DY. COMMISSIONER OF INCOME TAX, MUMBAI vs. ASHRAY REALTORS, MUMBAI

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: A BEFORE HON’BLESHRI PAWAN SINGH, JUDICIAL MEMBER AND HON’BLE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 6150/MUM/2025 निर्धारणवर्ा/Assmt. Year:2018-19) Permanent Account Number: AALFA0469J DY. COMMISSIONER OF ASHRAY REALTORS INCOME TAX 11/12 NAGARWALE ROOM NO. 420, G BLOCK, COLONY, PODDAR ROAD BANDRA KURLA COMPLEX, Vs. OPP LAXMI NARCENTRE MUMBAI, MAHARASHTRA MALAD EAST, MUMBAI 400051 (प्रत्यर्थीRespondent) (अपीलार्थीAppellant)

निर्धाऩितीद्वधिध/Assessee represented by: Shri Rakesh Joshi, CA िधजस्विद्वधिध/Revenue represented by: Shri Surendra Mohan, Sr. DR

सुिवधईकीतधिीख/Date of conclusion of hearing: 06.05.2026 घोषणधकीतधिीख/Date of pronouncement: 03.08.2026 आदेश / ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal is filed by the revenueagainst the order of ld. Commissioner of Income Tax (Appeal)52, Mumbai vide DIN: ITBA/APL/S/250/2025-26/1078467610(1) dated 14.07.2025 passed against the assessment order by Assistant Commissioner of Income Tax Central Circle 4(1), Mumbai u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 30.12.2019 for the Assessment Year 2018-19.

On the facts and circumstances of the case and in law, whether i. Ld. CIT(A) was justified in deleting the addition of Rs. 4,89,64,884/- made by the AO on account of bogus purchase, without appreciating the fact that the assessee was unable to prove the genuineness of such transactions along with the documentary evidence? Whether on the facts and circumstances of the case & in law, the ii. Ld. CIT(A) is justified in ignoring the sworn statement of Shri Dipak Padia, employee of the assessee group, wherein he clearly admitted that the assessee was engaged in booking bogus purchases, corroborated by specific entries in the seized Excel file AH.CALCI.xlsx, maintained under the instructions of Shri Rashmin Rughani and supported by email directly relating to the assessee and group concerns? Whether on the facts and circumstances of the case & in law, the iii. Ld. CIT(A) is justified in not appreciating that no prudent person would create and store such an Excel file in their email containing names and amounts of bogus purchase parties unless such transactions had actually occurred, and that the evidence collected during search, along with the admission of Shri Dipak Padia, clearly established that the purchase of Rs. 4,89,64,884/- was bogus and constituted an accommodation entry? 2.1. Revenue is contesting on the relief granted by the ld. CIT(A) in respect of addition made by the ld. AO on ground of alleged bogus purchases which were made on the basis of statement of one Shri Dipak Padia one of the employees of the group in which search was conducted and certain entries were found in the seized excel file maintained by him. The amount involved is Rs. 4,89,64,884/-, alleged as bogus purchases by way of accommodation entry.

3. Facts in this regard are that a search/survey action was undertaken on 07.10.2017 in the case of Sunshine Group, Sabari Developers LLP and Evergreen Enterprises and other entities, at their office premises and residences of main persons. Another search action was conducted on 18.12.2017 in the case of Ashray Group at their office and residences of the promoters.Assessee was also covered in the said search action.Present year under consideration is the year of search and hence an abated year.

