HARKARAM JOGIJI CHOUDHARY,MUMBAI vs. DCIT CENTRAL CIRCLE 4(2), MUMBAI

The Registry has pointed out a delay of 230 days in filing the present appeal. The assessee filed a condonation petition supported by a notarized affidavit sworn on 14.08.2026, explaining that an appeal against the same impugned order had earlier been filed before the Tribunal, but the Assessment Year was inadvertently mentioned incorrectly. The said appeal bearing ITA No. 8237/Mum/2025 was subsequently withdrawn and dismissed as withdrawn by the Coordinate Bench vide order dated 16.06.2026. Considering that the assessee had been pursuing the appellate remedy and the delay arose due to a bona fide procedural mistake, we are satisfied that sufficient cause has been shown within the meaning of Section 253(5) of the Act. Accordingly, the delay of 230 days is condoned and the appeal is admitted for adjudication on merits.

The brief facts of the case is that the assessee filed the original return by declaring total income Rs.2,99,200/-. 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 in Platinum Mall building, Girgaon Mumbai and amount of Rs.45,14,400/- was paid in cash on acquisition of property for AY 2019-20. The assessee contended that no cash was paid. Finally the assessment was completed u/sec. 153C of the Act. The Ld. AO found that in assessment proceeding 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 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 had paid the cash for AY 2019-20 amount to Rs.45,14,400/-. Accordingly, the amount of Rs.45,14,400/- 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.

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 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 3 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.

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. 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 scenariono 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:”

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.”

We have heard the rival submissions and perused the material available on record. The undisputed position emerging from the record is that the addition made by the Ld. AO is solely based on third-party statements recorded during the course of search in the case of the “Rubberwala Group” and certain excel sheet data allegedly maintained by an employee of the said group. Admittedly, no incriminating material has been found from the possession of the assessee, nor has any seized document been brought on record to demonstrate that the assessee had paid any amount over and above the registered agreement value. Further, the alleged material and statements were neither confronted to the assessee nor was any opportunity of cross-examination afforded, thereby violating the principles of natural justice. We find that the Coordinate Bench of the ITAT, Mumbai, in a series of decisions in identical facts arising out of the very same search in the “Rubberwala Group”, including Bhavana Vikram Jain (supra), Akhraj Pukhraj Chopra (supra), Kulsum Aaqib Memon (supra) and Pravin Khetaramm Purohit (supra), has consistently held that additions made merely on the basis of third-party statements or uncorroborated excel data, without any independent incriminating material against the assessee, are unsustainable in law. Respectfully following the aforesaid binding precedents of the Coordinate Bench, we hold that no addition can be made in the hands of the assessee in the absence of cogent and corroborative evidence. As regards the reliance placed by the Ld. DR on the decision of the Hon’ble Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra), we find that the same is clearly distinguishable on facts. In the said case, the addition was supported by direct and corroborative evidence establishing undisclosed investment of the assessee. However, in the present case, the addition is based solely on third-party statements and alleged excel data, without any independent verification or linkage to the assessee. Further, no material has been brought on record to demonstrate that the assessee was a party to any such cash transaction. Therefore, the ratio of the said decision does not advance the case of the revenue. In view of the above discussion, and respectfully following the consistent view taken by the Coordinate Bench of the ITAT, Mumbai, we set aside the impugned appellate order and direct the Ld. AO to delete the addition made under section 69 of the Act. Since identical facts and issues are involved in the other appeals, the decision rendered in ITA No. 9375/Mum/2025 shall apply mutatis mutandis to the remaining appeals. Accordingly, all the appeals of the assessee are allowed.

In the result, the appeals of the assessee bearing IT(SS)A No.7462/Mum/2026 are allowed. Order pronounced in the open court on 21st day of August 2026 Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक �Dated: 21/08/2026 SAUMYA Sr.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