the seized excel sheets and loose papers though not part of the statutory books of account, constituted contemporaneous records maintained by a responsible person of the group, and therefore, merited serious evidentiary consideration. The DR argued that TNS was a key managerial person who, by virtue of his long-standing involvement in the affairs of the group, had intimate knowledge of the cash transactions and dealings in land. The DR argued that the very fact, that the excel sheet and loose paper were discovered from the office premises of the assessee gave rise to a presumption under section 132(4A) that the contents thereof belonged to the assessee. He further argued that the statement of TNS, recorded contemporaneously during the search, carried evidentiary weight. According to the DR, such testimonies could not be brushed aside as unreliable merely because of subsequent retractions.

The learned DR further contended that the retractions filed by TNS and NKS were afterthoughts, strategically made only after they had realized the adverse implications of their earlier admissions. Such belated retractions, he argued, should not dilute the evidentiary value of statements recorded under section 132(4), which, by legislative design, enjoy a special evidentiary status. In this connection, he drew reference to certain judicial pronouncements where Courts have held that retractions lacking immediate contemporaneity or supporting explanation cannot be accepted at face value. The DR also maintained that while the excel sheets / loose paper may not have been formal books of account, they E I Resorts & Clubs Pvt. Ltd. nevertheless reflected a coherent pattern of transactions covering multiple years, with cross-references to names, amounts, and land parcels, thereby lending internal consistency and credibility to the entries. He urged that the Assessing Officer had correctly distinguished between the entries relatable to payment by cheque and entries relatable to payment by cash.

On the question of corroboration, the learned DR contended that complete mathematical or documentary correlation is not always possible in cases of search, and that circumstantial inference drawn from the seized material can, in appropriate cases, suffice for sustaining an addition. He emphasized that the Assessing Officer, by collating the excel sheet and loose sheet with the statements of key managerial person had constructed a cogent evidentiary mosaic pointing to unaccounted transactions. The DR urged that the Tribunal should not substitute its own appreciation of evidence in place of the Assessing Officer‟s considered view, unless such view is perverse or devoid of rational basis. In his submission, the order of the CIT(A), which had already granted substantial relief, represented a fair equilibrium between departmental interest and taxpayer‟s grievance, and no further deletion was warranted.

Further, the statement of TNS was considered only in part. The AO ignored the statement where TNS has stated that the cash was sourced from Estate. The AO has not recorded the statement of TNS in respect of various other entries found in the excel sheet. Thus, this statement per se cannot lead to conclusion that notings in the excel sheet prepared by PDG in his individual capacity as MIS statement can lead to adverse inference in so far as assessee company is concerned that they paid cash towards acquisition of land.

Another important fact is that both TNS and NKS have retracted their statements before the learned Assessing Officer. The reasons for such retraction were that they were not even aware that their statements would be used against the assessee company, particularly when the seized excel sheet were not prepared by any Director or employee of the E I Resorts & Clubs Pvt. Ltd. assesse company. When statements have been retracted with cogent and plausible reasons, the law casts a corresponding duty on the Assessing Officer to summon those persons, confront them with their earlier statements, and subject them to cross-examination. Such procedural safeguard, as repeatedly emphasized by the Hon‟ble Supreme Court in several decisions cited before us by learned counsel, is not a matter of indulgence but a sine qua non of natural and fair adjudication.

The mere discovery of excel sheet which are not even prepared by the directors of the assessee company and remain uncorroborated by any external evidence, cannot, by itself, form the sole basis for an addition. Particularly so when the authorship and authenticity of such documents are in dispute. The Investigation Wing, which carries out the search, may record statements or seized documents; however, the same are merely inputs for further enquiry. Once the material is transmitted to the jurisdictional Assessing Officer, it becomes incumbent upon him to apply his own independent mind and conduct proper enquiry to determine whether such statements or seized documents can lawfully lead to any addition. 39.1. The Assessing Officer cannot act as a mere forwarding agent of the report or view expressed by the Investigation Wing and mechanically incorporate the same in his assessment order without exercising his own judgment as to whether such information or view can legitimately form the foundation of an addition within the four corners of law. At best, the E I Resorts & Clubs Pvt. Ltd. information and material emanating from the Investigation Wing may serve as a trigger or starting point to issue a show- cause notice and seek an explanation from the assessee. But once the assessee has rebutted those materials including any recorded statement with cogent reasons, the Assessing Officer must judiciously evaluate such explanation and undertake at least a prima facie enquiry to test the correctness of the rebuttal and strengthen the evidentiary base of the material relied upon. 39.2. If he fails to do so, sustaining any addition solely on the basis of such material gathered from the search cannot be justified. In the present case, the statements and documents relied upon by the Department have been effectively rebutted and controverted with cogent reasoning, as elaborated in detail above. The Assessing Officer, functioning as a quasi- judicial authority, is bound to apply his mind independently and adjudicate the issue in a fair and reasoned manner. 39.3. The presumption under section 132(4A) is, at best, a limited and rebuttable presumption applicable only in the context of seizure and custody, and cannot, by itself, elevate a private employee‟s scribblings into proof of income chargeable to tax. The Assessing Officer‟s reliance on extrapolation to make addition in each year extending the inference drawn from a uncorroborated excel sheet amounts more to conjecture than to judicial reasoning.

This concern is further magnified when the foundation on which the said addition was made i.e. Statement of TNS has been retracted and no further examination or cross- E I Resorts & Clubs Pvt. Ltd. verification has been undertaken. In light of these circumstances, the very evidentiary substratum of the additions evaporates, leaving behind nothing but suspicion. The Assessing Officer‟s approach of brushing aside the retractions as afterthoughts, without testing their veracity through examination or cross-questioning, constitutes a serious procedural infirmity.

We therefore hold that the Assessing Officer, in relying solely upon unverified excel sheet and uncorroborated statements, has traversed beyond the permissible confines of evidentiary inference. The seized excel sheet, as earlier discussed, are incapable of interpretation without contextual evidence, and the statements upon which reliance was placed stand nullified by valid retraction. The confluence of these infirmities absence of corroboration, failure to summon and cross-examine, and the intrinsic vagueness of the documents compels us to conclude that the additions made towards alleged capital gains and unexplained money are devoid of factual and legal foundation. In the result, the additions sustained under the head “Unexplained Investment U/s 69A/69B” amounting to ₹2,58,50,000 in the case of E I Resorts and Clubs Private Limited, and under section 69A/69B in AY 2012-2013 and Rs 133,98,747 for AY 2020- 21 which has been confirmed in principle , cannot be upheld and are hereby deleted. The Orders passed by the CIT[Appeals] are accordingly reversed.

Having disposed of the additions of merits, we now turn to legal ground concerning the validity of the assessment itself. Upon the submissions and the judicial precedents, especially of Hon‟ble Jurisdictional High Court which is a binding precedent on us, we are persuaded that the reassessment edifice is untenable on two independent yet converging grounds. The assessee has assailed the reassessment orders on two principal planks first, that the notice under section 148 was issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer, in E I Resorts & Clubs Pvt. Ltd. contravention of the scheme notified under section 151A vide Notification S.O. 1466(E) dated 29th March 2022; and second, that the assessment order bears a manually inscribed Document Identification Number (DIN), contrary to CBDT Circular No. 19 of 2019 dated 14th August 2019. On the first issue, the legal position is no longer res integra. The Hon‟ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT [(2024) 464 ITR 430 (Bom)] has decisively explained that where Parliament and the delegated notification have assigned jurisdiction to the faceless unit, the jurisdiction of the local officer stands eclipsed. The scheme does not contemplate a concurrent or overlapping authority. Any notice issued dehors the faceless framework is coram non-judice and the proceeding is void at inception. The exposition laid down by the Hon‟ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT has since been consistently followed by the same Court in Capital G LP v. ACIT, Abhin Anil Kumar Shah v. ITO [(2024) 468 ITR 350 (Bom)], and Ganesh Nivrutti Jagtap v. ACIT [(2024) 166 Taxmann.com 168 (Bom)], thereby fortifying the principle that the faceless assessment regime under section 151A is not a matter of administrative convenience but a jurisdictional imperative. The High Court in these decisions has unambiguously held that once jurisdiction is statutorily vested in the Faceless Assessing Officer, any notice issued by the Jurisdictional Assessing Officer is coram non judice and consequently void ab initio. 42.1. This view now stands further affirmed by the Hon‟ble Supreme Court in Deepanjan Roy v. ADIT [SLP (C) No. 18753 of 2025], wherein the Special Leave Petition filed by E I Resorts & Clubs Pvt. Ltd. the Revenue against the decision of the Hon‟ble Telangana High Court in Writ Petition No. 23573 of 2024 upholding the invalidity of notices issued by the Jurisdictional Assessing Officer under section 148 was dismissed. The dismissal of the SLP lends the imprimatur of the Apex Court to the settled proposition that reassessment notices issued outside the framework of the faceless scheme are jurisdictionally incompetent. 42.2. In the absence of any contrary authority or distinguishing factual matrix, we are bound to follow the consistent line of judicial precedent emanating from the Hon‟ble Jurisdictional High Court. None of these decisions have been stayed, modified, or reversed by the Hon‟ble Supreme Court. Accordingly, these binding pronouncements of the Hon‟ble Bombay High Court command full precedential authority over this Tribunal.

The second legal infirmity relates to the manner in which the impugned assessment orders were issued bearing a manually written Document Identification Number (DIN) and followed by a separate communication of the DIN several weeks later. The undisputed factual matrix reveals that the assessment order was dated 28th March 2025, whereas the intimation letter bearing the DIN was generated and communicated on 30th April 2025. Thus, on the date when the assessment order was passed, no DIN existed in the system. The purported handwritten DIN subsequently inserted in the body of the order is a post facto attempt at regularization. This practice, we regret to note, stands in E I Resorts & Clubs Pvt. Ltd. direct contravention of the binding mandate of CBDT Circular No. 19 of 2019 dated 14th August 2019, which prescribes that “no communication shall be issued by any income-tax authority without a computer-generated DIN, and any communication issued in contravention thereof shall be treated as invalid and shall be deemed to have never been issued.” The Circular, being issued in exercise of powers under section 119 of the Act, has statutory force and is binding upon all officers of the Department.

The Circular admits of only limited exceptions in cases involving system outages, emergencies, or other exceptional circumstances and even then, mandates the recording of reasons in writing, prior approval of the Chief Commissioner or Director General, and contemporaneous documentation of such approval in the assessment record. The Revenue has neither pleaded nor produced any evidence that such conditions were satisfied in the present case. On the contrary, the generation of DIN after the date of assessment belies any claim of technical exigency. The omission, therefore, is not a mere procedural irregularity but a substantive breach that goes to the root of jurisdiction. The Hon’ble Bombay High Court in Ashok Commercial Enterprises v. ACIT [(2023) 154 Taxmann.com 144 (Bom)] has authoritatively held that failure to issue an order through the designated ITBA portal, or issuance of an order without a valid pre-existing DIN, renders such order invalid and non est in the eyes of law. The Court rejected the argument that subsequent intimation of DIN could cure the defect, holding that such post-dated compliance defeats the purpose of the Circular, which is to E I Resorts & Clubs Pvt. Ltd. ensure transparency, traceability, and audit trail of every communication issued by the Department.

The same principle was reaffirmed by the Hon’ble Madras High Court in CIT v. Laserwords US Inc. [(2025) 175 Taxmann.com 920 (Mad)], where it was held that an assessment order and DRP proceedings issued without a valid DIN were void ab initio. The Court observed that the procedural mandate under Circular No. 19 of 2019 is not directory but mandatory, and that even if a DIN was generated later and handwritten in the order, such post facto insertion could not cure the inherent defect of invalidity. The reasoning was reiterated in CIT (International Taxation) v. Sutherland Global Services Inc. [(2025) 175 Taxmann.com 897 (Mad)], where the Hon‟ble Court observed that the absence of a pre- generated DIN, or the failure to record reasons and obtain prior approval for manual issuance, is fatal to the validity of the order. These rulings, when read conjointly, leave no room for doubt that compliance with the DIN protocol is a jurisdictional prerequisite and not a curable irregularity.

The coordinate benches of this Tribunal have consistently followed this judicial position. In DCIT (Central Circle–7(2)) v. Shubhkanchi Trading Pvt. Ltd. (ITA No. 1600/Mum/2022), the Tribunal, applying the ratio of Ashok Commercial Enterprises (supra), quashed the assessment order for violation of the DIN requirement, observing that the issuance of a manual order without a computer-generated DIN was antithetical to the CBDT‟s stated policy of transparency and accountability. Likewise, in CIT v. Laserwords US Inc.

Having held so, it necessarily follows that the reassessment proceedings initiated under section 148 by the jurisdictional Assessing Officer, in violation of the Faceless Scheme under section 151A and compounded by the failure to generate and quote a valid DIN, stand vitiated in law. The dual breaches one jurisdictional, the other procedural strike at the root of the assessment‟s validity. The notice under section 148, having been issued by an officer not authorised under the notified scheme, is coram non judice, and the subsequent order passed without a valid DIN is a nullity. This conclusion is fortified by the decision of the Hon‟ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT (supra), which has been consistently followed in Capital G LP v. ACIT (Writ Petition No. 15289 of 2024), Abhin Anil Kumar Shah v. ITO [(2024) 468 ITR 350 (Bom)], and Ganesh Nivrutti Jagtap v. ACIT [(2024) 166 Taxmann.com 168 (Bom)]. The dismissal of the Special Leave Petition by the Hon’ble Supreme Court in Deepanjan Roy v. ADIT [SLP (C) No. 18753/2025] lends further imprimatur to this legal position.

The third legal infirmity relates to the manner in which the impugned notice has been issued under section 148. The AO has issued the notice under section 148 on the ground that the search was conducted on the assesse despite the fact that no search was ever conducted on the assesse. The reliance on the full bench of the Bombay High Court in the case of Mohd Farhan A Sheik (125 taxmann.com 253) clearly applies to the facts of the case at hand and respectfully following the full bench decision of jurisdictional High Court, the notice issued under section 148 is held to be defective. 48.1. The cumulative effect of our findings leads inexorably to the conclusion that both the reassessment proceedings and the resultant assessment orders are unsustainable. The notice under section 148, issued by an authority bereft of jurisdiction under the Faceless Assessment Scheme, is void ab initio. The assessment order, bereft of a valid, pre-generated DIN, stands condemned by the express stipulations of CBDT Circular No. 19 of 2019, as interpreted by the binding judgments of the jurisdictional and other High Courts. The Revenue, though afforded ample opportunity, has not demonstrated compliance with any of the statutory or procedural conditions that could lend legitimacy to its actions. In this view of the matter, the entire reassessment exercise is vitiated at inception, and all consequential proceedings are rendered nullities in the eye of law.

In the result, and in consonance with our detailed findings hereinbefore, we hold that (i) the additions made under section 69A on account of alleged cash investment in Kolgaon land stand deleted for want of evidence; (ii) the reassessment proceedings initiated under section 148 are quashed for lack of jurisdiction in terms of the Faceless Assessment Scheme; and (iii) the assessment orders are further invalidated for non-compliance with CBDT Circular No. 19 of 2019 owing to the absence of a valid pre-generated DIN. (iv) the assessment orders are further invalidated for issue of defective notice under section 148. The remaining grounds pertaining to interest under sections 234A, 234B, and 234C are purely consequential and call for no separate adjudication. The appeals filed by the assessees are thus allowed in part, whereas those preferred by the Revenue stand dismissed.

We now turn to the connected appeals filed by the department for AY 2012-2013 and 2020-2021 and cross appeal filed by the assesse for the assessment year 2020- 2021, wherein the facts, issues, and the reasoning adopted by the Assessing Officer are pari materia to those already adjudicated upon in the lead year. In each of these years, the additions have emanated from the same excel sheet and the same statements recorded during the search, with only the quantum of alleged receipts differing in arithmetical magnitude. The learned representatives on both sides fairly conceded that the evidentiary foundation, the nature of seized material, and the pattern of assessment are identical. Having already held that the very basis of these additions is legally E I Resorts & Clubs Pvt. Ltd. infirm and evidentially hollow, it necessarily follows that the same reasoning applies mutatis mutandis to these appeals as well. We therefore adopt our findings and conclusions in the lead appeal as applicable in toto to the remaining years under consideration and dismiss the appeals of the Department.

For the sake of ready reference the grounds raised by the assessee in other year and the Revenue grounds are incorporated as under:- (A)

Whether on the facts and circumstances of the case and E I Resorts & Clubs Pvt. Ltd. in law, the Ld CIT(A) erred in not considering the method of determination of proportionate cash paid for acquiring the land at Kolgaon whereby an addition of Rs. 13,55,23,303/- had been made by the Assessing Officer to be correctly calculated.; 5. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in not considering that the excel sheet seized from computer of Shri Tarun NandkumarSeksaria was the incriminating material containing the detailed bifurcation of the amounts paid in cheque for acquisition of land at Kolgaon (Column 'A') and amounts paid in cash for acquiring the said land at Kolgaon (Column'B'); 6. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in upholding the contention of the assessee that the amounts mentioned in Column B' of the excel sheet seized from the computer of Shri Tarun NandkumarSeksaria represented the projected return on investment made in the land purchased at Kolgaon; 7. The appellant craves leave to add to, alter, amend, modify and/or delete any or all of the above said grounds of appeal, the appellant reserves its right to file further submissions in the appeal.

Since we have held that the seized excel sheet themselves lack probative value and the statements supporting them stand retracted, the additions crumble together.

We also note that in certain assessment years, the Assessing Officer has purported to reopen completed assessments merely on the basis of the seized excel sheet, even though such material pertained entirely to earlier or later years. This mechanical transposition of entries across assessment years, without verifying the temporal correlation of the alleged transactions, amounts to impermissible telescoping of facts. The Hon‟ble Supreme Court in CIT v. Sun Engineering Works (P) Ltd. [(1992) 198 ITR 297 (SC)] held that reopening under section 147 cannot be used as a ploy for roving verification or fishing enquiry into completed matters. The Assessing Officer‟s act of extrapolating entries found in one year to reopen other years is precisely the mischief which the Court sought to prevent. On this count too, the reassessments lack legal sanctity.

Coming now to the appeals preferred by the Revenue, we find that the Department has assailed the relief granted by the learned CIT(A) in respect of certain portions of the seized material which, according to the Department, ought to have been sustained as unaccounted income. The grounds raised E I Resorts & Clubs Pvt. Ltd. are, in substance, that the CIT(A) erred in deleting additions relating to the additions emanating from the excel sheet and statements of TNS under section 69A/69B .Upon careful consideration, and based on our decision on facts in the assessee‟s case, we find no merit in the Revenue‟s grievance, which are accordingly dismissed for both years.

For completeness, we also confirm that the relief allowed by CIT(A) on computational and certain factual error made by the CIT(A) in respect of arithmetic reconciliations, while not impugned on merits, stand rendered academic in view of our decision to annul the substantive assessments themselves. Once the foundational assessment is quashed, all ancillary determinations such as depreciation recomputation, interest levies, or carry-forward adjustments lose their footing. In consequence, these incidental matters need no separate adjudication and are rendered infructuous.

Additionally, the Revenue has taken ground No.2 in AY 2020-21 relating to violation of Rule 46A. We have perused the papers filed by the assessee, assessment order and order of the ld. CIT(A), we are in agreement with the contention of the ld. AR that no evidence was produced before the ld.CIT(A) in violation of Rule 46A. Even at the time of hearing, ld. DR has not indicated what were the additional evidences which have been entertained by the ld. CIT(A). Thus, these grounds raised

For the sake of clarity and completeness, it is hereby recorded that: (i) additions made towards alleged unaccounted investment in land , are deleted in full; (ii) assessments reopened under section 147 are quashed as void ab initio for having been initiated by an officer lacking jurisdiction in contravention of the Faceless Assessment Scheme under section 151A; (iii) the assessment orders themselves are invalidated for non-compliance with CBDT Circular No. 19 of 2019 due to the absence of a valid pre-generated DIN and (iv) the assessment orders themselves are invalidated on account of defective notices issued under section 148. It is further clarified that all consequential adjustments such as disallowances, carry-forward of losses, and levy of interest under sections 234A, 234B and 234C are rendered academic in view of the annulment of the primary assessment orders.

The cumulative outcome of these appeals is thus be summarized, for administrative convenience, as follows:- ITA No. A.Y Result 3213/Mum/2025 2012-13 Allowed CO171/MUM/2025 2020-21 Allowed 3886/Mum/2025 2012-13 Dismissed 3926/Mum/2025 2020-21 Dismissed

All the appeal and CO filed by the assessee are allowed in full, whereas the appeals preferred by the Revenue are dismissed. No order as to costs. Order pronounced on 28th October, 2025.