BANPREETSINGH SURINDERSINGH ATAL,MUMBAI vs. DCIT CC-5(2), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA Nos. 8832 to 8834/MUM/2025 Assessment Year: 2018-19 to 2020-21 & ITA Nos. 8944 & 8945/MUM/2025 Assessment Year: 2021-22 to 2022-23

Banpreetsingh Surindersingh Vs. Deputy Commissioner of Income Atal Tax, Central Circle-5(2) 175, Atal Niwas, Mumbai, J. Kautilya Bhavan, Mumbai – B. Nagar, S. O., - 400059 400051. PAN NO. AEPPA7885Q Appellant Respondent ITA Nos. 9209 to 9211/MUM/2025 Assessment Year: 2020-21 to 2022-23

Vs. Tegh Cables Private Limited Deputy Commissioner of Income 301/302 Har Krishna Tax, Central Circle-5(2) Bhawan, Charat Singh Colony Kautilya Bhavan, Mumbai – Chakala Andheri East, 400051. Chakala Midc S.O, Mumbai, 400093. PAN NO. AEPPA7885Q Appellant Respondent

: Shri Mani Jain Assessee by Revenue by : Shri. Ritesh Misra CIT DR : 25/03/2026 Date of Hearing : 11/05/2026 Date of pronouncement

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. ORDER PER BENCH:

The captioned appeals have been preferred by two assessees, The captioned appeals have been preferred by two assessees, The captioned appeals have been preferred by two assessees, namely: (i) M/s. Tegh Cables Private Limited, Mumbai, a domestic Tegh Cables Private Limited, Mumbai, a domestic Tegh Cables Private Limited, Mumbai, a domestic company, and (ii) it’s director, Shri Banpreet Suriendersingh Atal s director, Shri Banpreet Suriendersingh Atal s director, Shri Banpreet Suriendersingh Atal. These appeals are directed against separate orders passed by the These appeals are directed against separate orders passed by the These appeals are directed against separate orders passed by the learned Commissioner of Income Tax (Appeals)–53, Mumbai learned Commissioner of Income Tax (Appeals) learned Commissioner of Income Tax (Appeals) [hereinafter referred to as “the learned CIT(A)”] for various [hereinafter referred to as “the learned CIT(A)”] for various [hereinafter referred to as “the learned CIT(A)”] for various assessment years. 2. In the case of the individual assessee, Shri Banpreet In the case of the individual assessee, Shri Banpreet In the case of the individual assessee, Shri Banpreet Suriendersingh Atal, the learned CIT(A), vide a consolidated order Suriendersingh Atal, the learned CIT(A), vide a consolidated order Suriendersingh Atal, the learned CIT(A), vide a consolidated order dated 20.09.2025, adjudicated the appeals for Assessment Years dated 20.09.2025, adjudicated the appeals for Assessment Years dated 20.09.2025, adjudicated the appeals for Assessment Years 2018–19 to 2022–23. Similarly, in the case of M/s 23. Similarly, in the case of M/s 23. Similarly, in the case of M/s. Tegh Cables Private Limited, the learned CIT(A) passed a consolidated orde Private Limited, the learned CIT(A) passed a consolidated orde Private Limited, the learned CIT(A) passed a consolidated order dated 30.10.2025 covering Assessment Years 2020 dated 30.10.2025 covering Assessment Years 2020– –21 to 2022–23. It is pertinent to note that the assessments in both cases emanate It is pertinent to note that the assessments in both cases emanate It is pertinent to note that the assessments in both cases emanate from common facts and material gathered during the course of a from common facts and material gathered during the course of a from common facts and material gathered during the course of a search and seizure operation conducted by the Investigation W search and seizure operation conducted by the Investigation W search and seizure operation conducted by the Investigation Wing of the Income Tax Department under Section 132 of the Income of the Income Tax Department under Section 132 of the Income of the Income Tax Department under Section 132 of the Income-tax Act, 1961( in short the Act) ( in short the Act) on 22.12.2023. Since the issues arising on 22.12.2023. Since the issues arising in these appeals are interconnected and stem from the same in these appeals are interconnected and stem from the same in these appeals are interconnected and stem from the same search proceedings, all the appeals were heard together and are search proceedings, all the appeals were heard together and are search proceedings, all the appeals were heard together and are

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. being disposed off by by way of this consolidated order for the sake of this consolidated order for the sake of convenience and to avoi convenience and to avoid repetition.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. alteration of dates. As per the findings recorded, the figures alteration of dates. As per the findings recorded, the figures alteration of dates. As per the findings recorded, the figures reflected in the Tally data were required to be multiplied by a factor reflected in the Tally data were required to be multiplied by a factor reflected in the Tally data were required to be multiplied by a factor of 100 to arrive at the actual transaction values, and the financial of 100 to arrive at the actual transaction values, and the financial of 100 to arrive at the actual transaction values, and the financial year indicated therein was to be read by year indicated therein was to be read by adding eleven years to the adding eleven years to the recorded year.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Enterprises), M/s. L.N. Enterprises, and M/s. Hans Wires and Hans Wires and ctual movement of goods Cables. It was further stated that no a Cables. It was further stated that no actual movement of goods took place in respect of such transactions, and that the took place in respect of such transactions, and that the took place in respect of such transactions, and that the arrangement involved receipt of cash from beneficiary parties, arrangement involved receipt of cash from beneficiary parties, arrangement involved receipt of cash from beneficiary parties, which was thereafter routed back through banking channels to the which was thereafter routed back through banking channels to the which was thereafter routed back through banking channels to the said entities. Through this mechanism, an amoun said entities. Through this mechanism, an amoun said entities. Through this mechanism, an amount of Rs.569.21 crores (initially quantified at crores (initially quantified at Rs.572.09 crores and subsequently 572.09 crores and subsequently revised) was introduced into the books in the guise of legitimate revised) was introduced into the books in the guise of legitimate revised) was introduced into the books in the guise of legitimate sales.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 9. On the basis of the aforesaid findings, the Assessing Officer the basis of the aforesaid findings, the Assessing Officer the basis of the aforesaid findings, the Assessing Officer proceeded to make additions in the hands of Shri Banpreet proceeded to make additions in the hands of Shri Banpreet proceeded to make additions in the hands of Shri Banpreet Suriendersingh Atal towards commission income arising from both Suriendersingh Atal towards commission income arising from both Suriendersingh Atal towards commission income arising from both modes of operation for the relevant assessment years under modes of operation for the relevant assessment years under modes of operation for the relevant assessment years under consideration. Correspondingly, in the case of M/s Tegh Cables orrespondingly, in the case of M/s Tegh Cables orrespondingly, in the case of M/s Tegh Cables Private Limited, additions were made by estimating the profit Private Limited, additions were made by estimating the profit Private Limited, additions were made by estimating the profit element embedded in the alleged non element embedded in the alleged non-genuine cash sales. genuine cash sales.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 6 On the facts and circumstances of the Appellant's case and in law, the Id. 6 On the facts and circumstances of the Appellant's case and in law, the Id. 6 On the facts and circumstances of the Appellant's case and in law, the Id. CIT(A) erred in confirming the action of the Id, AO in CIT(A) erred in confirming the action of the Id, AO in relying on contents of certain relying on contents of certain tally data which was found and seized from the premises of a third party with no tally data which was found and seized from the premises of a third party with no tally data which was found and seized from the premises of a third party with no co relation with the appellant, for reasons stated in the impugned order or co relation with the appellant, for reasons stated in the impugned order or co relation with the appellant, for reasons stated in the impugned order or otherwise 7. On the facts and circumstances of the Appellant's cas 7. On the facts and circumstances of the Appellant's case and in law, the Id. e and in law, the Id. CIT(A) erred in confirming the action of the Id. AO in alleging that appellant has CIT(A) erred in confirming the action of the Id. AO in alleging that appellant has CIT(A) erred in confirming the action of the Id. AO in alleging that appellant has facilitated non-genuine sales made by various entities of Sunrise Group to M/s genuine sales made by various entities of Sunrise Group to M/s genuine sales made by various entities of Sunrise Group to M/s Tegh Cables Pvt. Ltd. on commission basis, for the reasons stated in the Tegh Cables Pvt. Ltd. on commission basis, for the reasons stated in the Tegh Cables Pvt. Ltd. on commission basis, for the reasons stated in the impugned order or otherwise. impugned order or otherwise. 8. On the facts and circumstances of the Appellant's case and in law, the Id. 8. On the facts and circumstances of the Appellant's case and in law, the Id. 8. On the facts and circumstances of the Appellant's case and in law, the Id. CIT(A) erred in confirming the action of the Id. A.O in making an addition of Rs. CIT(A) erred in confirming the action of the Id. A.O in making an addition of Rs. CIT(A) erred in confirming the action of the Id. A.O in making an addition of Rs. 7,04,188/-, being commission 1% of corresponding sales by M/s. Te , being commission 1% of corresponding sales by M/s. Tegh Cables , being commission 1% of corresponding sales by M/s. Te Pvt. Ltd., for the reasons stated in the impugned order or otherwise. The Pvt. Ltd., for the reasons stated in the impugned order or otherwise. The Pvt. Ltd., for the reasons stated in the impugned order or otherwise. The appellant submits that the aforesaid commission rate as computed by the ld. AO appellant submits that the aforesaid commission rate as computed by the ld. AO appellant submits that the aforesaid commission rate as computed by the ld. AO being excessive on the facts and prays that the same be suitably reduced.” being excessive on the facts and prays that the same be suitably reduced.” being excessive on the facts and prays that the same be suitably reduced.”

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 12.1 The Assessing Officer, on the basis of material gathered The Assessing Officer, on the basis of material gathered The Assessing Officer, on the basis of material gathered during the search proceedings in the case of the assessee and during the search proceedings in the case of the assessee and during the search proceedings in the case of the assessee and other entities belonging to the Sunrise Group, alleged that the other entities belonging to the Sunrise Group, alleged that the other entities belonging to the Sunrise Group, alleged that the assessee had facilitated assessee had facilitated accommodation entry transactions and accommodation entry transactions and earned commission therefrom. earned commission therefrom. We have already reproduced the We have already reproduced the operandi explained explained by by the the assessee assessee in in preceding preceding modus paragraphs. In the year under consideration, the allegations are of paragraphs. In the year under consideration, the allegations are of paragraphs. In the year under consideration, the allegations are of receipt of commission from providing receipt of commission from providing accommodation entry accommodation entry through Tegh Cables Private Limited as per through Tegh Cables Private Limited as per Mode Mode-2. It was specifically alleged that, under the so specifically alleged that, under the so-called “Mode called “Mode-2”, the Sunrise Group entities issued accommodation sale invoices to M/s Tegh Group entities issued accommodation sale invoices to M/s Tegh Group entities issued accommodation sale invoices to M/s Tegh Cables Private Limited, which in turn issued corresponding Cables Private Limited, which in turn issued c Cables Private Limited, which in turn issued c accommodation entries to beneficiary parties, and that the entire accommodation entries to beneficiary parties, and that the entire accommodation entries to beneficiary parties, and that the entire facilitation was arranged by the assessee for which he allegedly facilitation was arranged by the assessee for which he allegedly facilitation was arranged by the assessee for which he allegedly received commission at the rate of 1% of such transactions. received commission at the rate of 1% of such transactions. received commission at the rate of 1% of such transactions.

12.2 In support of the aforesaid allegation, the Assessing In support of the aforesaid allegation, the Assessing In support of the aforesaid allegation, the Assessing Officer primarily relied upon the statement of Shri Vijay Pahuja, a Officer primarily relied upon the statement of Shri Vijay Pahuja, a Officer primarily relied upon the statement of Shri Vijay Pahuja, a key person of the Sunrise Group, who stated that a part of the key person of the Sunrise Group, who stated that a part of the key person of the Sunrise Group, who stated that a part of the unaccounted cash generated from cash sales was introduced into unaccounted cash generated from cash sales was introduced into unaccounted cash generated from cash sales was introduced into the regular books of account by recording non lar books of account by recording non lar books of account by recording non-genuine sales entries in the books of S P Electro Solutions Private Limited entries in the books of S P Electro Solutions Private Limited entries in the books of S P Electro Solutions Private Limited (formerly Sunrise Enterprises), M/s L.N. Enterprises, and M/s (formerly Sunrise Enterprises), M/s L.N. Enterprises, and M/s (formerly Sunrise Enterprises), M/s L.N. Enterprises, and M/s Hans Wires and Cables, without any actual movement of goods. It Hans Wires and Cables, without any actual movement of goods. It Hans Wires and Cables, without any actual movement of goods. It was further alleged that such entries were facilitated through a ged that such entries were facilitated through a ged that such entries were facilitated through a 8

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. mechanism involving receipt of cash from beneficiary parties and mechanism involving receipt of cash from beneficiary parties and mechanism involving receipt of cash from beneficiary parties and routing the same through banking channels. routing the same through banking channels.

12.3 The Assessing Officer has noted that through this modus The Assessing Officer has noted that through this The Assessing Officer has noted that through this operandi an amount an amount of Rs. 572.09 crores (later corrected to Rs. later corrected to Rs. 569.21 crores during the course of post search proceedings) was 569.21 crores during the course of post search proceedings) was 569.21 crores during the course of post search proceedings) was introduced in the books of SP Electro Solutions Private Limited, ( introduced in the books of SP Electro Solutions Private Limited, introduced in the books of SP Electro Solutions Private Limited, i.e.Sunrise Enterprises Sunrise Enterprises), LN Enterprises and Hans Wires and , LN Enterprises and Hans Wires and Cables in the form of non the form of non-genuine sale entries.

12.4 The Assessing Officer has further placed reliance upon The Assessing Officer has further placed reliance upon The Assessing Officer has further placed reliance upon the statement of Shri Jaideep Mahajani, an Account Assistant of the statement of Shri Jaideep Mahajani, an Account Assistant of the statement of Shri Jaideep Mahajani, an Account Assistant of the Sunrise Group, recorded under Section 132(4) of the Act the Sunrise Group, recorded under Section 132(4) of the Act the Sunrise Group, recorded under Section 132(4) of the Act during the course of search proceedings. In his statement, Shri during the course of search proceedings. In his statement, Shri during the course of search proceedings. In his statement, Shri Mahajani stated that he used to receive purchase orders from Shri Mahajani stated that he used to receive purchase orders from Shri Mahajani stated that he used to receive purchase orders from Shri Vijay Pahuja through WhatsApp and, based on the particulars Vijay Pahuja through WhatsApp and, based on the particulars Vijay Pahuja through WhatsApp and, based on the particulars contained therein, would pass corresponding entries in the contained therein, would pass corresponding entries in the contained therein, would pass corresponding entries in the accounting system. The Assessing Officer, referring to the said accounting system. The Assessing Officer, referring to the said accounting system. The Assessing Officer, referring to the said statement, observed that certain alleged accommodation entries nt, observed that certain alleged accommodation entries nt, observed that certain alleged accommodation entries were recorded in the Tally system under specific code names or were recorded in the Tally system under specific code names or were recorded in the Tally system under specific code names or identifiers such as ‘Rupesh Bhai’, ‘Neel’ and ‘=’. It was further identifiers such as ‘Rupesh Bhai’, ‘Neel’ and ‘=’. It was further identifiers such as ‘Rupesh Bhai’, ‘Neel’ and ‘=’. It was further stated by Shri Mahajani that no actual movement of goods took stated by Shri Mahajani that no actual movement of goods took stated by Shri Mahajani that no actual movement of goods took place in respect of such transactions and that these entries were respect of such transactions and that these entries were respect of such transactions and that these entries were recorded using coded nomenclature, as per instructions of Shri recorded using coded nomenclature, as per instructions of Shri recorded using coded nomenclature, as per instructions of Shri

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Vijay Pahuja, for the purpose of tracking non-genuine sales Vijay Pahuja, for the purpose of tracking non Vijay Pahuja, for the purpose of tracking non purportedly effected against cash. The statement further indicates purportedly effected against cash. The statement further indicates purportedly effected against cash. The statement further indicates that, in cases of such alleged non cases of such alleged non-genuine transactions, goods genuine transactions, goods were sold in cash to one party while corresponding sale invoices were sold in cash to one party while corresponding sale invoices were sold in cash to one party while corresponding sale invoices were issued in the name of another party, and that code words were issued in the name of another party, and that code words were issued in the name of another party, and that code words were employed in the books of account to distinguish such were employed in the books of account to distinguish such were employed in the books of account to distinguish such transactions from genuine sales. It was also stated that no genuine sales. It was also stated that no physical stock register was maintained by the entities of the physical stock register was maintained by the entities of the physical stock register was maintained by the entities of the Sunrise Group. Additionally, Shri Mahajani stated that entries Sunrise Group. Additionally, Shri Mahajani stated that entries Sunrise Group. Additionally, Shri Mahajani stated that entries relating to cash sales were maintained separately in a parallel Tally relating to cash sales were maintained separately in a parallel Tally relating to cash sales were maintained separately in a parallel Tally system by another individual, namely Shri Kalpesh Kumbhar, and individual, namely Shri Kalpesh Kumbhar, and individual, namely Shri Kalpesh Kumbhar, and that certain non-genuine sale entries were introduced in the genuine sale entries were introduced in the genuine sale entries were introduced in the regular books of account to bring a portion of unaccounted cash regular books of account to bring a portion of unaccounted cash regular books of account to bring a portion of unaccounted cash into the recorded financial system. The Assessing Officer has relied into the recorded financial system. The Assessing Officer has relied into the recorded financial system. The Assessing Officer has relied upon the aforesaid statement as forming part of the basis for d statement as forming part of the basis for d statement as forming part of the basis for drawing adverse inferences against the assessee. drawing adverse inferences against the assessee.

12.5 The Assessing Officer has also placed reliance upon the The Assessing Officer has also placed reliance upon the The Assessing Officer has also placed reliance upon the statement of Shri Mohanlal Pahuja statement of Shri Mohanlal Pahuja, recorded under Section , recorded under Section 131(1A) of the Income 131(1A) of the Income-tax Act, 1961 on 06.04.2024. In the said tax Act, 1961 on 06.04.2024. In the said statement, Shri Mohanlal Pahuja furnished details of alleged statement, Shri Mohanlal Pahuja furnished details of alleged statement, Shri Mohanlal Pahuja furnished details of alleged accommodation entry sales purportedly effected by entities of the accommodation entry sales purportedly effected by entities of the accommodation entry sales purportedly effected by entities of the Sunrise Group under coded identifiers, na Sunrise Group under coded identifiers, namely ‘Rupesh Bhai’, mely ‘Rupesh Bhai’, ‘Neel’ and ‘=’. List List of of such such sales sales aggregating aggregating to to Rs. Rs. 5,69,21,10,273/- is reproduced as under: is reproduced as under:

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd.

“ Amount in (Rs.) Amount in (Rs.) RUPESH BHAI NO F.Y. SUNRISE LN HANS 1 2016-17 8,93,05,085.00 21,84,84,915.00 4,75,80,043.00 4,75,80,043.00 2 2017-18 37,45,19,608.00 22,32,93,692.00 14,04,83,329.00 14,04,83,329.00 17,56,39,903.00 3 2018-19 26,63,46,607.00 13,60,46,359.00 17,56,39,903.00 4 2019-20 1,61,04,600.99 30,20,934.00 35,27,961.00 5 2020-21 59,02,322.00 6 2021-22 13,46,99,426.01 SP 2022-23 358846564.00 237241086.00 14625332.00 2023-24 685066703.00 49081716.00 106992069.00 106992069.00 SUB TOTAL 1,93,07,90,916.00 90,71,68,702 48,88,48,637.00 48,88,48,637.00 Grand total of sales Grand total of sales with with code code word word 3,28,68,08,255.00 ‘Rupesh Bhai’

Amount in (Rs.) Amount in (Rs.) NEEL NO F.Y. SUNRISE LN HANS HANS 1 2016-17 2 2017-18 3 2018-19 82,79,249.00 4 2019-20 261997945 7,94,73,225 3,18,15,301 3,18,15,301 5 2020-21 36,04,96,678.00 14,39,78,828.00 0 6 2021-22 65,13,90,889.00 5,65,12,761 72,59,917 72,59,917 7 2022-23 11,57,271.00 8 2023-24 NA SUB TOTAL 1311280837.00 280825750.00 39075218.00 39075218.00 Grand total of Grand total of sales with code sales with code Rs. 1,60,23,62,064.00 word ‘neel’

Amount in (Rs.) Amount in (Rs.) ‘n’ NO F.Y. SUNRISE LN HANS HANS 1 2013-14 145223440 2 2014-15 304790513 3 2015-16 352926001 Grand total of Grand total of sales with code sales with code Rs. 80,29,39,954 word ‘= 5,69,21,10,273.00 Grand Total Total 5,69,21,10,273.00

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 12.6 Based on the particulars so provided, the Assessing Based on the particulars so provided, the Assessing Based on the particulars so provided, the Assessing Officer noted that the aggregate value of such alleged transactions Officer noted that the aggregate value of such alleged transactions Officer noted that the aggregate value of such alleged transactions amounted to ₹5,69,21,10,273/ 5,69,21,10,273/-. The break- -up of these transactions, as reproduced above, reflects year transactions, as reproduced above, reflects year-wise and entity wise and entity- wise figures attributed to the aforesaid code names. It is the case wise figures attributed to the aforesaid code names. It is the case wise figures attributed to the aforesaid code names. It is the case of the Assessing Officer that the said coded entries represented of the Assessing Officer that the said coded entries represented of the Assessing Officer that the said coded entries represented non-genuine sales genuine sales recorded in the books of the Sunrise Group recorded in the books of the Sunrise Group entities and were part of a larger arrangement involving entities and were part of a larger arrangement involving entities and were part of a larger arrangement involving accommodation entries. The tabulated details, as extracted from accommodation entries. The tabulated details, as extracted from accommodation entries. The tabulated details, as extracted from the statement of Shri Mohanlal Pahuja, have been relied upon by the statement of Shri Mohanlal Pahuja, have been relied upon by the statement of Shri Mohanlal Pahuja, have been relied upon by the Assessing Officer to dra the Assessing Officer to draw an inference regarding the scale and w an inference regarding the scale and nature of such transactions. The aforesaid statement and the nature of such transactions. The aforesaid statement and the nature of such transactions. The aforesaid statement and the corresponding tabulation have thus been treated by the Assessing corresponding tabulation have thus been treated by the Assessing corresponding tabulation have thus been treated by the Assessing Officer as forming part of the evidentiary basis for the conclusions Officer as forming part of the evidentiary basis for the conclusions Officer as forming part of the evidentiary basis for the conclusions reached in the assessm reached in the assessment proceedings.

12.7 The Assessing Officer, upon undertaking a detailed The Assessing Officer, upon undertaking a detailed The Assessing Officer, upon undertaking a detailed analysis of the seized Tally data, observed that M/s Tegh Cables analysis of the seized Tally data, observed that M/s Tegh Cables analysis of the seized Tally data, observed that M/s Tegh Cables Private Limited was one of the entities allegedly benefiting from the Private Limited was one of the entities allegedly benefiting from the Private Limited was one of the entities allegedly benefiting from the impugned accommodation entry transactions. The AO noted that impugned accommodation entry transactions. The A impugned accommodation entry transactions. The A the said company had purportedly recorded purchase entries from the said company had purportedly recorded purchase entries from the said company had purportedly recorded purchase entries from entities of the Sunrise Group, namely M/s Sunrise Enterprises, entities of the Sunrise Group, namely M/s Sunrise Enterprises, entities of the Sunrise Group, namely M/s Sunrise Enterprises, M/s Hans Wires & Cables, and M/s L.N. Enterprises, which is M/s Hans Wires & Cables, and M/s L.N. Enterprises, which is M/s Hans Wires & Cables, and M/s L.N. Enterprises, which is tabulated as under: tabulated as under:

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Entity Sale Party 2017 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2022 2023- Grand controlled/mana 24 Total ged by Vijay Pahuja Sunrise Tegh Cables Pvt. 691921014 691921014 12926036 69154065 44200367 63819289 259291861 Enterprise Ltd. HANS Wires & Tegh Cables 3418989 3418989 3418989 Cables Pvt.Ltd-Sale LN Enterprise Tegh Cables Pvt. 5502551 5502551 20778471 588361 40656966 7773586 75299935 Ltd.

12.8 The particulars of such transactions, as tabulated above The particulars of such transactions, as tabulated above The particulars of such transactions, as tabulated above were relied upon by the Assessing Officer to infer the involvement were relied upon by the Assessing Officer to infer the involvement were relied upon by the Assessing Officer to infer the involvement of M/s Tegh Cables Private Limited in the alleged arrangement. of M/s Tegh Cables Private Limited in the alleged arrangement. of M/s Tegh Cables Private Limited in the alleged arrangement.

12.9 During the course of assessment proceedings, an During the course of assessment proceedings, an During the course of assessment proceedings, an opportunity was afforded to M/s Tegh Cables Private Limited to opportunity was afforded to M/s Tegh Cables Private Limited to opportunity was afforded to M/s Tegh Cables Private Limited to furnish its explanation in respect of the aforesaid transactions. In furnish its explanation in respect of the aforesaid transactions. In furnish its explanation in respect of the aforesaid transactions. In response, the company provided details of corresponding sales response, the company provided details of corresponding sales response, the company provided details of corresponding sales recorded against the purchases made from the Sunrise Group st the purchases made from the Sunrise Group st the purchases made from the Sunrise Group entities. Upon consideration of the said explanation, the Assessing entities. Upon consideration of the said explanation, the Assessing entities. Upon consideration of the said explanation, the Assessing Officer formed a view that the pattern of purchases and Officer formed a view that the pattern of purchases and Officer formed a view that the pattern of purchases and corresponding sales was indicative of accommodation entry corresponding sales was indicative of accommodation entry corresponding sales was indicative of accommodation entry transactions, similar in natu transactions, similar in nature to the modus operandi described as operandi described as “Mode-2”.

12.10 Proceeding on this premise, the Assessing Officer Proceeding on this premise, the Assessing Officer Proceeding on this premise, the Assessing Officer concluded that the assessee, Shri Banpreet Suriendersingh Atal, concluded that the assessee, Shri Banpreet Suriendersingh Atal, concluded that the assessee, Shri Banpreet Suriendersingh Atal, had facilitated such transactions through M/s Tegh Cables Private had facilitated such transactions through M/s Tegh Cables Private had facilitated such transactions through M/s Tegh Cables Private Limited and had earne Limited and had earned commission income at the rate of 1% on d commission income at the rate of 1% on the alleged accommodation entries. On this basis, the Assessing the alleged accommodation entries. On this basis, the Assessing the alleged accommodation entries. On this basis, the Assessing Officer quantified the commission income by applying the said rate Officer quantified the commission income by applying the said rate Officer quantified the commission income by applying the said rate

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. to the corresponding sales figures and attributed the resultant to the corresponding sales figures and attributed the resultant to the corresponding sales figures and attributed the resultant ee for the relevant assessment year. amount to the assess amount to the assessee for the relevant assessment year.

Company F.Y. Amount Amount of of Corresponding Amount Amount of of Commission Name Purchase Purchase Purchase F.Y. Sales Corresponding Corresponding Income of Entries Entries In Sale entries as Sale entries as Banpreet Atal Rs. Rs. submitted submitted by by in Rs. @1% of assessee in its assessee in its sales reply in Rs. 2017-18 70,418,760 704,188 2017-18 78,113,644 78,113,644 2018-19 10,383,896 103,839

Tegh 2018-19 20,893,648 208,936 Cables Pvt. Ltd. 2018-19 33,704,507 33,704,507 2019-20 13,655,751 136,558

2019-20 69,742,426 69,742,426 2019-20 73,811,486 738,115 2020-21 84,857,333 84,857,333 2020-21 86,547,083 865,471 2021-22 63,027,568 630,276 2021-22 71,592,875 71,592,875 2022-23 10,234,037 102,340 2023-24 407,104 4,071 Grand 338,010,785 338,010,785 349,379,333 3,493,793 Total

12.11 In furtherance thereof, the assessee was confronted with In furtherance thereof, the assessee was confronted with In furtherance thereof, the assessee was confronted with a show cause notice as to why the aforesaid arrangement, allegedly a show cause notice as to why the aforesaid arrangement, allegedly a show cause notice as to why the aforesaid arrangement, allegedly carried out through M/s Tegh Cables Private Limited, should not carried out through M/s Tegh Cables Private Limited, should not carried out through M/s Tegh Cables Private Limited, should not be treated as yielding commission income taxable in his hands at be treated as yielding commission income taxable in his hands at be treated as yielding commission income taxable in his hands at the rate of 1% of the corresponding sales, in line with the rate of 1% of the corresponding sales, in line with the rate of 1% of the corresponding sales, in line with the methodology adopted by the Assessing Officer under the said methodology adopted by the Assessing Officer under the said methodology adopted by the Assessing Officer under the said modus operandi.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 12.12 In response to the show cause, the assessee categorically In response to the show cause, the assessee categorically In response to the show cause, the assessee categorically denied the allegations and submitted that he had no knowledge denied the allegations and submitted that he had no knowled denied the allegations and submitted that he had no knowled whatsoever of the alleged Tally data maintained by third parties or whatsoever of the alleged Tally data maintained by third parties or whatsoever of the alleged Tally data maintained by third parties or of the transactions purportedly recorded therein. It was contended of the transactions purportedly recorded therein. It was contended of the transactions purportedly recorded therein. It was contended that the entire case of the Revenue rests primarily on the said Tally that the entire case of the Revenue rests primarily on the said Tally that the entire case of the Revenue rests primarily on the said Tally data seized from the premises of the Sunrise Group and on the data seized from the premises of the Sunrise Gro data seized from the premises of the Sunrise Gro statements recorded from Shri Vijay Pahuja and other persons, statements recorded from Shri Vijay Pahuja and other persons, statements recorded from Shri Vijay Pahuja and other persons, without any independent material directly linking the assessee to without any independent material directly linking the assessee to without any independent material directly linking the assessee to the alleged transactions. The assessee further submitted that, the alleged transactions. The assessee further submitted that, the alleged transactions. The assessee further submitted that, upon being confronted with the allegations, he had sought upon being confronted with the allegations, he had upon being confronted with the allegations, he had clarification from Shri Vijay Pahuja, who explained that the entries clarification from Shri Vijay Pahuja, who explained that the entries clarification from Shri Vijay Pahuja, who explained that the entries in the books of account were recorded against certain salesmen, in the books of account were recorded against certain salesmen, in the books of account were recorded against certain salesmen, namely ‘Rupesh Bhai’, ‘Neel’ and ‘=’, in the ordinary course of namely ‘Rupesh Bhai’, ‘Neel’ and ‘=’, in the ordinary course of namely ‘Rupesh Bhai’, ‘Neel’ and ‘=’, in the ordinary course of business. It was stated that the Sunrise Group had adopted a business. It was stated that the Sunrise Group had a business. It was stated that the Sunrise Group had a system of mapping sales against individual salesmen for internal system of mapping sales against individual salesmen for internal system of mapping sales against individual salesmen for internal monitoring and performance evaluation. According to the assessee, monitoring and performance evaluation. According to the assessee, monitoring and performance evaluation. According to the assessee, out of several sales personnel engaged by the group, the out of several sales personnel engaged by the group, the out of several sales personnel engaged by the group, the Investigation Wing had selectively referred to only three names Investigation Wing had selectively referred to only three n Investigation Wing had selectively referred to only three n without any cogent basis. It was further contended that if such without any cogent basis. It was further contended that if such without any cogent basis. It was further contended that if such names or codes were to be treated as indicative of non-genuine names or codes were to be treated as indicative of non names or codes were to be treated as indicative of non transactions, then, by parity of reasoning, the entire turnover transactions, then, by parity of reasoning, the entire turnover transactions, then, by parity of reasoning, the entire turnover mapped to all sales personnel would have to be treated similarly, mapped to all sales personnel would have to be treated simil mapped to all sales personnel would have to be treated simil which would be wholly inconsistent with the turnover disclosed in which would be wholly inconsistent with the turnover disclosed in which would be wholly inconsistent with the turnover disclosed in the regular books of account. The assessee thus submitted that the regular books of account. The assessee thus submitted that the regular books of account. The assessee thus submitted that the inference drawn by the Assessing Officer was based on the inference drawn by the Assessing Officer was based on the inference drawn by the Assessing Officer was based on 15

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. selective and unfounded interpretation of the data. The assessee selective and unfounded interpretation of the data. The assesse selective and unfounded interpretation of the data. The assesse also placed reliance on the fact that the statements of Shri Vijay also placed reliance on the fact that the statements of Shri Vijay also placed reliance on the fact that the statements of Shri Vijay Pahuja and Shri Kalpesh Kumbhar, which formed the principal Pahuja and Shri Kalpesh Kumbhar, which formed the principal Pahuja and Shri Kalpesh Kumbhar, which formed the principal basis of the addition, had been subsequently retracted. In their basis of the addition, had been subsequently retracted. In their basis of the addition, had been subsequently retracted. In their retraction statements, they had denied the allegations regarding retraction statements, they had denied the allegations regardi retraction statements, they had denied the allegations regardi non-genuine transactions and clarified that the use of names such genuine transactions and clarified that the use of names such genuine transactions and clarified that the use of names such as ‘Rupesh Bhai’ and ‘Neel’ pertained to internal identification of as ‘Rupesh Bhai’ and ‘Neel’ pertained to internal identification of as ‘Rupesh Bhai’ and ‘Neel’ pertained to internal identification of parties associated with specific personnel for business convenience parties associated with specific personnel for business convenience parties associated with specific personnel for business convenience and follow-up of payments. It was further urged tha up of payments. It was further urged tha up of payments. It was further urged that no addition could be sustained merely on the basis of documents or data could be sustained merely on the basis of documents or data could be sustained merely on the basis of documents or data found at the premises of a third party, in the absence of any found at the premises of a third party, in the absence of any found at the premises of a third party, in the absence of any independent evidence establishing a direct nexus with the independent evidence establishing a direct nexus with the independent evidence establishing a direct nexus with the assessee. The assessee also placed reliance on the CBDT Circular assessee. The assessee also placed reliance on the CBDT Circul assessee. The assessee also placed reliance on the CBDT Circul No. F. No. 286/98/2013 No. F. No. 286/98/2013-IT (Inv. II), wherein the field authorities IT (Inv. II), wherein the field authorities have been cautioned against obtaining and relying upon have been cautioned against obtaining and relying upon have been cautioned against obtaining and relying upon confessional statements without corroborative material evidence. confessional statements without corroborative material evidence. confessional statements without corroborative material evidence. On the strength of the aforesaid submissions, it was contended On the strength of the aforesaid submissions, it was contended On the strength of the aforesaid submissions, it was contended that t t the the the impugned impugned impugned addition, addition, addition, being being being founded founded founded solely solely solely on on on uncorroborated uncorroborated statements statements and and third-party third party material, material, is is unsustainable in law. unsustainable in law.

12.13 The Assessing Officer, however, did not accept the The Assessing Officer, however, did not accept the The Assessing Officer, however, did not accept the explanation furnished by the assessee. According to him, the explanation furnished by the assessee. According to him, the explanation furnished by the assessee. According to him, the material unearthed during the course of search indicated that the material unearthed during the course of search indicated that the material unearthed during the course of search indicated that the assessee, Shri Banpreet Suriendersingh Atal, had facilitated assessee, Shri Banpreet Suriendersingh Atal, had facilitated assessee, Shri Banpreet Suriendersingh Atal, had facilitated

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. accommodation entry transactions through entities such as M/s try transactions through entities such as M/s try transactions through entities such as M/s Tegh Cables Private Limited and Tegh Cables (India) Private Tegh Cables Private Limited and Tegh Cables (India) Private Tegh Cables Private Limited and Tegh Cables (India) Private Limited, and had earned commission in cash at the rate of 1% on Limited, and had earned commission in cash at the rate of 1% on Limited, and had earned commission in cash at the rate of 1% on such transactions. The Assessing Officer further recorded that, such transactions. The Assessing Officer further recorded that, such transactions. The Assessing Officer further recorded that, according to him, the according to him, the said conclusion stood supported by said conclusion stood supported by statements recorded during the search proceedings from Shri statements recorded during the search proceedings from Shri statements recorded during the search proceedings from Shri Banpreet Atal, Shri Kalpesh Kumbhar and Shri Vijay Pahuja, as Banpreet Atal, Shri Kalpesh Kumbhar and Shri Vijay Pahuja, as Banpreet Atal, Shri Kalpesh Kumbhar and Shri Vijay Pahuja, as well as by certain materials purportedly found at the premises of well as by certain materials purportedly found at the premises of well as by certain materials purportedly found at the premises of the Sunrise Group, including What the Sunrise Group, including WhatsApp communications and sApp communications and entries in the parallel Tally data. He also observed that the entries in the parallel Tally data. He also observed that the entries in the parallel Tally data. He also observed that the assessee had failed to satisfactorily rebut the findings emerging assessee had failed to satisfactorily rebut the findings emerging assessee had failed to satisfactorily rebut the findings emerging from the search and subsequent assessment proceedings. The from the search and subsequent assessment proceedings. The from the search and subsequent assessment proceedings. The Assessing Officer took note of the fact that the aforesaid Assessing Officer took note of the fact that Assessing Officer took note of the fact that statements had been retracted; however, he was of the view that statements had been retracted; however, he was of the view that statements had been retracted; however, he was of the view that such retractions were not acceptable and had been duly examined such retractions were not acceptable and had been duly examined such retractions were not acceptable and had been duly examined and and and rejected rejected rejected by by by the the the Department Department Department through through through separate separate separate communications. On the basis of the aforesaid reasoning, the communications. On the basis of the aforesaid reasoning, the communications. On the basis of the aforesaid reasoning, the Assessing Officer concluded that the assessee had earned sing Officer concluded that the assessee had earned sing Officer concluded that the assessee had earned commission income from facilitating the alleged accommodation commission income from facilitating the alleged accommodation commission income from facilitating the alleged accommodation entries and, accordingly, brought to tax a sum of ₹7,04,188/-, entries and, accordingly, brought to tax a sum of entries and, accordingly, brought to tax a sum of being 1% of the corresponding transaction value, as income that being 1% of the corresponding transaction value, as income that being 1% of the corresponding transaction value, as income that had escaped assessment for the Assessment Year 2018 essment for the Assessment Year 2018 essment for the Assessment Year 2018–19.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. the assessee and the material placed on record, proceeded to the assessee and the material placed on record, proceeded to the assessee and the material placed on record, proceeded to dismiss the grounds raised on merits. dismiss the grounds raised on merits.

13.1 The learned CIT(A), while affirming the action of the The learned CIT(A), while affirming the action of the The learned CIT(A), while affirming the action of the Assessing Officer, recorded that during the course of search Assessing Officer, recorded that during the course of search Assessing Officer, recorded that during the course of search proceedings in the case of the Sunrise G proceedings in the case of the Sunrise Group, certain data roup, certain data reflecting alleged unaccounted transactions was found to have reflecting alleged unaccounted transactions was found to have reflecting alleged unaccounted transactions was found to have been maintained in a parallel Tally system under coded names been maintained in a parallel Tally system under coded names been maintained in a parallel Tally system under coded names such as ‘Ka’, ‘Km’ and ‘CN’. It was further observed that the said such as ‘Ka’, ‘Km’ and ‘CN’. It was further observed that the said such as ‘Ka’, ‘Km’ and ‘CN’. It was further observed that the said data was maintained in a camouflaged manner by suppression of data was maintained in a camouflaged manner by data was maintained in a camouflaged manner by figures and manipulation of dates, and that, upon decoding, it figures and manipulation of dates, and that, upon decoding, it figures and manipulation of dates, and that, upon decoding, it purportedly revealed substantial unaccounted cash transactions. purportedly revealed substantial unaccounted cash transactions. purportedly revealed substantial unaccounted cash transactions.

13.2 The learned CIT(A) further noted that the Assessing The learned CIT(A) further noted that the Assessing The learned CIT(A) further noted that the Assessing Officer had relied upon statements of key persons associated with Officer had relied upon statements of key persons associa Officer had relied upon statements of key persons associa the Sunrise Group, wherein it was stated that non-genuine sales the Sunrise Group, wherein it was stated that non the Sunrise Group, wherein it was stated that non entries were recorded in the books of group entities without actual entries were recorded in the books of group entities without actual entries were recorded in the books of group entities without actual movement of goods, with a view to introduce unaccounted cash movement of goods, with a view to introduce unaccounted cash movement of goods, with a view to introduce unaccounted cash into the regular books of account. It was also observed that certain into the regular books of account. It was also observe into the regular books of account. It was also observe entries were recorded using coded identifiers such as ‘Rupesh entries were recorded using coded identifiers such as ‘Rupesh entries were recorded using coded identifiers such as ‘Rupesh Bhai’, ‘Neel’ and ‘=’, which, according to the Assessing Officer, Bhai’, ‘Neel’ and ‘=’, which, according to the Assessing Officer, Bhai’, ‘Neel’ and ‘=’, which, according to the Assessing Officer, represented non-genuine transactions. genuine transactions.

13.3 On the basis of the aforesaid material, the learned CIT(A) On the basis of the aforesaid material, the learned CIT(A) On the basis of the aforesaid material, the learned CIT(A) concurred with the Assessing Officer’s conclusion that the with the Assessing Officer’s conclusion that the with the Assessing Officer’s conclusion that the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. assessee had facilitated such alleged accommodation entry assessee had facilitated such alleged accommodation entry assessee had facilitated such alleged accommodation entry transactions and had earned commission income therefrom. The transactions and had earned commission income therefrom. The transactions and had earned commission income therefrom. The learned CIT(A) further observed that the assessee had, in his learned CIT(A) further observed that the assessee had, in his learned CIT(A) further observed that the assessee had, in his statement recorded during statement recorded during the course of search, admitted to the course of search, admitted to having earned commission income at varying rates depending having earned commission income at varying rates depending having earned commission income at varying rates depending upon the nature of the arrangement. upon the nature of the arrangement.

13.4 As regards the contention of the assessee that the As regards the contention of the assessee that the As regards the contention of the assessee that the statements relied upon by the Assessing Officer had been statements relied upon by the Assessing Officer had been statements relied upon by the Assessing Officer had been subsequently retracted, the learned CIT(A) held that such retracted, the learned CIT(A) held that such retracted, the learned CIT(A) held that such retraction could not be accepted in isolation and was required to retraction could not be accepted in isolation and was required to retraction could not be accepted in isolation and was required to be examined in the light of surrounding circumstances and the be examined in the light of surrounding circumstances and the be examined in the light of surrounding circumstances and the material found during the search. According to the learned CIT(A), material found during the search. According to the learned CIT(A), material found during the search. According to the learned CIT(A), the statements stood corroborated by the seized material, tood corroborated by the seized material, tood corroborated by the seized material, including the Tally data and other documents, and therefore including the Tally data and other documents, and therefore including the Tally data and other documents, and therefore retained evidentiary value. retained evidentiary value.

13.5 The learned CIT(A) also rejected the contention that no The learned CIT(A) also rejected the contention that no The learned CIT(A) also rejected the contention that no incriminating material was found at the premises of the assessee, incriminating material was found at the premises of the assessee, incriminating material was found at the premises of the assessee, holding that once material found during search at a third-party holding that once material found during search at a third holding that once material found during search at a third premises establishes a nexus with the assessee, the same can be premises establishes a nexus with the assessee, the same can be premises establishes a nexus with the assessee, the same can be y relied upon for making additions. The existence of such validly relied upon for making additions. The existence of such y relied upon for making additions. The existence of such nexus, according to the learned CIT(A), stood established from the nexus, according to the learned CIT(A), stood established from the nexus, according to the learned CIT(A), stood established from the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. ledger entries and other materials referred to by the Assessing ledger entries and other materials referred to by the Assessing ledger entries and other materials referred to by the Assessing Officer.

13.6 On this reasoning, the learned CIT(A) upheld the addition On this reasoning, the learned CIT(A) upheld the addition On this reasoning, the learned CIT(A) upheld the addition made by the Assessing Officer on account of alleged commission made by the Assessing Officer on account of alleged commission made by the Assessing Officer on account of alleged commission income amounting to ₹7,04,188/-, being 1% of the corresponding income amounting to , being 1% of the corresponding transaction value, and dismissed the grounds raised by the transaction value, and dismissed the grounds raised by the transaction value, and dismissed the grounds raised by the assessee on merits. 14. Before us, the learned Counsel for the assessee submitted that Before us, the learned Counsel for the assessee submitted that Before us, the learned Counsel for the assessee submitted that firstly, no incriminating material firstly, no incriminating material qua the assessee qua the assessee has been found even in the tally data which the Investigation has alleged to be a even in the tally data which the Investigation has alleged to be a even in the tally data which the Investigation has alleged to be a parallel tally data maintained by Sunrise Group of the companies. parallel tally data maintained by Sunrise Group of t parallel tally data maintained by Sunrise Group of t The learned Counsel for the assessee submitted that there is no The learned Counsel for the assessee submitted that there is no The learned Counsel for the assessee submitted that there is no reference of any commission in those parallel tally data and no commission in those parallel tally data and no commission in those parallel tally data and no such incriminating material specifying the commission paid to the such incriminating material specifying the commission paid to the such incriminating material specifying the commission paid to the assessee has been brought to the assessee or confronted to the assessee has been brought to the assessee or con assessee has been brought to the assessee or con assessee. Only basis is the statement of the few employees of assessee. Only basis is the statement of the few employees of assessee. Only basis is the statement of the few employees of Sunrise Group of the companies of making commission to the Sunrise Group of the companies of making commission to the Sunrise Group of the companies of making commission to the assessee against booking of bogus accommodation entry sales by assessee against booking of bogus accommodation entry sales by assessee against booking of bogus accommodation entry sales by the group entities of the Sunrise Group, those entities of the Sunrise Group, those entities of the Sunrise Group, those statement have already been retracted because same was recorded under undue already been retracted because same was recorded under undue already been retracted because same was recorded under undue pressure during the course of the search proceeding. The assessee pressure during the course of the search proceeding. The assessee pressure during the course of the search proceeding. The assessee was also subjected to was also subjected to such undue pressure in the course of the undue pressure in the course of the search proceeding and was forced to admit search proceeding and was forced to admit such commission such commission 20

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. received but no such commission was actually received by the eived but no such commission was actually received by the eived but no such commission was actually received by the assessee and the assessee also has retracted from his statement. assessee and the assessee also has retracted from his statement. assessee and the assessee also has retracted from his statement. The ld Counsel also relied on the Coordinate Bench of the Tribunal The ld Counsel also relied on the Coordinate Bench of the Tribunal The ld Counsel also relied on the Coordinate Bench of the Tribunal in Assistant Commissioner of Income Tax, Central Circle vs. Assistant Commissioner of Income Tax, Central Circle vs. Assistant Commissioner of Income Tax, Central Circle vs. nt Prakash Nilawar in ITA Nos. 5689 and 5073 of 2024, in ITA Nos. 5689 and 5073 of 2024, Prashant Prakash Nilawar wherein it was held that electronic evidence such as WhatsApp wherein it was held that electronic evidence such as WhatsApp wherein it was held that electronic evidence such as WhatsApp chats could not be relied upon in the absence of a certificate chats could not be relied upon in the absence of a certificate chats could not be relied upon in the absence of a certificate contemplated under section 65B of the Indian Evidence Act. The contemplated under section 65B of the Indian Evidence Act contemplated under section 65B of the Indian Evidence Act learned Counsel for the assessee, accordingly submitted that no learned Counsel for the assessee, accordingly submitted that no learned Counsel for the assessee, accordingly submitted that no addition could be made in the hands of the assessee merely on the addition could be made in the hands of the assessee merely on the addition could be made in the hands of the assessee merely on the basis of the statement recorded u/s. 132(4) of the third basis of the statement recorded u/s. 132(4) of the third basis of the statement recorded u/s. 132(4) of the third party/assessee without without any corroborative evidence unearthed ny corroborative evidence unearthed during the course of the search carried out by the Investigation g the course of the search carried out by the Investigation g the course of the search carried out by the Investigation Wing. 14.1 Per contra, the learned DR Per contra, the learned DR relied on the order of the relied on the order of the lower authorities and submitted that lower authorities and submitted that in view of the enough in view of the enough evidence of booking accommodation entries of booking accommodation entries bills through the bills through the assessee and the statement of the employees of the Sunrise Group, e statement of the employees of the Sunrise Group, e statement of the employees of the Sunrise Group, the assessee was engaged in facilitating the assessee was engaged in facilitating the the accommodation entries sales against commission in cash received which was duly entries sales against commission in cash received which was duly entries sales against commission in cash received which was duly admitted by the assessee himself and therefore admitted by the assessee himself and therefore, there is no iota of there is no iota of doubt that assessee had received cash commission in respect of doubt that assessee had received cash commission in respect of doubt that assessee had received cash commission in respect of the accommodation entries sales book through Tegh Cables Private the accommodation entries sales book through Tegh Cables Private the accommodation entries sales book through Tegh Cables Private Limited, Mumbai.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd.

15.1 The Assessing Officer has proceeded on the premise that he Assessing Officer has proceeded on the premise that he Assessing Officer has proceeded on the premise that the assessee facilitated accommodation entries and earned the assessee facilitated accommodation entries and earned the assessee facilitated accommodation entries and earned commission commission commission therefrom at therefrom at therefrom at specified rates. Upon specified specified rates. Upon a careful rates. Upon a a careful careful examination of the factual matrix, examination of the factual matrix, it is evident that the entire t that the entire edifice of the Revenue’s case rests upon (i) the statements recorded edifice of the Revenue’s case rests upon (i) the statements recorded edifice of the Revenue’s case rests upon (i) the statements recorded under Section 132(4) of the Act from the key personnel of the under Section 132(4) of the Act from the key personnel of the under Section 132(4) of the Act from the key personnel of the Sunrise Group—namely, namely, namely, Shri Shri Shri Vijay Vijay Vijay Pahuja, Pahuja, Pahuja, Shri Shri Shri Jaydeep Jaydeep Jaydeep Mahajani, and others Mahajani, and others—as well as the statement of the as well as the statement of the assessee himself (ii) certain ‘tally’ data and ‘WhatsApp’ communications himself (ii) certain ‘tally’ data and ‘WhatsApp’ communications himself (ii) certain ‘tally’ data and ‘WhatsApp’ communications found during the course of search at the premises of third parties. found during the course of search at the premises of third parties. found during the course of search at the premises of third parties.

15.2 The Ld. CIT( The Ld. CIT(A) has heavily relied upon the parallel tally A) has heavily relied upon the parallel tally data retrieved from the premises of a third party (the Sunrise data retrieved from the premises of a third party (the Sunrise data retrieved from the premises of a third party (the Sunrise Group) and certain WhatsApp chats to corroborate the retracted Group) and certain WhatsApp chats to corroborate the retracted Group) and certain WhatsApp chats to corroborate the retracted 22

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. statements. However, upon a careful examination of the record, we statements. However, upon a careful examination of the record, we statements. However, upon a careful examination of the record, we called parallel ‘Tally’ data nor the find that neither find that neither the so-called parallel ‘Tally’ data nor the WhatsApp communications, as referred to by the Revenue, contain WhatsApp communications, as referred to by the Revenue, contain WhatsApp communications, as referred to by the Revenue, contain any specific or direct evidence indicating that the assessee had, in any specific or direct evidence indicating that the assessee had, in any specific or direct evidence indicating that the assessee had, in fact, received commission income. the Revenue consider said fact, received commission income. the Revenue consider said fact, received commission income. the Revenue consider said whatsapp chat as t whatsapp chat as the primary corroborative material, but those he primary corroborative material, but those chats reveals absolutely no whisper of any commission being chats reveals absolutely no whisper of any commission being chats reveals absolutely no whisper of any commission being charged by the assessee or paid by the Sunrise Group. While the charged by the assessee or paid by the Sunrise Group. While the charged by the assessee or paid by the Sunrise Group. While the tally data and chats might loosely indicate certain business tally data and chats might loosely indicate certain business tally data and chats might loosely indicate certain business transactions, they nowhere transactions, they nowhere indicate, either expressly or by indicate, either expressly or by necessary implication, the crystallization, quantification, or actual necessary implication, the crystallization, quantification, or actual necessary implication, the crystallization, quantification, or actual payment of a 1% commission. In other words, the foundational payment of a 1% commission. In other words, the foundational payment of a 1% commission. In other words, the foundational requirement of corroborative evidence establishing receipt of requirement of corroborative evidence establishing receipt of requirement of corroborative evidence establishing receipt of income is conspicuously absen income is conspicuously absent. In order to establish from establish from the existence of third-party tally data to the conclusion that the party tally data to the conclusion that the party tally data to the conclusion that the assessee earned a specific percentage of cash commission, requires assessee earned a specific percentage of cash commission assessee earned a specific percentage of cash commission an unbroken chain of evidentiary links, which the Revenue has an unbroken chain of evidentiary links, which the Revenue has an unbroken chain of evidentiary links, which the Revenue has utterly failed to forge. utterly failed to forge.

15.3 The reliance placed by the Revenue on the statements The reliance placed by the Revenue on the statements The reliance placed by the Revenue on the statements recorded during search proceedings also does not advance its case. recorded during search proceedings also does not advance its case. recorded during search proceedings also does not advance its case. It is a matter of undisputed record that all the aforesaid It is a matter of undisputed record that all the aforesaid It is a matter of undisputed record that all the aforesaid statements were subsequently retracted by means of sworn statements were subsequently retracted by means of sworn statements were subsequently retracted by means of sworn affidavits, wherein the deponents unequivocally alleged that the the deponents unequivocally alleged that the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. initial admissions were obtained under duress and coercion during initial admissions were obtained under duress and coercion during initial admissions were obtained under duress and coercion during the search proceedings. the search proceedings.

15.4 It is well settled in law that a statement recorded under It is well settled in law that a statement recorded under It is well settled in law that a statement recorded under Section 132(4) of the Act, though relevant, cannot by itself Section 132(4) of the Act, though relevant, cannot by i Section 132(4) of the Act, though relevant, cannot by i constitute constitute constitute conclusive conclusive conclusive evidence evidence evidence unless unless unless it it it is is is supported supported by supported by by independent and cogent material. independent and cogent material. When a statement is retracted, When a statement is retracted, the burden shifts heavily onto the Revenue to independently the burden shifts heavily onto the Revenue to independently the burden shifts heavily onto the Revenue to independently corroborate the contents of the retracted confession with cogent, corroborate the contents of the retracted confession with cogent, corroborate the contents of the retracted confession with cogent, unimpeachable documentary evidence. mpeachable documentary evidence. In the present case, not In the present case, not only have such statements been subsequently retracted, but the only have such statements been subsequently retracted, but the only have such statements been subsequently retracted, but the Revenue has also failed to bring on record any substantive Revenue has also failed to bring on record any substantive Revenue has also failed to bring on record any substantive material to corroborate the contents of such statements. material to corroborate the contents of such statements. material to corroborate the contents of such statements.

15.5 We must also We must also advert to the binding administrative advert to the binding administrative guidelines issued by the Central Board of Direct Taxes (CBDT). The guidelines issued by the Central Board of Direct Taxes (CBDT). The guidelines issued by the Central Board of Direct Taxes (CBDT). The Board, taking serious cognizance of the arbitrary practice of Board, taking serious cognizance of the arbitrary practice of Board, taking serious cognizance of the arbitrary practice of extracting confessions during search and survey operations, has extracting confessions during search and survey operations, has extracting confessions during search and survey operations, has issued issued categorical categorical instruc instructions—including including Circular Circular F.No. F.No. 286/98/2013-IT (Inv. II) IT (Inv. II)—deprecating the practice of obtaining deprecating the practice of obtaining confessional confessional confessional statements statements statements without without without unearthing unearthing unearthing independent independent independent corroborative corroborative corroborative material. material. material. The The The administrative administrative administrative mandate mandate mandate aligns aligns aligns seamlessly with the judicial consensus: a confession, standing seamlessly with the judicial consensus: a confess seamlessly with the judicial consensus: a confess alone and unsupported by corroborative documentary evidence, alone and unsupported by corroborative documentary evidence, alone and unsupported by corroborative documentary evidence, cannot form the sole legal basis for an addition, more so when cannot form the sole legal basis for an addition, more so when cannot form the sole legal basis for an addition, more so when

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. such confession has been validly retracted. The assessing such confession has been validly retracted. The assessing such confession has been validly retracted. The assessing authorities are legally obligated to base their conclusions on authorities are legally obligated to base their conclusions authorities are legally obligated to base their conclusions tangible evidence gathered during the search, not merely on the tangible evidence gathered during the search, not merely on the tangible evidence gathered during the search, not merely on the oral, retracted testimony of the assessee or third parties. oral, retracted testimony of the assessee or third parties. oral, retracted testimony of the assessee or third parties.

15.6 It is a cardinal principle of taxation jurisprudence that no It is a cardinal principle of taxation jurisprudence that no It is a cardinal principle of taxation jurisprudence that no addition can be sustained on the basis of surmises, conjectures, or addition can be sustained on the basis of surmises, conjecture addition can be sustained on the basis of surmises, conjecture uncorroborated statements. The burden lies upon the Revenue to uncorroborated statements. The burden lies upon the Revenue to uncorroborated statements. The burden lies upon the Revenue to establish, by cogent and credible evidence, that the assessee has establish, by cogent and credible evidence, that the assessee has establish, by cogent and credible evidence, that the assessee has earned income which has escaped assessment. Suspicion, however earned income which has escaped assessment. Suspicion, however earned income which has escaped assessment. Suspicion, however strong, cannot take the place of proof. strong, cannot take the place of proof. The Hon'ble Apex C The Hon'ble Apex Court has consistently held that no addition can be sustained merely on the consistently held that no addition can be sustained merely on the consistently held that no addition can be sustained merely on the basis of third-party documents without granting the assessee a party documents without granting the assessee a party documents without granting the assessee a proper opportunity for cross proper opportunity for cross-examination, nor can retracted examination, nor can retracted statements be used as a primary weapon of assessment without statements be used as a primary weapon of assessment witho statements be used as a primary weapon of assessment witho independent validation. independent validation.

15.7 In the present case, we find that the addition has been In the present case, we find that the addition has been In the present case, we find that the addition has been made merely on the basis of alleged admissions and third-party made merely on the basis of alleged admissions and third made merely on the basis of alleged admissions and third statements, without any independent corroboration in the form of statements, without any independent corroboration in the form of statements, without any independent corroboration in the form of documentary evidence. the Revenue has documentary evidence. the Revenue has failed to bring on record failed to bring on record any cash trail, bank entry, or definitive documentary proof to any cash trail, bank entry, or definitive documentary proof to any cash trail, bank entry, or definitive documentary proof to establish that the sum of Rs. 7,04,188/ establish that the sum of Rs. 7,04,188/- was actually received by was actually received by the assessee. cash trail, or any material demonstrating actual the assessee. cash trail, or any material demonstrating actual the assessee. cash trail, or any material demonstrating actual

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. receipt of commission by the assessee receipt of commission by the assessee. Such an approach, in our . Such an approach, in our considered view, is unsustainable in law. considered view, is unsustainable in law.

15.8 In background of the aforesaid factual and legal matrix, In background of the aforesaid factual and legal matrix, In background of the aforesaid factual and legal matrix, we are of the considered view that the authorities below we are of the considered view that the authorities below we are of the considered view that the authorities below fundamentally erred in making and sustaining the impugned fundamentally erred in making and sustaining the impugned fundamentally erred in making and sustaining the impugned addition. The addition is based on surmises, uncorroborated third The addition is based on surmises, uncorroborated third- The addition is based on surmises, uncorroborated third party data, and retracted statements, which fail to pass the muster party data, and retracted statements, which fail to pass the muster party data, and retracted statements, which fail to pass the muster of judicial scrutiny. of judicial scrutiny. Accordingly, we hold that the addition made Accordingly, we hold that the addition made in the hands of the assessee on account of alleged commission in the hands of the assessee on account of alleged commission in the hands of the assessee on account of alleged commission income is devoid of any evidentiary foundation and cannot be come is devoid of any evidentiary foundation and cannot be come is devoid of any evidentiary foundation and cannot be sustained. Resultantly, the addition of Rs. 7,04,188/ Resultantly, the addition of Rs. 7,04,188/- made by the Resultantly, the addition of Rs. 7,04,188/ Assessing Officer and sustained by the Ld. CIT(A) is hereby Assessing Officer and sustained by the Ld. CIT(A) is hereby Assessing Officer and sustained by the Ld. CIT(A) is hereby deleted. Accordingly, Ground Nos. 5 to 8 raised by the assessee are . Accordingly, Ground Nos. 5 to 8 raised by the assessee are . Accordingly, Ground Nos. 5 to 8 raised by the assessee are allowed.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. represented in the form of an asset, expenditure or entry in the represented in the form of an asset, expenditure or entry in the represented in the form of an asset, expenditure or entry in the books of account, amounting to or likely to amount to ₹50 lakhs or books of account, amounting to or likely to amount to books of account, amounting to or likely to amount to more.

16.1 The learned counsel further submitted that in the The learned counsel further submitted that in the The learned counsel further submitted that in the present case, the relevant assessment year is 2018–19, and the present case, the relevant assessment year is 2018 present case, the relevant assessment year is 2018 notice under Section 148 of the Act was issued on 21.11.2024, notice under Section 148 of the Act was issued on 21.11.2024, notice under Section 148 of the Act was issued on 21.11.2024, which is clearly beyond a period of three years from the end of the which is clearly beyond a period of three years from the end of the which is clearly beyond a period of three years from the end of the relevant assessment year. It was contended that the monetary ssment year. It was contended that the monetary ssment year. It was contended that the monetary threshold of ₹50 lakhs, as mandated under Section 149(1)(b), is 50 lakhs, as mandated under Section 149(1)(b), is 50 lakhs, as mandated under Section 149(1)(b), is not satisfied in the present case, inasmuch as the Assessing not satisfied in the present case, inasmuch as the Assessing not satisfied in the present case, inasmuch as the Assessing Officer has proposed and ultimately made an addition of only Officer has proposed and ultimately made an addition of only Officer has proposed and ultimately made an addition of only ₹7,04,188/- towards al towards alleged commission income. Accordingly, it leged commission income. Accordingly, it was urged that the assumption of jurisdiction under Section 147 is was urged that the assumption of jurisdiction under Section 147 is was urged that the assumption of jurisdiction under Section 147 is vitiated in law and the reassessment proceedings deserve to be vitiated in law and the reassessment proceedings deserve to be vitiated in law and the reassessment proceedings deserve to be quashed.

16.2 We have heard the rival submissions and perused the We have heard the rival submissions and perused the We have heard the rival submissions and perused the material available on r material available on record. It is not in dispute that the ecord. It is not in dispute that the reassessment proceedings in the present case have been initiated reassessment proceedings in the present case have been initiated reassessment proceedings in the present case have been initiated pursuant to a search action carried out on 22.12.2023, and that pursuant to a search action carried out on 22.12.2023, and that pursuant to a search action carried out on 22.12.2023, and that the notice under Section 148 was issued on 21.11.2024. The the notice under Section 148 was issued on 21.11.2024. The the notice under Section 148 was issued on 21.11.2024. The assessee has invoked the applic assessee has invoked the applicability of Section 149(1)(b) of the ability of Section 149(1)(b) of the Act, which governs the issuance of notice beyond a period of three Act, which governs the issuance of notice beyond a period of three Act, which governs the issuance of notice beyond a period of three

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. years. For ready reference the said provision is reproduced as ready reference the said provision is reproduced as ready reference the said provision is reproduced as under: “149(1) No notice under section 148 shall be issued for the relevant 149(1) No notice under section 148 shall be issued for the relevant 149(1) No notice under section 148 shall be issued for the relevant assessment year, ar, — (a) …………………………………. …………………………………. [(b) if three years, but not more than ten years, have elapsed from the [(b) if three years, but not more than ten years, have elapsed from the [(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has end of the relevant assessment year unless the Assessing Officer has end of the relevant assessment year unless the Assessing Officer has in his possession books of account in his possession books of account or other documents or evidence or other documents or evidence which reveal that the income chargeable to tax, represented in the form which reveal that the income chargeable to tax, represented in the form which reveal that the income chargeable to tax, represented in the form of— (i)an asset; (ii)expenditure in respect expenditure in respect of a transaction or in relation to an event or of a transaction or in relation to an event or occasion; or (iii)an entry or entries in the books of account, an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to which has escaped assessment amounts to or is likely to amount to which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] rupees or more:]”

16.3 A plain and purposive reading of the aforesaid provision A plain and purposive reading of the aforesaid provision A plain and purposive reading of the aforesaid provision makes it abundantly clear that, where the notice is issued beyond makes it abundantly clear that, where the notice is issued beyond makes it abundantly clear that, where the notice is issued beyond a period of three years, the existence of material evidencing a period of three years, the existence of material evidencing a period of three years, the existence of material evidencing escapement of income of escapement of income of ₹50 lakhs or more is a sine qua non for 50 lakhs or more is a sine qua non for the valid assumption of jurisdiction. The condition is not merely the valid assumption of jurisdiction. The condition is not merely the valid assumption of jurisdiction. The condition is not merely procedural but goes to the root of the jurisdiction of the Assessing procedural but goes to the root of the jurisdiction of the Assessing procedural but goes to the root of the jurisdiction of the Assessing Officer. In the present case, it is an admitted position that the In the present case, it is an admitted position that the In the present case, it is an admitted position that the addition proposed and ultimately made by the Assessing Officer is d and ultimately made by the Assessing Officer is d and ultimately made by the Assessing Officer is only ₹7,04,188/-, which is far below the statutory threshold of , which is far below the statutory threshold of ₹50 , which is far below the statutory threshold of lakhs. There is nothing on record to indicate that the Assessing lakhs. There is nothing on record to indicate that the Assessing lakhs. There is nothing on record to indicate that the Assessing Officer was in possession of any material suggesting escapement of Officer was in possession of any material suggesting escapement of Officer was in possession of any material suggesting escapement of

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. income exceeding exceeding exceeding the the the prescribed prescribed prescribed limit. limit. limit. The The The jurisdictional jurisdictional jurisdictional requirement under Section 149(1)(b) thus remains unfulfilled. requirement under Section 149(1)(b) thus remains unfulfilled. requirement under Section 149(1)(b) thus remains unfulfilled.

16.4 In such circumstances, the initiation of reassessment In such circumstances, the initiation of reassessment In such circumstances, the initiation of reassessment proceedings beyond the period of three years is clearly without proceedings beyond the period of three years is clearly without proceedings beyond the period of three years is clearly without authority of law a authority of law and cannot be sustained. The jurisdiction nd cannot be sustained. The jurisdiction assumed by the Assessing Officer is vitiated at its very inception. assumed by the Assessing Officer is vitiated at its very inception. assumed by the Assessing Officer is vitiated at its very inception. Accordingly, we hold that the notice issued under Section 148 of Accordingly, we hold that the notice issued under Section 148 of Accordingly, we hold that the notice issued under Section 148 of the Act and the consequent reassessment proceedings are liable to the Act and the consequent reassessment proceedings are liable to the Act and the consequent reassessment proceedings are liable to be quashed. The same are hereby set aside. same are hereby set aside.

16.5 In view of the aforesaid conclusion, the other grounds In view of the aforesaid conclusion, the other grounds In view of the aforesaid conclusion, the other grounds raised by the assessee challenging the validity of the reassessment raised by the assessee challenging the validity of the reassessment raised by the assessee challenging the validity of the reassessment proceedings proceedings proceedings are are are rendered rendered rendered academic academic academic and and and do do do not not not require require require adjudication.

A.Y. 2019-20

17 Now, we take up the appeal for A.Y. 2019 Now, we take up the appeal for A.Y. 2019-20. The ground 20. The ground raised by the assessee are reproduced as under: raised by the assessee are reproduced as under: “Reopening of the assessment u/s 147 Reopening of the assessment u/s 147- 1. On the facts and circumstances of the Appellant's case and in law, the 1. On the facts and circumstances of the Appellant's case and in law, the 1. On the facts and circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of the Id. A.O in reopening the Ld. CIT(A) erred in confirming the acti on of the Id. A.O in reopening the case of the appellant which is bad in law, without jurisdiction and case of the appellant which is bad in law, without jurisdiction and case of the appellant which is bad in law, without jurisdiction and deserves to be quashed. deserves to be quashed. 2. On the facts and circumstances of the Appellant's case and in law, the 2. On the facts and circumstances of the Appellant's case and in law, the 2. On the facts and circumstances of the Appellant's case and in law, the Ld. CTT(A) erred in confirming the action of the Id. A.O in reopening the Ld. CTT(A) erred in confirming the action of the Id. A .O in reopening the assessment which is in violation to the clause (b) of sub section (1) to assessment which is in violation to the clause (b) of sub section (1) to assessment which is in violation to the clause (b) of sub section (1) to section 149 of the Income Tax Act, 1961. section 149 of the Income Tax Act, 1961.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 3. On the facts and circumstances of the Appellant's case and in law, the 3. On the facts and circumstances of the Appellant's case and in law, the 3. On the facts and circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of the Id. A.O in issuing notice Ld. CIT(A) erred in confirming the action of the Id. A.O in issuing notice u/s 148 on the basis of a mechanical approval u/s 151 of the Income Tax u/s 148 on the basis of a mechanical approval u/s 151 of the Income Tax u/s 148 on the basis of a mechanical approval u/s 151 of the Income Tax Act, 1961. 4. On the facts and circumstances of the Appellant's case and in law, the 4. On the facts and circumstances of the Appellant's case and in law, the 4. On the facts and circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of the Id. A.O in passing the Ld. CIT(A) erred in confirming the action of the Id. A.O in passing Ld. CIT(A) erred in confirming the action of the Id. A.O in passing order u/s 147 based on mechanical approval u/s 1488 of the Income Tax order u/s 147 based on mechanical approval u/s 1488 of the Income Tax order u/s 147 based on mechanical approval u/s 1488 of the Income Tax Act, 1961. Addition of commission income Addition of commission income 5. On the facts and circumstances of the Appellant's case and in law, the 5. On the facts and circumstances of the Appellant's case and in law, the 5. On the facts and circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in confirming the action of the ld. A.O in relying on the Ld. CIT(A) erred in confirming the action of the ld. A.O in relyi Ld. CIT(A) erred in confirming the action of the ld. A.O in relyi statements of the appellant as well as various third parties, despite the statements of the appellant as well as various third parties, despite the statements of the appellant as well as various third parties, despite the fact that such statements were subsequently retracted, for reasons stated fact that such statements were subsequently retracted, for reasons stated fact that such statements were subsequently retracted, for reasons stated in the impugned order or otherwise. in the impugned order or otherwise. 6. On the facts and circumstances of the Appellant's case and in law, the 6. On the facts and circumstances of the Appellant's case and 6. On the facts and circumstances of the Appellant's case and Ld. CIT(A) erred in confirming the action of the Id. A.O in relying on Ld. CIT(A) erred in confirming the action of the Id. A.O in relying on Ld. CIT(A) erred in confirming the action of the Id. A.O in relying on contents of certain tallydata which was found and seized from the contents of certain tallydata which was found and seized from the contents of certain tallydata which was found and seized from the premises of a third party with no co-relation with the appellant, for premises of a third party with no co relation with the appellant, for reasons stated in the impugned order or otherwise. reasons stated in the impugned order 7. On the facts and circumstances of the Appellant's case and in law, the 7. On the facts and circumstances of the Appellant's case and in law, the 7. On the facts and circumstances of the Appellant's case and in law, the Ld. CTT(A) erred in confirming the action of the Id. A.O in alleging that Ld. CTT(A) erred in confirming the action of the Id. A.O in alleging that Ld. CTT(A) erred in confirming the action of the Id. A.O in alleging that appellant has facilitated non-genuine sales made by various entities of appellant has facilitated non genuine sales made by various entities of Sunrise Group to M/s. Tegh Cables Pvt. Ltd. on commission basis, for the Sunrise Group to M/s . Tegh Cables Pvt. Ltd. on commission basis, for the reasons stated in the impugned order or otherwise. reasons stated in the impugned order or otherwise. 8. On the facts and circumstances of the Appellant's case and in law, the 8. On the facts and circumstances of the Appellant's case and in law, the 8. On the facts and circumstances of the Appellant's case and in law, the Ld. CTT(A) erred in confirming the action of the Id. A.O in making an Ld. CTT(A) erred in confirming the action of the Id. A.O in making an Ld. CTT(A) erred in confirming the action of the Id. A.O in making an addition of Rs.3,63,036/ n of Rs.3,63,036/-being commission @ 1% of corresponding sales being commission @ 1% of corresponding sales by M/s. Tegh Cables Pvt. Ltd., for the reasons stated in the impugned by M/s. Tegh Cables Pvt. Ltd., for the reasons stated in the impugned by M/s. Tegh Cables Pvt. Ltd., for the reasons stated in the impugned order or otherwise. The appellant submits that the aforesaid commission order or otherwise. The appellant submits that the aforesaid commission order or otherwise. The appellant submits that the aforesaid commission rate as computed by the Id. AO being excessive on the facts and prays rate as computed by the Id. AO being excessive on t he facts and prays that the same be suitably reduced.” that the same be suitably reduced. 18 In the ground raised, the assessee has challenged the validity In the ground raised, the assessee has challenged the validity In the ground raised, the assessee has challenged the validity of the reassessment as well as on merit of the reassessment as well as on merit of addition for of addition for the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. commission income. Firstly, we take up the commission income. Firstly, we take up the ground concerning ground concerning addition of commission income on merit for adjudication. addition of commission income on merit for adjudication. addition of commission income on merit for adjudication.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 20. Insofar as the addition on account of alleged commission far as the addition on account of alleged commission far as the addition on account of alleged commission 1”, pertaining to facilitation of income income under under “Modus “Modus-1”, pertaining to facilitation of accommodation accommodation accommodation entries entries entries to to to various various various beneficiary beneficiary beneficiary entities, entities, entities, is is is concerned, the Assessing Officer observed that certain material, concerned, the Assessing Officer observed that certain material, concerned, the Assessing Officer observed that certain material, including WhatsApp communi including WhatsApp communications and parallel Tally data seized cations and parallel Tally data seized during the course of search from the premises of the Sunrise during the course of search from the premises of the Sunrise during the course of search from the premises of the Sunrise Group, M/s Tegh Cables Private Limited and Tegh Cables (India) Group, M/s Tegh Cables Private Limited and Tegh Cables (India) Group, M/s Tegh Cables Private Limited and Tegh Cables (India) Private Limited, purportedly indicated that non-genuine sale Private Limited, purportedly indicated that non Private Limited, purportedly indicated that non invoices were issued by entities invoices were issued by entities of the Sunrise Group to various of the Sunrise Group to various beneficiaries. It was further noted that corresponding payments beneficiaries. It was further noted that corresponding payments beneficiaries. It was further noted that corresponding payments were received through banking channels in the accounts of the were received through banking channels in the accounts of the were received through banking channels in the accounts of the Sunrise entities and, thereafter, equivalent cash amounts were Sunrise entities and, thereafter, equivalent cash amounts were Sunrise entities and, thereafter, equivalent cash amounts were allegedly returned to the concerne allegedly returned to the concerned beneficiaries through key d beneficiaries through key persons of the Sunrise Group, namely Shri Vijay Pahuja, Shri Ram persons of the Sunrise Group, namely Shri Vijay Pahuja, Shri Ram persons of the Sunrise Group, namely Shri Vijay Pahuja, Shri Ram Dhirwani and Shri Rajiv Dhirwani Dhirwani and Shri Rajiv Dhirwani.

20.1 The Assessing Officer inferred that such transactions The Assessing Officer inferred that such transactions The Assessing Officer inferred that such transactions were carried out under the directions and facilitation of the were carried out under the directions and facilitation of the were carried out under the directions and facilitation of the assessee, Shri Banpreet Suriendersingh Atal, in his capacity as Shri Banpreet Suriendersingh Atal, in his capacity as Shri Banpreet Suriendersingh Atal, in his capacity as director of the aforesaid companies, and that he acted as an director of the aforesaid companies, and that he acted as an director of the aforesaid companies, and that he acted as an intermediary in arranging such accommodation entries. On this intermediary in arranging such accommodation entries. On this intermediary in arranging such accommodation entries. On this premise, the Assessing Officer concluded that the assessee had premise, the Assessing Officer concluded that the assessee had premise, the Assessing Officer concluded that the assessee had earned commission income at the rate of 2% on such alleged n income at the rate of 2% on such alleged n income at the rate of 2% on such alleged transactions.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 20.2 In support of the aforesaid conclusion, the Assessing In support of the aforesaid conclusion, the Assessing In support of the aforesaid conclusion, the Assessing Officer has referred to certain illustrative instances of beneficiary Officer has referred to certain illustrative instances of beneficiary Officer has referred to certain illustrative instances of beneficiary entities who are stated to have availed such alleged non-genuine entities who are stated to have availed such alleged non entities who are stated to have availed such alleged non sales invoices from the Sunrise Group, as discussed in detail in oices from the Sunrise Group, as discussed in detail in oices from the Sunrise Group, as discussed in detail in the assessment order. the assessment order.

20.3 In relation to the beneficiary entity, namely M/s Sterling In relation to the beneficiary entity, namely M/s Sterling In relation to the beneficiary entity, namely M/s Sterling and Wilson Pvt. Ltd., the Assessing Officer has placed reliance on and Wilson Pvt. Ltd., the Assessing Officer has placed reliance on and Wilson Pvt. Ltd., the Assessing Officer has placed reliance on certain WhatsApp communications, from which it was inferred certain WhatsApp communications, from which it was certain WhatsApp communications, from which it was that cash was allegedly collected by Shri Gaurav Bhatia, Executive that cash was allegedly collected by Shri Gaurav Bhatia, Executive that cash was allegedly collected by Shri Gaurav Bhatia, Executive Director of Tegh Cables India Pvt. Ltd., and subsequently handed Director of Tegh Cables India Pvt. Ltd., and subsequently handed Director of Tegh Cables India Pvt. Ltd., and subsequently handed over to Mr. Zarir Mistry, an employee of the Sterling Group. It was over to Mr. Zarir Mistry, an employee of the Sterling Group. It was over to Mr. Zarir Mistry, an employee of the Sterling Group. It was further observed that such cash payments were p further observed that such cash payments were purportedly made urportedly made in lieu of cheque/RTGS payments effected by M/s Sterling and in lieu of cheque/RTGS payments effected by M/s Sterling and in lieu of cheque/RTGS payments effected by M/s Sterling and Wilson Pvt. Ltd. in favour of Sunrise Group entities, including M/s Wilson Pvt. Ltd. in favour of Sunrise Group entities, including M/s Wilson Pvt. Ltd. in favour of Sunrise Group entities, including M/s V.S. Enterprises.

20.4 The The The Assessing Assessing Assessing Officer Officer Officer also referred also referred also referred to to WhatsApp to WhatsApp WhatsApp exchanges between Shri Ram Hans (alias Ram Dhirwani, exchanges between Shri Ram Hans (alias Ram exchanges between Shri Ram Hans (alias Ram associated with Hans Machinery) and the assessee, as well as associated with Hans Machinery) and the assessee, as well as associated with Hans Machinery) and the assessee, as well as statements recorded during the course of search, to infer that the statements recorded during the course of search, to infer that the statements recorded during the course of search, to infer that the term “Coil” was used as a code for cash. term “Coil” was used as a code for cash.

20.5 Reference was further made to a parallel Tally data Reference was further made to a parallel Tally data Reference was further made to a parallel Tally data maintained by Shri Ram maintained by Shri Ram Dhirwani under the entity name ‘KM’, Dhirwani under the entity name ‘KM’, which was seized during the search proceedings. It was noted that which was seized during the search proceedings. It was noted that which was seized during the search proceedings. It was noted that 33

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. the said Tally contained entries reflecting cash transactions, with the said Tally contained entries reflecting cash transactions, with the said Tally contained entries reflecting cash transactions, with narrations such as ‘Bunny’ and ‘Sterling’, which, according to the narrations such as ‘Bunny’ and ‘Sterling’, which, according to the narrations such as ‘Bunny’ and ‘Sterling’, which, according to the Assessing Officer, corresponded to cash payments made against corresponded to cash payments made against corresponded to cash payments made against RTGS receipts from entities including M/s Sterling and Wilson Pvt. RTGS receipts from entities including M/s Sterling and Wilson Pvt. RTGS receipts from entities including M/s Sterling and Wilson Pvt. Ltd.

20.6 The Assessing Officer also referred to instances wherein The Assessing Officer also referred to instances wherein The Assessing Officer also referred to instances wherein M/s V.S. Enterprises M/s V.S. Enterprises (ABEFM5573D) was stated to have issued was stated to have issued invoices to M/s Sterling and Wilson Pvt. Ltd., against which invoices to M/s Sterling and Wilson Pvt. Ltd., against which invoices to M/s Sterling and Wilson Pvt. Ltd., against which payments were made through banking channels, followed by payments were made through banking channels, followed by payments were made through banking channels, followed by alleged return of equivalent amounts in cash. It was thus inferred alleged return of equivalent amounts in cash. It was thus inferred alleged return of equivalent amounts in cash. It was thus inferred that such transactions were in the nature of accommodation that such transactions were in the nature of that such transactions were in the nature of entries without any actual movement of goods. VS Enterprises entries without any actual movement of goods. entries without any actual movement of goods. (ABEFM5573D) (whose partner is Prakash Gurbani aka Piku) is (ABEFM5573D) (whose partner is Prakash Gurbani aka Piku) is (ABEFM5573D) (whose partner is Prakash Gurbani aka Piku) is one such entity through which non genuine sales was provided by one such entity through which non genuine sales was provided by one such entity through which non genuine sales was provided by Shri Vijay Pahuja to parties of Shri Banpreet Atal Shri Vijay Pahuja to parties of Shri Banpreet Atal . It was further observed that such entries were recorded in the parallel Tally observed that such entries were recorded in the parallel Tally observed that such entries were recorded in the parallel Tally system under specific ledger heads, including ‘Piku cash1’, system under specific ledger heads, including ‘Piku cash1’, system under specific ledger heads, including ‘Piku cash1’, maintained in the entity identified as ‘Ka’. maintained in the entity identified as ‘Ka’. 20.7 In this backdrop, the Assessing Officer referred to the In this backdrop, the Assessing Officer referred to the In this backdrop, the Assessing Officer referred to the statement of the asse statement of the assessee recorded under Section 132(4) of the Act ssee recorded under Section 132(4) of the Act on 24.12.2023, wherein, in response to Question No. 38, the on 24.12.2023, wherein, in response to Question No. 38, the on 24.12.2023, wherein, in response to Question No. 38, the assessee is stated to have admitted that the quotations/proforma assessee is stated to have admitted that the quotations/proforma assessee is stated to have admitted that the quotations/proforma invoices and purchase orders issued in the name of M/s Sterling invoices and purchase orders issued in the name of M/s Sterling invoices and purchase orders issued in the name of M/s Sterling and Wilson Pvt. Ltd. and Wilson Pvt. Ltd. were not genuine, and that the payments were not genuine, and that the payments 34

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. received through RTGS in favour of M/s V.S. Enterprises were received through RTGS in favour of M/s V.S. Enterprises were received through RTGS in favour of M/s V.S. Enterprises were subsequently returned in cash to the said entity. subsequently returned in cash to the said entity.

20.8 Insofar as the other entities, namely Insofar as the other entities, namely M/s Nitco Ltd. and M/s Nitco Ltd. and Pyramid Technologies Pyramid Technologies, are concerned, the Assessing Officer noted sing Officer noted that Shri Gaurav Bhatia, in his statement recorded during the that Shri Gaurav Bhatia, in his statement recorded during the that Shri Gaurav Bhatia, in his statement recorded during the course of proceedings, reiterated that he had collected invoices for course of proceedings, reiterated that he had collected invoices for course of proceedings, reiterated that he had collected invoices for the purpose of facilitating the alleged non the purpose of facilitating the alleged non-genuine transactions. genuine transactions. With With regard regard to to the the beneficiary beneficiary entity, entity, namely n amely Pyramid Pyramid Technologies, the Assessing Officer observed that invoices were Technologies, the Assessing Officer observed that invoices were Technologies, the Assessing Officer observed that invoices were issued by S P Electro Solutions Pvt. Ltd. in favour of the said issued by S P Electro Solutions Pvt. Ltd. in favour of the said issued by S P Electro Solutions Pvt. Ltd. in favour of the said entity. entity. entity. Reference Reference Reference was was was also also also made made made to to to certain certain certain WhatsApp WhatsApp WhatsApp communications communications communications between between between the the the assessee, assessee, assessee, Shri Shri Shri Banpreet Banpreet Banpreet Suriendersingh Atal, and Shri Gaurav Bhatia, from which the ngh Atal, and Shri Gaurav Bhatia, from which the ngh Atal, and Shri Gaurav Bhatia, from which the Assessing Officer inferred that cash corresponding to the alleged Assessing Officer inferred that cash corresponding to the alleged Assessing Officer inferred that cash corresponding to the alleged non-genuine transactions was collected by Shri Gaurav Bhatia and genuine transactions was collected by Shri Gaurav Bhatia and genuine transactions was collected by Shri Gaurav Bhatia and delivered to the office of M/s Tegh Cables Pvt. Ltd. in accordance delivered to the office of M/s Tegh Cables Pvt. Ltd. in accordance delivered to the office of M/s Tegh Cables Pvt. Ltd. in accordance with the instructions of the assessee. instructions of the assessee.

20.9 Insofar as the beneficiary entity, M/s Laqshya Media Insofar as the beneficiary entity, M/s Laqshya Media Insofar as the beneficiary entity, M/s Laqshya Media Ltd., is concerned, the Assessing Officer has referred to certain Ltd., is concerned, the Assessing Officer has referred to certain Ltd., is concerned, the Assessing Officer has referred to certain WhatsApp communications exchanged between Shri Ram Hans WhatsApp communications exchanged between Shri Ram Hans WhatsApp communications exchanged between Shri Ram Hans (alias (alias (alias Ram Ram Ram Dhirwani) Dhirwani) Dhirwani) and and and the the the assessee, assessee, assessee, Shri Shri Shri Banpreet Suriendersingh Atal, to infer that the said entity had availed Suriendersingh Atal, to infer that the said entity had availed Suriendersingh Atal, to infer that the said entity had availed alleged non-genuine purchase entries from entities such as Hans genuine purchase entries from entities such as Hans genuine purchase entries from entities such as Hans

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Machinery, Asian Ecolightings Pvt. Ltd. and L.N. Enterprises. It Machinery, Asian Ecolightings Pvt. Ltd. and L.N. Enterprises. It Machinery, Asian Ecolightings Pvt. Ltd. and L.N. Enterprises. It was further observed that purchase orders pertaining to such was further observed that purchase orders pertaining to was further observed that purchase orders pertaining to transactions were reflected in the said communications. The transactions were reflected in the said communications. The transactions were reflected in the said communications. The Assessing Officer also relied upon the statement of the assessee Assessing Officer also relied upon the statement of the assessee Assessing Officer also relied upon the statement of the assessee recorded under Section 132(4) of the Act on 23.12.2023, wherein, recorded under Section 132(4) of the Act on 23.12.2023, wherein, recorded under Section 132(4) of the Act on 23.12.2023, wherein, in response to Question No. 32, the assessee is stated to have in response to Question No. 32, the assessee is stated to ha in response to Question No. 32, the assessee is stated to ha admitted that non-genuine purchase orders were issued by M/s genuine purchase orders were issued by M/s genuine purchase orders were issued by M/s Laqshya Media Ltd., and that corresponding cash was allegedly Laqshya Media Ltd., and that corresponding cash was allegedly Laqshya Media Ltd., and that corresponding cash was allegedly returned to the said entity. returned to the said entity.

20.10 The The The Assessing Assessing Assessing Officer Officer Officer further further further referred referred referred to to to certain certain certain WhatsApp exchanges extracted from the mobile device of the WhatsApp exchanges extracted from the mobile devi WhatsApp exchanges extracted from the mobile devi assessee, which, according to him, indicated that Hans Machinery assessee, which, according to him, indicated that Hans Machinery assessee, which, according to him, indicated that Hans Machinery had received an amount of had received an amount of ₹11.8 lakhs through RTGS from the 11.8 lakhs through RTGS from the said entity and had, in turn, allegedly returned said entity and had, in turn, allegedly returned ₹10 lakhs in cash 10 lakhs in cash through informal channels. These materials have been relied upon through informal channels. These materials have been r through informal channels. These materials have been r to to to substantiate substantiate substantiate the the the allegation allegation allegation of of of accommodation accommodation accommodation entry entry entry transactions.

20.11 With regard to the beneficiary entity, M/s Airtech With regard to the beneficiary entity, M/s Airtech With regard to the beneficiary entity, M/s Airtech Systems India Private Limited, the Assessing Officer has referred to Systems India Private Limited, the Assessing Officer has referred to Systems India Private Limited, the Assessing Officer has referred to WhatsApp communications between Shri Vijay Pahuja and the WhatsApp communications between Shri Vijay Pahuja and t WhatsApp communications between Shri Vijay Pahuja and t assessee to infer that S P Electro Solutions Pvt. Ltd. had issued assessee to infer that S P Electro Solutions Pvt. Ltd. had issued assessee to infer that S P Electro Solutions Pvt. Ltd. had issued

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. non-genuine sales invoices to the said entity, against which genuine sales invoices to the said entity, against which genuine sales invoices to the said entity, against which payments were received through banking channels and equivalent payments were received through banking channels and equivalent payments were received through banking channels and equivalent amounts were allegedly returned in cash. The Assessing Officer amounts were allegedly returned in cash. The Assessing Officer amounts were allegedly returned in cash. The Assessing Officer has also relied upon the statement of the assessee recorded under has also relied upon the statement of the assessee recorded under has also relied upon the statement of the assessee recorded under Section 132(4) of the Act on 23.12.2023, wherein the assessee is Section 132(4) of the Act on 23.12.2023, wherein the assessee is Section 132(4) of the Act on 23.12.2023, wherein the assessee is stated to have acknowledged such transactions. Further, it was stated to have acknowledged such transactions. Further, it was stated to have acknowledged such transactions. Further, it was noted that another entity, namely Tushar Trading Co. (a noted that another entity, namely Tushar Trading Co. (a noted that another entity, namely Tushar Trading Co. (a proprietary concern of Shri Mehul Rasiklal Sanghvi), was also etary concern of Shri Mehul Rasiklal Sanghvi), was also etary concern of Shri Mehul Rasiklal Sanghvi), was also involved in issuing alleged accommodation entry invoices to M/s involved in issuing alleged accommodation entry invoices to M/s involved in issuing alleged accommodation entry invoices to M/s Airtech Systems India Private Limited. Reference was made to Airtech Systems India Private Limited. Reference was made to Airtech Systems India Private Limited. Reference was made to WhatsApp communications wherein invoices raised by the said WhatsApp communications wherein invoices raised by the said WhatsApp communications wherein invoices raised by the said entity were shared with the assessee, and the assessee is stated to red with the assessee, and the assessee is stated to red with the assessee, and the assessee is stated to have admitted these facts in response to Question No. 44 of his have admitted these facts in response to Question No. 44 of his have admitted these facts in response to Question No. 44 of his statement recorded during the search proceedings statement recorded during the search proceedings on 23.12.2023 on 23.12.2023.

20.12 In respect of the beneficiary entity, M/s Viswaat In respect of the beneficiary entity, M/s Viswaat In respect of the beneficiary entity, M/s Viswaat Chemicals Limited, the Assessing Officer has relied upon Chemicals Limited, the Assessing Officer has relied upon Chemicals Limited, the Assessing Officer has relied upon WhatsApp communications indicating that cash was allegedly WhatsApp communications indicating that cash was allegedly WhatsApp communications indicating that cash was allegedly collected by Shri Vijay Pahuja and delivered to a representative of collected by Shri Vijay Pahuja and delivered to a representative of collected by Shri Vijay Pahuja and delivered to a representative of the said entity namely Shri Viswanath at Malad. namely Shri Viswanath at Malad. namely Shri Viswanath at Malad. Reference was also made to the statement of Shri Gaurav Bhatia recorded under e to the statement of Shri Gaurav Bhatia recorded under e to the statement of Shri Gaurav Bhatia recorded under Section 132(4) of the Act on 24.12.2023, wherein he purportedly Section 132(4) of the Act on 24.12.2023, wherein he purportedly Section 132(4) of the Act on 24.12.2023, wherein he purportedly explained such transactions with reference to communications explained such transactions with reference to communications explained such transactions with reference to communications exchanged with the assessee. exchanged with the assessee.. The Assessing Officer further relied The Assessing Officer further relied upon the statement of the assessee recorded under Section 132(4) upon the statement of the assessee recorded under Section 132(4) upon the statement of the assessee recorded under Section 132(4) 37

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. of the Act on 24.12.2023, wherein, in response to Question No. 39, of the Act on 24.12.2023, wherein, in response to Question No. 39, of the Act on 24.12.2023, wherein, in response to Question No. 39, in whatsapp chat the assessee is stated to have admitted that the assessee is stated to have admitted that in whatsapp chat extracted from his mobile extracted from his mobile shown a quotation/proforma invoice a quotation/proforma invoice dated 11.07.2022 amounting to Rs. 60,46,973/ amounting to Rs. 60,46,973/- issued by M/s Sunrise Enterprises to M/s Viswaat Chemicals Limited was not Sunrise Enterprises to M/s Viswaat Chemicals Limited was not Sunrise Enterprises to M/s Viswaat Chemicals Limited was not genuine. Similarly, in respect of another beneficiary, namely M/s Similarly, in respect of another beneficiary, namely M/s Similarly, in respect of another beneficiary, namely M/s Imagination Edutainment India Pv Imagination Edutainment India Pvt. Ltd., reliance was placed on t. Ltd., reliance was placed on WhatsApp communications between Shri Vijay Pahuja and the WhatsApp communications between Shri Vijay Pahuja and the WhatsApp communications between Shri Vijay Pahuja and the assessee, which were stated to have been acknowledged by the assessee, which were stated to have been acknowledged by the assessee, which were stated to have been acknowledged by the assessee in his statement recorded under Section 132(4) of the Act assessee in his statement recorded under Section 132(4) of the Act assessee in his statement recorded under Section 132(4) of the Act on 25.12.2023, in response to Question on 25.12.2023, in response to Question No. 43.

20.13 The Assessing Officer further observed that the alleged The Assessing Officer further observed that the alleged The Assessing Officer further observed that the alleged accommodation entry transactions or non accommodation entry transactions or non-genuine sales recorded genuine sales recorded by the Sunrise Group entities were also sought to be corroborated by the Sunrise Group entities were also sought to be corroborated by the Sunrise Group entities were also sought to be corroborated by reference to GST data pertaining to the beneficiary entities, in by reference to GST data pertaining to the beneficiary by reference to GST data pertaining to the beneficiary conjunction with the statements recorded and the WhatsApp conjunction with the statements recorded and the WhatsApp conjunction with the statements recorded and the WhatsApp communications relied upon during the course of proceedings. communications relied upon during the course of proceedings. communications relied upon during the course of proceedings. The Assessing Officer has thus relied upon the aforesaid material The Assessing Officer has thus relied upon the aforesaid material The Assessing Officer has thus relied upon the aforesaid material and statements to draw an inference regarding the involvement of and statements to draw an inference regarding the involve and statements to draw an inference regarding the involve the assessee in facilitating such transactions. the assessee in facilitating such transactions.

20.14 The Assessing Officer has further placed reliance upon The Assessing Officer has further placed reliance upon The Assessing Officer has further placed reliance upon the statement of the assessee, Shri Banpreet Suriendersingh Atal, the statement of the assessee, Shri Banpreet Suriendersingh Atal, the statement of the assessee, Shri Banpreet Suriendersingh Atal, recorded under Section 132(4) of the Income recorded under Section 132(4) of the Income-tax Act, 1961 on tax Act, 1961 on 38

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 23.12.2023, wherein the assessee is stated to have acknowledged in the assessee is stated to have acknowledged in the assessee is stated to have acknowledged his involvement in facilitating certain transactions alleged to be his involvement in facilitating certain transactions alleged to be his involvement in facilitating certain transactions alleged to be non-genuine in nature between entities of the Sunrise Group and genuine in nature between entities of the Sunrise Group and genuine in nature between entities of the Sunrise Group and various beneficiary parties. In the said statement, in response to various beneficiary parties. In the said statement, in response to various beneficiary parties. In the said statement, in response to Question No. 22, the assessee purportedly stated that he had been . 22, the assessee purportedly stated that he had been . 22, the assessee purportedly stated that he had been involved in such transactions since December 2021, and that the involved in such transactions since December 2021, and that the involved in such transactions since December 2021, and that the aggregate value of such transactions was approximately ₹10 aggregate value of such transactions was approximately aggregate value of such transactions was approximately crores, against which he had allegedly earned commission of about crores, against which he had allegedly earned commission of about crores, against which he had allegedly earned commission of about ₹20 lakhs, being approximately 2% thereof. The statement also eing approximately 2% thereof. The statement also eing approximately 2% thereof. The statement also enumerates certain entities alleged to have been involved in such enumerates certain entities alleged to have been involved in such enumerates certain entities alleged to have been involved in such transactions, along with the respective persons with whom transactions, along with the respective persons with whom transactions, along with the respective persons with whom coordination was carried coordination was carried out. Relevant part of his statement is his statement is reproduced as under: under: “Q. 22 With respect to your explanation about source of cash as ted in the “Q. 22 With respect to your explanation about source of cash as ted in the “Q. 22 With respect to your explanation about source of cash as ted in the answer of question No. 21 above, please explain in detail from when you are answer of question No. 21 above, please explain in detail from when you are answer of question No. 21 above, please explain in detail from when you are involved in such cash transactions and the quantum of cash you have generated involved in such cash transactions and the quantum of cash you have generated involved in such cash transactions and the quantum of cash you have generated through these transactions till date and also explain the entities involved in such through these trans actions till date and also explain the entities involved in such transactions and how you are associated with these entities. transactions and how you are associated with these entities. transactions and how you are associated with these entities. Ans. Sir. I am involved in the said cash transactions since December. 2021 and Sir. I am involved in the said cash transactions since December. 2021 and Sir. I am involved in the said cash transactions since December. 2021 and the total cash transaction is approx. 10 crores till date and I have got approx. 20 the total cash transaction is approx. 10 crores ti ll date and I have got approx. 20 lakhs (2% of total cash transactions of Rs. 10 crores) as commission from the lakhs (2% of total cash transactions of Rs. 10 crores) as commission from the lakhs (2% of total cash transactions of Rs. 10 crores) as commission from the cash giving parties. The following entities are involved in the above stated cash giving parties. The following entities are involved in the above stated cash giving parties. The following entities are involved in the above stated transactions: Sr. Name of the Entities involved in the cash Name of the Entities involved in the cash PAN Key Person of the entity with Key Person of the entity with No. transaction whom coordination is done whom coordination is done i. M/s. Sterling & Wilson Private Limited M/s. Sterling & Wilson Private Limited AAACS9939D Mr. Khurshid Daruwala Mr. Khurshid Daruwala ii. M/s. Sterling Generators Pvt. Ltd. M/s. Sterling Generators Pvt. Ltd. AACCS2107H Mr. Zarir Mistry Mr. Zarir iii. M/s. Raghavendra Electrical Engineers Pvt. M/s. Raghavendra Electrical Engineers Pvt. AKWPK4307J Mr. Sachin Kulkarni Mr. Sachin Kulkarni Ltd. iv. M/s. Airtech Systems India Pvt. Ltd. M/s. Airtech Systems India Pvt. Ltd. AAECA7022R Do not remember Do not remember v. M/s. Pyramid Technologies Pvt. Ltd. M/s. Pyramid Technologies Pvt. Ltd. AAFFP8216L Mr. Ajay Parwani Mr. Ajay Parwani vi M/s Viswaat Chemicals Ltd. Chemicals Ltd. AAACV4184B Mr. Vishwanathan Mr. Vishwanathan vii M/s Laqshya Media Ltd. M/s Laqshya Media Ltd. AAACL5004C Do not remember Do not remember viii M/s. Hans Machinery M/s. Hans Machinery AAHPH4385A Mr. Rajeev Dhirwani Mr. Rajeev Dhirwani 39

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd.

ix M/s. V. S Enterprise ABEFM5573D through Mr. Vijay Pahuja through Mr. Vijay Pahuja x M/s SP Electro Solutions Pvt. M/s SP Electro Solutions Pvt. Ltd. ABJCS2260B Mr. Vijay Pabuja Mr. Vijay Pabuja xi M/s Sunrise Enterprise M/s Sunrise Enterprise ABXFS4006L Mr. Vijay Pahuja Mr. Vijay Pahuja xii M/s L.N Enterprises AADPL5995L Mr. Vijay Pahuja Mr. Vijay Pahuja xiii M/s Asian Ecolightings Pvt. Ltd. M/s Asian Ecolightings Pvt. Ltd. AAOCA8811E through Mr. Vijay Pahuja through Mr. Vijay Pahuja xiv M/s Tushar Trading Company M/s Tushar Trading Company AWTPS0584L through Mr. Vijay Pahuja through Mr. Vijay Pahuja

20.15 On the basis of the aforesaid material and other On the basis of the aforesaid material and other On the basis of the aforesaid material and other information information information gathered gathered gathered during during during the the the course course course of of of assessment assessment assessment proceedings, proceedings, proceedings, the the the Assessing Assessing Assessing Officer Officer Officer compiled compiled compiled a a a tabulation tabulation tabulation identifying the entities of the Sunrise Group purportedly issuing identifying the entities of the Sunrise Group purportedly i identifying the entities of the Sunrise Group purportedly i non-genuine sale invoices and the corresponding beneficiary genuine sale invoices and the corresponding beneficiary genuine sale invoices and the corresponding beneficiary entities. The said tabulation, as reproduced in the assessment entities. The said tabulation, as reproduced in the assessment entities. The said tabulation, as reproduced in the assessment order, reflects year- -wise details of such alleged transactions and wise details of such alleged transactions and the aggregate quantum attributed thereto. F the aggregate quantum attributed thereto. For ready referen or ready reference, the said table is extracted as under: said table is extracted as under:

S. Entity Name Name of of 2019- 2020-21 2021-22 2022-23 2023-24 Grand No. controlled/managed Entity, FY Entity, FY 20 Total by Vijay Pahuja 1. SP Electrosolutions Raghavendra Raghavendra 4162982 4162982 Pvt Ltd Electrical Electrical Engineers Engineers (AKWPK4307J) (AKWPK4307J) 2. SP Electrosolutions Airtech Airtech 2957319 2965681 5923000 Pvt Ltd Systems India Systems India Pvt Pvt Ltd Ltd (AAECA7022R) (AAECA7022R) 3 SP Electrosolutions Pyramid Pyramid 1795884 960749 2756633 Pvt Ltd Technologies Technologies (AAFFP8216L) (AAFFP8216L) 4 Sunrise Enterprise Pyramid Pyramid 3356124 2389891 4746018 Technologies Technologies (AAFFP8216L) (AAFFP8216L) 5 SP Electrosolutions Viswaat Viswaat 12380461 22740930 36121391 Pvt Ltd Chemicals Ltd Chemicals Ltd (AAACV41848) (AAACV41848)

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 20.16 Accordingly, t Accordingly, the Assessing Officer show caused the he Assessing Officer show caused the assessee as why the cash commission @2% as per modus 1, he assessee as why the cash commission @2% as per modus 1, he assessee as why the cash commission @2% as per modus 1, he made in the case of the assessee as under: made in the case of the assessee as under:

F.Y. Amount of Sales in Rs. Amount of Sales in Rs. Commission Commission income income of of Banpreet Atal in Rs. @2% Banpreet Atal in Rs. @2% 2018-19 2513025 2513025 50260.5 2019-20 11108856 11108856 2221771 2020-21 50724897 50724897 1014498 2021-22 93102555 93102555 1862051 2022-23 79874195 79874195 1597484 2023-24 60725211 60725211 1214504 Total 298048739 298048739 5960974.6

20.17 In response to the show cause notice, the assessee In response to the show cause notice, the assessee In response to the show cause notice, the assessee categorically denied the allegations of having facilitated non- categorically denied the allegations of having facilitated non categorically denied the allegations of having facilitated non genuine transactions or having earned any commission therefrom. genuine transactions or having earned any commission therefrom. genuine transactions or having earned any commission therefrom. It was submitted that the assessee has been engaged in the It was submitted that the assessee has been engaged in the It was submitted that the assessee has been engaged in the business for over two to three decades and has had longstanding wo to three decades and has had longstanding wo to three decades and has had longstanding commercial dealings with various entities, including M/s Sterling commercial dealings with various entities, including M/s Sterling commercial dealings with various entities, including M/s Sterling and Wilson Pvt. Ltd., M/s Nitco Limited, M/s Pyramid and and Wilson Pvt. Wilson Pvt. Ltd., Ltd., M/s M/s Nitco Nitco Limited, Limited, M/s M/s Pyramid Pyramid Technologies, M/s Laqshya Media Ltd., M/s Airtech Systems India Technologies, M/s Laqshya Media Ltd., M/s Airtech Systems India Technologies, M/s Laqshya Media Ltd., M/s Airtech Systems India Pvt. Ltd., M/s Viswaat Chemi Pvt. Ltd., M/s Viswaat Chemicals Ltd., and others, through entities cals Ltd., and others, through entities The assessee further explained that, in the of the Tegh Group. of the Tegh Group. The assessee further explained that, in the ordinary course of business, where the requisite goods were not ordinary course of business, where the requisite goods were not ordinary course of business, where the requisite goods were not readily available with the Tegh Group, he would, upon request readily available with the Tegh Group, he would, upon request readily available with the Tegh Group, he would, upon request from such parties, refer th from such parties, refer them to entities of the SP Group (formerly em to entities of the SP Group (formerly Sunrise Group), with whom he maintained business relations. It Sunrise Group), with whom he maintained business relations. It Sunrise Group), with whom he maintained business relations. It was thus contended that such referrals were part of legitimate was thus contended that such referrals were part of legitimate was thus contended that such referrals were part of legitimate

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. commercial dealings and did not involve any arrangement for commercial dealings and did not involve any arrangement for commercial dealings and did not involve any arrangement for accommodation entries. accommodation entries.

20.18 The assessee also emphatically submitted that there ssessee also emphatically submitted that there ssessee also emphatically submitted that there exists no documentary evidence whatsoever to establish receipt of exists no documentary evidence whatsoever to establish receipt of exists no documentary evidence whatsoever to establish receipt of commission at the rate of 2%, either in the WhatsApp commission at the rate of 2%, either in the WhatsApp commission at the rate of 2%, either in the WhatsApp communications or in the Tally data relied upon by the Assessing communications or in the Tally data relied upon by the Assessing communications or in the Tally data relied upon by the Assessing Officer. It was further c Officer. It was further contended that the statement recorded ontended that the statement recorded during the course of search proceedings was obtained under during the course of search proceedings was obtained under during the course of search proceedings was obtained under circumstances of stress and pressure, and was influenced by the circumstances of stress and pressure, and was influenced by the circumstances of stress and pressure, and was influenced by the statement of Shri Gaurav Bhatia. The assessee pointed out that he statement of Shri Gaurav Bhatia. The assessee pointed out that he statement of Shri Gaurav Bhatia. The assessee pointed out that he had already retracted the said had already retracted the said statement by way of a duly sworn statement by way of a duly sworn affidavit.

20.19 It was additionally submitted that, in view of the It was additionally submitted that, in view of the It was additionally submitted that, in view of the retraction of the statement of Shri Gaurav retraction of the statement of Shri Gaurav Bhatia as well, the very Bhatia as well, the very foundation of the Revenue’s case stands eroded. The assessee foundation of the Revenue’s case stands eroded. The assessee foundation of the Revenue’s case stands eroded. The assessee maintained that, to the best of his knowledge, he had merely maintained that, to the best of his knowledge, he had merely maintained that, to the best of his knowledge, he had merely facilitated business connections between parties and was not facilitated business connections between parties and was not facilitated business connections between parties and was not aware of any alleged cash movement or return of funds to the aware of any alleged cash movement or return of aware of any alleged cash movement or return of purchasing entities. purchasing entities. 20.20 On the strength of the aforesaid submissions, the On the strength of the aforesaid submissions, the On the strength of the aforesaid submissions, the assessee contended that the addition made by the Assessing assessee contended that the addition made by the Assessing assessee contended that the addition made by the Assessing Officer, being based solely on uncorroborated statements and Officer, being based solely on uncorroborated statements and Officer, being based solely on uncorroborated statements and without any supporting evidence, is unsustainable in law. without any supporting evidence, is unsustainable i without any supporting evidence, is unsustainable i

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd.

20.21 The Assessing Officer, after considering the submissions The Assessing Officer, after considering the submissions The Assessing Officer, after considering the submissions advanced by the assessee, was not persuaded to accept the advanced by the assessee, was not persuaded to accept the advanced by the assessee, was not persuaded to accept the explanation furnished and proceeded to reject the same. Based on explanation furnished and proceeded to reject the same. Based on explanation furnished and proceeded to reject the same. Based on the material gathered during the course of search proceedings, he the material gathered during the course of search proceedings, he the material gathered during the course of search proceedings, he was of opinion that the assessee, Shri Banpreet Suriendersingh s of opinion that the assessee, Shri Banpreet Suriendersingh s of opinion that the assessee, Shri Banpreet Suriendersingh Atal, had arranged accommodation entries for various entities and Atal, had arranged accommodation entries for various entities and Atal, had arranged accommodation entries for various entities and had earned commission thereon at the rate of 2% in cash. The had earned commission thereon at the rate of 2% in cash. The had earned commission thereon at the rate of 2% in cash. The Assessing Officer recorded that such conclusion was, in his view, Assessing Officer recorded that such conclusion was, in his view, Assessing Officer recorded that such conclusion was, in his view, substantiated not only by the statement of the assessee recorded bstantiated not only by the statement of the assessee recorded bstantiated not only by the statement of the assessee recorded under Section 132(4) of the Act during the search proceedings but under Section 132(4) of the Act during the search proceedings but under Section 132(4) of the Act during the search proceedings but also by certain material, including WhatsApp communications, also by certain material, including WhatsApp communications, also by certain material, including WhatsApp communications, found during the course of the search. It was further observed that found during the course of the search. It was further observed tha found during the course of the search. It was further observed tha the assessee had failed to satisfactorily rebut the findings emerging the assessee had failed to satisfactorily rebut the findings emerging the assessee had failed to satisfactorily rebut the findings emerging from the search and subsequent assessment proceedings. The from the search and subsequent assessment proceedings. The from the search and subsequent assessment proceedings. The Assessing Officer also took note of the retraction affidavit filed by Assessing Officer also took note of the retraction affidavit filed by Assessing Officer also took note of the retraction affidavit filed by the assessee; however, he held that the contents thereof were not the assessee; however, he held that the contents thereo the assessee; however, he held that the contents thereo acceptable and stood duly examined and rejected by the acceptable and stood duly examined and rejected by the acceptable and stood duly examined and rejected by the Department through communication issued via ITBA dated Department through communication issued via ITBA dated Department through communication issued via ITBA dated 22.01.2025. On the basis of the aforesaid reasoning, the Assessing 22.01.2025. On the basis of the aforesaid reasoning, the Assessing 22.01.2025. On the basis of the aforesaid reasoning, the Assessing Officer Officer Officer concluded concluded concluded that that that commission commission commission income income income amounting amounting amounting to to to ₹50,261/-, being 2% of the alleged transaction value of ng 2% of the alleged transaction value of ng 2% of the alleged transaction value of ₹25,13,025/-, had escaped assessment in the hands of the , had escaped assessment in the hands of the , had escaped assessment in the hands of the assessee for Assessment Year 2019 assessee for Assessment Year 2019–20. Accordingly, the said 20. Accordingly, the said amount was brought to tax. amount was brought to tax. 43

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd.

21 On further appeal, the learned Commissioner of Income Tax On further appeal, the learned Commissioner of Income Tax On further appeal, the learned Commissioner of Income Tax (Appeals), upon consideration of the facts of the case, the findings , upon consideration of the facts of the case, the findings , upon consideration of the facts of the case, the findings of the Assessing Officer, and the submissions advanced by the of the Assessing Officer, and the submissions advanced by the of the Assessing Officer, and the submissions advanced by the assessee, proceeded to uphold the addition made on account of assessee, proceeded to uphold the addition made on account of assessee, proceeded to uphold the addition made on account of alleged commission income. alleged commission income.

21.1 The The The learned learned learned CIT(A) CIT(A) CIT(A) noted noted noted that, that, that, apart apart apart from from from the the the transactions routed through M/s Tegh Cables Pvt. Ltd., the transactions routed through M/s Tegh Cables Pvt. Ltd., the transactions routed through M/s Tegh Cables Pvt. Ltd., the assessee had allegedly facilitated similar transactions through assessee had allegedly facilitated similar transactions through assessee had allegedly facilitated similar transactions through other entities, for which commission income was estimated at the other entities, for which commission income was estimated at the other entities, for which commission income was estimated at the rate of 2% (referred t rate of 2% (referred to as “Modus-1”). In this regard, reliance was 1”). In this regard, reliance was placed primarily on the statement of Shri Gaurav Bhatia, an placed primarily on the statement of Shri Gaurav Bhatia, an placed primarily on the statement of Shri Gaurav Bhatia, an employee associated with the assessee, as well as on certain employee associated with the assessee, as well as on certain employee associated with the assessee, as well as on certain WhatsApp communications and entries found in the parallel Tally WhatsApp communications and entries found in the parallel Tally WhatsApp communications and entries found in the parallel Tally data maintained by entiti data maintained by entities of the Sunrise Group. Based on such es of the Sunrise Group. Based on such material, the Assessing Officer had concluded that the assessee material, the Assessing Officer had concluded that the assessee material, the Assessing Officer had concluded that the assessee facilitated non-genuine transactions involving various entities, genuine transactions involving various entities, genuine transactions involving various entities, including M/s Sterling & Wilson Pvt. Ltd., M/s Nitco Limited, M/s including M/s Sterling & Wilson Pvt. Ltd., M/s Nitco Limited, M/s including M/s Sterling & Wilson Pvt. Ltd., M/s Nitco Limited, M/s Pyramid Technologies, Pyramid Technologies, M/s Laqshya Media Ltd., M/s Airtech M/s Laqshya Media Ltd., M/s Airtech Systems India Pvt. Ltd., M/s Viswaat Chemicals Ltd., and M/s Systems India Pvt. Ltd., M/s Viswaat Chemicals Ltd., and M/s Systems India Pvt. Ltd., M/s Viswaat Chemicals Ltd., and M/s Imagination Edutainment India Pvt. Ltd., and accordingly Imagination Edutainment India Pvt. Ltd., and accordingly Imagination Edutainment India Pvt. Ltd., and accordingly computed commission income of ₹50,261/- at the rate of 2%. computed commission income of at the rate of 2%. The learned CIT(A) also took note of the co learned CIT(A) also took note of the contention of the assessee that ntention of the assessee that the statement of Shri Gaurav Bhatia, forming the basis of the the statement of Shri Gaurav Bhatia, forming the basis of the the statement of Shri Gaurav Bhatia, forming the basis of the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. addition, had been subsequently retracted, and that the WhatsApp addition, had been subsequently retracted, and that the WhatsApp addition, had been subsequently retracted, and that the WhatsApp communications relied upon by the Assessing Officer were merely communications relied upon by the Assessing Officer were merely communications relied upon by the Assessing Officer were merely incidental to business interactions incidental to business interactions. It was further contended that . It was further contended that no independent inquiry had been conducted with the alleged no independent inquiry had been conducted with the alleged no independent inquiry had been conducted with the alleged beneficiary parties to substantiate the conclusions drawn. beneficiary parties to substantiate the conclusions drawn. beneficiary parties to substantiate the conclusions drawn.

21.2 However, the learned CIT(A), after considering the However, the learned CIT(A), after considering the However, the learned CIT(A), after considering the material on record, held that the retraction of th material on record, held that the retraction of the statement could e statement could not be accepted in isolation and was required to be evaluated in not be accepted in isolation and was required to be evaluated in not be accepted in isolation and was required to be evaluated in the light of surrounding circumstances and evidentiary material. the light of surrounding circumstances and evidentiary material. the light of surrounding circumstances and evidentiary material. According to the learned CIT(A), the statement of Shri Gaurav According to the learned CIT(A), the statement of Shri Gaurav According to the learned CIT(A), the statement of Shri Gaurav Bhatia, explaining the alleged flow of cash in Bhatia, explaining the alleged flow of cash in respect of such respect of such transactions, stood corroborated by WhatsApp communications transactions, stood corroborated by WhatsApp communications transactions, stood corroborated by WhatsApp communications and ledger entries maintained by the Sunrise Group entities. The and ledger entries maintained by the Sunrise Group entities. The and ledger entries maintained by the Sunrise Group entities. The learned CIT(A) further observed that the admission made by the learned CIT(A) further observed that the admission made by the learned CIT(A) further observed that the admission made by the assessee during the course of search proceedings regarding receipt assessee during the course of search proceedings re assessee during the course of search proceedings re of commission also lent support to the conclusions drawn by the of commission also lent support to the conclusions drawn by the of commission also lent support to the conclusions drawn by the Assessing Officer.

21.3 On the aforesaid reasoning, the learned CIT(A) held that On the aforesaid reasoning, the learned CIT(A) held that On the aforesaid reasoning, the learned CIT(A) held that the assessee had facilitated non the assessee had facilitated non-genuine transactions and had genuine transactions and had m at the rate of 2%, and earned commission income therefro earned commission income therefrom at the rate of 2%, and accordingly confirmed the addition of accordingly confirmed the addition of ₹50,261/- - made by the Assessing Officer.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 22. We have carefully considered the rival submissions and We have carefully considered the rival submissions and We have carefully considered the rival submissions and The grievance of the perused the material placed on record. perused the material placed on record. The grievance of the assessee pertains to the addition assessee pertains to the addition of Rs. 50,261/- made on account made on account of alleged commission income computed at the rate of 2% under of alleged commission income computed at the rate of 2% under of alleged commission income computed at the rate of 2% under what the Revenue terms as what the Revenue terms as "Modus-1".

22.1 The genesis of the impugned addition lies in the The genesis of the impugned addition lies in the The genesis of the impugned addition lies in the Assessing Officer’s conclusion that the assessee functioned as an Assessing Officer’s conclusion that the assessee functioned as an Assessing Officer’s conclusion that the assessee functioned as an entry provider, facilitating non ry provider, facilitating non-genuine sales/accommodation genuine sales/accommodation entries from the Sunrise Group entities to various corporate entries from the Sunrise Group entities to various corporate entries from the Sunrise Group entities to various corporate beneficiaries, including M/s Sterling & Wilson Pvt. Ltd., M/s Nitco beneficiaries, including M/s Sterling & Wilson Pvt. Ltd., M/s Nitco beneficiaries, including M/s Sterling & Wilson Pvt. Ltd., M/s Nitco Ltd., Pyramid Technologies, Laqshya Media Ltd., Airtech Systems Ltd., Pyramid Technologies, Laqshya Media Ltd., Airtech Systems Ltd., Pyramid Technologies, Laqshya Media Ltd., Airtech Systems India Pvt. Ltd., and Viswaat Chemicals Ltd. The Assessing Officer Pvt. Ltd., and Viswaat Chemicals Ltd. The Assessing Officer Pvt. Ltd., and Viswaat Chemicals Ltd. The Assessing Officer observed that against the RTGS payments made by these that against the RTGS payments made by these that against the RTGS payments made by these beneficiaries to the Sunrise Group, equivalent cash was routed beneficiaries to the Sunrise Group, equivalent cash was routed beneficiaries to the Sunrise Group, equivalent cash was routed back to the beneficiaries. back to the beneficiaries. This conclusion is primarily founded This conclusion is primarily founded upon selective reliance on statements and certain extracts of reliance on statements and certain extracts of reliance on statements and certain extracts of WhatsApp chats, coupled with entries found in third-party data. WhatsApp chats, coupled with entries found in third WhatsApp chats, coupled with entries found in third

22.2 For For For allegedly allegedly allegedly orchestrating orchestrating orchestrating this this this mechanism, mechanism, mechanism, the the the Assessing Officer concluded that the assessee earned a cash Assessing Officer concluded that the assessee earned a cash Assessing Officer concluded that the assessee earned a cash commission of 2%. To buttress To buttress this addition, the Assessing Officer this addition, the Assessing Officer heavily relied upon certain WhatsApp chats recovered from the heavily relied upon certain WhatsApp chats recovered from the heavily relied upon certain WhatsApp chats recovered from the mobile phones of the assessee and third parties, parallel Tally data mobile phones of the assessee and third parties, parallel Tally data mobile phones of the assessee and third parties, parallel Tally data (referred to as ‘KM’) maintained by one Shri Ram Dhirwani, and (referred to as ‘KM’) maintained by one Shri Ram Dhirwani, and (referred to as ‘KM’) maintained by one Shri Ram Dhirwani, and

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. the confessional statemen the confessional statements recorded under Section 132(4) of the ts recorded under Section 132(4) of the Act from the assessee, his employee Shri Gaurav Bhatia, and other Act from the assessee, his employee Shri Gaurav Bhatia, and other Act from the assessee, his employee Shri Gaurav Bhatia, and other key personnel of the Sunrise Group. The Ld. CIT(A) sustained the key personnel of the Sunrise Group. The Ld. CIT(A) sustained the key personnel of the Sunrise Group. The Ld. CIT(A) sustained the addition, primarily holding that despite the subsequent retraction addition, primarily holding that despite the subsequent retraction addition, primarily holding that despite the subsequent retraction of these confessional statements by the deponents, the statements nal statements by the deponents, the statements nal statements by the deponents, the statements stood corroborated by the circumstantial evidence in the form of stood corroborated by the circumstantial evidence in the form of stood corroborated by the circumstantial evidence in the form of the aforementioned WhatsApp chats and third the aforementioned WhatsApp chats and third-party tally data. party tally data.

22.3 It is a matter of undisputed record that the entire It is a matter of undisputed record that the entire It is a matter of undisputed record that the entire foundation of the 2% commission addition rests upon the foundation of the 2% commission addition rests upon the foundation of the 2% commission addition rests upon the statements of the assessee and third parties statements of the assessee and third parties—most notably, Shri most notably, Shri Gaurav Bhatia—recorded during the search operations. These recorded during the search operations. These recorded during the search operations. These statements were subsequen statements were subsequently retracted by way of sworn affidavits, tly retracted by way of sworn affidavits, wherein it was categorically stated that the admissions were wherein it was categorically stated that the admissions were wherein it was categorically stated that the admissions were extracted under immense stress and coercion. It is a trite law that extracted under immense stress and coercion. It is a trite law that extracted under immense stress and coercion. It is a trite law that while an admission is an extremely important piece of evidence, it while an admission is an extremely important piece of evidence, it while an admission is an extremely important piece of evidence, it cannot be held to be conclusive, and a validly retracted confession be conclusive, and a validly retracted confession be conclusive, and a validly retracted confession shifts the onus back onto the Revenue to independently shifts the onus back onto the Revenue to independently shifts the onus back onto the Revenue to independently corroborate corroborate corroborate the the the exact exact exact nature nature nature of of of the the the transaction transaction transaction with with with unimpeachable documentary evidence. unimpeachable documentary evidence.

22.4 In the present case, the Revenue has failed to bring on In the present case, the Revenue has failed to bring on In the present case, the Revenue has failed to bring on record any independent material to substantiate the allegation that record any independent material to substantiate the allegation that record any independent material to substantiate the allegation that the assessee had earned commission income under “Modus-1”. the assessee had earned commission income under “Modus the assessee had earned commission income under “Modus The WhatsApp communications, even if taken at face value, only The WhatsApp communications, even if taken at face value, only The WhatsApp communications, even if taken at face value, only

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. indicate that the assessee was in contact with certain parties; they indicate that the assessee was in contact with certain parties; th indicate that the assessee was in contact with certain parties; th do not, in any manner, establish receipt of commission. Likewise, do not, in any manner, establish receipt of commission. Likewise, do not, in any manner, establish receipt of commission. Likewise, the Tally data seized from third parties does not reflect any specific the Tally data seized from third parties does not reflect any specific the Tally data seized from third parties does not reflect any specific entry evidencing payment of commission to the assessee. entry evidencing payment of commission to the assessee. entry evidencing payment of commission to the assessee.

22.5 Upon a careful scrutiny of the purported "corroborative" Upon a careful scrutiny of the purported Upon a careful scrutiny of the purported material—namely, the WhatsApp chats and the parallel Tally data namely, the WhatsApp chats and the parallel Tally data namely, the WhatsApp chats and the parallel Tally data seized from third-party premises, as relied upon by the Revenue, party premises, as relied upon by the Revenue, party premises, as relied upon by the Revenue, we find that same don’t contain any specific or direct material we find that same don’t contain any specific or direct material we find that same don’t contain any specific or direct material demonstrating that the assessee had actually received commission demonstrating that the assessee had actually received commis demonstrating that the assessee had actually received commis income. There is no evidence of any cash trail, no documentary There is no evidence of any cash trail, no documentary There is no evidence of any cash trail, no documentary proof of payment of commission, nor any entry in the books of proof of payment of commission, nor any entry in the books of proof of payment of commission, nor any entry in the books of account reflecting such income. account reflecting such income. While these digital footprints While these digital footprints might loosely suggest an exchange of cash for RTGS payments might loosely suggest an exchange of cash for RTGS payments might loosely suggest an exchange of cash for RTGS payments between the Sunrise Group and the beneficiary companies, they ween the Sunrise Group and the beneficiary companies, they ween the Sunrise Group and the beneficiary companies, they are absolutely silent on the issue of are absolutely silent on the issue of commission. There is not a . There is not a shred of documentary evidence, neither in the WhatsApp chats nor shred of documentary evidence, neither in the WhatsApp chats nor shred of documentary evidence, neither in the WhatsApp chats nor in the 'KM' Tally ledgers, indicating that a 2% commission was ever Tally ledgers, indicating that a 2% commission was ever Tally ledgers, indicating that a 2% commission was ever quantified, charged, or paid to the assessee. The Revenue has quantified, charged, or paid to the assessee. The Revenue has quantified, charged, or paid to the assessee. The Revenue has failed to unearth any parallel ledger, cash trail, or notation that failed to unearth any parallel ledger, cash trail, or notation that failed to unearth any parallel ledger, cash trail, or notation that corroborates the actual receipt of the alleged commission by the corroborates the actual receipt of the alleged commission by the corroborates the actual receipt of the alleged commission by the assessee.

22.6 We also find merit in the contention of the assessee that We also find merit in the contention of the We also find merit in the contention of the no independent inquiry has been conducted with the alleged no independent inquiry has been conducted with the alleged no independent inquiry has been conducted with the alleged

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. beneficiary parties to establish the flow of funds or to corroborate beneficiary parties to establish the flow of funds or to corroborate beneficiary parties to establish the flow of funds or to corroborate the allegation of commission payment. In the absence of such the allegation of commission payment. In the absence of such the allegation of commission payment. In the absence of such verification, the conclusion drawn by the Assessing Officer remains verification, the conclusion drawn by the Assessing O verification, the conclusion drawn by the Assessing O based on presumption rather than proof. based on presumption rather than proof.

22.7 We reiterate that the fundamental mandate of law, as We reiterate that the fundamental mandate of law, as We reiterate that the fundamental mandate of law, as reinforced by the binding circulars of the Central Board of Direct reinforced by the binding circulars of the Central Board of Direct reinforced by the binding circulars of the Central Board of Direct Taxes (CBDT), is that assessing authorities must not predicate Taxes (CBDT), is that assessing authorities must not predicate Taxes (CBDT), is that assessing authorities must not predicate additions solely on uncorroborated confessional statements solely on uncorroborated confessional statements solely on uncorroborated confessional statements obtained during search and seizure operations. In the absence of obtained during search and seizure operations. In the absence of obtained during search and seizure operations. In the absence of any substantive, tangible seized material demonstrating the actual any substantive, tangible seized material demonstrating the actual any substantive, tangible seized material demonstrating the actual flow of commission income into the hands of the assessee, an flow of commission income into the hands of the assessee, an flow of commission income into the hands of the assessee, an addition based merely on retracted oral testimony and third merely on retracted oral testimony and third-party merely on retracted oral testimony and third documents violates the basic tenets of evidentiary jurisprudence. documents violates the basic tenets of evidentiary jurisprudence. documents violates the basic tenets of evidentiary jurisprudence. Suspicion, however grave, cannot elevate itself to the status of Suspicion, however grave, cannot elevate itself to the status of Suspicion, however grave, cannot elevate itself to the status of legal proof.

22.8 Significantly, an identical issue relating to addition of Significantly, an identical issue relating to addition Significantly, an identical issue relating to addition commission commission income income under under “Modus-2” “Modus 2” has has already already been been adjudicated by us hereinabove, wherein it has been held that, in adjudicated by us hereinabove, wherein it has been held that, in adjudicated by us hereinabove, wherein it has been held that, in the absence of corroborative material, addition cannot be the absence of corroborative material, addition cannot be the absence of corroborative material, addition cannot be sustained merely on the basis of statements recorded during sustained merely on the basis of statements recorded during sustained merely on the basis of statements recorded during search proceedings search proceedings. The facts and evidentiary position in the . The facts and evidentiary position in the present issue being pari present issue being pari materia, the same reasoning squarely , the same reasoning squarely applies.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 22.9 In the conspectus of the aforesaid discussion, and In the conspectus of the aforesaid discussion, and In the conspectus of the aforesaid discussion, and maintaining parity with our decision rendered in respect of the maintaining parity with our decision rendered in respect of the maintaining parity with our decision rendered in respect of the identical issue under identical issue under "Modus-2", we hold that the addition of Rs. , we hold that the addition of Rs. 50,261/- (computed at 2% on alleged bogus sales) is legally (computed at 2% on alleged bogus sales) is legally (computed at 2% on alleged bogus sales) is legally unsustainable, as it lacks the backing of any corroborative seized unsustainable, as it lacks the backing of any corroborative seized unsustainable, as it lacks the backing of any corroborative seized material. Resultantly, the findings of the Ld. CIT(A) on this issue material. Resultantly, the findings of the Ld. CIT(A) on this issue material. Resultantly, the findings of the Ld. CIT(A) on this issue are reversed. We direct the Assessing Officer to delete the direct the Assessing Officer to delete the impugned addition of Rs. 50,261/ impugned addition of Rs. 50,261/- for the Assessment Year 2019 for the Assessment Year 2019- 20. The corresponding grounds raised by the assessee are thus 20. The corresponding grounds raised by the assessee are thus 20. The corresponding grounds raised by the assessee are thus allowed.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. asset, expenditure, or entry in the books of account, amounting to asset, expenditure, or entry in the books of account, amounting to asset, expenditure, or entry in the books of account, amounting to or likely to amount to ₹50 lakhs or more. or likely to amount to

23.1 In the present case, it was pointed out that the Assessing In the present case, it was pointed out that the Assessing In the present case, it was pointed out that the Assessing Officer, in the show cause notice as well as in the final assessment Officer, in the show cause notice as well as in the fin Officer, in the show cause notice as well as in the fin order, has proposed and made addition only to the extent of order, has proposed and made addition only to the extent of order, has proposed and made addition only to the extent of ₹3,63,036/- towards alleged commission income, which is towards alleged commission income, which is towards alleged commission income, which is substantially below the statutory threshold of ₹50 lakhs. It was substantially below the statutory threshold of 50 lakhs. It was thus contended that the mandatory jurisdictional condition thus contended that the mandatory jurisdictional condition thus contended that the mandatory jurisdictional condition prescribed under Section 149(1)(b) of the Act remains unfulfilled. escribed under Section 149(1)(b) of the Act remains unfulfilled. escribed under Section 149(1)(b) of the Act remains unfulfilled.

23.2 Having regard to the aforesaid undisputed factual Having regard to the aforesaid undisputed factual Having regard to the aforesaid undisputed factual position, we find merit in the contention advanced on behalf of the position, we find merit in the contention advanced on behalf of the position, we find merit in the contention advanced on behalf of the assessee. The issuance of notice under Section 148 beyond the assessee. The issuance of notice under Section 148 beyond the assessee. The issuance of notice under Section 148 beyond the period of three years, in the absence of satisfaction of the of three years, in the absence of satisfaction of the of three years, in the absence of satisfaction of the threshold requirement prescribed under Section 149(1)(b), is threshold requirement prescribed under Section 149(1)(b), is threshold requirement prescribed under Section 149(1)(b), is without without without jurisdiction jurisdiction jurisdiction and and and vitiates vitiates vitiates the the the entire entire entire reassessment reassessment reassessment proceedings.

23.3 Accordingly, the notice issued under Section 148 of the Accordingly, the notice issued under Section 148 of the Accordingly, the notice issued under Section 148 of the Act and the consequent reassessment proceedings are held to be the consequent reassessment proceedings are held to be the consequent reassessment proceedings are held to be invalid and void ab initio ab initio. The grounds raised by the assessee . The grounds raised by the assessee challenging the validity of reassessment are, therefore, allowed. challenging the validity of reassessment are, therefore, allowed. challenging the validity of reassessment are, therefore, allowed.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. A.Ys. 2020-21 to 2022 21 to 2022-23 22 Grounds on merit raised are identical to grounds raised in Grounds on merit raised are identical to grounds raised in Grounds on merit raised are identical to grounds raised in A.Y. 2019-20 and therefore, all relevant grounds in the appeals for 20 and therefore, all relevant grounds in the appeals for 20 and therefore, all relevant grounds in the appeals for A.Y. 2020-21 to 2022 21 to 2022-23 are decided mutatis mutandis mutatis mutandis. As far as legal grounds are concerned same are left open to be decided at legal grounds are concerned same are left open to be decided at legal grounds are concerned same are left open to be decided at appropriate stage.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. search action, despite the fact that such statements were subsequently search action, despite the fact that such statements were subsequently search action, despite the fact that such statements were subsequently retracted, for reasons stated in the impugned order or otherwise. retracted, for reasons stated i n the impugned order or otherwise. 5. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in relying on the statements of CIT(A) erred in confirming the action of the ld. A.O in relying on the statements of CIT(A) erred in confirming the action of the ld. A.O in relying on the statements of third parties recorded during the course of search action, despite the fact that third parties recorded during the course of search action, d third parties recorded during the course of search action, d such statements were subsequently retracted, for reasons stated in the such statements were subsequently retracted, for reasons stated in the such statements were subsequently retracted, for reasons stated in the impugned order or otherwise. impugned order or otherwise. 6. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in relying on contents of CIT(A) erred in confirming the action of the ld. A.O in rel CIT(A) erred in confirming the action of the ld. A.O in rel certain tally data which was found and seized from the premises of a third certain tally data which was found and seized from the premises of a third certain tally data which was found and seized from the premises of a third party, for reasons stated in the impugned order or otherwise. party, for reasons stated in the impugned order or otherwise. party, for reasons stated in the impugned order or otherwise. 7. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in holding that the appellant CIT(A) erred in confirm ing the action of the ld. A.O in holding that the appellant has made unaccounted cash sales of Rs.1.96 Crs. in the absence of any has made unaccounted cash sales of Rs.1.96 Crs. n the absence of any incriminating material found during the course of search, for reasons stated in incriminating material found during the course of search, for reasons stated in incriminating material found during the course of search, for reasons stated in the impugned order or otherwise. the impugned order or otherwise. 8. On the facts and circumstances of the Appellant’s case and in law, the ld. and circumstances of the Appellant’s case and in law, the ld. and circumstances of the Appellant’s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in making an addition of gross CIT(A) erred in confirming the action of the ld. A.O in making an addition of gross CIT(A) erred in confirming the action of the ld. A.O in making an addition of gross profit @9.04% amounting to Rs. 17,71,840/- on the alleged unaccounted cash profit @9.04% amounting to Rs. 17,71,840/ on the alleged unaccounted cash sales recorded in the tally data, for the reasons stated in the impugned order or sales recorded in the tally data, for the reasons stated in the impugned order or otherwise. 9. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in making an addition of gross CIT(A) erred in confirming the action of the ld. A.O in making an addition of gross CIT(A) erred in confirming the action of the ld. A.O in making an addition of gross profit @9.04% on the alleged unaccounted cash sales made by the appellant, for profit @9.04% on the alleged unaccoun ted cash sales made by the appellant, for the reasons stated in the impugned order or otherwise. The Appellant submits the reasons stated in the impugned order or otherwise. The Appellant submits the reasons stated in the impugned order or otherwise. The Appellant submits that the aforesaid gross profit rate as computed by the ld. AO being excessive on that the aforesaid gross profit rate as computed by the ld. AO being excessive on that the aforesaid gross profit rate as computed by the ld. AO being excessive on facts and prays that the same be suitably reduced. facts and prays that the same be suitably reduced. Action of AO in holding that appellant has made non on of AO in holding that appellant has made non- -genuine purchases in its books of accounts in its books of accounts 10. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. On the facts and circumstances of the Appellant’s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in holding that appellant has CIT(A) erred in confirming the action of the ld. A.O in holding that appellant has CIT(A) erred in confirming the action of the ld. A.O in holding that appellant has taken bogus purchase entries from M/s Sunrise Enterprises, M/s Hans Wires & ogus purchase entries from M/s Sunrise Enterprises, M/s Hans Wires & ogus purchase entries from M/s Sunrise Enterprises, M/s Hans Wires & Cables and M/s L N Enterprises for the reasons mentioned in the impugned Cables and M/s L N Enterprises for the reasons mentioned in the impugned Cables and M/s L N Enterprises for the reasons mentioned in the impugned order passed. 11. The Appellant craves leaves to alter, amend, withdraw or substitute any The Appellant craves leaves to alter, amend, withdraw or substitute any The Appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before ground or grounds or to add any new ground or grounds of appeal on or before the hearing.”

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 24. As far as the grounds . As far as the grounds on merit are concerned, the assessee is on merit are concerned, the assessee is with the addition of gross profit at the rate of 9.04% on aggrieved with the addition of gross profit at the rate of 9.04% on with the addition of gross profit at the rate of 9.04% on the alleged unaccounted cash sales recorded in the tally data the alleged unaccounted cash sales recorded in the the alleged unaccounted cash sales recorded in the computed at Rs. 17,71,840 computed at Rs. 17,71,840/-.

24.1 The facts, insofar as they are relevant to the issue under The facts, insofar as they are relevant to the issue under The facts, insofar as they are relevant to the issue under consideration, are that the Assessing Officer observed that a consideration, are that the Assessing Officer observed that a consideration, are that the Assessing Officer observed that a parallel Tally data identified as “Tally ‘Ka’” was unearthed during parallel Tally data identified as “Tally ‘Ka’” was unearthed during parallel Tally data identified as “Tally ‘Ka’” was unearthed during the course of search proceed the course of search proceedings conducted in the case of the ings conducted in the case of the Sunrise Group. According to the Assessing Officer, incriminating Sunrise Group. According to the Assessing Officer, incriminating Sunrise Group. According to the Assessing Officer, incriminating material in the form of WhatsApp conversations exchanged material in the form of WhatsApp conversations exchanged material in the form of WhatsApp conversations exchanged between Shri Kalpesh Kumbhar, Accountant of the Sunrise Group between Shri Kalpesh Kumbhar, Accountant of the Sunrise Group between Shri Kalpesh Kumbhar, Accountant of the Sunrise Group and custodian of the said parallel Tal and custodian of the said parallel Tally records, and Shri Vijay ly records, and Shri Vijay Pahuja, another key person of the Sunrise Group entities, was Pahuja, another key person of the Sunrise Group entities, was Pahuja, another key person of the Sunrise Group entities, was recovered from the mobile device of Shri Kalpesh Kumbhar, the recovered from the mobile device of Shri Kalpesh Kumbhar, the recovered from the mobile device of Shri Kalpesh Kumbhar, the backup whereof was seized during the search proceedings. From backup whereof was seized during the search proceedings. From backup whereof was seized during the search proceedings. From the said material, the Assessing Officer in the said material, the Assessing Officer inferred that the entries ferred that the entries recorded in Tally ‘Ka’ had been maintained in a coded and recorded in Tally ‘Ka’ had been maintained in a coded and recorded in Tally ‘Ka’ had been maintained in a coded and camouflaged manner. It was further noted by the Assessing camouflaged manner. It was further noted by the Assessing camouflaged manner. It was further noted by the Assessing Officer, on the basis of the statement of Shri Kalpesh Kumbhar, Officer, on the basis of the statement of Shri Kalpesh Kumbhar, Officer, on the basis of the statement of Shri Kalpesh Kumbhar, that the actual monetary figures were allegedly represented by that the actual monetary figures were allegedly repr that the actual monetary figures were allegedly repr multiplying the amounts reflected in Tally ‘Ka’ by a factor of 100, multiplying the amounts reflected in Tally ‘Ka’ by a factor of 100, multiplying the amounts reflected in Tally ‘Ka’ by a factor of 100, and that the financial years recorded therein were stated to be and that the financial years recorded therein were stated to be and that the financial years recorded therein were stated to be eleven years prior to the actual years of transaction, such that the eleven years prior to the actual years of transaction, such that the eleven years prior to the actual years of transaction, such that the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. actual year was to be determined by adding e actual year was to be determined by adding eleven years to the leven years to the year mentioned in the ledger. year mentioned in the ledger.

24.2 The Assessing Officer further observed that the said Tally The Assessing Officer further observed that the said Tally The Assessing Officer further observed that the said Tally data contained ledgers styled as “Bunny Seth”, “Bobby Cash 1” data contained ledgers styled as “Bunny Seth”, “Bobby Cash 1” data contained ledgers styled as “Bunny Seth”, “Bobby Cash 1” and “Tegh Cable SB2”, which, according to him, pertained to cash and “Tegh Cable SB2”, which, according to him, pertained to cash and “Tegh Cable SB2”, which, according to him, pertained to cash transactions relating to Shri Banpreet Atal, Tegh Cables Pvt. Ltd. ating to Shri Banpreet Atal, Tegh Cables Pvt. Ltd. ating to Shri Banpreet Atal, Tegh Cables Pvt. Ltd. and Tegh Cables India Pvt. Ltd. The aforesaid conclusion was and Tegh Cables India Pvt. Ltd. The aforesaid conclusion was and Tegh Cables India Pvt. Ltd. The aforesaid conclusion was stated to be founded upon the statement recorded from Shri stated to be founded upon the statement recorded from Shri stated to be founded upon the statement recorded from Shri Banpreet Atal. The Assessing Officer held that the entries Banpreet Atal. The Assessing Officer held that the entries Banpreet Atal. The Assessing Officer held that the entries contained in the said ledg contained in the said ledgers represented unaccounted cash sales ers represented unaccounted cash sales effected by the assessee. It was also noted that the ledgers effected by the assessee. It was also noted that the ledgers effected by the assessee. It was also noted that the ledgers captioned “Bunny Seth” and “Tegh Cable SB2” had allegedly been captioned “Bunny Seth” and “Tegh Cable SB2” had allegedly been captioned “Bunny Seth” and “Tegh Cable SB2” had allegedly been admitted and owned up by Shri Banpreet Atal, Director of the admitted and owned up by Shri Banpreet Atal, Director of the admitted and owned up by Shri Banpreet Atal, Director of the assessee-company, during the cou company, during the course of search and post rse of search and post-search proceedings.

24.3 In response thereto, before the ld AO, the assessee In response thereto, before the ld AO, the assessee In response thereto, before the ld AO, the assessee contended that the entire edifice of the addition rested upon Tally contended that the entire edifice of the addition rested upon Tally contended that the entire edifice of the addition rested upon Tally data recovered from the premises of a third party, namely the data recovered from the premises of a third party, namely the data recovered from the premises of a third party, namely the Sunrise Group, and, theref Sunrise Group, and, therefore, no adverse inference could validly ore, no adverse inference could validly be drawn against the assessee solely on the basis of such third- be drawn against the assessee solely on the basis of such third be drawn against the assessee solely on the basis of such third party material. It was further submitted that the burden to explain party material. It was further submitted that the burden to explain party material. It was further submitted that the burden to explain the contents of the said Tally data could not be fastened upon the the contents of the said Tally data could not be fastened upon the the contents of the said Tally data could not be fastened upon the assessee. The assessee also urged that no addition could legally be essee also urged that no addition could legally be essee also urged that no addition could legally be

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. sustained merely on the strength of material recovered from a sustained merely on the strength of material recovered from a sustained merely on the strength of material recovered from a third party, particularly in the absence of any independent third party, particularly in the absence of any independent third party, particularly in the absence of any independent corroborative evidence discovered during the search conducted corroborative evidence discovered during the search conducted corroborative evidence discovered during the search conducted upon the assessee. Ac upon the assessee. According to the assessee, the statutory cording to the assessee, the statutory presumption contemplated under section 292C of the Act was presumption contemplated under section 292C of the Act was presumption contemplated under section 292C of the Act was inapplicable in its case, as no incriminating material corroborating inapplicable in its case, as no incriminating material corroborating inapplicable in its case, as no incriminating material corroborating the alleged transactions had been found from its premises. the alleged transactions had been found from its premises. the alleged transactions had been found from its premises.

24.4 The assessee further submitted that the statements of The assessee further submitted that the statements of The assessee further submitted that the statements of the promoters and employees of the Sunrise Group had the promoters and employees of the Sunrise Group had the promoters and employees of the Sunrise Group had subsequently been retracted. Insofar as the statement of Shri subsequently been retracted. Insofar as the statement of Shri subsequently been retracted. Insofar as the statement of Shri Banpreet Atal was concerned, it was specifically contended that Banpreet Atal was concerned, it was specifically contended that Banpreet Atal was concerned, it was specifically contended that the same had also been the same had also been retracted after the search proceedings. The retracted after the search proceedings. The assessee emphasised emphasised that, during the course of search conducted that, during the course of search conducted in its own case, no documentary or incriminating evidence in its own case, no documentary or incriminating evidence in its own case, no documentary or incriminating evidence whatsoever had been found so as to substantiate the allegations whatsoever had been found so as to substantiate the allegations whatsoever had been found so as to substantiate the allegations leveled by the Assessing O leveled by the Assessing Officer.

24.5 Proceeding on the aforesaid premise, the Assessing Proceeding on the aforesaid premise, the Assessing Proceeding on the aforesaid premise, the Assessing Officer rejected the submission of assessee and estimated the Officer rejected the submission of assessee and estimated the Officer rejected the submission of assessee and estimated the profit element embedded in the alleged cash sales by applying the profit element embedded in the alleged cash sales by applying the profit element embedded in the alleged cash sales by applying the gross profit ratio of 9.04%, being the gross profit rate disclosed in gross profit ratio of 9.04%, being the gross profit rate disclos gross profit ratio of 9.04%, being the gross profit rate disclos the audited financial statements of the assessee. Consequently, an the audited financial statements of the assessee. Consequently, an the audited financial statements of the assessee. Consequently, an , being 9.04% of the alleged cash sales addition of Rs.17,71,840/ addition of Rs.17,71,840/-, being 9.04% of the alleged cash sales

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. aggregating to Rs.1,96,00,000/ aggregating to Rs.1,96,00,000/-, came to be made in the hands of , came to be made in the hands of the assessee.

24.6 On further appeal, the learned CI On further appeal, the learned CIT(A), after considering T(A), after considering the submissions advanced on behalf of the assessee and the submissions advanced on behalf of the assessee and the submissions advanced on behalf of the assessee and examining the material placed on record, upheld the addition examining the material placed on record, upheld the addition examining the material placed on record, upheld the addition made by the Assessing Officer. made by the Assessing Officer.

24.7 The learned CIT(A) noted that the assessee had The learned CIT(A) noted that the assessee had The learned CIT(A) noted that the assessee had contended that the statements of contended that the statements of the promoters and employees of the promoters and employees of the Sunrise Group, namely Shri Vijay Pahuja, Shri Mohanlal the Sunrise Group, namely Shri Vijay Pahuja, Shri Mohanlal the Sunrise Group, namely Shri Vijay Pahuja, Shri Mohanlal Pahuja and Shri Kalpesh Kumbhar, had subsequently been Pahuja and Shri Kalpesh Kumbhar, had subsequently been Pahuja and Shri Kalpesh Kumbhar, had subsequently been retracted. However, according to the learned CIT(A), such retracted. However, according to the learned CIT(A), such retracted. However, according to the learned CIT(A), such retractions could not be viewed in isolation and were required to be retractions could not be viewed in isolation and wer retractions could not be viewed in isolation and wer examined in conjunction with the surrounding circumstances and examined in conjunction with the surrounding circumstances and examined in conjunction with the surrounding circumstances and incriminating material unearthed during the course of the search incriminating material unearthed during the course of the search incriminating material unearthed during the course of the search proceedings. It was observed that the existence of the parallel Tally proceedings. It was observed that the existence of the parallel Tally proceedings. It was observed that the existence of the parallel Tally data designated as “Tally ‘Ka’”, containi data designated as “Tally ‘Ka’”, containing details of various alleged ng details of various alleged unaccounted unaccounted unaccounted transactions, transactions, transactions, stood stood stood undisputed, undisputed, undisputed, having having having been been been recovered during the search conducted in the case of the Sunrise recovered during the search conducted in the case of the Sunrise recovered during the search conducted in the case of the Sunrise Group. The learned CIT(A), therefore, held that the authenticity Group. The learned CIT(A), therefore, held that the authenticity Group. The learned CIT(A), therefore, held that the authenticity s reflected therein could and evidentiary value of the transaction and evidentiary value of the transactions reflected therein could not be lightly discarded. not be lightly discarded.

24.8 The learned CIT(A) further observed that the said Tally The learned CIT(A) further observed that the said Tally The learned CIT(A) further observed that the said Tally data contained ledger accounts styled as “Bunny Seth”, “Bobby data contained ledger accounts styled as “Bunny Seth”, “Bobby data contained ledger accounts styled as “Bunny Seth”, “Bobby 57

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Cash 1” and “Tegh Cable SB2”, which, according to the Revenue, Cash 1” and “Tegh Cable SB2”, which, according to the Revenue, Cash 1” and “Tegh Cable SB2”, which, according to the Revenue, transactions relating to Shri Banpreet Atal, Tegh pertained to cash transactions relating to Shri Banpreet Atal, Tegh transactions relating to Shri Banpreet Atal, Tegh Cables Pvt. Ltd. and Tegh Cables India Pvt. Ltd. It was further Cables Pvt. Ltd. and Tegh Cables India Pvt. Ltd. It was further Cables Pvt. Ltd. and Tegh Cables India Pvt. Ltd. It was further noted that Shri Banpreet Atal, in the statement recorded during noted that Shri Banpreet Atal, in the statement recorded during noted that Shri Banpreet Atal, in the statement recorded during the course of search proceedings, had acknowledged the the course of search proceedings, had acknowledged the the course of search proceedings, had acknowledged the transactions reflected transactions reflected in the said ledger accounts. Upon perusal of in the said ledger accounts. Upon perusal of the statement of Shri Banpreet Atal, the learned CIT(A) concluded the statement of Shri Banpreet Atal, the learned CIT(A) concluded the statement of Shri Banpreet Atal, the learned CIT(A) concluded that the transactions recorded in the aforesaid ledgers had indeed that the transactions recorded in the aforesaid ledgers had indeed that the transactions recorded in the aforesaid ledgers had indeed been been been admitted admitted admitted by by by him him him at at at the the the relevant relevant relevant point point point of of of time, time, time, notwithstanding the subseq notwithstanding the subsequent retraction thereof. According to uent retraction thereof. According to the learned CIT(A), such retraction did not, by itself, efface the the learned CIT(A), such retraction did not, by itself, efface the the learned CIT(A), such retraction did not, by itself, efface the evidentiary value of the original statement, particularly when evidentiary value of the original statement, particularly when evidentiary value of the original statement, particularly when viewed in the backdrop of the corroborative material recovered viewed in the backdrop of the corroborative material recovered viewed in the backdrop of the corroborative material recovered during the search.

