MANOJ DAYACHAND JAIN,MUMBAI vs. DCIT-CENTRAL CIRCLE-4(2), MUMBAI, MUMBAI

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ITA 8700/MUM/2025Status: DisposedITAT Mumbai15 May 2026AY 2019-2013 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that additions made solely on the basis of uncorroborated third-party statements and excel sheet data, without any independent evidence linking the assessee, are unsustainable. The principles of natural justice were violated as the material was not confronted to the assessee.

What were the facts?

During a search on the Rubberwala Group, it was found that the assessee purchased a shop with an agreement value. The AO added a significant cash component to the assessee's income based on third-party statements and excel sheet data from the developer's employee.

What were the issues?

Whether additions made based on third-party information and electronic data from a search on another group, without independent corroboration and without confronting the assessee, are valid?

Which sections of the Income-tax Act were involved?

Section 69,Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI ANIKESH BANERJEE & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Ms. Khushali Desai
For Respondent: Shri R. A. Dhyani (CIT DR)
Hearing: 12/05/2026Pronounced: 15/05/2026

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.8700/Mum/2025 (Assessment year: 2019-20) ITA No.8701/Mum/2025 (Assessment year: 2020-21)

Manoj Dayachand Jain vs DCIT C.C.4(2), Mumbai 2003 Darshan Hights, Sitaram Kautilya Bhavan, Mumbai-400051 Poddar Marg, Zawba wadi, Thakurdwar, Kalbadevi H.O.,Mumbai-400002 PAN:ADBPJ0927H APPELLANT RESPONDENT Assessee by : Ms. Khushali Desai Revenue by : Shri R. A. Dhyani (CIT DR) Date of hearing : 12/05/2026 Date of pronouncement : 15/05/2026 O R D E R Per:Anikesh Banerjee (JM): Both the appeals pertain to the same assessee filed against the 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 2019-20 and A.Y. 2020-21, date of order 17.10.2025. The impugned orders emanated from the order of the Ld. Assistant

2 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain Commissioner of Income Tax C.C. 4(2), Mumbai (for brevity the ‘Ld. AO’) order passed under section 153C of the Act date of both the orders 30.03.2024.

2.

Since all the appeals pertain to the same assesse, involving similar issues arising out of a similar factual matrix, these appeals were heard together as a matter of convenience and are being decided by way of this consolidated order. With the consent of the parties, ITA No 8700/Mum/2025 for AY 2019-20 is treated as lead case, and the decision rendered therein shall apply 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.18,89,020/-. 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 a shop no 108 at 1st Floor, located in Platinum Mall building, Girgaon Mumbai with agreement value of Rs.58,32,750/-. The investigating authority found that the amount of Rs.59,62,995/- was paid in cash on acquisition of property in two installments for AY 2019-20 & AY 2020-21 amount to Rs.40,73,975/- and Rs.17,58,775/- 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

3 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain components are 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) upheld the observations of the Ld. AO and rejected the appeal for the assessee. 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.

5.

The Ld. AR further contended that an identical factual issue had already been adjudicated by the Coordinate Bench of the ITAT, Mumbai, in cases arising out of the search conducted in the Rubberwala Group. The Coordinate Bench has

4 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain 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), Akhraj Pukhraj 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.

6.

The Ld. AR respectfully relied on the order of the Coordinate Bench of ITAT Mumbai in case of Pravin Khetaram Purohit vs. DCIT in ITA Nos. 4742 to 4744/Mum/2025 date of pronouncement 15/10/2025. The identical fact is adjudicated by the Bench & relevant observations are reproduced as below:- “11. From the above we find that the Coordinate bench has consider the same facts and rightly decided the issue in favour of the assessee and since the facts of the present case are also identical with the facts of Rajesh Jain's (supra) case, therefore the said decision will be application on the facts of the present case as well. Moreover, the assessee categorically denied having paid any amount in cash over and above the agreement value. The AO has neither confronted assessee with any of the material found during the search on Rubberwala group and even no evidence or seized document has been referred to where any name of the assessee has been explicitly mentioned on account of paying any 'on-money. 12. Although it has been claimed in the order of assessment that the assessee had paid on money, but again no such statement has been confronted, neither the seized material/documents/pendrive was confronted to the assessee nor the copy of statement of Key person was confronted.

5 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain 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 Heena Dashrath Jhanglani 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:”

7.

The Ld.AR advanced his argument and relied on the order of the Coordinate Bench of ITAT Mumbai ‘D’ Bench in the case of Dimple Shailesh Jain vs DCIT, in ITA No.6732 and 6733/Mum/2025 date of order 01.09.2025. The relevant paragraph no.12 of the said order is reproduced as below: “12. Having heard the parties and perusing the material available on record and giving thoughtful consideration to the peculiar facts and circumstances of the case and rival claims of the parties, it is observed that from the assessment order that it clearly appears that the Assessing Officer made the addition mainly on the basis of the excel sheet retrieved from pen drive recovered from the premises of Mr. Ansari, the statement of Mr. Ansari, wherein he admitted receipt of the cash component by the company, and the statement of the Director of the RHIL Group, wherein he admitted statement made and the Excel sheet prepared by Mr. Ansari, as true and offered income 8% of the cash amounts/component, as unaccounted receipts.”

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

6 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain 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.”

9.

The Ld. DR further argued and invited our attention in impugned appellate order paragraph 9.1 & 9.2. The observation of the ld. CIT(A) is reproduced as below: “9.1 Further even if the appellant has contended that he has not paid cash or not purchased any shop during the year under consideration. It never gives the appellant to take view that only the date of registration/agreement is key year for assessment not the other year payment. This does not mean that the cash payments were made on the date of registration of property/or on the date of first cheque payments, when the other incriminating documents and evidence gathered during the course of search clearly indicates that cash component was paid by many purchasers much earlier and even after the date of registration of a property and this is common practice of the Builder. Further, as per the accounting principle the cash component

7 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain should be taxable in the year when the unrecorded/unaccounted transaction takes place. The appellant's argument regarding the registration date is thus irrelevant to the applicability of Section 69 of the Act for the cash payment made in the relevant financial year. The appellant's argument that the payments were made much later and hence could not relate to earlier years also fails because the seized record itself specifies year-wise receipts of on-money, and the builder's statement confirms that the record was maintained on real-time basis for each financial year. Thus, the year-wise addition made by the AO is consistent with the seized material. 9.2 The appellant has also contended that he had purchase the shop over & above of the agreement value. The claim that the stamp duty value being the agreement value does not negate the possibility of a cash payment. Further the books of accounts and/or registered agreement is only depicting the true money of the appellant which have no dispute if the source of the same is undisputed and legitimate taxes have been paid thereon. Therefore, the contention of appellant that books of account is duly reflected with the amount paid to the builder & shop was purchased over and above of the agreement value is not accepted and is hereby rejected.” 10. The Ld. DR advanced his argument by submitting the statement of Mr. Imran Ashfaque Ansari dated 17/03/2021. For strengthening his argument he filed note on argument. The relevant part of the submission is reproduced as below:- “Brief facts of the case: 1. Assessee filed original return of income for A.Y. 2020-21 on 10.01.2021 declaring total income of Rs.26,57,930/- 2. Search and seizure action was carried out on 17.03.2021 in the case of Rubberwala group. Assessee was also covered in the said search 3. Accordingly, notice u/s 153C was issued on 26.07.2023 and duly served on the 4. Assessment completed u/s 153C vide order dated 30.03.2024 Gist of issues/GOA: 1. On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C of the IT Act in absence

8 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain of any incriminating material found during the course of search making the assessment order illegal and without jurisdiction

2.

On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of AO in making the addition in absence of incriminating material found during the course of search as per grounds contained in the assessment order or otherwise

3.

On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of AO in merely relying on the statement of Shri Imran Ansari without any cogent evidence on record for reasons mentioned in the impugned order or otherwise

4.

On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of AO in holding that the appellant has paid cash in the form of on money on purchase of immovable property for the reasons mentioned in the impugned order or otherwise

5.

On facts and circumstances of the case and in law, Ld. CIT(A) had erred in confirming the action of Ld. AO in making an addition of Rs. 17,58,775/ being cash paid on purchase of immovable property by appellant treating the same as unexplained investment by invoking the provision of section 69 of the Act for the reasons stated in the impugned order or otherwise

Findings on issues/GOA: All grounds of appeal are inter-connected and are related to incriminating material found during the course of search and basis for making addition and hence taken up together:

On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C of the IT Act in absence of any incriminating material found during the course of search making the assessment order illegal and without jurisdiction On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of AO in making the addition in absence of incriminating material found during the course of search as per grounds contained in the assessment order or otherwise On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of AO in merely relying on the statement of Shri Imran Ansari without any cogent evidence on record for reasons mentioned in the impugned order or otherwise On facts and circumstances of the appellant's case and in law, Ld. CIT(A) erred in confirming the action of AO in holding that the appellant has paid cash in the form of on money on purchase of immovable property for the reasons mentioned in the impugned order or otherwise

9 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain On facts and circumstances of the case and in law, Ld. CIT(A) had erred in confirming the action of Ld. AO in making an addition of Rs. 17,58,775/ being cash paid on purchase of immovable property by appellant treating the same as unexplained investment by invoking the provision of section 69 of the Act for the reasons stated in the impugned order or otherwise Finding of AO: 1. A search and seizure action was undertaken on 17.03.2021 on Rubberwala group. Shri Tabrez Sheikh (key employee of the group) and Shri Imran Ansari who was handling sale and registration of shops in Platinum Mall project of RHIL were also covered (Para 5 Page 2 of AO) 2. Statement of Shri Imran Ansari recorded during the course of search where he revealed that total price of shops contained cash component which was not recorded in books of accounts (Para 5.2 Page 3 of AO) 3. 16GB Pen drive containing excel sheet named 'consolidated 123 balance' retrieved from the possession of Shri Imran Ansari containing details about the sale transactions as duly corroborated by the statement of shri Ansari (Para 5.3 Page 4 of AO) 4. Explanation provided by Shri Ansari (Refer Para 5.4 Page 5 6 of AO) 5. Modus operandi explained by Shri Ansari (Refer answer to Q26 27 on Page 8 of AO) 6. Financial year wise data provided by AO in para 7 page 9 of AO 7. Acceptance of Shri Tabrez Sheikh that cash was taken from individuals for sale of shops in Platinum Malls (Refer Para 9.2 Page 10 Answer to Q10) 8. Hence addition made (Para 10 Page 11 of AO) CIT (A) has confirmed additions based on: (Para 16 Page 50) Same as A.Y. 2019-20 Prayer: Hence considering facts and circumstances of the case and legal proposition put forward appeal of the assessee be dismissed and additions made by AO duly confirmed by CIT (A) be upheld.”

11.

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 Majithia in R/Tax Appeal No.20 of 2024 date 06.03.2024. The relevant paragraphs 2 and 3 are reproduced as below:

10 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain “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.”

12.

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-

11 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain 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.

13.

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

12 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain 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.

14.

Further, even the so-called seized excel sheet does not carry any evidentiary sanctity in the absence of independent verification, authentication, and corroboration. The veracity of such electronic data has not been tested by the Ld. AO, nor has any effort been made to establish its reliability vis-à-vis the assessee. In such circumstances, the same cannot be treated as credible evidence for making addition under section 69 of the Act. 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.

15.

In the result, the appeals of the assessee bearing ITA No.8700 and 8701/Mum/2025 are allowed. Order pronounced in the open court on 15th day of May 2026. Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 15/05/2026 SAUMYASr.PS Copy of the Order forwarded to:

13 ITA No.8700 AND 8701/Mum/2025 Manoj Dayachand Jain 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

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