3.1. Assessee is engaged in the business of construction activity with the status of partnership firm.It filed its return of income on 29.09.2018, reporting total income at nil. Ld. AO noted that assessee had made purchase of Rs. 2,61,15,267/- from Hetal Enterprises, of Rs. 1,44,06,539/- from Jagannath Steel Company and Rs. 84,43,078/- from Shriya Enterprises. In this regard, we noted that in the course of search action, statement of one of the employees of the group namely Shri Dipak Padia was on record. According to the ld. AO, incriminating evidences relating to bogus purchases made by the assessee from the aforesaid three parties were found and seized from the email account of Shri Dipak Padia in a folder containing an excel sheet. The said excel sheet which forms the basis for the impugned assessment is extracted below:

3.2. Ld. AO referred to the statement of Shri Dipak Padia recorded under section 131 which according to him revealed that the said excel sheet maintained by him contains details of cash income and expenses of the group who is engaged in booking bogus purchases. Details and explanations were called for by the ld. AO in this regard from the assessee against which detailed submissions were made. Assessee contended that the statement made by Shri Dipak Padia was retracted for which affidavit was placed on record. According to the assessee there is no corroborative material other than the retracted statement of Shri Dipak Padia to taint it for the bogus purchases. Further, cross examination was sought of Shri Dipak Padia for which ld. AO noted that the result of cross examination is merely a self-serving statement to save the assessee from its tax liability. He noted that since assessee and Shri Dipak Padia share employer-employee relationship, therefore, is prone to be biased. He thus, observed that the denial of the transaction by the employee is mutually beneficial and they connived together to cause an injury to the Revenue.

3.3. According to the ld. AO, assessee failed to discharge its onus by submitting complete documentary evidences to prove the genuineness of the transaction by establishing delivery of goods. He thus, completed the assessment by making the addition in this regard.

I. Confirmation letter received from the seller party along with ledger of M/s Hetal Enterprises, M/s. Shriya Enterprises for the purchases made by the assessee from the said parties; II. Bank statement highlighting the relevant payments received by the said parties from the assessee; III. Purchase bills along with delivery challan; IV. Accounts Ledger of Ashray Housing for the purchase made from M/s Hetal Enterprises, M/s Shriya Enterprises and M/s Jagannath Steel Company.

4.1. Ld. CIT(A) called for a remand report from the ld. Assessing Officer to verify these additional evidences and make his submissions. Ld. AO noted in the remand report that assessee has not submitted anything to prove actual delivery of goods purchased from the aforesaid parties. He noted that assessee has not submitted weighment slips, gate pass, vajan-kata receipt, proof of duty, etc. In support of the claim in the rejoinder to the remand report, assessee made a detailed submission explaining that weighment slip and vajan- kata means the same. All the invoices mentiondetails about the delivery of goods by road containing lorry number. Further, purchases made were subjected to VAT, which has been duly discharged by the assessee, verifiable from the invoices and bank statement on record. Also, confirmation from the suppliers was placed on record along with the copy of their bank statements. Thus, assessee strongly contended that none of the documentary evidences placed on record have been found to be deficient or defective so as to disapprove the claim made by the assessee.

4.2. The entire edifice for the addition made lies on one excel sheet found from one of the employees of the searched group and his statement.Ld. CIT(A) took note of all the submissions including the remand report and rejoinder.He also took into account documentary evidences and the explanation given by the assessee and formed an opinion that assessee has discharged its onus on proving the genuineness of the purchase transactions. He noted that addition is made on the basis of statement of Shri Dipak Padia and one excel file on his email id.With similar factual matrix, on this issue the coordinate bench of ITAT, Mumbai in the case of DCIT v. Bharat Girdharlal Rughan in ITA no. 1511 to 1517/Mum/2023 dated 31.10.2023 held in favor of the assessee. Ld. CIT(A) relied on thisjudicial precedent.Relevant paragraphs from this decision are extracted below for ready reference:

“Moreover, the entire assessment order has been framed by the AO on the basis of one excel sheet found in possession of Mr. Dipak Padia and his statement who has referred to the transaction as discussed by the Ld. CIT(A) by thrashing the facts which further support the case of the assessee that these transactions referred to by the assessee belong to Mr. Nilesh Bharani and not the assessee. Moreover, Mr. Dipak Padia whose statement has been referred in para 5.19 of the assessment order has named one Mr. Rashmin Rughani and has not named assessee as his boss. Moreover, liability of addition cannot be fasten on the basis of statement only without any corroborative evidence. Furthermore, when the AO has provided an opportunity of cross examination of one Mr. Nilesh Bharani to the assessee it has proved on record in the cross examination that the transactions between them (Mr. Nilesh Bharani and the assessee) were through banking channel and TDS and brokerage were deducted as is evident from question No.6 of the statement of Mr. Nilesh Bharani recorded by the AO. Moreover, during the recording of statement and cross examination of Mr. Nilesh Bharani parties have confirmed that they had transactions with banking channel only. In view of what has been discussed above there is no incriminating evidence against the assessee from the material seized from the premises of Mr. Nilesh Bharani and in these circumstances the Ld. CIT(A) has validly and legally deleted the addition made by the AO under section 69 & 56 of the Act. So the appeals filed by the Revenue for A.Y. 2012-13 to 2017-18 are dismissed.” 5. We heard both the parties and perused the material on record. From the excel sheet which is relied upon by the ld. AO, we note that the name of the party „Jagannath‟ is not mentioned therein.Also, the addition made by the ld. AO and the amounts mentioned therein do not match. Further, assessee has corroborated its transaction by producing verifiable documentary evidences. Ld. AO laid emphasis on furnishing of evidences for establishing delivery of goods for which also assessee has furnished relevant documents in the form of vajan-kata slips i.e. weighment slips along with details of lorry number as contained in the respective invoices. Ld. AO did not make any further enquiry to corroborate the factual date furnished by the assessee along with the documents from the corresponding department of VAT/GST for cross verification.

5.1. We find that in the conspectus of the above discussion, addition made is merely on the basis of statement of Shri Dipak Padia and the excel sheet found from his email id without there being any corroborative documentary evidence to taint the assessee for bogus purchases. The decision of coordinate bench of ITAT in the case of Bharat Girdharlal Rughan (supra) finds favor with the assessee as dealt by the ld. CIT(A).In the given set of facts and judicial precedent, we do not find any reason to interfere with the findings arrived at by the ld. CIT(A).

5.2. Furthermore, for our above stated finding, we find force from the decision of Hon‟ble jurisdiction High Court of Bombay in the case of

PCIT v. SVD Resins and Plastic Private Limited (2024) 166 taxmann.com 242(Bom).This decision dealt with the issue of similar factual position wherein an important observation has been made by the Hon'ble Court in para-13 of its judgment whereby it opined that “wherever relevant, any confusion in regard to the transaction being bogus, needs to be aligned only after the Assessing Officer consults the sales tax department and a thorough enquiry in regard to such specific transactions being bogus, is also conclusion of the sales tax department.” Thus, Hon'ble Court held that in absence of such a cohesive and coordinated approach of the Assessing Officer with the sales tax authorities, it would be difficult to come to a concrete conclusion with regard to such purchases/sales transaction being bogus, merely on the basis of general information, so as to discard such expenditure and make the addition thereof.

5.3. This above stated judgment was subsequently followed by the same Court in the case of Ashok Kumar Rungta vs. ITO [2024] 167 taxmann.com 429 (Bom) and also in the case of PCIT vs. Ramelex Pvt. Ltd. [2025] 179 taxmann.com 374 (Bom). Accordingly, grounds raised by the Revenue are dismissed.

Order pronounced in the open court on 03 August, 2026

Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member ANKIT, PS Mumbai Dated: 03.08.2026 Copy to:

DY. COMMISSIONER OF INCOME TAX ROOM NO. 420, G BLOCK, BANDRA 1 KURLA COMPLEX, MUMBAI, MAHARASHTRA 400051

ASHRAY REALTORS 11/12 NAGARWALE COLONY, 2 PODDAR ROAD OPP LAXMI NARCENTRE MALAD EAST, MUMBAI 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE