DCIT, CENTRAL CIRCLE-8(1), MUMBAI, MUMBAI vs. THE ESTATE INVESTMENT COMPANY PVT LTD, MUMBAI

ITA 3936/MUM/2025Status: DisposedITAT Mumbai17 October 2025AY 2017-1867 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessments framed pursuant to notices under section 148 or 153A, based on the seized diaries, statements, and MIS sheets, stood annulled for want of jurisdiction, procedural legitimacy, and evidentiary support. Specifically, additions made 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. Assessments reopened under section 147 were quashed as void ab initio for initiation by an officer lacking jurisdiction, contravening the Faceless Assessment Scheme. The assessment orders were invalidated for non-compliance with CBDT Circular No. 19 of 2019 due to the absence of a valid pre-generated DIN. All consequential adjustments, including disallowances and interest, were rendered academic. The Tribunal found no merit in the Revenue's grievance regarding the deletion of diary entries not marked 'KB', agreeing with the CIT(A) that only specifically identified and linked entries could be considered. The Revenue's plea for enhancement was not maintainable as it sought to introduce new sources of income. The grounds relating to violation of Rule 46A were dismissed as no evidence was produced before the CIT(A) in violation of the rule. 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 DCIT, CC-8(1), Mumbai (revenue) for assessment years ranging from 2014-15 to 2022-23. These appeals arose from assessment and reassessment orders passed after search and survey operations conducted on October 7, 2021. The core of the dispute involved additions made by the Assessing Officer (AO) based on seized diaries, loose papers, digital data, and statements recorded under section 132(4). The AO treated certain notings as capital gains on alleged NOC receipts and unexplained money under section 69A. The assessee appealed these additions, and the revenue also filed appeals seeking to sustain certain additions deleted by the CIT(A). The ITAT consolidated the appeals due to common issues.

What were the issues?

1. Whether the additions made by the Assessing Officer on account of alleged NOC receipts treated as capital gains are sustainable in law, particularly concerning the evidentiary value of seized diaries and statements (Section 45 of the Income Tax Act, 1961)? 2. Whether the additions made by the Assessing Officer under section 69A for unexplained money, based on cash entries in diaries not linked to NOC transactions, are valid? 3. Whether the relief granted by the CIT(A) in deleting additions relating to diary entries not marked 'KB' and not corroborated was justified? 4. Whether the Revenue's appeals seeking to sustain additions deleted by the CIT(A) have merit? 5. Whether the Revenue's grounds regarding violation of Rule 46A by the CIT(A) are sustainable? Assessee's Contentions: The assessee argued that the assessments were vitiated due to procedural irregularities, including lack of jurisdiction, contravention of the Faceless Assessment Scheme, and non-compliance with CBDT Circular No. 19 of 2019 regarding DIN. They contended that the seized material lacked evidentiary value and the additions were not substantiated. Revenue's Contentions: The Revenue argued that the CIT(A) erred in deleting additions relating to diary entries not marked 'KB' and that these should have been sustained as unaccounted income. They also sought enhancement of income on the footing that certain unaccounted receipts were wrongly omitted or under-assessed. The Revenue also raised grounds regarding violation of Rule 46A.

Which sections of the Income-tax Act were involved?

Section 132,Section 132(4),Section 45,Section 69A,Section 69C,Section 147,Section 148,Section 151A,Section 153A,Section 251,Section 234A,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(13)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, ‘E’ BENCH MUMBAI

Before: SHRI AMIT SHUKLA & SHRI ARUN KHODPIA

Heard together (2 matters)

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

Read from the judgment's own cause title. This page is filed under one of them.

PER BENCH:

The present batch of appeals emanates from a series of assessment and reassessment orders passed pursuant to search and sur

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 132

All 14,598 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →