THE ESTATE INVESTMENT COMPANY PRIVATE LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -8(1), MUMBAI

ITA 3222/MUM/2025Status: DisposedITAT Mumbai17 October 2025AY 2022-2367 pages
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What did the Tribunal hold?

The Tribunal held that the reassessment orders framed pursuant to notices under section 148 or 153A, based on the seized diaries, statements, and MIS sheets, were annulled for want of jurisdiction, procedural legitimacy, and evidentiary support. The Tribunal found that the assessments were initiated by an officer lacking jurisdiction in contravention of the Faceless Assessment Scheme and invalidated the assessment orders for non-compliance with CBDT Circular No. 19 of 2019 due to the absence of a valid pre-generated DIN. Consequently, all consequential additions were set aside. Specifically, additions towards alleged NOC receipts treated as capital gains were deleted in full. Additions made under section 69A or 69C for unexplained money or expenditure were also deleted. The Tribunal found no merit in the Revenue's grievance against the CIT(A)'s deletion of additions relating to diary entries not marked 'KB', agreeing that only entries specifically identified, explained, and linked to the assessee could be considered. The Revenue's plea for enhancement was dismissed as not maintainable. The grounds raised by the Revenue regarding violation of Rule 46A were also dismissed. The assessee's appeals were allowed, and the Revenue's appeals were dismissed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard a batch of appeals concerning The Estate Investment Company Pvt. Ltd. (assessee) and the Deputy Commissioner of Income Tax (Revenue) for assessment years 2014-15 to 2022-23. The appeals arose from search and survey operations conducted on October 7, 2021, which led to the seizure of diaries, loose papers, and digital data. The Assessing Officer (AO) made additions based on these documents and statements recorded under section 132(4), including capital gains on alleged NOC receipts and unexplained money under section 69A. The assessee's appeals challenged these additions, while the Revenue's appeals sought to sustain them and sought enhancement. The appeals were filed against orders of the CIT(A)-50, Mumbai.

What were the issues?

1. Whether the additions made by the Assessing Officer on account of alleged NOC receipts treated as capital gains are justified, considering the evidentiary value of seized diaries and statements (Section 132(4))? 2. Whether the additions made under section 69A for unexplained money, based on cash entries in diaries not linked to NOC transactions, are sustainable? 3. Whether the Revenue's appeals against the deletion of additions by the CIT(A) relating to diary entries not marked 'KB' are valid? 4. Whether the Revenue's plea for enhancement of income is maintainable? 5. Whether the Revenue's grounds regarding violation of Rule 46A are valid? Assessee's Contentions: The assessee argued that the assessments were vitiated by lack of jurisdiction and procedural illegality, including non-compliance with the Faceless Assessment Scheme and CBDT Circular No. 19 of 2019 (absence of DIN). They contended that the seized material lacked evidentiary support for the additions made. Revenue's Contentions: The Revenue argued that the CIT(A) erred in deleting additions relating to diary entries not marked 'KB' and contended that these should have been attributed to the assessee. They also sought enhancement of income and raised grounds concerning violations of Rule 46A.

Which sections of the Income-tax Act were involved?

Section 132(4),Section 69A,Section 69C,Section 147,Section 148,Section 151A,Section 153A,Section 251,Section 234A,Section 234B,Section 234C

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Income Tax Appellate Tribunal, ‘E’ BENCH

Before: SHRI AMIT SHUKLA & SHRI ARUN KHODPIA

Heard together (2 matters)

ITA No. 3928/Mum/2025
ITA No.3012/Mum/2025

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PER BENCH:

The present batch of appeals emanates from a series

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