ISMAIL RAHEMATULLA SUNASARA,MUMBAI vs. DCIT CENTRAL CIRCLE 4(2), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No.8418/Mum/2025 (Assessment year: 2017-18) ITA No.8419/Mum/2025 (Assessment year: 2018-19) ITA No.8420/Mum/2025 (Assessment year: 2019-20)

Ismail Rahematulla Sunasara vs DCIT C.C. 4(2), Mumbai R No. 10,11, Qayyum Manzil Kautilya Bhawan, C-41-43, Avenue Mumbai Central H.O., 3, near Videsh Bhavan, G Block Mumbai-400008 BKC, Gilban Area, Bandra East, PAN: EHMPS5952Q Mumbai-400051 APPELLANT RESPONDENT Assessee by : Shri Bharat Kumar, CA Revenue by : Shri Virabhadra Mahajan, (SR DR) Date of hearing : 14/05/2026 Date of pronouncement : 20/05/2026 O R D E R Per Bench: A bunch of three appeals pertains to the same assessee filed against the combined order of the Ld. Commissioner of Income Tax-(Appeals)-52, Mumbai [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2017-18 to 2019-2020, date of order 03.09.2025. The impugned order emanated from the order of the Ld. Assistant Commissioner Income Tax Officer-4(2), Mumbai (for brevity the ‘Ld. AO’)

2 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara order passed under section 153C of the Act, all the orders passed on dated 08.03.2024. 2. Since all the appeals pertains to the same assessee, involving same issues arising out of similar factual matrix, these appeals were heard together, as a matter convenience and are being decided by way of this consolidated order. With the consent of parties, ITA No.8418/Mum/2025 A.Y. 2017-18 is treated as lead case and the decision rendered therein shall applied mutatis mutandis to other appeals. 3. The brief facts of the case are that the assessee filed the original return by declaring total income Rs.2,68,950/-. A search and seizure action u/sec. 132 of the Act was conducted on 17.03.2021 in Rubberwala Group and other. During the search action, it is gathered that the assessee has purchased with joint ownership of Mr. Osamabhai Markaniya a shop no 141 at 3rd Floor, located in Platinum Mall building, Girgaon Mumbai with agreement value of Rs.19,19,985/-. after payment of the GST 2,30,391/- total amount paid to developer amount to Rs. 21,50,316/- The investigating authority found that the amount of Rs.14,98,575/- was paid in cash on acquisition of property in three installments for AY 2017-18 to AY 2019-20 amount to Rs.2,00,000/-, Rs.8,25,550/- & Rs.4,73,025/- respectively. Finally the assessment was completed u/sec. 153C of the Act. In the assessment proceeding the Ld. AO found that the premises was developed by M/s Rubberwala Housing and Infrastructure Ltd. (RHIL), its promoter and director and Shri Tabrez Shaikh and key employee of the RHIL Shri Imran Ansari who was handling sale and registration of shop in Platinum Mall Project of RHIL were covered. On statement of oath, Shri Imran Ansari had admitted that total price of the shops contained cash component and banking channel component and these components are

3 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara decided by Shri Tabrez Shaikh. He further admitted that the said data maintained by him in excel sheet are related to sale of shops in Platinum Mall. The Ld. AO found that the assessee for purchase of shops for Assessment Years 2019-20 & 2020-21 had paid the cash total amount to Rs.59,62,995/- out of that in impugned A.Y. 2019-20 assessee paid Rs.40,73,975/-. Accordingly, the amount of Rs.40,73,975/- was added back u/sec. 69 of the Act. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the 50% addition as the assessee is the co owner of the alleged property & the appeal for the assessee is partly allowed. Being aggrieved the assessee filed an appeal before us. 4. The Ld. AR contended that the assessee has categorically denied having made any cash payment to RHIL in connection with the purchase of the said commercial property. It was further submitted that no opportunity of cross- verification was granted to the assessee in respect of the additions made by the Ld. AO. The Ld. AR respectfully placed reliance on the order of the Coordinate Bench of the ITAT, Mumbai, in the case of Ankit Jems (P.) Ltd. vs. ITO reported in (2025) 178 taxmann.com 454 (Mum-Trib), wherein it was held that an addition under section 69, made solely on the basis of information received from investigation proceedings in another group case, could not be sustained in the absence of any cogent evidence against the assessee, particularly when the assessee had denied the transactions and the purchase records did not reflect any such entries.

4 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara consistently held that additions relating to alleged cash payments for the purchase of commercial properties, based solely on third-party statements, cannot be sustained. In support, reliance was placed on the decisions in Bhavana Vikram Jain vs. ACIT (ITA Nos. 6363 & 6364/Mum/2025, order dated 10.12.2025), AkhrajPukhraj Chopra vs. DCIT (ITA Nos. 5553 & 5555/Mum/2025, order dated 12.11.2025), and Kulsum Aaqib Memon vs. DCIT (ITA No. 6540/Mum/2025, order pronounced on 06.01.2026). In all these cases, the Coordinate Bench of the ITAT has taken a consistent view that, in the absence of any cogent incriminating material, additions made merely on the basis of excel sheets or third-party statements are unsustainable.

5 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara 13. Therefore, in our view, the information if any found in the pendrive etc., cannot be considered as 'credible evidence', unless they have been corroborated with any other evidence. Since the assessee was not provided with the adverse material, if any, based on which notice u/s 153 of the Act, was issued, in our view, it hampers the primary and fundamental requirement of natural justice. 14. As far as the information claimed in pendrive is concerned, the same was not found from the possession of the assessee but was found as per order of assessment, during the search and seizure conducted in the case of third party therefore, in the absence of corroborative evidence to establish that the contents of pendrive are correct and authenticated to the extent assessee paid 'on-money' in cash, no addition can be made and even otherwise during the entire reassessment proceedings the veracity and reliability of the data recorded in the pendrive was not checked or tested. Therefore, in such a scenario no addition is warranted in the case of assessee. Reliance in this regard has been placed on the decision in case of HeenaDashrathJhanglani ITA no.1665/Mum./2018 (Assessment Year: 2007-08) wherein the Coordinate Bench of ITAT had decided the issue in favour of assessee and the relevant portion is being reproduced herein below:”

6 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara 8. The Ld. DR argued and contended that the RHIL group had accepted the cash transactions with the parties. So, the cash transactions are duly accepted on basis of the recorded statement. Though the RHIL declared the cash component during the search action and declared net profit @8% and paid the tax. So, the Ld. DR supported and relied upon the orders of the revenue authorities. He respectfully relied on the order of the Hon’ble Gujrat High Court in case of Kamleshbhai Dharamshibhai Patel vs. CIT reported in [2013] 31 taxmann.com 50 (Guj). The Ld. DR invited our attention in relevant paragraph of the impugned appellate order which is reproduced as below:- “8.8 Further, at the same time, it is seen that full facts were not placed before the Hon'ble ITAT and it has also not been examined that Excel sheet clearly stated the agreement value as well cash component both. Imran Ashfaque Ansari was employee of Rubberwala group and his statement was also recorded on oath at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, Imran Ansari was questioned about his roles and responsibilities in M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, he stated that he had been working with Rubberwala group of entities since 2010 and inter-alia handling sale and registration of the shops in "Platinum Mall" Project of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL, that he was handling said excel sheet. It was not case where unrelated person statements were recorded. This statement was further reinforced by Shri Tabrez Ahmed Shaikh, Director and Promoter of RHIL, in his post-search deposition dated 19.08.2021. He verified the contents of the Excel file and affirmed the truth of Shri Imran Ansari's statement. Moreover, the Rubberwala Group itself admitted to having received such on-money (cash component), offered the same as additional income, and paid taxes thereon.”