24.9 The learned CIT(A), therefore, rejected the contention of he learned CIT(A), therefore, rejected the contention of he learned CIT(A), therefore, rejected the contention of the assessee that the addition could not survive merely because the assessee that the addition could not survive merely because the assessee that the addition could not survive merely because the statements relied upon by the Revenue had been retracted. It the statements relied upon by the Revenue had been retracted. It the statements relied upon by the Revenue had been retracted. It was held that the statements stood sufficiently corroborated by the was held that the statements stood sufficiently corroborated by the was held that the statements stood sufficiently corroborated by the incriminating material discovered during the search proceedings. criminating material discovered during the search proceedings. criminating material discovered during the search proceedings. The further plea of the assessee that no incriminating documents The further plea of the assessee that no incriminating documents The further plea of the assessee that no incriminating documents had been found from its own premises, and consequently the had been found from its own premises, and consequently the had been found from its own premises, and consequently the presumption under section 292C of the Act was inapplicable, was presumption under section 292C of the Act was inapplicable, was presumption under section 292C of the Act was inapplicable, was also rejected. In this regard, the learned CIT(A) observed that the rejected. In this regard, the learned CIT(A) observed that the rejected. In this regard, the learned CIT(A) observed that the ledger accounts recovered during the search had a direct nexus ledger accounts recovered during the search had a direct nexus ledger accounts recovered during the search had a direct nexus

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. with the assessee and its Director, Shri Banpreet Atal, which with the assessee and its Director, Shri Banpreet Atal, which with the assessee and its Director, Shri Banpreet Atal, which nexus was evident from the contents of the ledger accounts nexus was evident from the contents of the ledger accounts nexus was evident from the contents of the ledger accounts themselves. It was further observed that it was not indispensable, s. It was further observed that it was not indispensable, s. It was further observed that it was not indispensable, in every case of search, that incriminating documents must in every case of search, that incriminating documents must in every case of search, that incriminating documents must necessarily be recovered from the premises of the assessee itself. necessarily be recovered from the premises of the assessee itself. necessarily be recovered from the premises of the assessee itself. According to the learned CIT(A), once the seized material recovered According to the learned CIT(A), once the seized material recovered According to the learned CIT(A), once the seized material recovered from the premises of a third party was shown to have a direct and the premises of a third party was shown to have a direct and the premises of a third party was shown to have a direct and live nexus with the assessee, the same constituted sufficient basis live nexus with the assessee, the same constituted sufficient basis live nexus with the assessee, the same constituted sufficient basis for framing the assessment in the hands of such connected for framing the assessment in the hands of such connected for framing the assessment in the hands of such connected person.

24.10 In view of the aforesaid findings, the learned CIT(A) In view of the aforesaid findings, the learned CIT(A) In view of the aforesaid findings, the learned CIT(A) concluded that the assessee had engaged in unaccounted cash concluded that the assessee had engaged in unaccounted cash concluded that the assessee had engaged in unaccounted cash sales of its products through the facilitation of the Sunrise Group sales of its products through the facilitation of the Sunrise Group sales of its products through the facilitation of the Sunrise Group entities. The learned CIT(A) further noted that, without prejudice to entities. The learned CIT(A) further noted that, without prejudice to entities. The learned CIT(A) further noted that, without prejudice to its its its principal principal principal submissions, submissions, submissions, the the the assessee assessee assessee had had had alternatively alternatively alternatively contended that the gross profit rate of 9.04% adopted by the contended that the gross profit rate of 9.04% adopted by the contended that the gross profit rate of 9.04% adopted by the Assessing Officer was excessive, and that the addition, if any, Assessing Officer was excessive, and that the addition, if any, Assessing Officer was excessive, and that the addition, if any, ought to be restricted to 1% of the alleged cash sales on the ought to be restricted to 1% of the alleged cash sales on the ought to be restricted to 1% of the alleged cash sales on the ground ground ground that that that profit profit profit margins margins margins in in in cash cash cash transactions transactions transactions were were were comparatively lower. The said contention was also rejected by the wer. The said contention was also rejected by the wer. The said contention was also rejected by the learned CIT(A), who observed that the gross profit rate adopted by learned CIT(A), who observed that the gross profit rate adopted by learned CIT(A), who observed that the gross profit rate adopted by the Assessing Officer was duly derived from the audited financial the Assessing Officer was duly derived from the audited financial the Assessing Officer was duly derived from the audited financial statements of the assessee and, therefore, could not be regarded as statements of the assessee and, therefore, could not be regarded as statements of the assessee and, therefore, could not be regarded as arbitrary rary rary or or or unreasonable. unreasonable. unreasonable. Accordingly, Accordingly, Accordingly, the the the addition addition addition of of of

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Rs.17,71,840/- made by the Assessing Officer on account of made by the Assessing Officer on account of made by the Assessing Officer on account of alleged cash sales was confirmed. alleged cash sales was confirmed.

24.11 Before us, the learned counsel appearing on behalf of the Before us, the learned counsel appearing on behalf of the Before us, the learned counsel appearing on behalf of the assessee drew our attention to the grounds rais assessee drew our attention to the grounds raised in the appeal ed in the appeal and submitted that the Assessing Officer had already made and submitted that the Assessing Officer had already made and submitted that the Assessing Officer had already made additions in respect of the alleged cash sales recorded in the additions in respect of the alleged cash sales recorded in the additions in respect of the alleged cash sales recorded in the parallel Tally data recovered from the premises of the Sunrise parallel Tally data recovered from the premises of the Sunrise parallel Tally data recovered from the premises of the Sunrise Group and, therefore, any further addition in the hands of the Group and, therefore, any further addition in the hands Group and, therefore, any further addition in the hands present assessee on the very same transactions would result in present assessee on the very same transactions would result in present assessee on the very same transactions would result in impermissible double addition. It was further contended that no impermissible double addition. It was further contended that no impermissible double addition. It was further contended that no ledger account reflecting cash sales in the name of the assessee ledger account reflecting cash sales in the name of the assessee ledger account reflecting cash sales in the name of the assessee was found in the said parallel Tally records. According to the was found in the said parallel Tally records. According was found in the said parallel Tally records. According learned counsel, the Assessing Officer proceeded merely on the learned counsel, the Assessing Officer proceeded merely on the learned counsel, the Assessing Officer proceeded merely on the basis of an alleged confessional statement of Shri Banpreet Atal, basis of an alleged confessional statement of Shri Banpreet Atal, basis of an alleged confessional statement of Shri Banpreet Atal, wherein he is stated to have admitted that the ledger accounts wherein he is stated to have admitted that the ledger accounts wherein he is stated to have admitted that the ledger accounts captioned “Bunny Seth”, “Bobby Cash 1” and “Tegh Cable SB2” captioned “Bunny Seth”, “Bobby Cash 1” and “Tegh Cable SB captioned “Bunny Seth”, “Bobby Cash 1” and “Tegh Cable SB pertained to Shri Banpreet Atal, Tegh Cable Pvt. Ltd. and Tegh pertained to Shri Banpreet Atal, Tegh Cable Pvt. Ltd. and Tegh pertained to Shri Banpreet Atal, Tegh Cable Pvt. Ltd. and Tegh Cables India Pvt. Ltd. respectively. Cables India Pvt. Ltd. respectively. 24.12 The learned counsel further submitted that, solely on the The learned counsel further submitted that, solely on the The learned counsel further submitted that, solely on the basis of the aforesaid statement, the Assessing Officer treated the basis of the aforesaid statement, the Assessing Officer treated the basis of the aforesaid statement, the Assessing Officer treated the transactions reflected in the ledger account “Bobby Cash 1” as ted in the ledger account “Bobby Cash 1” as ted in the ledger account “Bobby Cash 1” as belonging to the assessee and consequently estimated the gross belonging to the assessee and consequently estimated the gross belonging to the assessee and consequently estimated the gross profit thereon at the rate of 9.04% for the purpose of making the profit thereon at the rate of 9.04% for the purpose of making the profit thereon at the rate of 9.04% for the purpose of making the impugned addition. It was argued that, apart from the statement of impugned addition. It was argued that, apart from the statement of impugned addition. It was argued that, apart from the statement of 60

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Shri Banpreet Atal, no independent documentary evidence al, no independent documentary evidence al, no independent documentary evidence whatsoever had been brought on record to establish that the said whatsoever had been brought on record to establish that the said whatsoever had been brought on record to establish that the said ledger account pertained to the assessee. It was further submitted ledger account pertained to the assessee. It was further submitted ledger account pertained to the assessee. It was further submitted that Shri Banpreet Atal had subsequently retracted the statement that Shri Banpreet Atal had subsequently retracted the statement that Shri Banpreet Atal had subsequently retracted the statement relied upon by the relied upon by the Revenue. Reliance was also placed upon the Revenue. Reliance was also placed upon the decision of the Coordinate Bench of the Tribunal in Assistant decision of the Coordinate Bench of the Tribunal in decision of the Coordinate Bench of the Tribunal in Commissioner of Income Tax, Central Circle vs. Prashant Prakash Commissioner of Income Tax, Central Circle vs. Prashant Prakash Commissioner of Income Tax, Central Circle vs. Prashant Prakash Nilawar in ITA Nos. 5689 and 5073 of 2024, wherein it was held in ITA Nos. 5689 and 5073 of 2024, wherein it was held in ITA Nos. 5689 and 5073 of 2024, wherein it was held that electronic evidence such as WhatsApp chats could not be that electronic evidence such as WhatsApp chats could not be that electronic evidence such as WhatsApp chats could not be relied upon in the absence of a certificate contemplated under relied upon in the absence of a certificate contemplated under relied upon in the absence of a certificate contemplated under section 65B of the Indian Evidence Act. According to the learned section 65B of the Indian Evidence Act. According to the learned section 65B of the Indian Evidence Act. According to the learned counsel, the WhatsApp communications referred to by the e WhatsApp communications referred to by the e WhatsApp communications referred to by the Assessing Officer as corroborative material suffered from the same Assessing Officer as corroborative material suffered from the same Assessing Officer as corroborative material suffered from the same legal infirmity.

24.13 The learned counsel also invited our attention to the The learned counsel also invited our attention to the The learned counsel also invited our attention to the post-search statement of Shri Banpreet Atal recorded by the search statement of Shri Banpreet Atal recorded by the search statement of Shri Banpreet Atal recorded by the Investigation Wing, placed at pages 113 to 115 of the paper book, tigation Wing, placed at pages 113 to 115 of the paper book, tigation Wing, placed at pages 113 to 115 of the paper book, wherein Shri Banpreet Atal is stated to have expressed inability to wherein Shri Banpreet Atal is stated to have expressed inability to wherein Shri Banpreet Atal is stated to have expressed inability to recollect the exact nature of the transactions recorded in “Bobby recollect the exact nature of the transactions recorded in “Bobby recollect the exact nature of the transactions recorded in “Bobby Cash 1”, stating that the transactions were old in nature. It was, Cash 1”, stating that the transactions were old in nature. It Cash 1”, stating that the transactions were old in nature. It therefore, contended that Shri Banpreet Atal himself had therefore, contended that Shri Banpreet Atal himself had therefore, contended that Shri Banpreet Atal himself had expressed ignorance regarding the contents of the said ledger expressed ignorance regarding the contents of the said ledger expressed ignorance regarding the contents of the said ledger account and, consequently, there existed no valid basis to treat the account and, consequently, there existed no valid basis to treat the account and, consequently, there existed no valid basis to treat the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. ledger account “Bobby Cash 1” as representing unaccounted cash ledger account “Bobby Cash 1” as representing unaccounted cash ledger account “Bobby Cash 1” as representing unaccounted cash sales of the assessee. sales of the assessee.

24.14 We have heard the rival submissions and carefully perused We have heard the rival submissions and carefully perused We have heard the rival submissions and carefully perused the material available on record. It is an undisputed position that the material available on record. It is an undisputed position that the material available on record. It is an undisputed position that the Tally data relied upon by the Revenue was recovered from the the Tally data relied upon by the Revenue was recovered from the the Tally data relied upon by the Revenue was recovered from the premises of the Sunrise Group ent premises of the Sunrise Group entities. Before us, the learned ities. Before us, the learned counsel for the assessee reiterated that the entire alleged cash counsel for the assessee reiterated that the entire alleged cash counsel for the assessee reiterated that the entire alleged cash sales reflected in the relevant ledger accounts had already been sales reflected in the relevant ledger accounts had already been sales reflected in the relevant ledger accounts had already been considered in the hands of the Sunrise Group entities and that any considered in the hands of the Sunrise Group entities and that any considered in the hands of the Sunrise Group entities and that any separate addition in the hand separate addition in the hands of the assessee with respect to one s of the assessee with respect to one of such ledger accounts would inevitably lead to duplication of of such ledger accounts would inevitably lead to duplication of of such ledger accounts would inevitably lead to duplication of addition.

24.15 We have further been apprised that the appeals pertaining We have further been apprised that the appeals pertaining We have further been apprised that the appeals pertaining to the Sunrise Group entities are presently pending adjudication to the Sunrise Group entities are presently pending adjudication to the Sunrise Group entities are presently pending adjudication before the Coordinate Bench of the Tribunal. In our considered rdinate Bench of the Tribunal. In our considered rdinate Bench of the Tribunal. In our considered opinion, the issue as to whether the alleged cash sales attributed opinion, the issue as to whether the alleged cash sales attributed opinion, the issue as to whether the alleged cash sales attributed to the assessee have already been subjected to tax in the hands of to the assessee have already been subjected to tax in the hands of to the assessee have already been subjected to tax in the hands of the Sunrise Group entities requires factual verification. In the the Sunrise Group entities requires factual verification. In the the Sunrise Group entities requires factual verification. In the event it is found that the very same transactions have already been is found that the very same transactions have already been is found that the very same transactions have already been brought to tax in their hands, no further addition on that count brought to tax in their hands, no further addition on that count brought to tax in their hands, no further addition on that count would survive in the hands of the present assessee would survive in the hands of the present assessee. .

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 24.16 We further find that the impugned addition has principally We further find that the impugned addition has principally We further find that the impugned addition has principally upon the statement of Shri Banpreet Atal, wherein been founded upon the statement of Shri Banpreet Atal, wherein upon the statement of Shri Banpreet Atal, wherein he is stated to have admitted that the ledger account “Bobby Cash he is stated to have admitted that the ledger account “Bobby Cash he is stated to have admitted that the ledger account “Bobby Cash 1” pertained to the assessee. However, in his subsequent 1” pertained to the assessee. However, in his subsequent 1” pertained to the assessee. However, in his subsequent statement dated 23/09/2024 recorded before the Investigation statement dated 23/09/2024 recorded before the Investigation statement dated 23/09/2024 recorded before the Investigation Wing (PB:113-115), Shr 115), Shri Banpreet Atal expressed lack of i Banpreet Atal expressed lack of recollection and uncertainty regarding the transactions reflected in recollection and uncertainty regarding the transactions reflected in recollection and uncertainty regarding the transactions reflected in the said ledger account. For ready reference, relevant part of his the said ledger account. For ready reference, relevant part of his the said ledger account. For ready reference, relevant part of his statement is reproduced as under: statement is reproduced as under: “Q.7 I am showing you the ledger accounts in the name of Bobby-Cash-1, “Q.7 I am showing you the ledger accounts in the nam “Q.7 I am showing you the ledger accounts in the nam Bunny Seth and Tegh Cable Bunny Seth and Tegh Cable – SB2 in the tally named Ka (page no 1 to 18) SB2 in the tally named Ka (page no 1 to 18) which has been found during the course of search proceedings u/s 132 of which has been found during the course of search proceedings u/s 132 of which has been found during the course of search proceedings u/s 132 of Income-tax Act, 1961 in the case of S P Electrosolutions and others at tax Act, 1961 in the case of S P Electrosolutions and others at tax Act, 1961 in the case of S P Electrosolutions and others at Choksi Mills Compound, Choksi Mills Compound, Narayan Nagar, Ghatkopar (West), Mumbai Narayan Nagar, Ghatkopar (West), Mumbai – 400086 on 22.12.2023. Please confirm and offer your comments. 400086 on 22.12.2023. Please confirm and offer your comments. 400086 on 22.12.2023. Please confirm and offer your comments. ANs: Madam, I confirm I have seen the ledgers. These are very old transactions Madam, I confirm I have seen the ledgers. These are very old transactions Madam, I confirm I have seen the ledgers. These are very old transactions so I can’t recollect the exact nature of such transaction. Further I have already so I can’t recollect the exact nature of such transaction. Further I hav so I can’t recollect the exact nature of such transaction. Further I hav described most of the transactions during the course of search proceedings itself. described most of the transactions during the course of search proceedings itself. described most of the transactions during the course of search proceedings itself. However, I can’t comment on the ledgers in the name of Bunny Seth.” However, I can’t comment on the ledgers in the name of Bunny Seth.” However, I can’t comment on the ledgers in the name of Bunny Seth.”

24.17 Significantly, apart from the aforesaid statement, no Significantly, apart from the aforesaid statement, no Significantly, apart from the aforesaid statement, no independent documentary evidence independent documentary evidence has been brought on record by has been brought on record by the Assessing Officer to substantiate that the alleged cash sales the Assessing Officer to substantiate that the alleged cash sales the Assessing Officer to substantiate that the alleged cash sales pertained to the assessee pertained to the assessee.

24.18 We also note that the Coordinate Bench of the Tribunal We also note that the Coordinate Bench of the Tribunal We also note that the Coordinate Bench of the Tribunal in the case of Prashant Prakash Nilawar Prashant Prakash Nilawar (supra), while dealing with (supra), while dealing with additions founded upon electronic ditions founded upon electronic records and WhatsApp ditions founded upon electronic records and WhatsApp records and WhatsApp

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. communications, extensively examined the requirements of section communications, extensively examined the requirements of section communications, extensively examined the requirements of section 65B of the Indian Evidence Act and the provisions of the 65B of the Indian Evidence Act and the provisions of the 65B of the Indian Evidence Act and the provisions of the Information Technology Act, 2000. The Coordinate Bench, after Information Technology Act, 2000. The Coordinate Bench, after Information Technology Act, 2000. The Coordinate Bench, after considering the dec considering the decisions of the Hon’ble Supreme Court and isions of the Hon’ble Supreme Court and various judicial precedents, held that electronic communications various judicial precedents, held that electronic communications various judicial precedents, held that electronic communications such as WhatsApp chats cannot, by themselves, constitute such as WhatsApp chats cannot, by themselves, constitute such as WhatsApp chats cannot, by themselves, constitute conclusive evidence in the absence of proper certification and conclusive evidence in the absence of proper certification and conclusive evidence in the absence of proper certification and independent corroborative mater independent corroborative material. The Tribunal further observed ial. The Tribunal further observed that additions based merely on electronic extracts recovered from that additions based merely on electronic extracts recovered from that additions based merely on electronic extracts recovered from third parties, without compliance with statutory evidentiary third parties, without compliance with statutory evidentiary third parties, without compliance with statutory evidentiary requirements requirements requirements and and and without without without affording affording affording opportunity opportunity opportunity of of of cross- cross cross examination, could not be sustained in examination, could not be sustained in law.The relevant findings of law.The relevant findings of the Coordinate Bench of the Tribunal in the case of Prashant the Coordinate Bench of the Tribunal in the case of the Coordinate Bench of the Tribunal in the case of Prakash Nilawar (Supra Supra), are reproduced as under: are reproduced as under: “9. Before parting, in addition to our discussion and conclusions arrived in the Before parting, in addition to our discussion and conclusions arrived in the Before parting, in addition to our discussion and conclusions arrived in the context of compliance requirements context of compliance requirements of section 65B of Indian Evidence Act, it is of section 65B of Indian Evidence Act, it is important to note that the impugned additions in the present appeals are based important to note that the impugned additions in the present appeals are based important to note that the impugned additions in the present appeals are based on electronic images/sheets found and seized from the mobile of the concerned on electronic images/sheets found and seized from the mobile of the concerned on electronic images/sheets found and seized from the mobile of the concerned persons/third parties in the course of their respecti persons/third parties in the course of their respective searches. In the present era ve searches. In the present era of technology and digital communication, additions cannot be simply based on of technology and digital communication, additions cannot be simply based on of technology and digital communication, additions cannot be simply based on extracts of WhatsApp conversation between third parties without placing on extracts of WhatsApp conversation between third parties without placing on extracts of WhatsApp conversation between third parties without placing on record corroborative evidence to support the allegations. We make a useful record corroborative evidence to support the allegations. We make a usef record corroborative evidence to support the allegations. We make a usef reference to certain provisions contained in the Information Technology Act, 2000, reference to certain provisions contained in the Information Technology Act, 2000, reference to certain provisions contained in the Information Technology Act, 2000, wherein the term “electronic record” is defined in Section 2(t). According to this wherein the term “electronic record” is defined in Section 2(t). According to this wherein the term “electronic record” is defined in Section 2(t). According to this section, it means data, record or data generated, image or sound stored, received section, it means data, record or data generated, image or sound stored, received section, it means data, record or data generated, image or sound stored, received or sent in an electronic form or micro film or computer generated micro fiche. In nt in an electronic form or micro film or computer generated micro fiche. In nt in an electronic form or micro film or computer generated micro fiche. In this Act, section 11 deals with attribution of electronic records for the purpose of this Act, section 11 deals with attribution of electronic records for the purpose of this Act, section 11 deals with attribution of electronic records for the purpose of attributing the same to the originator of such electronic records. Section 11 is attributing the same to the originator of such electronic records. Section 11 is attributing the same to the originator of such electronic records. Section 11 is reproduced as under: under: 11. Attribution of electronic records. Attribution of electronic records. — An electronic record shall be An electronic record shall be attributed to the originator attributed to the originator— (a) if it was sent by the originator himself; (a) if it was sent by the originator himself; 64

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. (b) by a person who had the authority to act on behalf of the originator in (b) by a person who had the authority to act on behalf of the originator in (b) by a person who had the authority to act on behalf of the originator in respect of that electroni respect of that electronic record; or (c) by an information system programmed by or on behalf of the originator by an information system programmed by or on behalf of the originator by an information system programmed by or on behalf of the originator to operate automatically. to operate automatically. 9.1. In the present case, before us, additions have been made on the basis of the present case, before us, additions have been made on the basis of the present case, before us, additions have been made on the basis of electronic images / sheets found and seized from the mobiles of concerned electronic images / sheets found and seized from the mobiles of concerned electronic images / sheets found and seized from the mobiles of concerned persons/third parties which are electronic records. Section 132(4A) r.w.s. 292C persons/third parties which are electronic records. Section 132(4A) r.w.s. 292C persons/third parties which are electronic records. Section 132(4A) r.w.s. 292C contains presumption as to evid contains presumption as to evidence which is admissible against the person in ence which is admissible against the person in whose possession or control such evidence is found and such a presumption is a whose possession or control such evidence is found and such a presumption is a whose possession or control such evidence is found and such a presumption is a rebuttable presumption. Section 11 of the Information Technology Act also rebuttable presumption. Section 11 of the Information Technology Act also rebuttable presumption. Section 11 of the Information Technology Act also attributes the electronic record to its originator when attributes the electronic record to its originator when it was sent by the originator it was sent by the originator himself or any person authorised on his behalf or by a system programmed by or himself or any person authorised on his behalf or by a system programmed by or himself or any person authorised on his behalf or by a system programmed by or on behalf of the originator. Keeping the provisions of the Act and of Information on behalf of the originator. Keeping the provisions of the Act and of Information on behalf of the originator. Keeping the provisions of the Act and of Information Technology Act discussed herein, there cannot be any presumption or attribution Technology Act discussed herein, there cannot be any presumption Technology Act discussed herein, there cannot be any presumption on the assessee in respect of the electronic records (electronic images / sheets on the assessee in respect of the electronic records (electronic images / sheets on the assessee in respect of the electronic records (electronic images / sheets found and seized from the mobiles) based on which additions have been made in found and seized from the mobiles) based on which additions have been made in found and seized from the mobiles) based on which additions have been made in the hands of the assessee. the hands of the assessee. 9.2. In the given context, Hon 9.2. In the given context, Hon'ble Supreme Court in the case of Ambalal Sarabhai case of Ambalal Sarabhai Enterprise vs. KS Infraspace LLP Ltd, Civil Appeal No. 9346 of 2019 dealt on the Enterprise vs. KS Infraspace LLP Ltd, Civil Appeal No. 9346 of 2019 dealt on the Enterprise vs. KS Infraspace LLP Ltd, Civil Appeal No. 9346 of 2019 dealt on the aspect of WhatsApp chats and observed as under: aspect of WhatsApp chats and observed as under: “The WhatsApp messages, which are virtual verbal communications, are matters “The WhatsApp messages, which are virtual verbal communications, are matters “The WhatsApp messages, which are virtual verbal communications, are matters of evidence with regard of evidence with regard to their meaning and its contents to be proved during trial to their meaning and its contents to be proved during trial by evidence in chief and cross by evidence in chief and cross-examination. The emails and WhatsApp messages examination. The emails and WhatsApp messages will have to be read and understood cumulatively to decipher whether there was a will have to be read and understood cumulatively to decipher whether there was a will have to be read and understood cumulatively to decipher whether there was a concluded contract or not”. concluded contract or not”. 9.3. Hon’ble Apex Court highlighted the importance of proving the contents of le Apex Court highlighted the importance of proving the contents of le Apex Court highlighted the importance of proving the contents of WhatsApp chat during trial by evidence and also cross examination. In the WhatsApp chat during trial by evidence and also cross examination. In the WhatsApp chat during trial by evidence and also cross examination. In the present case, ld. A.O neither provided any evidence in support of the WhatsApp present case, ld. A.O neither provided any evidence in support of the WhatsApp present case, ld. A.O neither provided any evidence in support of the WhatsApp chats relied upon by him nor did he chats relied upon by him nor did he provide the opportunity to cross examine the provide the opportunity to cross examine the third parties even after a specific request was made by the assessee. third parties even after a specific request was made by the assessee. third parties even after a specific request was made by the assessee. 9.4. Also, Coordinate Bench of ITAT, Chennai in the case of Mr. A. Johnkumar vs. 9.4. Also, Coordinate Bench of ITAT, Chennai in the case of Mr. A. Johnkumar vs. 9.4. Also, Coordinate Bench of ITAT, Chennai in the case of Mr. A. Johnkumar vs. DCIT in ITA No.3092/Chny/2019 dealt with issues relating to additions made DCIT in ITA No.3092/Chny/2019 dealt with issues relating to DCIT in ITA No.3092/Chny/2019 dealt with issues relating to based on WhatsApp messages and observed as under: based on WhatsApp messages and observed as under: “First of all, WhatsApp messages cannot be considered as a conclusive evidence “First of all, WhatsApp messages cannot be considered as a conclusive evidence “First of all, WhatsApp messages cannot be considered as a conclusive evidence to draw an adverse inference against the assessee, unless those WhatsApp to draw an adverse inference against the assessee, unless those WhatsApp to draw an adverse inference against the assessee, unless those WhatsApp messages are supported by corroborativ messages are supported by corroborative evidences to indicate that those e evidences to indicate that those messages and contents represents undisclosed income of the assessee. ......The messages and contents represents undisclosed income of the assessee. ......The messages and contents represents undisclosed income of the assessee. ......The AO neither bring on record from which person, the assessee has received cash AO neither bring on record from which person, the assessee has received cash AO neither bring on record from which person, the assessee has received cash and to whom the assessee has distributed cash. The AO neither mad and to whom the assessee has distributed cash. The AO neither mad and to whom the assessee has distributed cash. The AO neither made out a case of source for cash and destiny of cash distributed by the assessee. In other of source for cash and destiny of cash distributed by the assessee. In other of source for cash and destiny of cash distributed by the assessee. In other words, the AO has abruptly concluded in his own understanding of the messages, words, the AO has abruptly concluded in his own understanding of the messages, words, the AO has abruptly concluded in his own understanding of the messages, the assessee has received so much of cash and distributed so much of cash and the assessee has received so much of cash and distributed so much of cash and the assessee has received so much of cash and distributed so much of cash and which is nothing but cash for votes and hence, concluded that the assessee has nothing but cash for votes and hence, concluded that the assessee has nothing but cash for votes and hence, concluded that the assessee has incurred a sum of Rs. 17 Crs. incurred a sum of Rs. 17 Crs. for distribution of cash to voters and which is or distribution of cash to voters and which is 65

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. nothing but unexplained expenditure taxable u/s.69C of the Act..........Further, the nothing but unexplained expenditure taxable u/s.69C of the Act..........Further, the nothing but unexplained expenditure taxable u/s.69C of the Act..........Further, the AO had relied upon the AO had relied upon the WhatsApp messages sent from assessee’s mobile phone to WhatsApp messages sent from assessee’s mobile phone to Mr. Somu and had given his own meaning to those messages. In the process, the Mr. Somu and had given his own meaning to those messages. In the process, the Mr. Somu and had given his own meaning to those messages. In the process, the AO neither tested the admissibility of WhatsApp messages as evidence u/s.69B of AO neither tested the admissibility of WhatsApp messages as evidence u/s.69B of AO neither tested the admissibility of WhatsApp messages as evidence u/s.69B of Evidence Act, nor examined Mr. Somu the rec Evidence Act, nor examined Mr. Somu the recipient of messages sent by the ipient of messages sent by the assessee. The AO without carrying out necessary enquiries and also examining assessee. The AO without carrying out necessary enquiries and also examining assessee. The AO without carrying out necessary enquiries and also examining those persons, simply concluded that those messages are meant for distribution of those persons, simply concluded that those messages are meant for distribution of those persons, simply concluded that those messages are meant for distribution of cash and the assessee has spent such a huge amount for election ex cash and the assessee has spent such a huge amount for election ex cash and the assessee has spent such a huge amount for election expenses. In our considered view, the findings recorded by the AO is purely on suspicion and our considered view, the findings recorded by the AO is purely on suspicion and our considered view, the findings recorded by the AO is purely on suspicion and surmises manner without any evidences to justify his findings.” surmises manner without any evidences to justify his findings.” surmises manner without any evidences to justify his findings.” 9.5. Keeping the context of material found and seized from third parties, we also 9.5. Keeping the context of material found and seized from third parties, we also 9.5. Keeping the context of material found and seized from third parties, we also refer to decision in the case of ACIT vs. Lata Mangeshkar [1974] 97 ITR 696 (Bom) n the case of ACIT vs. Lata Mangeshkar [1974] 97 ITR 696 (Bom) n the case of ACIT vs. Lata Mangeshkar [1974] 97 ITR 696 (Bom) wherein Hon'ble Court has extensively discussed the importance and meaning of ble Court has extensively discussed the importance and meaning of ble Court has extensively discussed the importance and meaning of primary evidence. In this case, Income primary evidence. In this case, Income-tax authorities came across a sort of a tax authorities came across a sort of a ledger maintained by a firm known as ledger maintained by a firm known as Vasu Films of Madras which was seized Vasu Films of Madras which was seized by them. Department relied on the entries in the ledger which allegedly reflected by them. Department relied on the entries in the ledger which allegedly reflected by them. Department relied on the entries in the ledger which allegedly reflected payments to Ms. Lata Mangeshkar in white and black and took the view that no payments to Ms. Lata Mangeshkar in white and black and took the view that no payments to Ms. Lata Mangeshkar in white and black and took the view that no receipts were shown by the assessee (i.e. Ms. Lata Mangeshkar) in the regular receipts were shown by the assessee (i.e. Ms. Lata Mangesh receipts were shown by the assessee (i.e. Ms. Lata Mangesh books of accounts. Statements of the managing partner of Vasu Films and firm’s books of accounts. Statements of the managing partner of Vasu Films and firm’s books of accounts. Statements of the managing partner of Vasu Films and firm’s Bombay manager were recorded in which they explained the entries stating that Bombay manager were recorded in which they explained the entries stating that Bombay manager were recorded in which they explained the entries stating that the letter “W” put against payment is “White” while the letter “B” were put the letter “W” put against payment is “White” while the letter “B” were put the letter “W” put against payment is “White” while the letter “B” were put against payment is “Black”. Income inst payment is “Black”. Income-tax officer made additions on the basis of tax officer made additions on the basis of entries as in the seized material alleging that these payments were outside the entries as in the seized material alleging that these payments were outside the entries as in the seized material alleging that these payments were outside the books of accounts and also relied upon the statements made by these two books of accounts and also relied upon the statements made by these two books of accounts and also relied upon the statements made by these two persons. The Appellate Assist persons. The Appellate Assistant Commissioner confirmed the additions made by ant Commissioner confirmed the additions made by the Income-tax Officer. tax Officer. 9.5.1. Before the Tribunal, it was contended on behalf of the assessee that the 9.5.1. Before the Tribunal, it was contended on behalf of the assessee that the 9.5.1. Before the Tribunal, it was contended on behalf of the assessee that the entire evidence merely created suspicion and it did not take the place of proof. entire evidence merely created suspicion and it did not take the place of proof. entire evidence merely created suspicion and it did not take the place of proof. Tribunal after appreci Tribunal after appreciating all the evidence came to a conclusion that evidence ating all the evidence came to a conclusion that evidence was not sufficient to prove that assessee had received money in “black” for which was not sufficient to prove that assessee had received money in “black” for which was not sufficient to prove that assessee had received money in “black” for which she did not pass a receipt in the regular books of accounts. In the statement she did not pass a receipt in the regular books of accounts. In the statement she did not pass a receipt in the regular books of accounts. In the statement recorded of managing partner, it was p recorded of managing partner, it was pointed out by the Tribunal that he had no ointed out by the Tribunal that he had no personal knowledge of the actual payments made to the assessee and therefore personal knowledge of the actual payments made to the assessee and therefore personal knowledge of the actual payments made to the assessee and therefore his evidence could not carry the case of the Department any further. In the his evidence could not carry the case of the Department any further. In the his evidence could not carry the case of the Department any further. In the statement of firm’s Bombay manager, he accepted that he had made payments in statement of firm’s Bombay manager, he accepted that he had m statement of firm’s Bombay manager, he accepted that he had m “black” to the assessee. It was pointed out by the Tribunal that he used to receive “black” to the assessee. It was pointed out by the Tribunal that he used to receive “black” to the assessee. It was pointed out by the Tribunal that he used to receive amounts from Madras from which he used to make disbursements in Bombay but amounts from Madras from which he used to make disbursements in Bombay but amounts from Madras from which he used to make disbursements in Bombay but he maintained no account in respect of the same which made it difficult to rely on he maintained no account in respect of the same which made it difficult to rely o he maintained no account in respect of the same which made it difficult to rely o his evidence. Hence, Tribunal rejected the entries and disbelieved the statement his evidence. Hence, Tribunal rejected the entries and disbelieved the statement his evidence. Hence, Tribunal rejected the entries and disbelieved the statement of the two witnesses. of the two witnesses. 9.5.2. An appeal was filed before the High Court of Bombay. The High Court of 9.5.2. An appeal was filed before the High Court of Bombay. The High Court of 9.5.2. An appeal was filed before the High Court of Bombay. The High Court of Bombay after considering all the circumstances held that the Tribunal was Bombay after considering all the circumstances held that the Tribunal was Bombay after considering all the circumstances held that the Tribunal was justified in holding that the additions were wrongly made stating as below: justified in holding that the additions were wrongly made stating as below: justified in holding that the additions were wrongly made stating as below: “Moreover, entries in books of account “Moreover, entries in books of account-whether in day-book or in the ledger book or in the ledger-are merely corroborative evidence and in the absence of proper corroborative evidence merely corroborative evidence and in the absence of proper corroborative evidence merely corroborative evidence and in the absence of proper corroborative evidence

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. the primary direc the primary direct evidence would alone be required to be scrutinized and that t evidence would alone be required to be scrutinized and that evidence in this case consisted of the testimony of C. S. Kumar and the evidence evidence in this case consisted of the testimony of C. S. Kumar and the evidence evidence in this case consisted of the testimony of C. S. Kumar and the evidence of that witness was found to be thoroughly unreliable by the Tribunal. After all, of that witness was found to be thoroughly unreliable by the Tribunal. After all, of that witness was found to be thoroughly unreliable by the Tribunal. After all, the entries in the day the entries in the day-book or the ledger would be a corroborative piece of the ledger would be a corroborative piece of evidence and once the direct evidence of the person who is said to have made evidence and once the direct evidence of the person who is said to have made evidence and once the direct evidence of the person who is said to have made payments in “black” to the assessee is disbelieved, we do not think that any value payments in “black” to the assessee is disbelieved, we do not think that any value payments in “black” to the assessee is disbelieved, we do not think that any value could be attached to the entries in the ledger or t could be attached to the entries in the ledger or to the entries in the day o the entries in the day-book even if one had been produced. In the circumstances, we feel that the questions which if one had been produced. In the circumstances, we feel that the questions which if one had been produced. In the circumstances, we feel that the questions which are sought to be referred arise out of a finding of fact recorded by the Tribunal on are sought to be referred arise out of a finding of fact recorded by the Tribunal on are sought to be referred arise out of a finding of fact recorded by the Tribunal on pure appreciation of evidence.” pure appreciation of evidence.” 9.6. We also refer to t 9.6. We also refer to the decision of Hon’ble Supreme Court in the case of CBI vs. he decision of Hon’ble Supreme Court in the case of CBI vs. V.C. Shukla & Ors. 1998 (3 SCC 410) (SC), where Section 34 of the Evidence Act, V.C. Shukla & Ors. 1998 (3 SCC 410) (SC), where Section 34 of the Evidence Act, V.C. Shukla & Ors. 1998 (3 SCC 410) (SC), where Section 34 of the Evidence Act, 1872 has been explained and held that entries in a file containing loose sheets of 1872 has been explained and held that entries in a file containing loose sheets of 1872 has been explained and held that entries in a file containing loose sheets of papers were not “book” and hence papers were not “book” and hence entries therein were not admissible under entries therein were not admissible under Section 34 of the Evidence Act. Further, it was also held in this case that entries Evidence Act. Further, it was also held in this case that entries Evidence Act. Further, it was also held in this case that entries in books of account shall not alone be sufficient evidence to charge any person in books of account shall not alone be sufficient evidence to charge any person in books of account shall not alone be sufficient evidence to charge any person with liability. Entries, even if relevant, were on with liability. Entries, even if relevant, were only corroborative evidence. ly corroborative evidence. Independent evidence as to trustworthiness of those entries was necessary to Independent evidence as to trustworthiness of those entries was necessary to Independent evidence as to trustworthiness of those entries was necessary to fasten the liability. In view of these facts, it was held by the Hon'ble Court that fasten the liability. In view of these facts, it was held by the Hon fasten the liability. In view of these facts, it was held by the Hon entries made in the Jain Hawala diaries are under Section 34, but truthfulness entries made in the Jain Hawala diaries are under Section 34, but tr entries made in the Jain Hawala diaries are under Section 34, but tr thereof was not proved by any independent evidence. Hon'ble Supreme Court thereof was not proved by any independent evidence. Hon thereof was not proved by any independent evidence. Hon further went on to state that even correct and authentic entries in books of further went on to state that even correct and authentic entries in books of further went on to state that even correct and authentic entries in books of account cannot, without independent evidence of their trustworthiness, fix a account cannot, without independent evidence of their trustworthiness, fix a account cannot, without independent evidence of their trustworthiness, fix a liability upon a person. The relevant extracts are as under: person. The relevant extracts are as under: "Book" ordinarily means a collection of sheets of paper or other material, blank, ordinarily means a collection of sheets of paper or other material, blank, ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. written, or printed, fastened or bound together so as to form a material whole. written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed a Loose sheets or scraps of paper cannot be termed as "book" " for they can be easily detached and replaced in dealing with the word detached and replaced in dealing with the word "book" appearing in Section 34 in appearing in Section 34 in Mukundram v. Dayaram a decision on which both sides have placed reliance, the Mukundram v. Dayaram a decision on which both sides have placed reliance, the Mukundram v. Dayaram a decision on which both sides have placed reliance, the Court observed: Court observed:- 'In its ordinary sense it signifies collection o In its ordinary sense it signifies collection of sheets of paper bound together in a manner, which cannot be disturbed or altered except by bound together in a manner, which cannot be disturbed or altered except by bound together in a manner, which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the tearing apart. The binding is of a kind which is not intended to the moveable in the tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a port sense of being undone and put together again. A collection of papers in a port sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, or clip, or strung together on a piece of twine which is intended to be untied at will, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book.... I think the term would not, in ordinary English, be called a book.... I think the term would not, in ordinary English, be called a book.... I think the term 'book' in Section 34 aforesaid may properly be taken to signify, ordinarily, a collection o Section 34 aforesaid may properly be taken to signify, ordinarily, a collection o Section 34 aforesaid may properly be taken to signify, ordinarily, a collection of sheets of paper bound together with the intention that such binding shall be sheets of paper bound together with the intention that such binding shall be sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. It is easier however to permanent and the papers used collectively in one volume. It is easier however to permanent and the papers used collectively in one volume. It is easier however to say what is not a book for the purposes of Section 34, and I have no hesitation in say what is not a book for the purposes of Section 34, and I have no hesitation in say what is not a book for the purposes of Section 34, and I have no hesitation in holding that unbound sheets of paper, in whatever quantity, though filled up with unbound sheets of paper, in whatever quantity, though filled up with unbound sheets of paper, in whatever quantity, though filled up with one continuous account, are not a book of account within the purview of Section one continuous account, are not a book of account within the purview of Section one continuous account, are not a book of account within the purview of Section 34." We must observe that the aforesaid approach is in accord with good We must observe that the aforesaid approach is in accord with good We must observe that the aforesaid approach is in accord with good reasoning and we are in full agree reasoning and we are in full agreement with it. Applying the above tests it must be ment with it. Applying the above tests it must be held that the two spiral note books (MR 68/91 and MR 71/91) and the two spiral held that the two spiral note books (MR 68/91 and MR 71/91) and the two spiral held that the two spiral note books (MR 68/91 and MR 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are pads (MR 69/91 and MR 70/91) are "books" within the meaning of section 34, but within the meaning of section 34, but not the loose sheets of papers contained in the not the loose sheets of papers contained in the two files (Mrs 72/91 and 73/91). two files (Mrs 72/91 and 73/91).' 9.7. Also, Hon'ble Supreme Court in case of Common Cause v. UOI [2017] 394 ITR ble Supreme Court in case of Common Cause v. UOI [2017] 394 ITR ble Supreme Court in case of Common Cause v. UOI [2017] 394 ITR 220 (SC), wherein searches were conducted on the Birla and Sahara Group of 220 (SC), wherein searches were conducted on the Birla and Sahara Group of 220 (SC), wherein searches were conducted on the Birla and Sahara Group of 67

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Companies and incriminating material in form of random sheets and loose Companies and incriminating material in form of random sheets and Companies and incriminating material in form of random sheets and papers, computer prints, hard disk, papers, computer prints, hard disk, pen drives etc. were found, held that noting pen drives etc. were found, held that noting on loose sheet/diary does carry any evidentiary value under the provision of on loose sheet/diary does carry any evidentiary value under the provision of on loose sheet/diary does carry any evidentiary value under the provision of section 34 of the Evidence Act. Relevant extract reads as under: section 34 of the Evidence Act. Relevant extract reads as under: section 34 of the Evidence Act. Relevant extract reads as under: "It is apparent from the af It is apparent from the aforesaid discussion that loose sheets of paper are wholly oresaid discussion that loose sheets of paper are wholly irrelevant as evidence being not admissible U/s 34 so as to constitute evidence irrelevant as evidence being not admissible U/s 34 so as to constitute evidence irrelevant as evidence being not admissible U/s 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. with respect to the transactions mentioned therein being of no evidentiary value. with respect to the transactions mentioned therein being of no evidentiary value. ................... In case of Sahara In case of Sahara, in addition we have the adjudication by the Income , in addition we have the adjudication by the Income-tax Settlement Commission. The order has been placed on record along with I.A. No. 4. Settlement Commission. The order has been placed on record along with I.A. No. 4. Settlement Commission. The order has been placed on record along with I.A. No. 4. The Settlement Commission has observed that the scrutiny of entries on loose The Settlement Commission has observed that the scrutiny of entries on loose The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen papers, computer prints, hard disk, pen drives etc. have revealed that the drives etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value transactions noted on documents were not genuine and have no evidentiary value transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen and that details in these loose papers, computer print outs, hard disk and pen and that details in these loose papers, computer print outs, hard disk and pen drive etc, do not comply with the requirement of the Indian Evi drive etc, do not comply with the requirement of the Indian Evi drive etc, do not comply with the requirement of the Indian Evidence Act and are not admissible evidence. It further observed that the department has no evidence not admissible evidence. It further observed that the department has no evidence not admissible evidence. It further observed that the department has no evidence to prove that entries in these loose papers and electronic data were kept regularly to prove that entries in these loose papers and electronic data were kept regularly to prove that entries in these loose papers and electronic data were kept regularly during the course of business of the concerned business house and the fac during the course of business of the concerned business house and the fac during the course of business of the concerned business house and the fact that these entries were fabricated, non these entries were fabricated, non-genuine was proved. It held as well that the genuine was proved. It held as well that the PCIT/DR have not been able to show and substantiate, the nature and source of PCIT/DR have not been able to show and substantiate, the nature and source of PCIT/DR have not been able to show and substantiate, the nature and source of receipts as well as nature and reason of payments and have failed to prove receipts as well as nature and reason of payments and have failed to prove receipts as well as nature and reason of payments and have failed to prove evidentiary valu evidentiary value of loose papers and electronic documents within the legal e of loose papers and electronic documents within the legal parameters. The Commission has also observed that Department has not been parameters. The Commission has also observed that Department has not been parameters. The Commission has also observed that Department has not been able to make out a clear case of taxing such income in the hands of the applicant able to make out a clear case of taxing such income in the hands of the applicant able to make out a clear case of taxing such income in the hands of the applicant firm on the basis of these documents. It firm on the basis of these documents. It is apparent that the Commission has is apparent that the Commission has recorded a finding that transactions noted in the documents were not genuine and recorded a finding that transactions noted in the documents were not genuine and recorded a finding that transactions noted in the documents were not genuine and thus has not attached any evidentiary value to the pen drive, hard disk, computer thus has not attached any evidentiary value to the pen drive, hard disk, computer thus has not attached any evidentiary value to the pen drive, hard disk, computer loose papers, computer printouts. Since it is not disput loose papers, computer printouts. Since it is not disputed that for entries relied on ed that for entries relied on in these loose papers and electronic data were not regularly kept during course of in these loose papers and electronic data were not regularly kept during course of in these loose papers and electronic data were not regularly kept during course of business, such entries were discussed in the order dated 11 business, such entries were discussed in the order dated 11 business, such entries were discussed in the order dated 11-11-2016 passed in Sahara's case by the Settlement Commission and the documents have s case by the Settlement Commission and the documents have not been s case by the Settlement Commission and the documents have relied upon by the Commission against assessee, and thus such documents have relied upon by the Commission against assessee, and thus such documents have relied upon by the Commission against assessee, and thus such documents have no evidentiary value against third parties. On the basis of the materials which no evidentiary value against third parties. On the basis of the materials which no evidentiary value against third parties. On the basis of the materials which have been placed on record, we are of the considered opinion that no case is made have been placed on record, we are of the considered opinion that no case is made have been placed on record, we are of the considered opinion that no case is made out to direct investigation against any of the persons named in the Birla direct investigation against any of the persons named in the Birla's direct investigation against any of the persons named in the Birla documents or in the documents A documents or in the documents A-8, A-9 and A-10 etc. of Sahara.... 10 etc. of Sahara...." 10. Accordingly, considering the above fact pattern and circumstances as well as Accordingly, considering the above fact pattern and circumstances as well as Accordingly, considering the above fact pattern and circumstances as well as judicial precedents discussed above, a judicial precedents discussed above, along with Section 65B of the Indian long with Section 65B of the Indian Evidence Act, 1972, grounds raised by Revenue in its appeal are dismissed, Evidence Act, 1972, grounds raised by Revenue in its appeal are dismissed, Evidence Act, 1972, grounds raised by Revenue in its appeal are dismissed, resulting in appeal of the Revenue being dismissed and grounds raised by the resulting in appeal of the Revenue being dismissed and grounds raised by the resulting in appeal of the Revenue being dismissed and grounds raised by the assessee in ground no.2 and 3 are allowed. For Ground no.1, which is on legal assessee in ground no.2 and 3 are allowed. For Ground no.1, which is assessee in ground no.2 and 3 are allowed. For Ground no.1, which is jurisdictional issue, the same is kept open and not adjudicated upon since the jurisdictional issue, the same is kept open and not adjudicated upon since the jurisdictional issue, the same is kept open and not adjudicated upon since the case has been decided on the merits of the case allowing the claim of the case has been decided on the merits of the case allowing the claim of the case has been decided on the merits of the case allowing the claim of the assessee in respect of addition so made. In the result, appeal of the assessee is assessee in respect of addition so made. In the result, appeal of the assessee is assessee in respect of addition so made. In the result, appeal of the assessee is partly allowed.”

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 24.19 In the present case, we find that no certificate, as In the present case, we find that no certificate, as In the present case, we find that no certificate, as contemplated under section 65B of the Indian Evidence Act, has contemplated under section 65B of the Indian Evidence Act, has contemplated under section 65B of the Indian Evidence Act, has been brought on record by the Assessing Officer in respect of the been brought on record by the Assessing Officer in respect of the been brought on record by the Assessing Officer in respect of the WhatsApp communications relied upon as corroborative evidence. communications relied upon as corroborative evidence. communications relied upon as corroborative evidence. In the absence of such statutory compliance, the said electronic In the absence of such statutory compliance, the said electronic In the absence of such statutory compliance, the said electronic material cannot be safely relied upon for sustaining the impugned material cannot be safely relied upon for sustaining the impugned material cannot be safely relied upon for sustaining the impugned addition. 24.20 Having Having Having regard regard regard to to to the the the totality totality totality of of of the the the facts facts facts and and and circumstances of the case, we deem it appropriate, in the interest mstances of the case, we deem it appropriate, in the interest mstances of the case, we deem it appropriate, in the interest of justice, to restore the issue to the file of the Assessing Officer for of justice, to restore the issue to the file of the Assessing Officer for of justice, to restore the issue to the file of the Assessing Officer for the purpose of verifying whether the alleged sales, on the basis of the purpose of verifying whether the alleged sales, on the basis of the purpose of verifying whether the alleged sales, on the basis of which gross profit addition has been made in the hands of the which gross profit addition has been made in the han which gross profit addition has been made in the han assessee, have already been brought to tax in the hands of the assessee, have already been brought to tax in the hands of the assessee, have already been brought to tax in the hands of the Sunrise Sunrise Sunrise Group Group entities. Group entities. Subject entities. Subject Subject to to to such such verification such verification verification and and and examination of other issues , the matter shall be decided afresh in examination of other issues , the matter shall be decided afresh in examination of other issues , the matter shall be decided afresh in accordance with law after affording adequate opportunity of accordance with law after affording adequate opportunity o accordance with law after affording adequate opportunity o hearing to the assessee. Accordingly, the grounds raised on merits hearing to the assessee. Accordingly, the grounds raised on merits hearing to the assessee. Accordingly, the grounds raised on merits are treated as allowed for statistical purposes. Since the matter is are treated as allowed for statistical purposes. Since the matter is are treated as allowed for statistical purposes. Since the matter is being restored on merits, we refrain from adjudicating the legal being restored on merits, we refrain from adjudicating the legal being restored on merits, we refrain from adjudicating the legal grounds urged before us at this stage, and the same are kept open. grounds urged before us at this stage, and the same a grounds urged before us at this stage, and the same a

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. that the assessee had entered into non that the assessee had entered into non-genuine purchase genuine purchase transactions with various entities of the Sunrise Group without transactions with various entities of the Sunrise Group without transactions with various entities of the Sunrise Group without actual movement of goods and that Shri Banpreet Atal, Director of actual movement of goods and that Shri Banpreet Atal, Director of actual movement of goods and that Shri Banpreet Atal, Director of the assessee-company, had facilitated such transactions on company, had facilitated such transactions on company, had facilitated such transactions on commission basis. On that premise, the assessee had challenged ssion basis. On that premise, the assessee had challenged ssion basis. On that premise, the assessee had challenged the initiation of penalty proceedings under section 271AAD of the the initiation of penalty proceedings under section 271AAD of the the initiation of penalty proceedings under section 271AAD of the Act as being unjustified and contrary to law. Act as being unjustified and contrary to law.

25.1 The learned CIT(A), however, noted that the Assessing The learned CIT(A), however, noted that the Assessing The learned CIT(A), however, noted that the Assessing Officer had merely initiate Officer had merely initiated separate penalty proceedings under d separate penalty proceedings under section 271AAD of the Act on the basis of the findings recorded in section 271AAD of the Act on the basis of the findings recorded in section 271AAD of the Act on the basis of the findings recorded in the assessment order regarding alleged false entries in the books of the assessment order regarding alleged false entries in the books of the assessment order regarding alleged false entries in the books of account, and that no penalty order had yet been passed. The account, and that no penalty order had yet been passed. The account, and that no penalty order had yet been passed. The learned CIT(A) further learned CIT(A) further observed that the addition on account of observed that the addition on account of alleged commission income had been made in the hands of the alleged commission income had been made in the hands of the alleged commission income had been made in the hands of the Director separately, whereas, insofar as the assessee was Director separately, whereas, insofar as the assessee was Director separately, whereas, insofar as the assessee was concerned, only initiation of penalty proceedings had taken place. concerned, only initiation of penalty proceedings had taken place. concerned, only initiation of penalty proceedings had taken place. According to the learned CIT(A According to the learned CIT(A), since no penalty had actually been ), since no penalty had actually been levied as on the date of appellate adjudication, the grievance raised levied as on the date of appellate adjudication, the grievance raised levied as on the date of appellate adjudication, the grievance raised by the assessee was premature in nature. It was accordingly by the assessee was premature in nature. It was accordingly by the assessee was premature in nature. It was accordingly observed that the assessee would be at liberty to challenge the observed that the assessee would be at liberty to challenge the observed that the assessee would be at liberty to challenge the penalty proceedings, if penalty proceedings, if and when any penalty order came to be and when any penalty order came to be passed, before the appropriate forum in accordance with law. On passed, before the appropriate forum in accordance with law. On passed, before the appropriate forum in accordance with law. On the aforesaid reasoning, the ground raised by the assessee was the aforesaid reasoning, the ground raised by the assessee was the aforesaid reasoning, the ground raised by the assessee was

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. dismissed as premature. The relevant finding of ld CIT(A) is dismissed as premature. The relevant finding of ld CIT(A) is dismissed as premature. The relevant finding of ld CIT(A) is reproduced as under: reproduced as under:

“9.3 Facts of the case and submission of the assessee have been examined. The s of the case and submission of the assessee have been examined. The s of the case and submission of the assessee have been examined. The assessee has raised this ground stating that the AO in the assessment order assessee has raised this ground stating that the AO in the assessment order assessee has raised this ground stating that the AO in the assessment order passed has held that the assessee has made non passed has held that the assessee has made non-genuine purchases from genuine purchases from various entities of Sunrise Group without various entities of Sunrise Group without actual flow of goods and that the actual flow of goods and that the director of the assessee company Shri Banpreet Atal has facilitated these director of the assessee company Shri Banpreet Atal has facilitated these director of the assessee company Shri Banpreet Atal has facilitated these transactions on commission basis and hence contended that penalty initiated u/s transactions on commission basis and hence contended that penalty initiated u/s transactions on commission basis and hence contended that penalty initiated u/s 271AAD of the IT Act is incorrect and unjustified. I found that the AO has made 271AAD of the IT Act is incorrect and unjustified. I found that the 271AAD of the IT Act is incorrect and unjustified. I found that the the addition of commission income in the hands of director. However, while the addition of commission income in the hands of director. However, while the addition of commission income in the hands of director. However, while passing the assessment order, AO based on its findings has separately initiated passing the assessment order, AO based on its findings has separately initiated passing the assessment order, AO based on its findings has separately initiated penalty proceedings u/s 271AAD against the assessee for making false entries in penalty proceedings u/s 271AAD against the assessee for making false entries in penalty proceedings u/s 271AAD against the assessee for making false entries in the books of account. Aggrieved by the same, assessee has raised the present s of account. Aggrieved by the same, assessee has raised the present s of account. Aggrieved by the same, assessee has raised the present grounds of appeal. Since the penalty proceedings are only initiated and no grounds of appeal. Since the penalty proceedings are only initiated and no grounds of appeal. Since the penalty proceedings are only initiated and no penalty order has been passed as yet, this ground of appeal of the assessee is penalty order has been passed as yet, this ground of appeal of the assessee is penalty order has been passed as yet, this ground of appeal of the assessee is premature. The assessee is free t premature. The assessee is free to contest any such penalty order, as and when o contest any such penalty order, as and when levied, at appropriate level. Accordingly, this ground of appeal of the assessee is levied, at appropriate level. Accordingly, this ground of appeal of the assessee is levied, at appropriate level. Accordingly, this ground of appeal of the assessee is DISMISSED, being premature in nature. DISMISSED, being premature in nature.”

25.2 Having considered the rival submissions and the Having considered the rival submissions and the Having considered the rival submissions and the findings recorded by the authori findings recorded by the authorities below, we are of the ties below, we are of the considered view that the issue raised in the aforesaid ground considered view that the issue raised in the aforesaid ground considered view that the issue raised in the aforesaid ground presently has no bearing on the determination of taxable income or presently has no bearing on the determination of taxable income or presently has no bearing on the determination of taxable income or profit for the year under consideration. Admittedly, what has been profit for the year under consideration. Admittedly, what has been profit for the year under consideration. Admittedly, what has been challenged is only the initiation challenged is only the initiation of penalty proceedings under of penalty proceedings under section 271AAD of the Act, and no final order imposing penalty section 271AAD of the Act, and no final order imposing penalty section 271AAD of the Act, and no final order imposing penalty has yet been passed. In such circumstances, the grievance raised has yet been passed. In such circumstances, the grievance raised has yet been passed. In such circumstances, the grievance raised by the assessee is clearly premature and academic in nature at by the assessee is clearly premature and academic in nature at by the assessee is clearly premature and academic in nature at this stage. Accordingly, Ground No. this stage. Accordingly, Ground No. 10 is dismissed as 10 is dismissed as infructuous/premature, with liberty to the assessee to avail such infructuous/premature, with liberty to the assessee to avail such infructuous/premature, with liberty to the assessee to avail such

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. remedy as may be permissible in law if and when any penalty remedy as may be permissible in law if and when any penalty remedy as may be permissible in law if and when any penalty order is ultimately passed. order is ultimately passed.

26.1 Insofar as Ground Nos. Insofar as Ground Nos. 4 and 5 are concerned, we find 4 and 5 are concerned, we find that the learned CIT(A), while adjudicating the identical issue in that the learned CIT(A), while adjudicating the identical issue in that the learned CIT(A), while adjudicating the identical issue in Assessment Year 2021 Assessment Year 2021-22, had dismissed the same as being 22, had dismissed the same as being premature in nature. The said findings of the learned CIT(A) for the premature in nature. The said findings of the learned CIT(A) for the premature in nature. The said findings of the learned CIT(A) for the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. earlier assessment year have alr earlier assessment year have already been considered by us eady been considered by us hereinabove, and the corresponding grounds were treated as hereinabove, and the corresponding grounds were treated as hereinabove, and the corresponding grounds were treated as infructuous.

26.2 Since the facts and circumstances obtaining in the year Since the facts and circumstances obtaining in the year Since the facts and circumstances obtaining in the year under consideration are under consideration are pari materia with those prevailing in with those prevailing in Assessment Year 2021 Assessment Year 2021-22, and no distinguishing feature has been stinguishing feature has been brought to our notice by either side, we see no reason to take a brought to our notice by either side, we see no reason to take a brought to our notice by either side, we see no reason to take a different view in the present year. Accordingly, Ground Nos. 4 and different view in the present year. Accordingly, Ground Nos. 4 and different view in the present year. Accordingly, Ground Nos. 4 and 5 raised by the assessee are also rendered infructuous and are, 5 raised by the assessee are also rendered infructuous and are, 5 raised by the assessee are also rendered infructuous and are, therefore, dismissed as such. therefore, dismissed as such.

26.3 However, insofar as the legal grounds challenging the However, insofar as the legal grounds challenging the However, insofar as the legal grounds challenging the validity of the reassessment proceedings are concerned, the same validity of the reassessment proceedings are concerned, the same validity of the reassessment proceedings are concerned, the same are kept open and are not being adjudicated upon at this stage. are kept open and are not being adjudicated upon at this stage. are kept open and are not being adjudicated upon at this stage.

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. Action of AO in holding that appellant has made non Action of AO in holding that appellant has made non-genuine purchases -genuine purchases in its books of accounts in its books of accounts 4. On the facts and circumstances of the Appellant On the facts and circumstances of the Appellant's case and in law, the ld. s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in holding that appellant has confirming the action of the ld. A.O in holding that appellant has confirming the action of the ld. A.O in holding that appellant has taken bogus purchase entries from M/s Sunrise Enterprises, M/s Hans Wires & taken bogus purchase entries from M/s Sunrise Enterprises, M/s Hans Wires & taken bogus purchase entries from M/s Sunrise Enterprises, M/s Hans Wires & Cables and M/s L N Enterprises for the reasons mentioned in the impugned order Cables and M/s L N Enterprises for the reasons mentioned in the impugned order Cables and M/s L N Enterprises for the reasons mentioned in the impugned order passed. Action of AO in holding c Action of AO in holding commission paid by the appellant as non ommission paid by the appellant as non-genuine 5. On the facts and circumstances of the Appellant On the facts and circumstances of the Appellant's case and in law, the ld. s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in relying on the statements of CIT(A) erred in confirming the action of the ld. A.O in relying on the statements of CIT(A) erred in confirming the action of the ld. A.O in relying on the statements of employees of the appellant without appreciatin employees of the appellant without appreciating the fact that such employees do g the fact that such employees do not know complete factual position of affairs of the appellant company. not know complete factual position of affairs of the appellant company. not know complete factual position of affairs of the appellant company. 6. On the facts and circumstances of the Appellant On the facts and circumstances of the Appellant's case and in law, the ld. s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in relying on contents of CIT(A) erred in confirming the action of the ld. A.O in relying on conte CIT(A) erred in confirming the action of the ld. A.O in relying on conte whatsapp chats, for reasons stated in the impugned order or otherwise. whatsapp chats, for reasons stated in the impugned order or otherwise. whatsapp chats, for reasons stated in the impugned order or otherwise. 7. On the facts and circumstances of the Appellant On the facts and circumstances of the Appellant's case and in law, the ld. s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in holding that commission CIT(A) erred in confirming the action of the ld. A.O in holding that commission CIT(A) erred in confirming the action of the ld. A.O in holding that commission expenses incurred by expenses incurred by the appellant are non-genuine, for reasons stated in the genuine, for reasons stated in the impugned order or otherwise. impugned order or otherwise. 8. On the facts and circumstances of the Appellant On the facts and circumstances of the Appellant's case and in law, the ld. s case and in law, the ld. CIT(A) erred in confirming the action of the ld. A.O in disallowing the commission CIT(A) erred in confirming the action of the ld. A.O in disallowing the commission CIT(A) erred in confirming the action of the ld. A.O in disallowing the commission expenses of Rs. 26,31,600/ of Rs. 26,31,600/- in the hands of the appellant, for reasons stated in in the hands of the appellant, for reasons stated in the impugned order or otherwise. the impugned order or otherwise.” 27.1 Insofar as Ground Nos. 5 to 8, relating to the disallowance of Insofar as Ground Nos. 5 to 8, relating to the disallowance of Insofar as Ground Nos. 5 to 8, relating to the disallowance of commission expenditure treated as non commission expenditure treated as non-genuine, are concerned, genuine, are concerned, the relevant facts, in brief, are that the Assessing Officer observed the relevant facts, in brief, are that the Assessing Officer observed the relevant facts, in brief, are that the Assessing Officer observed that during the course of search proceedings conducted in the case that during the course of search proceedings conducted in th that during the course of search proceedings conducted in th of the assessee, the statement of Shri Rajesh Shinde, stated to be of the assessee, the statement of Shri Rajesh Shinde, stated to be of the assessee, the statement of Shri Rajesh Shinde, stated to be the Senior Accountant of the assessee the Senior Accountant of the assessee-company, was recorded. company, was recorded. According to the Assessing Officer, Shri Rajesh Shinde, in his According to the Assessing Officer, Shri Rajesh Shinde, in his According to the Assessing Officer, Shri Rajesh Shinde, in his statement, admitted that the commission expenditure claimed by statement, admitted that the commission expenditure claime statement, admitted that the commission expenditure claime the assessee-company was not genuine. Reference was also made company was not genuine. Reference was also made company was not genuine. Reference was also made by the Assessing Officer to certain WhatsApp communications by the Assessing Officer to certain WhatsApp communications by the Assessing Officer to certain WhatsApp communications

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. allegedly recovered from Shri Rajesh Shinde, which, according to allegedly recovered from Shri Rajesh Shinde, which, according to allegedly recovered from Shri Rajesh Shinde, which, according to the Revenue, indicated that cash had been received back by the the Revenue, indicated that cash had been received back by the the Revenue, indicated that cash had been received back by the assessee against payments made through banking channels. ssessee against payments made through banking channels. ssessee against payments made through banking channels. 27.2 The Assessing Officer further observed that no formal The Assessing Officer further observed that no formal The Assessing Officer further observed that no formal agreements had been executed by the assessee with the parties to agreements had been executed by the assessee with the parties to agreements had been executed by the assessee with the parties to whom commission and brokerage payments had allegedly been whom commission and brokerage payments had allegedly been whom commission and brokerage payments had allegedly been made. It was also noted that the said commission payments had noted that the said commission payments had noted that the said commission payments had been effected with the approval of Shri Surinder Singh Atal, been effected with the approval of Shri Surinder Singh Atal, been effected with the approval of Shri Surinder Singh Atal, Director Director of of the the assessee assessee-company, company, though though no no satisfactory satisfactory explanation or basis for the quantification of such commission explanation or basis for the quantification of such commission explanation or basis for the quantification of such commission payments had been furnished. Th payments had been furnished. The Assessing Officer additionally e Assessing Officer additionally observed that no documentary material evidencing the nature of observed that no documentary material evidencing the nature of observed that no documentary material evidencing the nature of services rendered by the concerned parties was found either at the services rendered by the concerned parties was found either at the services rendered by the concerned parties was found either at the office premises or at the godown of the assessee during the course office premises or at the godown of the assessee during the course office premises or at the godown of the assessee during the course of search proceedings. On of search proceedings. On the basis of the aforesaid observations, the basis of the aforesaid observations, the Assessing Officer asked the assessee as why said commission the Assessing Officer asked the assessee as why said commission the Assessing Officer asked the assessee as why said commission expenditure aggregating to Rs.26,31,600/ expenditure aggregating to Rs.26,31,600/- claimed to have been claimed to have been paid to Shri Sujit Wagh and Shri Nitin Jadhav might be paid to Shri Sujit Wagh and Shri Nitin Jadhav might be paid to Shri Sujit Wagh and Shri Nitin Jadhav might be disallowed. 27.3 In response the In response thereto, the assessee contended that the reto, the assessee contended that the impugned commission payments had been incurred wholly and impugned commission payments had been incurred wholly and impugned commission payments had been incurred wholly and exclusively in the ordinary course of business for procuring sales exclusively in the ordinary course of business for procuring sales exclusively in the ordinary course of business for procuring sales orders in a competitive market environment. It was submitted that orders in a competitive market environment. It was submitted that orders in a competitive market environment. It was submitted that certain sales transactions certain sales transactions had been executed through the efforts had been executed through the efforts 75

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. and assistance of Shri Sujit Wagh and Shri Nitin Jadhav and that and assistance of Shri Sujit Wagh and Shri Nitin Jadhav and that and assistance of Shri Sujit Wagh and Shri Nitin Jadhav and that commission had accordingly been paid to them in consideration of commission had accordingly been paid to them in consideration of commission had accordingly been paid to them in consideration of such services rendered. such services rendered. 27.4 The The The assessee assessee assessee further further submitted further submitted submitted that that that all all all relevant relevant relevant documentary evidence in support of the impugned expenditure y evidence in support of the impugned expenditure y evidence in support of the impugned expenditure had been duly furnished before the Assessing Officer, including had been duly furnished before the Assessing Officer, including had been duly furnished before the Assessing Officer, including copies of invoices, working of commission payments, journal copies of invoices, working of commission payments, journal copies of invoices, working of commission payments, journal vouchers recorded in the books of account, bank statements vouchers recorded in the books of account, bank statements vouchers recorded in the books of account, bank statements evidencing payment thro evidencing payment through banking channels, and Form 16A ugh banking channels, and Form 16A reflecting deduction of tax at source on the commission payments. reflecting deduction of tax at source on the commission payments. reflecting deduction of tax at source on the commission payments. According to the assessee, the Assessing Officer had not pointed According to the assessee, the Assessing Officer had not pointed According to the assessee, the Assessing Officer had not pointed out any specific defect, discrepancy or infirmity in the aforesaid out any specific defect, discrepancy or infirmity in the aforesaid out any specific defect, discrepancy or infirmity in the aforesaid documentary evidence. documentary evidence. 27.5 With regard to the statement of Shri Rajesh Shinde, the With regard to the statement of Shri Rajesh Shinde, the With regard to the statement of Shri Rajesh Shinde, the assessee submitted that Shri Rajesh Shinde was merely an assessee submitted that Shri Rajesh Shinde was merely an assessee submitted that Shri Rajesh Shinde was merely an employee entrusted with the limited function of recording employee entrusted with the limited function of recording employee entrusted with the limited function of recording accounting entries in the books of account and maintaining Tally accounting entries in the books of account and maintaining Tally accounting entries in the books of account and maintaining Tally records, and that he was neither conversant with nor responsible t he was neither conversant with nor responsible t he was neither conversant with nor responsible for the actual business operations and commercial decisions for the actual business operations and commercial decisions for the actual business operations and commercial decisions undertaken by the higher management of the company. It was undertaken by the higher management of the company. It was undertaken by the higher management of the company. It was further contended that the statement of Shri Rajesh Shinde had further contended that the statement of Shri Rajesh Shinde had further contended that the statement of Shri Rajesh Shinde had never been confronted to never been confronted to the Directors or promoters of the the Directors or promoters of the assessee-company, who alone were fully aware of the complete company, who alone were fully aware of the complete company, who alone were fully aware of the complete factual matrix pertaining to the impugned transactions. factual matrix pertaining to the impugned transactions. factual matrix pertaining to the impugned transactions. 76

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 27.6 The assessee also contended that there existed no The assessee also contended that there existed no The assessee also contended that there existed no statutory requirement mandating execution of formal written statutory requirement mandating execution of forma statutory requirement mandating execution of forma agreements with every commission agent or intermediary engaged agreements with every commission agent or intermediary engaged agreements with every commission agent or intermediary engaged in business operations. Insofar as the WhatsApp communications in business operations. Insofar as the WhatsApp communications in business operations. Insofar as the WhatsApp communications relied upon by the Revenue were concerned, the assessee relied upon by the Revenue were concerned, the assessee relied upon by the Revenue were concerned, the assessee submitted that the said chats did not, in any manner, establish submitted that the said chats did not, in any manner, establish submitted that the said chats did not, in any manner, establish that the commission payments were bogus or that no services had that the commission payments were bogus or that no services had that the commission payments were bogus or that no services had in fact been rendered by the concerned parties. It was further in fact been rendered by the concerned parties. It was further in fact been rendered by the concerned parties. It was further urged that WhatsApp communications recovered from the mobile urged that WhatsApp communications recovered from the mobile urged that WhatsApp communications recovered from the mobile phone of an employee could not, by themselves, constitute phone of an employee could not, by themselves, constitute phone of an employee could not, by themselves, constitute conclusive evidence for making an addition in the hands of the evidence for making an addition in the hands of the evidence for making an addition in the hands of the assessee-company. In support of the aforesaid submissions, company. In support of the aforesaid submissions, company. In support of the aforesaid submissions, reliance was placed upon various judicial pronouncements. On the reliance was placed upon various judicial pronouncements. On the reliance was placed upon various judicial pronouncements. On the strength of these submissions, the assessee pleaded that the strength of these submissions, the assessee pleaded that the strength of these submissions, the assessee pleaded that the commission expendi commission expenditure claimed by it was genuine and allowable ture claimed by it was genuine and allowable under law. But the ld AO rejecting the contention s of the assessee , But the ld AO rejecting the contention s of the assessee , But the ld AO rejecting the contention s of the assessee , disallowed the commission expenses. disallowed the commission expenses.

27.7 On further appeal, the learned CIT(A), after considering On further appeal, the learned CIT(A), after considering On further appeal, the learned CIT(A), after considering the submissions advanced on behalf of the the submissions advanced on behalf of the assessee and examining the material available on record, proceeded to uphold examining the material available on record, proceeded to uphold examining the material available on record, proceeded to uphold the disallowance made by the Assessing Officer. The learned CIT(A) the disallowance made by the Assessing Officer. The learned CIT(A) the disallowance made by the Assessing Officer. The learned CIT(A) observed that the assessee had failed to substantiate, by cogent observed that the assessee had failed to substantiate, by cogent observed that the assessee had failed to substantiate, by cogent and credible evidence, that any actual service and credible evidence, that any actual services had in fact been s had in fact been 77

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. rendered rendered rendered by by by the the the recipients recipients recipients against against against whom whom whom the the the impugned impugned impugned commission payments had been claimed. commission payments had been claimed.

27.8 The learned CIT(A) further observed that, upon perusal of The learned CIT(A) further observed that, upon perusal of The learned CIT(A) further observed that, upon perusal of the statement of Shri Rajesh Shinde, it was evident that he had the statement of Shri Rajesh Shinde, it was evident that he had the statement of Shri Rajesh Shinde, it was evident that he had categorically stated that the commission payments claimed by the d that the commission payments claimed by the d that the commission payments claimed by the assessee were non- -genuine in nature and that the assessee had genuine in nature and that the assessee had allegedly received cash back against the payments made through allegedly received cash back against the payments made through allegedly received cash back against the payments made through banking channels. According to the learned CIT(A), the said banking channels. According to the learned CIT(A), the said banking channels. According to the learned CIT(A), the said statement statement also also stood stood corroborated corr oborated by by the the WhatsApp WhatsApp communications forming part of the material referred to in the communications forming part of the material referred to in the communications forming part of the material referred to in the statement of Shri Rajesh Shinde. It was observed that the contents statement of Shri Rajesh Shinde. It was observed that the contents statement of Shri Rajesh Shinde. It was observed that the contents of the said chats allegedly indicated that cash had been received of the said chats allegedly indicated that cash had been received of the said chats allegedly indicated that cash had been received back by the assessee in lieu of the back by the assessee in lieu of the commission payments routed commission payments routed through banking channels. through banking channels.

The learned CIT(A) did not find merit in the contention of 27.9 The learned CIT(A) did not find merit in the contention of The learned CIT(A) did not find merit in the contention of the assessee that the statement of Shri Rajesh Shinde ought not to the assessee that the statement of Shri Rajesh Shinde ought not to the assessee that the statement of Shri Rajesh Shinde ought not to be relied upon on the ground that he was merely an employee not be relied upon on the ground that he was merely an employee not be relied upon on the ground that he was merely an employee not conversant with the complete business affairs of the company. In ant with the complete business affairs of the company. In ant with the complete business affairs of the company. In this regard, the learned CIT(A) observed that Shri Rajesh Shinde this regard, the learned CIT(A) observed that Shri Rajesh Shinde this regard, the learned CIT(A) observed that Shri Rajesh Shinde was serving as Senior Accountant of the assessee-company and, was serving as Senior Accountant of the assessee was serving as Senior Accountant of the assessee therefore, it could reasonably be presumed that he possessed therefore, it could reasonably be presumed that he possessed therefore, it could reasonably be presumed that he possessed nowledge regarding the business and financial affairs of adequate knowledge regarding the business and financial affairs of nowledge regarding the business and financial affairs of the assessee. Consequently, the explanation furnished by the the assessee. Consequently, the explanation furnished by the the assessee. Consequently, the explanation furnished by the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. assessee for disregarding the statement of Shri Rajesh Shinde was assessee for disregarding the statement of Shri Rajesh Shinde was assessee for disregarding the statement of Shri Rajesh Shinde was rejected.

27.10 The learned CIT(A) further observed that the assessee The learned CIT(A) further observed that the assessee The learned CIT(A) further observed that the assessee had failed to furnish any satisfactory explanation or basis for the d failed to furnish any satisfactory explanation or basis for the d failed to furnish any satisfactory explanation or basis for the quantification and computation of the commission payments quantification and computation of the commission payments quantification and computation of the commission payments allegedly made to the concerned parties. In view of the aforesaid allegedly made to the concerned parties. In view of the aforesaid allegedly made to the concerned parties. In view of the aforesaid findings, the learned CIT(A) affirmed the disallowance made by the findings, the learned CIT(A) affirmed the disallowance made by the findings, the learned CIT(A) affirmed the disallowance made by the Assessing Officer in respect of the impugned commission Assessing Officer in respect of the impugned commission Assessing Officer in respect of the impugned commission expenditure.

27.11 Before us, the learned counsel appearing on behalf of the Before us, the learned counsel appearing on behalf of the Before us, the learned counsel appearing on behalf of the assessee drew our attention to the paper book placed on record assessee drew our attention to the paper book placed on record assessee drew our attention to the paper book placed on record and submitted that the assessee had furnished complete and submitted that the assessee had furnished complete and submitted that the assessee had furnished complete documentary evidence in support of the commission expenditure umentary evidence in support of the commission expenditure umentary evidence in support of the commission expenditure claimed to have been paid to the concerned parties. It was claimed to have been paid to the concerned parties. It was claimed to have been paid to the concerned parties. It was contended that the computation and payment of commission stood contended that the computation and payment of commission stood contended that the computation and payment of commission stood duly substantiated from the material filed before the authorities duly substantiated from the material filed before the authorities duly substantiated from the material filed before the authorities below.

27.12 The learned counsel further submitted that, although no The learned counsel further submitted that, although no The learned counsel further submitted that, although no formal written agreements had been executed with the commission formal written agreements had been executed with the commission formal written agreements had been executed with the commission agents, the said agents had been rendering services to the agents, the said agents had been rendering services to the agents, the said agents had been rendering services to the assessee consistently over the years in the ordinary course of assessee consistently over the years in the ordinary course of assessee consistently over the years in the ordinary course of business. It was explained that, as stated during the course of It was explained that, as stated during the course of It was explained that, as stated during the course of assessment proceedings, the commission payments were made assessment proceedings, the commission payments were made assessment proceedings, the commission payments were made 79

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. only after due verification and approval by the Director of the only after due verification and approval by the Director of the only after due verification and approval by the Director of the company. The learned counsel also submitted that the assessee company. The learned counsel also submitted that the assessee company. The learned counsel also submitted that the assessee had furnished deta had furnished details of the parties to whom sales had been ils of the parties to whom sales had been effected through the efforts and intervention of the said effected through the efforts and intervention of the said effected through the efforts and intervention of the said commission agents.

27.13 It was further argued that the Assessing Officer had It was further argued that the Assessing Officer had It was further argued that the Assessing Officer had made no meaningful enquiry or independent verification with made no meaningful enquiry or independent verification with made no meaningful enquiry or independent verification with regard to the services rendered by the commission agents or the ices rendered by the commission agents or the ices rendered by the commission agents or the genuineness of the transactions in question, and that the genuineness of the transactions in question, and that the genuineness of the transactions in question, and that the disallowance had been made mechanically without undertaking disallowance had been made mechanically without undertaking disallowance had been made mechanically without undertaking proper investigation of the relevant parties. The learned counsel proper investigation of the relevant parties. The learned counsel proper investigation of the relevant parties. The learned counsel additionally contended tha additionally contended that the statement of the accountant relied t the statement of the accountant relied upon by the Revenue was not supported by any independent or upon by the Revenue was not supported by any independent or upon by the Revenue was not supported by any independent or reliable corroborative material. According to the learned counsel, reliable corroborative material. According to the learned counsel, reliable corroborative material. According to the learned counsel, the accountant was merely entrusted with routine accounting the accountant was merely entrusted with routine accounting the accountant was merely entrusted with routine accounting functions and was not fully functions and was not fully conversant with the business conversant with the business processes of the assessee processes of the assessee-company, particularly the commercial company, particularly the commercial aspects relating to procurement of orders and achievement of sales aspects relating to procurement of orders and achievement of sales aspects relating to procurement of orders and achievement of sales targets.

We have heard the rival submissions advanced by the 27.14 We have heard the rival submissions advanced by the We have heard the rival submissions advanced by the parties and carefully perused parties and carefully perused the material available on record. the material available on record. Upon a thoughtful consideration of the facts and circumstances of Upon a thoughtful consideration of the facts and circumstances of Upon a thoughtful consideration of the facts and circumstances of the case, we find that the assessee had furnished before the the case, we find that the assessee had furnished before the the case, we find that the assessee had furnished before the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. authorities below various documentary evidences in support of the authorities below various documentary evidences in support of the authorities below various documentary evidences in support of the ed, including details of commission commission expenditure expenditure claimed, claim including details of corresponding sales transactions effected through the concerned corresponding sales transactions effected through the concerned corresponding sales transactions effected through the concerned commission agents, copies of invoices, ledger accounts, bank commission agents, copies of invoices, ledger accounts, bank commission agents, copies of invoices, ledger accounts, bank statements evidencing payment through banking channels, as well statements evidencing payment through banking channels, as well statements evidencing payment through banking channels, as well as tax deduction at source details. Signif as tax deduction at source details. Significantly, neither the icantly, neither the Assessing Officer nor the learned CIT(A) has pointed out any Assessing Officer nor the learned CIT(A) has pointed out any Assessing Officer nor the learned CIT(A) has pointed out any specific specific specific discrepancy, discrepancy, discrepancy, falsity falsity falsity or or or infirmity infirmity infirmity in in in the the the aforesaid aforesaid aforesaid documentary evidence produced by the assessee. documentary evidence produced by the assessee.

27.15 The principal basis on which the impugned disallowance The principal basis on which the impugned disallowance The principal basis on which the impugned disallowance has been sustained is the statement of Shri Rajesh Shinde and the een sustained is the statement of Shri Rajesh Shinde and the een sustained is the statement of Shri Rajesh Shinde and the WhatsApp communications allegedly recovered from him. However, WhatsApp communications allegedly recovered from him. However, WhatsApp communications allegedly recovered from him. However, except for such statement and electronic chats, no independent or except for such statement and electronic chats, no independent or except for such statement and electronic chats, no independent or cogent material has been brought on record by the Revenue to cogent material has been brought on record by the Revenue to cogent material has been brought on record by the Revenue to conclusively establish that the commission payments were sham usively establish that the commission payments were sham usively establish that the commission payments were sham transactions or that no services had in fact been rendered by the transactions or that no services had in fact been rendered by the transactions or that no services had in fact been rendered by the concerned parties. It is trite law that additions cannot be concerned parties. It is trite law that additions cannot be concerned parties. It is trite law that additions cannot be sustained merely on the basis of suspicion, surmise or conjecture sustained merely on the basis of suspicion, surmise or conjecture sustained merely on the basis of suspicion, surmise or conjecture in the absence of substantive corroborative evidence. absence of substantive corroborative evidence. absence of substantive corroborative evidence.

We further find merit in the contention of the assessee 27.16 We further find merit in the contention of the assessee We further find merit in the contention of the assessee that mere absence of a formal written agreement with commission that mere absence of a formal written agreement with commission that mere absence of a formal written agreement with commission agents cannot, by itself, be determinative of the non-genuineness agents cannot, by itself, be determinative of the non agents cannot, by itself, be determinative of the non of of the the expenditur expenditure, e, particularly particularly when when the the assessee assessee has has

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. demonstrated that the payments were made through regular demonstrated that the payments were made through regular demonstrated that the payments were made through regular banking channels, subjected to deduction of tax at source, and banking channels, subjected to deduction of tax at source, and banking channels, subjected to deduction of tax at source, and duly reflected in the books of account. In commercial dealings, duly reflected in the books of account. In commercial dealings, duly reflected in the books of account. In commercial dealings, especially especially in in competitive competitive trade trade pr practices, actices, commission commission arrangements are not invariably reduced into formal written arrangements are not invariably reduced into formal written arrangements are not invariably reduced into formal written contracts, and the genuineness of such expenditure is required to contracts, and the genuineness of such expenditure is required to contracts, and the genuineness of such expenditure is required to be examined on the touchstone of surrounding circumstances and be examined on the touchstone of surrounding circumstances and be examined on the touchstone of surrounding circumstances and supporting evidence. supporting evidence.

27.17 At the same time, in At the same time, insofar as the actual rendering of sofar as the actual rendering of services by the concerned commission agents is concerned, we find services by the concerned commission agents is concerned, we find services by the concerned commission agents is concerned, we find that no meaningful enquiry or verification appears to have been that no meaningful enquiry or verification appears to have been that no meaningful enquiry or verification appears to have been undertaken by the Assessing Officer. The Revenue authorities have undertaken by the Assessing Officer. The Revenue authorities have undertaken by the Assessing Officer. The Revenue authorities have neither examined the recipi neither examined the recipients of commission nor conducted any ents of commission nor conducted any independent verification with the parties through whom the alleged independent verification with the parties through whom the alleged independent verification with the parties through whom the alleged sales were effected. The disallowance has thus been made sales were effected. The disallowance has thus been made sales were effected. The disallowance has thus been made predominantly on presumptions arising from the statement of the predominantly on presumptions arising from the statement of the predominantly on presumptions arising from the statement of the accountant and the alleged What accountant and the alleged WhatsApp chats, without carrying out sApp chats, without carrying out a a a comprehensive comprehensive comprehensive factual factual factual verification verification verification of of of the the the underlying underlying underlying transactions.

In our considered view, therefore, the findings recorded 27.18 In our considered view, therefore, the findings recorded In our considered view, therefore, the findings recorded by the learned CIT(A), affirming the disallowance in toto, cannot be by the learned CIT(A), affirming the disallowance in toto, cannot be by the learned CIT(A), affirming the disallowance in toto, cannot be esent form. Nevertheless, since the question sustained in their pr sustained in their present form. Nevertheless, since the question regarding the actual nature and extent of services rendered by the regarding the actual nature and extent of services rendered by the regarding the actual nature and extent of services rendered by the

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. concerned commission agents requires proper factual verification, concerned commission agents requires proper factual verification, concerned commission agents requires proper factual verification, we deem it appropriate, in the interest of justice, to restore the we deem it appropriate, in the interest of justice, to restore the we deem it appropriate, in the interest of justice, to restore the matter to the file of the Assessing Officer for fresh adjudication. he file of the Assessing Officer for fresh adjudication. he file of the Assessing Officer for fresh adjudication. The Assessing Officer shall carry out necessary enquiry and The Assessing Officer shall carry out necessary enquiry and The Assessing Officer shall carry out necessary enquiry and verification with the concerned parties regarding the services verification with the concerned parties regarding the services verification with the concerned parties regarding the services allegedly rendered by them and thereafter decide the issue afresh allegedly rendered by them and thereafter decide the issue afresh allegedly rendered by them and thereafter decide the issue afresh in accordance with law, after affording adequate and effective nce with law, after affording adequate and effective nce with law, after affording adequate and effective opportunity of hearing to the assessee. opportunity of hearing to the assessee.

27.19 Accordingly, the order of the learned CIT(A) on this issue Accordingly, the order of the learned CIT(A) on this issue Accordingly, the order of the learned CIT(A) on this issue is set aside and the matter is restored to the file of the Assessing is set aside and the matter is restored to the file of the Assessing is set aside and the matter is restored to the file of the Assessing Officer for de novo adjudicat Officer for de novo adjudication in the light of the observations ion in the light of the observations made hereinabove. The grounds raised by the assessee are allowed made hereinabove. The grounds raised by the assessee are allowed made hereinabove. The grounds raised by the assessee are allowed for statistical purposes. for statistical purposes.

S.No. ITA No. Assessee AY Result 1. 8832/M/2025 8832/M/2025 Banpreet Singh 2018-19 Allowed Surindersingh Atal 2. 8833/M/2025 8833/M/2025 Banpreet Singh 2019-20 -do- Surindersingh Atal

ITA No. 8832/Mum/2025 &Ors. ITA No. 8832/Mum/2025 &Ors. Banpreetsingh Suriendersingh Atal Banpreetsingh & Tegh Cables Pvt. Ltd. 3. 8834/M/2025 8834/M/2025 Banpreet Singh 2020-21 Allowed Surindersingh Atal 4. 8944/M/2025 8944/M/2025 Banpreet Singh 2021-22 -do- Surindersingh Atal 5. 8945/M/2025 8945/M/2025 Banpreet Singh 2022-23 -do- Surindersingh Atal 6. 9209/M/2025 9209/M/2025 Tegh Cables Pvt. 2020-21 Allowed for Ltd. statistical purposes 7. 9210/M/2025 9210/M/2025 Tegh Cables Pvt. 2021-22 Dismissed Ltd. 8. 9211/M/2025 9211/M/2025 Tegh Cables Pvt. 2022-23 Allowed for Ltd. statistical purposes Order pronounced in the open Court on ounced in the open Court on 11/05 05/2026.

- Sd/- S Sd/-/- (SANDEEP SINGH KARHAIL SANDEEP SINGH KARHAIL) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT Mumbai; Dated: 11/05/2026 Ranganath Vittal, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy//

BY ORDER, BY ORDER,