DCIT-CC-4(2),MUMBAI, MUMBAI vs. SUREKHA VIJAY MAHAJAN, MUMBAI

These three appeals filed by the Revenue are directed against the separate orders dated 08.11.2025 passed by the Commissioner of Income Tax (Appeals)–52, Mumbai [“the ld. CIT(A)”], for assessment year 2015–16. They arise from the assessments under section 143(3) read with section 153C in the cases of Smt. Mafari Devi Choudhary and Smt. Surekha Vijay Mahajan, and under section 143(3) read with section 153A in the case of Smt. Leradevi Natharamji Choudhary. The appeals involve the same issue arising from the same search and seized documents. The respondents belong to the same group and were represented by the same learned authorised representatives. These matters were heard together with the connected group appeals and are disposed of by this common order.

The effective grievance of the Revenue in all three appeals is against deletion of the protective additions under section 69 of the Income-tax Act, 1961, for alleged on-money paid towards flats in Nathani Heights. The Revenue contends that the substantive addition in the hands of Shri Narsiram Natharamji Choudhary had not attained finality; that substantive and protective assessments could coexist pending determination of the person chargeable; and that the seized

Briefly stated, a search under section 132 was conducted on 17.03.2021 in the cases of Rubberwala Group and others. Pages 5 to 13 of Loose Paper Bundle–2, seized from the residence of Shri Narsiram Natharamji Choudhary, contained ledgers and a tabulation relating to flats in Nathani Heights developed by M/s. Nathani Parekh Constructions Pvt. Ltd. The Assessing Officer relied upon the cash figures appearing in the tabulation and the correspondence of its cheque entries with the builder’s ledgers. He made the substantive addition in the hands of Shri Narsiram Natharamji Choudhary and corresponding protective additions in the hands of the respondents as follows:

The ld. CIT(A) deleted the protective additions having regard to the substantive addition then sustained in the case of Shri Narsiram Natharamji Choudhary.

The learned Departmental Representative relied upon the assessment orders. He submitted that the seized papers identified the flats and their cash components and that the cheque entries were corroborated by the builder’s records. He further submitted that the protective additions should be retained until the substantive proceedings attained finality and relied on Lalji Haridas v. ITO [1961] 43 ITR 387 (SC).

We have heard the rival submissions and perused the material on record. The issue has already been decided by us in the connected cross appeals of Shri Narsiram Natharamji Choudhary for assessment year 2015–16, being ITA Nos. 638/Mum/2026 and 382/Mum/2026, forming part of the combined order for assessment years 2015–16 to 2021–22. In paragraphs 21 to 26 of that order, we examined the same seized papers, the builder’s records, the statements and the documents concerning cancellation and subsequent sale. We held that the alleged cash investment had not been established, deleted the addition of Rs. 8,27,75,848 sustained by the ld. CIT(A) and dismissed the Revenue’s ground seeking restoration of the higher addition.

The joint booking of Flat No. 5704 in the names of Smt. Mafari Devi Choudhary and Shri Narsiram Natharamji Choudhary was specifically considered in paragraphs 24 and 25 of the connected order. We held that the joint booking and matching cheque payments did not establish actual payment of the disputed cash. The deletion of the substantive addition was thus on merits, including the alleged cash

The protective additions before us arise from the very same alleged cash payments for Flat Nos. 5702, 5703 and 5704 and rest on the same evidence. No independent material establishing payment of the disputed cash by these respondents has been brought to our notice. The principle permitting protective proceedings where the person chargeable is uncertain does not warrant sustaining these additions when the alleged investment itself has been found not established on the common material. Following our decision in the main appeals of Shri Narsiram Natharamji Choudhary, we find no infirmity in the deletion of the corresponding protective additions by the ld. CIT(A). The effective grounds of the Revenue in all three appeals are dismissed.

In the result, all three appeals filed by the Revenue, being ITA Nos. 390, 391 and 1010/Mum/2026 for assessment year 2015–16, are dismissed.