7 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara examination cannot be taken as plea to not make the addition.Therefore, decision relied upon by the assessee, in my considered opinion, is not of any help to him. 9.11 Thus, Hon’ble ITAT decision relied upon by the appellant does not aid his case. Unlike the present matter, where there is clear linkage between the documents found, the assessee’s transaction, and the admission of parties involved, the cases cited by the appellant pertain to instances where uncorroborated third-party statements were the sole basis of addition. Here, the evidence is not only specific but also substantiated.” 10. Per Contra, the Ld.AR contended that the identical fact was duly considered by the Hon’ble Gujrat High Court in the case of PCIT vs Kaushik Nanubhai Majithiain R/Tax Appeal No.20 of 2024 date 06.03.2024. The relevant paragraphs 2 and 3 are reproduced as below: “2. The excel sheet, according to the learned Counsel for the Revenue, contained the details of payment made by the assessee to the developer, with respect to which tax had been paid by the developer before the Settlement Commissioner. The findings returned by the CITA and ITAT on the issue is sought to be assailed on the ground that the payment of tax by the developer, in whose premises search was conducted, before the Settlement Commissioner, with respect to the amount entered in the excel sheet found from the possession of the assistant working with the developer, is sufficient proof of the transaction between the assessee and the developer. 3 We find inherent fallacy in this submission, inasmuch as, there is no basis for conducting proceedings against the assessee merely for the fact that the developer had paid tax on the amount shown in the excel-sheet. There is no adjudication with regard to the payment, which was shown in the excel-sheet to the effect that the same was actually paid by the assessee to the developer. Even otherwise, the concurrent findings returned by the CITA and ITAT are that the document found from the premises of the third party namely excel-sheet, which is the basis of the proceedings was without any signature and there is no corroborative material to substantiate the said document. The nature of the document has not been explained by the Assessing Officer while proceeding against the assessee. The statements of the persons recorded during search with reference to the alleged, seized material, was not provided to the assessee and hence, the entire proceedings under Section 153C of the IT Act of 1961 stood vitiated.”

8 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara 11. We have heard the rival submissions and perused the material available on record. The undisputed factual position is that the impugned addition under section 69 has been made solely on the basis of third-party statements recorded during the course of search in the case of the Rubberwala Group and certain excel sheet data allegedly retrieved from a pen drive belonging to an employee of the said group. It is an admitted position that no incriminating material whatsoever has been found from the possession or control of the assessee. Further, no seized document directly evidencing any cash payment by the assessee has been brought on record by the Ld. AO. We find considerable merit in the contention of the Ld. AR that the entire addition is founded on uncorroborated third-party material, which was neither confronted to the assessee nor subjected to cross- examination. Such an approach is in clear violation of the principles of natural justice. It is a settled proposition of law that any adverse material used against the assessee must be put to him for rebuttal, failing which such material loses its evidentiary value. We further note that on identical facts arising out of the very same search in the Rubberwala Group, the Coordinate Bench of the ITAT, Mumbai has consistently held that additions made merely on the basis of excel sheets or third-party statements, without any independent corroborative evidence linking the assessee, are unsustainable in law. Respectfully following the judicial discipline and the binding precedents in the cases of Bhavana Vikram Jain (supra), Akhraj Pukhraj Chopra (supra), Kulsum Aaqib Memon (supra), Dimple Shailesh Jain (supra) and Pravin Khetaram Purohit (supra), we hold that no addition can be sustained in the hands of the present assessee.

9 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara 12. As regards the contention of the Ld. DR that the developer group has admitted receipt of on-money and paid tax thereon, we find that such admission by a third party cannot ipso facto lead to an inference that the assessee has made corresponding cash payments, in the absence of any independent evidence establishing such nexus. This precise issue has been examined by the Hon’ble Gujarat High Court in Kaushik Nanubhai Majithia (supra), wherein it was categorically held that payment of tax by the developer on alleged on-money does not, by itself, constitute evidence against the purchaser unless there is material to establish actual payment by such purchaser. The reliance placed by the Ld. DR on the decision of the Hon’ble Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) is clearly misplaced and distinguishable on facts. In that case, the addition was supported by cogent and direct evidence demonstrating undisclosed investment by the assessee. However, in the present case, there is a complete absence of any such corroborative material. The addition is based merely on generalized statements and unverifiable excel data recovered from a third party, which has neither been authenticated nor linked specifically to the assessee.

10 ITA No.8418 to 8420/Mum/2025 Ismail Rahematulia Sunasara In view of the foregoing discussion, we hold that the addition made by the Ld. AO and sustained by the Ld. CIT(A) is unsustainable both on facts and in law. Accordingly, we set aside the impugned appellate order and direct the Ld. AO to delete the addition made under section 69 of the Act. 14. In the result, the appeals of the assessee bearing ITA Nos. 8418 to 8420/Mum/2025 are allowed.

Order pronounced in the open court on 20th day of May 2026. Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 20/05/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI