Loading judgment…
Facts
A search and seizure operation was conducted on the premises of the assessees, Shri Sameer Mutreja and Shri Sachin Mutreja. The Assessing Officer (AO) made additions under Section 69A of the Income Tax Act, 1961, alleging that cash withdrawn by companies M/s Dream Business Solutions Private Limited and M/s Fast Conversion Marketing Solutions Private Limited, controlled by the assessees, was for their personal enrichment. The CIT(A) confirmed these additions.
Held
The Tribunal held that for Section 69A to be invoked, the assessee must be the owner of the money, and the source of acquisition must be unexplained. The Tribunal noted that the cash withdrawals were from company bank accounts and the alleged source was funds from M/s Hero Motorcorp Limited routed through M/s SALT. Furthermore, the Tribunal found contradictions in the statements relied upon by the AO and noted that a Benami Property Transactions Act authority had previously held the assessees not to be beneficial owners of M/s SALT.
Key Issues
Whether the addition under Section 69A is justified when the assessee is not the owner of the cash, and the source of cash withdrawals from companies is explained. Whether additions can be made solely based on contradictory third-party statements without incriminating material found during the search.
Sections Cited
69A, 147, 143(3), 132, 132(4), 131(1A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI M. BALAGANESH
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA Nos. 5098 to 5104/Del/2025 (Assessment Years: 2014-15 to 2020-21) Sameer Mutreja, Vs. JCIT(OSD), 1004A, The Aralias DLF Gold Central Circle-27, Links, Gurgaon Galleria DLF-IV, New Delhi SO Gurgaon (Appellant) (Respondent) PAN: AANPM1252B
ITA Nos. 4951 to 4957/Del/2025 (Assessment Years: 2014-15 to 2020-21) Sachin Mutreja, Vs. JCIT(OSD), 16th Floor Apartment No. PH02, Central Circle-27, The Pal springs, Sector-54, New Delhi Gurgaon (Appellant) (Respondent) PAN: AANPM1251C
Assessee by : Shri Ajay Wadhwa, Adv Shri Depanshu Kaushik, Adv Shri Vaibhav Gupta, Adv Revenue by: Shri Pravin Rawal, CIT DR Date of Hearing 17/02/2026 Date of pronouncement 02/04/2026
O R D E R PER M. BALAGANESH, AM 1. The appeal in ITA No. ITA Nos. 5098 to 5104/Del/2025 for AYs 2014-15 to 2020-21, arises out of the order of the ld ld. Commissioner of Income Tax
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
(Appeals)-29, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] against the order of assessment passed u/s 147 r.s.w. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Assessing Officer, JCIT (OSD), Central Circle-27, New Delhi (hereinafter referred to as ‘ld. AO’).
The appeal in ITA No. ITA Nos. 4951 to 4957/Del/2025 for AYs 2014-15 to 2020-21, arises out of the order of the ld ld. Commissioner of Income Tax (Appeals)-29, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] against the order of assessment passed u/s 147 r.s.w. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Assessing Officer, JCIT (OSD), Central Circle-27, New Delhi (hereinafter referred to as ‘ld. AO’). Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.
The first effective issue involved in all these appeals is as to whether the Learned CITA was justified in confirming the addition made under section 69A of the Act in the facts and circumstances of the instant case for all the years under consideration.
We have heard the rival submissions and perused the materials available on record. A search and seizure action under section 132 of the Act was carried out in the premises of the assessee Shri Samir Mutreja, Shri Sachin Mutreja on 23.3.2022 along with M/s Hero Motorcorp Limited. Since the search happened after 1.4.2021, assessments for the Assessment Years 2014-15 to 2020-21 stood reopened under section 147 of the Act. Reasessments stood framed in the hands of Shri Sameer Mutreja (assessee herein) for the Assessment Years 2014-
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
15 to 2020-21. The Learned AR before us submitted a chart depicting the various additions made for various assessment years as under:-
Addition u/s 69A on account of cash Addition u/s A.Y. withdrawals 69A on basis of tally data Addition Bogus of FAST- u/s 69A on purchases purchase of personal from shell foreign expenses to entities - Total currency law firm cash additions Dream Fast Total made generated by FAST – through transferred alleged to be DREAM to Assessee personal expenses of Assessee 2020 3,71,233 3,71,233 - - - 3,71,233 -21 2019 28,35,580 48,33,534 76,69,114 - 3,15,416 4,11,65,320 4,91,49,850 -20 2018 6,07,66,696 4,06,65,272 - 12,29,354 1,88,72,070 -19 2017 4,64,23,074 - 1,17,88,154 23,14,375 6,05,25,603 -18 2016 4,81,19,5 5,07,55,32 9,88,74,913 - - - 9,88,74,913 89 4 -17 2015 2,49,60,0 3,83,47,52 6,33,07,571 - - - 6,33,07,571 -16 47 4 2,08,03,27 2014 Nil 2,08,03,272 9,75,000 - - 2,17,78,272 -15 2 7,59,15,2 11,51,10,8 27,81,14,449 9,75,000 1,33,32,924 6,23,51,765 35,47,74,138 16 87
On perusal of the assessment order framed in the hands of Shri Sameer Mutreja, we find that the primarily allegation for the search encapsulated at
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
para-5 of the assessment order of the Assessment Year 2014-15 is that M/s Hero Motorcorp Limited (HMCL) has claimed travel and stay expenses of its Chairman and Managing Director (CMD) and Chief Executive Officer (CEO) Shri Pawan Munjal as business expenditure in the form of event management and brand promotion expenditure by using companies namely, M/s Salt Experience & Management Pvt. Ltd. (M/s SEMPL, hereinafter referred as ‘SALT’) and other such companies including third party vendors, which were controlled by Shri Sachin Mutreja, his brother Shri Sameer Mutreja and Shri Hemant Dahiya (MD of M/s SALT). According to the revenue, SALT and its linked entities charged approximately 7% as commission income on the value of transaction or invoice generated against M/s HMCL, under the head brand and event promotion expenses. The allegation referred to in the show cause notice issued by the Learned AO was that nine entities were used by Mutreja Brothers to facilitate personal expenses of Shri Pawan Munjal in garb of event management expenses shown to have incurred for M/s HMCL. However, the Learned AO on the basis of evidences in the form of statements, etc. from the various directors, employees of the various companies, concluded that the companies namely M/s Dream Business Solutions Private Limited (hereinafter referred as ‘Dream’) and M/s Fast Conversion Marketing Solutions Private Limited (hereinafter referred as ‘Fast’) used to enter false bills in their accounts, withdraw cash and part of that cash would be handed over to Shri Sachin Mutreja and Shri Sameer Mutreja and Hemant Dahiya for their personal enrichment and, therefore, the money handed over to them ought to be taxable u/s 69A of the Act.
We first take up Ground Nos. 1, 2, 3, 4, 6, 13, 14 & 15 for AY 2014-15, being grounds challenging the addition under section 69A of the Act on account Page | 4
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
of cash withdrawals made by the companies M/s Dream and M/s Fast and purportedly handed over to Mutreja Brothers and Hemant Dahiya.
Ground No. 6 raised for the AY 2014-15 specifically deals with the challenge in respect of the additions made u/s 69A of the Act. It is stated that the assessee was not found to be the owner of the undisclosed cash; the source of the alleged cash withdrawals stood explained as per the Learned AO's own findings, the funds originated from M/s HMCL and were routed through M/s SALT to M/s Fast and M/s Dream and hence, once the source of the cash is explained, Section 69A of the Act cannot be invoked. The Learned AO has merely relied upon the uncorroborated and contradictory statement made by the employees of M/s SALT, M/s Dream & M/s Fast in the absence of any incriminating evidence of proof of ownership or any possession of cash.
The Ground No. 2 challenges the addition on the ground on the fact that no incriminating material or evidence or undisclosed asset was found during the course of search and without any incriminating evidence, no addition to income can be made.
The Ground No. 3 challenges the addition so made alleging that the principles of natural justice have not been followed; and the third-party statement cannot be relied upon without giving the meaningful opportunity to the assessee.
Ground No. 13 states that though the basis of the search and investigation was that Mr. Pawan Munjal of Hero Group was using the entities M/s SALT, M/s Dream and M/s Fast for funding his personal expenses and the entire activity
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
was also for his benefit as stated by the Learned AO in the assessment order, yet the additions have been made in the hands of the assessee herein while giving a clean chit to Mr. Pawan Munjal.
The assessee vide Ground No. 14 contended that the cash withdrawn by M/s Dream and M/s Fast was used to book expenses on account of advertisement and publicity in its books and the same must have been claimed as business expenditure before the Income-tax Department. How can the cash used towards business expenditure be taxed in the hands of the assessee when it has already been booked as expenditure in the books of the said companies.
The assessee vide Ground No. 15 contended that the Learned AO has sought to tax the assessee on the ground that he is a beneficial owner/de-facto owner of M/s SALT, M/s Dream and M/s Fast and, therefore, the cash withdrawn by the said companies from their bank account and allegedly handed over to Shri Sameer Mutreja must be taxed in his hands. The proceedings under the Prohibition of Benami Property Transactions Act, 1988 were initiated against Shri Herbert Mohan Spratt & Mutreja Brothers and it was held by the Learned Adjudicating Authority that both Shri Sameer Mutreja & Shri Sachin Mutreja are not beneficial owners and Shri Herbert Mohan Spratt is the true owner of M/s SALT since he had invested in the said company towards its share capital. Hence the basis of addition by the Learned AO that assessee is the beneficial owner of M/s SALT is totally misconceived and contrary to the facts and law.
The assessee has filed Synopsis for the A.Y. 2014-15 which reads as under:-
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
GROUND NO. 6 and 6.1: SECTION 69A NOT APPLICABLE AS ASSESSEE NOT FOUND TO BE “OWNER” OF ANY MONEY AND “SOURCE “ OF SUCH CASH WITHDRAWALS FROM THE COMPANIES WAS DULY EXPLAINED: 1.1 The invocation of Section 69A of the Act is wholly misconceived in the facts of the present case, as the Appellant has never been the “owner” of the alleged cash withdrawals. 1.2 The provisions of Section 69A contemplate that an addition u/s 69A can be made if the Assessee is found to be the owner of any money which is not recorded in the books of account, if an explanation about the nature of the source of acquisition offered by him is not satisfactory in the opinion of the AO. The deeming effect of the provision will only apply to the Assessee if he is the owner of the impugned money. Section 69A of the Act is reproduced below: “69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.]” 1.3 For the invocation of section 69A of the Income-tax Act, three essential conditions must be cumulatively satisfied. a. First, the assessee must be found to be the owner of the money. Ownership, in this context, implies both possession and the legal right to dispose of the money in the manner the person so desires. In the present case, there is no evidence whatsoever to establish that the assessee was in possession of the money, much less that he was its owner. Mere contradictory statements, unsupported by any documentary evidence or even circumstantial material, to demonstrate that the money belonged to the assessee, are wholly insufficient and cannot be relied upon. b. Further, the assessee must be physically found to be the owner of the money for section 69A to be attracted. This principle stands affirmed by the decision of the Hon’ble Mumbai Bench in the case of DCIT v. Yograj Arora, ITA No. 2440/Del/2022 (para 8 & 9) of the Tribunal and by the two decisions of the Hon’ble Delhi Benches of the Tribunal in the case of ACIT v. Navneet Kumar Sureka, ITA No. 5573, 6660 & 6661/Del/2016 (para 10 & 11) and ACIT v. Jotindra Steel & Tubes Ltd, ITA No. 4401/ Del/2017 (para 4, 21 & 22). Even where a person is alleged to be the owner, such ownership must be lawful. A person who is in illegal possession of cash cannot be regarded as its owner for the purposes of section 69A. In the present case, the cash was withdrawn by the company from its bank account, and the money indisputably belonged to the company, which is a separate and distinct legal entity. Even assuming, without admitting, that the directors handed over the cash to a third person, the possession, if any, by such third person would be illegal, as the money belonged to the company and not to the individual concerned. As held by the Hon’ble Apex Court in the case of D. N. Singh (para 47 - pg. 16 & 17 of CBK), an illegal possessor cannot be treated as the “owner” within the meaning of section 69A of the Act. c. The third condition for invoking section 69A is that the source of the money must remain unexplained. Where the source of the asset is satisfactorily explained, section 69A has no application. In the present case, as per the Ld. AO's own findings, these withdrawals from M/s FAST and M/s DREAM were out of funds received from M/s SALT which were paid through banking channels. Once the source of the cash stands explained, the provisions of section 69A are rendered inapplicable.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
Support for this proposition can also be drawn from the analogous legal principle governing section 69C. It has been consistently held, including by the Hon’ble Delhi High Court in the case of PCIT (Central)-2 v. Param Dairy Ltd. (ITA No. 50 OF 2022) & CIT v. M/S Radhika Creation (ITA No.- 692/2009), that where the source of an alleged unexplained or bogus expenditure is traceable to disclosed bank accounts of the assessee, section 69C cannot be invoked. The same principle squarely applies to section 69A, as held in several judicial precedents. 1.4 The additions have been made in the hands of the Appellant by treating the cash withdrawals admittedly made by directors of the companies, M/s DREAM and M/s FAST, which are unconnected, to the Appellant, as unexplained money under section 69A of the Act, even though the Appellant is neither a director nor a shareholder in those companies and has no control over their business or accounts (refer financials of both M/s Fast & M/s Dream along with chart as Annexure B. 1.5 As per statement (Q.27 and Q.30) of S. Nayyar, Mr. Sachin Mutreja was never a director or shareholder, and that the directors and shareholders of SALT were Hemant Dahiya, Herbert Mohan Spratt, and Abhishek Mehta - refer pg. 197A of PBK II. 1.6 Even the Ld. CIT(A) has at para 8.7 at page 97 of CIT(A) order accepted that the Appellant is neither a director nor a shareholder in those companies - Financials of both M/s Fast & M/s Dream along with chart as Annexure B and Financials of both M/s SALT along with chart as Annexure C. 1.7 The facts of the case in hand show that the Appellant was never found to be in possession of any real money. No cash or asset found in the Appellant’s possession and not even any utilization of cash found from premises of Assessee. Hence, provisions of Section 69A were wrongly invoked. Refer Panchnama (attached as Annexure D) dated 27.03.2022, 21.04.2022 and 12.05.2022 wherein the following was found from the Assessee (refer pg. 34, 37, 42-44, 56 of Annexure D): Bullion- Nil; Cash- Rs. 41,200/-; Silver: Rs. 1,38,000/- and jewellery-Rs. 79,10,643/- and Rs. 8,41,575/- (both Assesee and his wife) 1.8 Assessee vide replies dated 25.01.2024 filed before the Ld. AO stated that he has no relation with Mohd. Anwar and the assessee has not received any cash from him during the year under consideration; the assessee has not entered into any transaction with Sh. Kumar Rajesh Raman during the year under consideration; no transactions have been made by DREAM and FAST on assessee’s behalf during the year under consideration- refer page 196-198, 210-213 of PBK 1.9 Reliance is placed upon following wherein it has been categorically held that addition under section 69A is not maintainable if ownership is not established and where source of money is explained. The provisions of Section 69A of the Act are not attracted where assessee is not found in possession of any money; additions are made solely on the basis of certain notings found during search backed with statements recorded and there is no reference whatsoever to the assessee in the impugned documents, and the Assessing Officer has proceeded merely on assumptions and presumptions without any corroborative evidence. a. D. N. Singh v. Commissioner of Income-tax, Central, [2023] 454 ITR 595 (SC) b. Kantilal Chandulal & Co. v. Commissioner of Income-tax,136 ITR 889 (Calcutta) - para 7 & 8 c. Durga Kamal Rice Mills v. CIT, [2004] 265 ITR 25 (Calcutta) - para 8 d. CIT v. Ravi Kumar [2007] 294 ITR 78 (Punjab & Haryana) - para 7 & 8 e. CIT v. K.K. Abdul Kareem [1996] 88 TAXMAN 323 (KER.) - para 22-29 & 31 f. ACIT v. Trilok Chaudhary, ITA No. 1450/Del/2024 - para 16-18 & 77 g. ACIT v. Navneet Kumar Sureka, ITA No. 5573, 6660 & 6661/Del/2016 - para 10 & 11 h. DCIT v. Yograj Arora, ITA No. 2440/Del/2022 - para 8 & 9 Page | 8
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
i. ACIT v. Jotindra Steel & Tubes Ltd, ITA No. 4401/ Del/2017 - para 4, 21 & 22 j. M/s. Rucha Consultancy LLP v. DCIT, Central Circle-6(1), ITA No. 4996/Mum/2024 - para 6.10 & 6.11 k. Tushar Anand v. DCIT, ITA No. 1772/Del/2024 - para 4
GROUND NO. 2, 2.1,2.2: NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH UNDER SECTION 132(1) OF THE ACT ON THE ASSESSEE; ADDITION MADE IS INVALID AND VOID-AB-INITIO; MERE STATEMENTS UNDER SECTION 132(4) CANNOT JUSTIFY ADDITION: 3.1. It is humbly submitted that the addition rests entirely on assumptions and third-party statements. It is an admitted position that no incriminating material, undisclosed asset, cash or expenditures or evidence whatsoever was found or seized during the course of the search on the Appellant. 3.2. Reliance is placed upon the following wherein it has be laid that statements recorded u/s 132(4) do not by themselves constitute incriminating material. Uncorroborated statements alone cannot justify an addition in absence of supporting documents or material discovered during search. a. Commissioner of Income-tax v. Harjeev Aggarwal [2016] 241 Taxman 199 (Delhi)/(290 CTR 263) – para 19 to 24 b. Principal Commissioner of Income-tax, Delhi-2 v. Best Infrastructure (India) (P.) Ltd, (397 ITR 82) (Delhi) – para 38 c. PCIT vs. Pavitra Realcon Pvt. Ltd. (ITA No. 579/2018) - para 19 to 23 & 35 d. PCIT vs. Anand Kumar Jain (HUF) ITA 23/2021 - para 7 to 10 e. DCIT v. Rama Allied Products Marketing Pvt. Ltd., (ITA No.5028, 5029 & 5030/DEL/2019) - para 17 3.3. At page 25 to 28 at para 6.5 of the Assessment order the Ld. AO has reproduced the reply of M/s Dream & M/s Fast where they have specifically stated that the cash withdrawn by the companies was used for the purpose of expenditure by the said companies. This fact is contradictory to the statement by the Directors of the companies as relied upon by the Ld. AO. The Ld. AO has ignored the explanation in writing given by M/s Dream & M/s Fast. 3.4. In view of the above, the impugned addition suffers from a jurisdictional defect as well as factual infirmity, and therefore deserves to be deleted in toto.
STATEMENTS RELIED UPON BY THE LD. AO ARE CONTRADICTORY AND CANNOT BE RELIED UPON: 4.1. Statement dated 23.03.2022 u/s 132(4) of Shri Herbert Mohan Spratt (director and 70% shareholder of SALT): i. The Ld. AO, at page 3 of the assessment order, has placed reliance upon response to Q10 and Q11 of statement of Shri Herbert Mohan Spratt, wherein it is recorded that M/s SALT was being managed by the Shri Sameer Mutreja, Shri Sachin Mutreja and Shri Hemant Dahiya. Shri Spratt categorically denied any knowledge of the shareholding structure of SALT and admitted that he had not paid any amount towards the purchase of shares in the said company or in any other entity. He further stated that Mr. Sushil Mutreja informed him that shares worth Rs. 30,000 were allotted in his name, but the payment would be made by someone else.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
ii. The said statement, even if accepted in its entirety, does not establish any element of beneficial ownership on the part of the Appellant. It is submitted that mere allegation or assumption that shares were funded by someone else is not sufficient proof of beneficial ownership under law. It is not stated that the Appellant has paid for the shares. Shri Spratt has not stated who has paid for shares. Beneficial ownership must be established through tangible evidence of funding or control, not by inference drawn from a vague statement. In the absence of such evidence, reliance on Shri Spratt’s statement is wholly misconceived and devoid of probative value. iii. The Ld. Adjudicating Authority vide its order dated 27.03.2025, passed under Section 26(3) of the Prohibition of Benami Property Transactions Act, 1988, has categorically held that the Appellant is not the beneficial owner or benamidar of the shareholding in SALT, thereby negating any inference of control or ownership. The Adjudicating Authority at para 5.5.3.3 at page 52 & 53 of the order dated 27.03.2025, while arriving at this conclusion, specifically noted that Mr. Herbert Mohan Spratt had, in his statement before the Customs Authorities in 2019, admitted that he was the Director of SALT and had contributed Rs. 70,000/- as share capital in the said company. However, in subsequent proceedings before other authorities, he retracted and claimed ignorance about his role in SALT. The Authority, therefore, held that such contradictory statements cannot be relied upon, as they lack credibility and consistency. 4.2. Statement dated 27.03.2022 of Sh Mohd. Anwar (ex-employee of SALT): iv. The Ld. AO has, at pages 21 and 35 of the assessment order, relied upon the response to Q5 of statement of Shri Anwar, who claimed to have been engaged in a “field job,” namely, collecting cash from banks after receiving bearer cheques from Dream and Fast. Shri Anwar stated that such cheques were signed by Smt. Supriya Verma, Shri Gaurav Karna, and Shri Kumar Samar. He further claimed that, as per instructions of Mr. Amit Saxena and Mr. Kumar Rajesh Raman, he used to collect cash from Nasir Gupta in the range of ₹1 to ₹1.5 crore per month and also made notings of these in his diary. He also alleged that the cash so collected from Nasir Gupta was subsequently handed over to Mr. Raman, who in turn prepared packets to be delivered to Mr. Sameer Mutreja, Mr. Sachin Mutreja, Mr. Hemant Dahiya, and Mr. Sameer (Cashier of HMCL). v. It is respectfully submitted that no such diary was ever provided to the Appellant, either during the course of assessment or appellate proceedings. The existence, custody, or verification of the said diary has not been established by the Department, and there is no record to suggest that it was ever confronted to the Appellant for rebuttal. Further, as per Anwar’s own statement there is no name of the Appellant in the diary. On the contrary, he admits that he was acting under the instructions of Mr. Amit Saxena and Mr. Kumar Rajesh Raman; cheques were signed by Smt. Supriya Verma, Shri Gaurav Karna, and Shri Kumar Samar; cash was collected from Nasir Gupta and handed over to Mr. Raman. There is no role or name of Assessee in this. How can Anwar state what Mr. Raman, in turn did with the cash. vi. While Anwar stated that he handed over the collected cash to Shri Raman and acted under his instructions, Shri Raman claimed that Anwar, being on the payroll of SALT, directly delivered cash to the alleged recipients i.e. Sameer Mutreja, Sachin Mutreja, Hemant Dahiya, Abhishek Mehta at their homes-refer Q54. Gaurav Karna has stated that this cash was sent to him by his brother, Shri Kumar Rajesh Raman and Shri Amit Saxena. Hence there is contradiction in all three statements of Anwar, Shri Kumar Rajesh Raman and Gaurav Karna.
4.3. Statement dated 23.03.2022 u/s 132(4) of Sh. Kumar Rajesh Raman (consultant in SALT and DREAM and director of FAST): vii. The Ld. AO relied upon response to Q52, 53, 54 of statement of Shri Kumar Rajesh Raman at page 20 and 34 of the Assessment Order to determine alleged cash percentages given to the Assessee. However, his version contradicts that of Shri Anwar. While Anwar stated that he handed over the collected cash to Shri Page | 10
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
Raman and acted under his instructions, Shri Raman claimed that Anwar, being on the payroll of SALT, directly delivered cash to the alleged recipients i.e. Sameer Mutreja, Sachin Mutreja, Hemant Dahiya, Abhishek Mehta at their homes. Gaurav Karna has stated that this cash was sent to him by his brother, Shri Kumar Rajesh Raman and Shri Amit Saxena. Hence there is contradiction in all three statements of Anwar, Shri Kumar Rajesh Raman and Gaurav Karna. viii. These mutually inconsistent statements on the mode and person of delivery render both testimonies unreliable and devoid of evidentiary value, and hence, no addition can be sustained thereon.
4.4. Statement dated 23.03.2022 u/s 132(4) of Shri Gaurav Karna -current director of company DREAM: ix. The Ld. AO, at page 14 of the assessment order, relied on response to Q27 and Q43 of statement of Shri Gaurav Karna and also Q78-Q80 (page 16 of assessment order of AY 2015-16) who stated that cash withdrawals were made by Shri Mohammed Anwar and by another person and was sent to Gaurav Karna by his brother, Shri Kumar Rajesh Raman and Shri Amit Saxena. The withdrawals were through cheques signed by Gaurav Karna’ wife, Ms. Supriya Verma (director of Dream), under the directions of Shri Kumar Rajesh Raman and Shri Amit Saxena. He has stated that purpose of such cash withdrawal was to give cash to Hemant Dahiya, Sachin Mutreja, Sameer Mutreja, Ramesh Kapoor, Kumar Rajesh Raman. x. Another person making cash withdrawal is not named by Gaurav Karna; xi. Here Gaurav Karna has stated that this cash was sent to him by his brother, Shri Kumar Rajesh Raman and Shri Amit Saxena whereas as per statement of Anwar this cash was given by Anwar to Shri Kumar Rajesh Raman and as per statement of Shri Kumar Rajesh Raman this cash was given by Anwar directly to the alleged recipients i.e. Sameer Mutreja, Sachin Mutreja, Hemant Dahiya, Abhishek Mehta at their homes. Hence there is contradiction in all three statements of Anwar, Shri Kumar Rajesh Raman and Gaurav Karna. xii. Gaurav has stated that the withdrawals were through cheques signed by Gaurav Karna’ wife, Ms. Supriya Verma (director of Dream), under the directions of Shri Kumar Rajesh Raman and Shri Amit Saxena whereas as per statement of Anwar the cheques were signed by Smt. Supriya Verma, Shri Gaurav Karna, and Shri Kumar Samar. xiii. Gaurav Karna has also stated that purpose of such cash withdrawal was to give cash Kumar Rajesh Raman, hence even statement of Raman cannot be relied upon. xiv. The Ld. AO selectively relied on Question No. 78, ignoring Question No. 45, wherein Gaurav Karna stated that transactions with Sameer Mutreja and Sachin Mutreja are basically payments made towards professional consultancy services.
4.5. Statement dated 25.03.2022 u/s 131(1A) of Sh. Amit Saxena (GM Finance in SALT): xv. The Ld. AO, at page 4 of the assessment order, relied on the response to Q6 of statement of Shri Amit Saxena, employee of SALT. He stated that a meeting was held where Sameer Mutreja, Sachin Mutreja, and Hemant Dahiya informed employees about the formation of SALT, to be headed by Hemant Dahiya. His statement, when read as a whole, shows that SALT was managed by Hemant Dahiya, not the Mutreja brothers, thereby contradicting the inference drawn by the Ld. AO.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
xvi. The statement is vague, uncorroborated and lacks any evidentiary value. Accordingly, the reliance on Shri Saxena’s statement is misplaced.
4.6. Statement dated 23.03.2022 u/s 132(4) of Sh. S. Nayyar: xvii. The Ld. AO has at page 8 of the assessment order, relied on Question No. 31 of Shri S. Nayyar’s statement to allege that Shri Sachin Mutreja was de facto taking financial decisions of M/s SALT. However, the same statement (Q.27 and Q.30 - refer pg. 197A & 197B of PBK II) clearly records that Mr. Sachin Mutreja was never a director or shareholder, and that the directors and shareholders of SALT were Hemant Dahiya, Herbert Mohan Spratt, and Abhishek Mehta. There is no accusation against Assessee. xviii. The Assessee was consultant to SALT, and it was within their domain and responsibilities to interact with Mr. Nayyar on financial matters also. Nayyar’s mere response to Q31 that Sachin Mutreja was de-facto taking financial decisions has been twisted to allege that Sachin Mutreja was a benami owner of SALT. The AO ignored the later part of his statement in which he said that “which the management used to follow”. He clearly meant that the management was separate from Sachin Mutreja and Sachin Mutreja was merely advising. He was not the ‘Management’.
4.7. Statement of Shri. Hemant Dahiya (MD of SALT) recorded on 23.03.2022 us/ 132(4): xix. The AO has at pages 11, 24 & 25 of assessment order relied upon the statement of Shri. Hemant Dahiya i.e. Q79, Q81 & Q82 which has been wrongly interpreted by the AO.
It could be seen Shri. Hemant at question 79 has merely explained in a broad sense the business model adopted by SALT, there was no mention how Assessee is involved. Further, at Q81 the authorized officer asked about gross margin of SALT to which Shri Hemant Dahiya stated that he does not have any concrete idea, but he would assume it was 15%. His statement was general and non-specific. In response to Q82 he has stated that SALT was making profit and same was declared in books. There is no allegation against the Assessee in this.
xx. It is pertinent to mention that Shri Hemant Dahiya in response to question no. 83, explained that he was weak in finance, and it was Kumar Rajesh Raman who handled the profit and finance.
Statement of Shri. Pawan Munjal (CMD of HMCL and primary client of SALT) recorded on 24.03.2022: xxi. The Ld. AO relied upon the statement of Sh Pawan Munjal i.e. Q 8 to 11 at page 3-4 of order where he was asked whether he know Mr. Sachin & Mr. Sameer and their association. He mentioned that he knows both of them as being associated with SALT. This is admitted by the Sachin Mutreja in his statement at Q24 itself; that he was a consultant to SALT and acted as a professional advisor and all professional receipts have been declared by both Sameer and Sachin Mutreja. At Q9 Pawan Munjal stated that SALT is an event management company which provided services related to organisation of events. xxii. In Q11 Sh. Pawan Munjal stated that “as far as my knowledge goes, SALT was owned by Sachin and Sameer Mutreja.” It is pertinent to note that it is a vague statement and cannot be relied upon since he is unsure about the same.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
Statement of Sh. Sachin Mutreja dated 23.03.2022 xxiii. The Ld. AO relied upon the statement of Sh. Sachin Mutreja - Q24 at page 10 of order. The complete reading of the statement demonstrates that Shri Sachin Mutreja has categorically denied any shareholding, management role, or financial control in SALT. He explicitly stated that his involvement, if any, was limited to consultancy and technical support relating to events, and that he had no role in the management, finances, or operations of SALT. xxiv. He mentioned that he had never received any direct remuneration from the said company. He further clarified that he was only receiving consultancy fees from Dream and Fast which were independent vendors were rendering services to SALT. xxv. Nowhere does Shri Mutreja claim to have participated in the incorporation, control, decision-making, or funding of the company.
GROUND NO. 2 PRESUMPTION UNDER SECTION 132(4B) CANNOT BE REBUTTED BY AN UNSUPPORTED THIRD-PARTY STATEMENT. 5.1. It is respectfully submitted that the reliance placed by the Department on the third-party statement recorded under Section 132(4B) is wholly misconceived. 5.2. The Presumption of cash withdrawn vests in the hands of the company. They cannot rebut the presumption by simply making statement without any documentary evidence. 5.3. It is a settled principle that a bald oral statement, lacking any contemporaneous documentary support, cannot override or negate entries in the regular books of account maintained in the ordinary course of business.
GROUND NO. 15 AND 15.1: THE ADJUDICATING AUTHORITY VIDE ORDER DATED 27.03.2025 PASSED UNDER SECTION 26(3) OF THE PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988, HELD THAT THE APPELLANT IS NOT THE BENEFICIAL OWNER OF THE SHAREHOLDING IN SALT AND HAS NO RELATIONSHIP WITH SALT 6.1. The Ld. Adjudicating Authority vide its order dated 27.03.2025, passed under Section 26(3) of the Prohibition of Benami Property Transactions Act, 1988, has categorically held that the Appellant is not the beneficial owner or benamidar of the shareholding in SALT, thereby negating any inference of control or ownership. The Adjudicating Authority at para 5.5.3.3 at page 52 & 53 of the order dated 27.03.2025, while arriving at this conclusion, specifically noted that Mr. Herbert Mohan Spratt had, in his statement before the Customs Authorities in 2019, admitted that he was the Director of SALT and had contributed Rs. 70,000/- as share capital in the said company. Such statement was never retracted by him. However, in subsequent proceedings before other authorities, he claimed ignorance about his role in SALT. The Authority, therefore, held that such contradictory statements cannot be relied upon, as they lack credibility and consistency. 6.2. Importantly, the Ld. Adjudicating Authority at para 5.5.3.4 – 5.6 at page 53 to 55 of the order dated 27.03.2025 further observed that there exists no material or evidence on record to show that the Mutreja brothers were the beneficial owners of SALT or that the Appellant had any beneficial interest therein. Page | 13
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
This categorical finding, rendered by a competent statutory forum, directly nullifies the very premise of the addition under Section 69A. Once the competent authority under the Benami Act has conclusively held that the Appellant is not a benamidar or beneficial owner, the entire reasoning adopted by the Ld. AO collapses.
GROUND NUMBER 13 & 13.1: ASSESSMENT BASED ON SEARCH PROCEEDINGS PERTAINING TO THE HERO GROUP AND SHRI PAWAN MUNJAL, WITHOUT ANY INCRIMINATING MATERIAL IMPLICATING THE APPELLANT. 7.1. It is respectfully submitted that the assessment framed against the Appellant is fundamentally misconceived, as the addition has been made entirely on the basis of statements and material gathered during the search and investigation on the Hero Group and Shri Pawan Munjal. No incriminating material, evidence, or document was found during the search that pertains to or implicates the Appellant in any manner. 7.2. The Ld. AO himself, at para 5 of the assessment order, categorically records that M/s HMCL has claimed travel & stay expenses of its CMD and CEO Sh. Pawan Munjal as business expenditure in the form of event management and brand promotion expenditure by using companies namely, SALT and its group companies including third party vendors, which were controlled by Sh. Sachin Mutreja, his brother Sh. Sameer Mutreja and Sh. Hemant Dahiya (MD of M/s SALT). This admission by the Ld. AO negates the very basis of taxing the alleged cash in the hands of the Appellant. 7.3. The Ld. AO also at para 2 of the show cause notice dated 12.02.2024 alleges that the above 9 entities were used by Mutreja brothers to create a web of transactions to facilitate personal expenses of Sh. Pawan Munjal in garb of event management expenses shown to have incurred for Hero MotoCorp Ltd. Thus, the Department’s own narrative attributes the alleged benefit entirely to Pawan Munjal, not the Appellant. 7.4. However, despite these explicit findings, no addition whatsoever seems to have been made in the hands of Shri Pawan Munjal. Instead, the Appellant who neither participated in, nor benefited from, the alleged arrangement has been arbitrarily fastened with tax liability without any supporting material. 7.5. The end client HMCL is an established brand. It gave contracts to SALT after due diligence and market research. The entire theme of the assessment order is contrary to normal human logic. 7.6. This selective approach of the Revenue, whereby the alleged beneficiary is left untouched while an unrelated person is assessed, is perverse, arbitrary, and contrary to law. It amounts to treating the Appellant as a convenient scapegoat in the absence of any legally admissible evidence linking him to the alleged transactions. 7.7. When the Ld. AO believes that the alleged cash withdrawals were for the personal use and benefit of Sh. Pawan Munjal, no addition can be sustained in the hands of the Appellant, who has neither been shown to receive, possess, or utilise the alleged cash. 7.8. Accordingly, the assessment framed on the Appellant on the basis of material, findings, and allegations pertaining exclusively to Hero Group and Shri Pawan Munjal is illegal, arbitrary, and liable to be deleted. 8. GROUND NUMBER 14, 14.1 AND 14.2: ILLEGAL PRESUMPTION OF CASH BENEFIT TO THE APPELLANT WITHOUT DISALLOWANCE OF EXPENDITURE IN THE HANDS OF THE COMPANIES ACTUALLY CLAIMING IT. 8.1. It is respectfully submitted that the assessment order and the appellate order are completely silent on the status of assessments in the cases of SALT, DREAM and FAST. The Revenue has neither disclosed whether Page | 14
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
the expenditure claimed by these companies alleged to be bogus has been disallowed in their respective assessments, nor produced any order demonstrating that such alleged bogus expenditure has been taxed in their hands. 8.2. The entire basis of the addition in the present case is the allegation that SALT, DREAM and FAST booked bogus expenditure for the benefit of third parties. If this is the Department’s stand, then the first and foremost requirement is that the Revenue must show whether those expenditures have been disallowed in the hands of the respective companies. In absence of such disallowance, the allegation of bogus expenditure remains unsupported and uncorroborated. 8.3. Without prejudice to the foregoing submissions, even if the Department’s contention that the expenses incurred by Hero Group were non-genuine is accepted arguendo, the correct course in law would have been to disallow such expenditure in the hands of Hero Group or the concerned entities, namely, SALT, FAST, and DREAM. 8.4. There exists no legal presumption that disallowance of expenses automatically results in a taxable event in the hands of a third person. There is no statutory provision which permits the Department to presume that the “cash component” said to have arisen from an alleged bogus expenditure must be taxed in the hands of a third person, who neither claimed the expenditure nor was found in possession of any cash. Such a presumption is contrary to the scheme of the Act, which requires the disallowance of expenditure in the hands of the entity claiming it, and actual receipt or ownership of money before any addition can be made under Section 69A. 8.5. Without prejudice, even if the Revenue’s theory of bogus expenditure is accepted arguendo, the only permissible course in law would be the disallowance of such expenditure in the hands of the companies that claimed it. The addition cannot be shifted to the Appellant merely on the basis of uncorroborated statements or assumptions, especially when no cash was found, no receipt was proved, and no nexus was established with the Appellant. 8.6. Accordingly, in absence of any disallowance in the hands of the companies or any evidence of receipt in the hands of the Appellant, the addition under Section 69A is wholly unsustainable and liable to be deleted in toto.
GROUND NO. 3: VIOLATION OF PRINCIPLES OF NATURAL JUSTICE: ADDITION BASED ON UNCONFRONTED MATERIAL AND DENIAL OF CROSS-EXAMINATION. 11.1. It is respectfully submitted that the assessment and appellate orders suffer from gross violation of the principles of natural justice, inasmuch as the documents, materials, evidence and information relied upon by the Department were never made available to the Appellant. 11.2. It is humbly submitted that the Appellant requested for material or evidence relied upon and also for cross examination via replies filed on 23.10.2023 (refer page 170-183 of the PBK), replies filed on 25.01.2024 (refer page 193-198 and 207 to 213 of the PBK), 27.02.2024 (refer page 288 to 293 of the PBK) and 15.03.2024 (refer page 294 to 298 of the PBK). 11.3. The Hon’ble Supreme Court in Kishanchand Chellaram v. CIT [(1980) 125 ITR 713 (SC)] has categorically held that any material used against an assessee must be disclosed and the assessee must be granted an opportunity to rebut the same.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
11.4. In the present case, the entire addition is based on statements of third parties recorded during the search. Although copies of such statements were subsequently made available (04.01.2024 and 04.03.2024) to the Appellant, admittedly, no cross examination was given during the course of assessment proceedings, even on askance and the department has consciously applied its mind not to give any cross examination 11.5. The following statements have been relied upon in the assessment order: i. Sh. Herbert Mohan Spratt (page 3 of assessment order) ii. Sh. Pawan Munjal, CMD of HMCL & Client of SALT (page 3-4 of the Assessment Order) iii. Sh. Amit Saxena, GM Finance in SALT (page 4 of the Assessment Order) iv. Sh. S. Nayyer (page 8 of the Assessment Order) v. Sh. SAchin Mutreja at page 10 of order vi. Sh. Hemant Dahiya (page 11, 24-25 of the Assessment Order) vii. Sh. Gaurav Karna, Director of M/s Dream (page 13-14 of assessment order) viii. Sh. Kumar Rajesh Raman, Director of M/s Fast (page 20, 34 of the Assessment Order) ix. Sh. Anwar (page 21,35 of the Assessment Order) 11.6. In absence of such opportunity to cross examine the above, the statements cannot be treated as admissible evidence, and any addition founded thereon stands vitiated in law. The denial of cross-examination goes to the root of the matter and renders the addition liable to be deleted on this ground alone. 11.7. It is a settled proposition of law that any statement recorded from a third party, without affording the assessee an opportunity to cross-examine the deponent, has no evidentiary value and cannot be relied upon for making additions. It has been upheld by the Hon’ble Supreme Court of India in the case of M/s Andaman Timber Industries Vs. CCE (Civil Appeal No. 4228 of 2006) and CIT Vs. Odean Builders Pvt. Ltd. (2019) (418 ITR 315) and Hon’ble Supreme Court in the case of Ayaaub khan Noor khan Pathan vs. The State of Maharashtra and Ors. in CIVIL APPEAL NO. 7728 OF 2012 (para 28-30) that not allowing cross examination of evidence relied upon is a serious flaw and violation of principles of natural justice. 11.8. This conduct amounts to a blatant violation of the fundamental principle of natural justice, audi alteram partem that no one shall be condemned unheard. The right to a fair hearing includes not only the right to respond but also the right to know the material being used against a person. In the absence of disclosure of these statements, the assessee was deprived of any effective opportunity to rebut the allegations contained therein. 11.9. Hence, the addition made on the basis of unverified statements or confrontation to the assessee, is not only devoid of evidentiary value but also contrary to settled principles of natural justice and must be deleted in toto.
GROUND No. 16: MANDATORY REQUIREMENT OF SECTIONS 65B OF THE INDIAN EVIDENCE ACT, 1872 (NOW SECTION 63 OF THE BHARATIYA SAKSHYA ADHINIYAM, 2023) HAVE NOT BEEN COMPLIED WITH AND THEREFORE, ADDITION BASED ON DIGITAL DATA IS GROSSLY INCORRECT. 13.1. Section 65B of the Indian Evidence Act, 1872 (now Section 63 of the BharatiyaSakshyaAdhiniyam, 2023) deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the section starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
conditions mentioned under sub-section (2) are satisfied, without further proof or production of the original. 13.2. It is respectfully submitted that the documents relied upon by the Ld. AO namely; (i) Email from S. Nayyer to Sh. Sachin Mutreja (refer page 4-5 of the Assessment Order), (ii) WhatsApp chats between Sh. S. Nayyer & Sh. Sachin Mutreja (refer page 5-8 of the Assessment Order), (iii) WhatsApp chats between Sh. Hemant Dahiya & Sh. Sachin Mutreja (refer page 8-9 of order), (iv) Tally data or the digital data as mentioned at para 7-7.3 at page 16 to 19 of the Assessment Order dated seized from the laptop of Sh. Gaurav Karna. (v) Tally data or the digital data as mentioned at para 8 at page 21 to 22 of the Assessment Order. All the above constitute electronic records and secondary evidence, the admissibility of which is governed by Section 65B(4) of the Indian Evidence Act, 1872. 13.3. The tally data or the digital data and the whatsapp chats and emails extracted is indubitably an electronic record in the form secondary evidence under the Indian Evidence Act which can become an admissible evidence only after the compliance with the provisions of the sections 65B(2) and 65B(4) of the said Act. 13.4. The entire evidence, which is the secondary evidence sought to be used by the Ld. AO, has to be disregarded and the same is inadmissible for the purpose of making assessment. 13.5. Following case laws are relied upon by the assessee in support of his aforesaid contention: a) A three-judge bench of the Hon’ble Supreme Court vide their judgment in the case of Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal and others [C.A.Nos.20825-20826 of 2017 dated 14-7-2020] gave finality to the legal conundrum pertaining to the requirement of certificate for producing electronic evidence under Section 65B of the Indian Evidence Act, 1872. The Hon’ble Supreme Court clarified that certificate required under Section 65B(4) of the Act is mandatory and a condition precedent to the admissibility of evidence by way of electronic record. b) Hon’ble Madras High Court in the case of SKM Animal Feeds and Foods (India) (P.) Ltd. V. ACIT, Central Circle [2023] 156 taxmann.com 385 (Madras) - para 22 & 23 c) Hon’ble ITAT Delhi Bench in the case of Ritu Tuli v. DCIT, ITA 2016/Del/2023 - para 10-14 d) Vishakhapatnam in Polisetty Somasundaram v. DCIT (ITA Nos. 172 to 180/Viz/2023) (Para 45 &46) 13.6. Hence, reliance placed on these uncertified, untested, and uncorroborated electronic documents is wholly untenable in the eyes of law, and any addition made on such basis deserves to be deleted.
The Learned AR drew our attention to the assessment order for the AY 2014-15 and focused on the statement of various officials of M/s SALT, M/s Dream and M/s Fast who, according to the Learned AO, have deposed against the assessee, stating inter alia that cash withdrawn from the bank accounts of M/s Dream and M/s Fast used to be handed over to the assessee and his brother for their own use and enrichment.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
The assessee, at the very inception, contended that the companies, namely M/s SALT, M/s Dream, and M/s Fast, have no connection with him in terms of ownership, shareholding, or directorship. It was explained that these entities are managed and controlled by separate individuals who are entirely unrelated to the assessee and operate independently. A flow chart/diagram was presented and discussed during the proceeding which is reproduced as under:-
From the aforesaid, the assessee sought to contend that M/s SALT was owned by Mr. Herbert Mohan Spratt, Mr. Hemant Dahiya and Mr. Abhishek Mehta, who were the shareholders and directors of the company. Likewise, M/s Dream was controlled by Smt. Supriya Verma, Shri Gaurav Karna and Shri Kumar Samar, and M/s Fast was controlled by Shri Kumar Samar, Shri Kumar Prashant, Smt. Prathvi Singh, Smt. Priya Ranjan Kumar, Shri Ravi Verma, Shri Kumar Rajesh Raman Page | 18
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
(w.e.f. 09.02.2018) and Shri Kumar Rakesh Raman (w.e.f. 09.02.2018), who were the shareholders and directors of the company.
The Learned AR stated that assessee used to render consultancy services to M/s Dream and M/s Fast, for which he was remunerated through banking channels, and such remuneration was duly disclosed and offered to tax in his personal return of income.
As far as the statements of the functionaries of M/s SALT, M/s Dream and M/s Fast were concerned, the Learned AR contended that they were false, contradictory, illegal and an attempt to hide their criminal conduct of withdrawing cash from the bank accounts of the companies, putting false bills in the company and siphoning of the funds for their own benefit. The assessee took us through the statement of Mr. Herbert Mohan Spratt, as relied upon by the Learned AO, who held 70% shareholding in SALT and was a director of the company. He claimed that he was merely a dummy shareholder and had not even paid any consideration for such shareholding. He further stated that he had been approached by the father of the Mutreja Brothers and Mr. Hemant Dahiya to become a director of SALT. According to the assessee, this statement is false and untrue. The Department itself had started benami proceedings against Mr. Herbert Mohan Spratt seeking to hold him as a benamidar of M/s SALT and Mutreja Brothers as the beneficial owners of the said company. The Learned Adjudicating Authority (PBPTA, New Delhi), vide its order dated 27.03.2025 (enclosed at page 215-271 of PBK II) held Mr. Herbert Mohan Spratt to be the real owner of SALT and shareholder/director of the company and the assessee
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
contended that based on this finding alone, the allegation of Mr. Herbert Mohan Spratt that he was the benamidar is false and incorrect.
Mr. Pawan Munjal in his statement stated that as far as his knowledge goes, SALT was run by Shri Sachin Mutreja and Shri Sameer Mutreja. The statement of Shri Amit Saxena, General Manager (Finance) - SALT, was relied upon by the Learned AO wherein he stated that the assessee and Shri Hemant Dahiya offered him to join SALT. Reference was made to the statement of the auditor of M/ SALT Shri S. Nayyar wherein he had requested the assessee to make payment of his fee for the various companies namely M/s SALT, M/s Scapes Reality, M/s Scoop, etc. Shri Nayyar further stated that Mutreja Brothers were taking financial decisions for M/s SALT. The Learned AO further placed reliance on the statement of the assessee that he received no consultancy fee from M/s SALT and he was rendering services to M/s Fast and M/s Dream who were vendors to M/s SALT.
The Learned AO placed reliance on the statement of Mr. Hemant Dahiya who explained how M/s SALT would raise invoice on HMCL with pre-decided mark up of 7% and how M/s Dream and M/s Fast would render services to M/s SALT and the process of billing. Reliance was placed on the statements of Mr. Gaurav Karna, Director of M/s Dream and Mr. Kumar Rajesh Raman, Director of M/s Fast and consultant of M/s SALT. Both stated that the cash withdrawn was shown as fake expenses in the books and was actually handed over to Mutreja Brothers, Mr. Hemant Dahiya and Mr. Abhishek Mehta through a person named Anwar. Mr. Kumar Rajesh Raman further stated, in response to Question No. 54 at pages 20 and 34 of the assessment order, that Anwar would directly deliver
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
the cash payments at the homes of the Mutreja Brothers, Hemant Dahiya and Mr. Abhishek Mehta. He further stated that cash so withdrawn was distributed in the ratio of 35% to Sameer Mutreja, 35% to Sachin Mutreja, 25% to Hemant Dahiya and 5% to Abhishek Mehta. The Learned AR stated that there is a contradiction in the statement by Mr. Anwar in as much as Mr Anwar in his statement to the Department at pages 21 and 35 of the assessment order contended that he used to collect cash from Bank after getting bearer cheques of M/s Dream and M/s Fast which were signed by Smt. Supriya Verma, Shri Gaurav Karna, and Shri Kumar Samar. He further stated that he worked as per the instructions of Mr. Amit Saxena and Mr. Kumar Rajesh Raman and the cash collected from Nisit Gupta was subsequently handed over to Mr. Raman. This is stated by Mr. Anwar at page 21 & 35 of the assessment order. According to the Learned AR, there is a major contradiction in the statement as Mr. Kumar Rajesh Raman claimed that Anwar, being on the payroll of M/s SALT, directly delivered cash to the alleged recipients i.e. Sameer Mutreja, Sachin Mutreja, Hemant Dahiya, Abhishek Mehta at their homes. On the contrary, Mr Anwar admits that he was acting under the instructions of Mr. Amit Saxena and the cash was collected from Nisit Gupta and handed over to Mr. Raman. Needless to add that Mr. Nisit Gupta’s statement has not been taken. Mr. Anwar in his statement to the Department at pages 21 and 35 of the assessment order stated that he maintained a red-coloured diary of the ‘Lotus’ brand in which he recorded the said transactions. However, the said diary was neither found during the course of search nor handed over by Mr. Anwar to the Department, and the same has not been relied upon by the Learned AO.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
According to the Learned AR, the entire narrative is a concocted story devised to falsely implicate the assessee and the apparent contradictions in the statements clearly expose the falsity of the allegations of the Learned AO.
The Learned AR contended that there is no incriminating material found which is even remotely suggestive of any undisclosed income. It was submitted that the Learned AO has merely relied upon the self-serving and contradictory statements of Mr. Herbert Mohan Spratt, Mr. Kumar Rajesh Raman, Mr. Anwar, Mr. Gaurav Karna, Mr. Amit Saxena and Mr. S. Nayyar. The Learned AR referred to para 6.5 of the assessment order placing strong reliance on the letters filed by M/s Dream and M/s Fast in response to the query raised in respect of the cash withdrawals made by the said companies. The said letters have been reproduced by the Learned AO at pages 25 to 28 of the assessment order. The crux of the letters by M/s Dream and M/s Fast is that the cash withdrawn by them was utilized for booking expenses in the nature of business promotion, including payments to promoters and supervisors, as well as expenses towards canter hire, diesel, food and beverages, local conveyance, banner printing, gift items, etc. According to the said letters, the entire cash withdrawals were utilized for business promotion purposes; the same were in accordance with law, and were allowable in the hands of the respective companies. For the sake of convenience, the relevant portion of the letter is reproduced as under:-
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
The Learned AR contended that once M/s Dream and M/s Fast, vide their respective letters, have categorically stated that the entire cash withdrawn by them was utilized as business expenditure of the said companies, it is inconceivable as to how the very same withdrawals for expenses can be alleged to have been handed over to the Mutreja Brothers for their personal benefit and enrichment. Hence, the entire narrative put forth by the Learned AO is a figment of imagination, contradictory and clearly points to the fact that the assessee is being falsely implicated by the persons in control of M/s SALT, M/s Dream and M/s Fast.
Before the Learned CITA, the assessee reiterated the aforesaid contentions. However, the same were summarily rejected and the action of the
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
Learned AO was upheld by the Learned CITA for all the years under consideration.
With regard to the ground relating to cross-examination of third parties whose statements were relied upon against the assessee, the Learned CITA opined that cross-examination is not mandatory in every case.
On merits, the Learned CITA, while accepting that the Mutreja Brothers were neither shareholders nor directors, proceeded to examine the concept of Significant Beneficial Ownership and upheld the Learned AO’s conclusion that, under the guise of consultancy and brand promotion expenses, cash withdrawn by the companies was handed over to the Mutreja Brothers on the basis of statements given by various individuals. It was further concluded that Mutreja Brothers were the real owners of M/s SALT, M/s Dream, and M/s Fast, and that the Learned AO found that they exercised clear influence and control over M/s SALT.
On the issue of invocation of section 69A of the Act in respect of these transactions, the Learned AR contended that the same cannot be legally invoked in the facts and circumstances of the instant case. There is no documentary evidence whatsoever to suggest that any cash withdrawn from M/s Dream and M/s Fast was handed over to the Mutreja Brothers. The entire allegation rests solely upon the false and contradictory statements of Mr. Herbert Mohan Spratt, Mr. Kumar Rajesh Raman, Mr. Anwar, Mr. Gaurav Karna, Mr. Amit Saxena, Mr. S. Nayyar, and Mr. Pawan Munjal. Hence the requirement of section 69A of the Act being that the assessee must be found to be the owner of money is not fulfilled as there is no evidence of the same. Page | 24
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
It was further submitted that ‘ownership’ connotes possession and control over the money to the exclusion of others, coupled with the ability to deal with and utilize the same at one’s discretion. In this case, the money belonged to the companies from where it was withdrawn and had been booked as expenditure by them in their accounts. How then the assessee can be held to be the owner of the money which has been expensed by the companies. The Learned AR vehemently relied upon the judgement of the Hon'ble Supreme Court in the case of D. N. Singh vs CIT reported in 454 ITR 595 (SC) for the proposition that ownership means total ownership to the exclusion of the rest of the world. As an analogy, a thief cannot be the owner and section 69A of the Act would not apply. The Learned AR also placed reliance on the following decisions in support of his proposition that Section 69A of the Act would apply if actual money is found to be in the possession and not merely by way of untested statements of third parties:-
a) ACIT v. Trilok Chaudhary, ITA No. 1450/Del/2024 b) DCIT v. Yograj Arora, ITA No. 2440/Del/2022 c) M/s. Rucha Consultancy LLP v. DCIT, Central Circle-6(1), ITA No. 4996/Mum/2024 d) Tushar Anand v. DCIT, ITA No. 1772/Del/2024
The Learned AR further pointed out that Section 69A of the Act would come into operation only when the source of the money is not found or the explanation about the source is not to the satisfaction of the Assessing Officer. Section 69A of the Act is a deeming provision which taxes money, bullion,
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
jewellery, or other valuable articles only if its source is not established. In this case, the source is clearly established as per the Learned AO’s own findings i.e. being cash withdrawal from the bank account owned by M/s Dream and M/s Fast and therefore, if the source of cash is established, Section 69A of the Act cannot be pressed into service.
The assessee contended that Mr. Herbert Mohan Spratt was held to be the owner of M/s SALT under the Benami Property Transactions Act, 1988 and, therefore, Mutreja Brothers cannot be held to be the beneficial owner of M/s SALT since the findings given under the Benami Property Transactions Act, 1988 would be binding on the Income Tax Department. He argued that even if it is construed as a persuasive value, still the factual findings given by Benami Property Transactions Act, 1988 cannot be ignored at once.
The Learned AR further contended that the cross examinations of all the persons who deposed against the Mutreja Brothers were asked for on many occasions before the Learned AO as well as before the Learned CITA and the same were not allowed. He relied upon the judgements of the Hon'ble Supreme Court in the case of M/s Andaman Timber Industries v. CCE reported in 281 CTR 241 wherein it was held that third party statement cannot be used in the absence of cross examination, being provided.
Per Contra, the Learned DR vehemently opposed the contentions of the Learned AR and strongly supported the order of the Learned CITA stating inter alia that the statements given by Mr. Herbert Mohan Spratt, Mr. Kumar Rajesh Raman, Mr Anwar, Mr. Gaurav Karna. Mr. Amit Saxena, Mr. S. Nayyar, Mr. Hemant Dahiya and Mr. Pawan Munjal were conclusive in nature and that the Page | 26
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
intimate association of the Mutreja Brothers with M/s Dream, M/s Fast and M/s SALT stood established beyond doubt. The Learned DR vehemently submitted that the Mutreja Brothers were the architects of this entire game plan and hence the entire addition made under section 69A of the Act deserves to be upheld.
Having gone through the orders and supporting documents, it is evident that, apart from the statements of the functionaries of M/s SALT, M/s Dream and M/s Fast, there is no incriminating evidence demonstrating any transmission of cash withdrawn by these entities to the Mutreja Brothers. The revenue’s initial allegation was that M/s HMCL through M/s SALT and other group companies was funding certain personal expenses of Mr. Pawan Munjal of the Hero Group; however, the ultimate conclusion drawn by the Learned AO was that a portion of the cash so withdrawn by the said entities had found its way to the Mutreja Brothers and was, therefore, liable to be taxed under Section 69A of the Act in their hands. As rightly pointed out by the Learned AR, we find that there are many contradictions in the statement of Shri. Kumar Rajesh Raman, Shri. Herbert Mohan Spratt, Shri. Anwar and many others. Shri. Herbert Mohan Spratt claimed that he was only the benami of Mutreja brothers and the company M/s SALT belongs to Mutreja brothers. But the Learned Adjudicating Authority vide their order dated 27.03.2025 under the Benami Property Transaction Act, 1988 have clearly held Mr. Herbert Mohan Spratt is not the benamidar of M/s SALT and Mutreja brothers are not the beneficial owners. It would not be out of place to reproduce the relevant portion of the decision of Learned Adjudicating Authority which is as under:-
“…….If the statement of Shri Herbert Mohan Spratt tendered before the DRI is accepted (though it has already been concluded that his statement cannot be relied upon), wherein Page | 27
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
he admitted that he paid Rs. 70,000/- as share capital, in such situation the person providing consideration is clearly traceable. Then no case of benami transaction u/s 2(9)(D) would come into play. Moreover, no case of benami transaction can be said as he paid the consideration for which shares acquired in his name. Since, Shri Herbert Mohan Spratt has changed his stand before different authorities, his statements cannot, therefore, be relied upon, and based of his statements it cannot be said that person providing consideration is not traceable or is fictitious. Therefore, it is concluded that the impugned transaction cannot be said benami transaction under Section 2(9)(D) of the PBPT Act.\ 5.6 In view of above, it is concluded that the IO has wrongly held the transactions under question as a benami transactions, the property under question as benami property, D-1 to be benamidar, and D-2 and D-3 to be beneficial owner.” Hence by placing reliance on the aforesaid finding, we hold that M/s SALT belongs to Mr. Herbert Mohan Spratt and not to the Mutreja Brothers.
We find that the statement of Mr. Kumar Rajesh Raman is contradictory in as much as he claimed that Mr. Anwar, an employee of M/s SALT would hand over the cash to Mutreja Brothers whereas Mr. Anwar stated that he would hand over the cash to Raman. Besides, Mr. Kumar Rajesh Raman is the director in the company and would withdraw cash belonging to M/s Dream & M/s Fast and book the entire cash as expense in the books of the said companies. Having booked expenditure for the cash withdrawals made in the books of the company, it cannot be simply alleged at the same breath that the expenses were bogus and instead the cash were handed over to Mutreja Brothers. Further we find that in the assessment order at pages 25 to 28, M/s Dream and M/s Fast addressed letters to the Learned AO stating that the entire cash withdrawn had been utilized and claimed as business expenditure of the respective companies. We are unable to comprehend ourselves to accept to the proposition of the Learned DR that when such expenditure has been incurred by the companies and duly Page | 28
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
reflected in their audited Profit and Loss Accounts and Balance Sheets placed before us, how can it be alleged that the very same expenses, which stand booked, were not genuine, and that the cash representing those expenses was instead handed over to the Mutreja Brothers. This argument of the revenue does not draw support from the audited balance sheets of M/s Dream and M/s Fast. If that were so, it would imply that the audited financial statements of the said companies are false and concocted, which has never been the case of the revenue. Thus, there exists a clear contradiction: on one hand, the directors of M/s Dream and M/s Fast stated that the cash withdrawn from the bank accounts was handed over to the Mutreja Brothers; on the other hand, by way of letters addressed to the Learned AO, they categorically stated that the entire cash withdrawn was duly booked as business expenditure of the companies. Hence, on this ground alone, the addition made by the Learned AO for various assessment years deserves to be deleted.
We find that the assessee has made repeated requests for cross examination of the third parties who deposed against him. They have not been allowed and Learned CITA has summarily rejected the assessee’s requests which is totally against the principles of natural justice. Cross examination of third party statements is mandatory and in the absence of the same they cannot be put to use. Besides, there is no corroborative evidence that is found to substantiate the third-party statements. It is settled law that third party statements in the absence of any proof of corroborative evidence to substantiate the same, have no evidentiary value. Reliance in this regard is placed on the following decisions of Hon’ble Jurisdictional Delhi High Court:-
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
a) PCIT vs Best Infrastructure (India) (P.) Ltd reported in 397 ITR 82 (Del)
b) PCIT vs Pavitra Realcon Pvt. Ltd reported in 481 ITR 663 (Del)
c) PCIT vs Anand Kumar Jain reported in 133 taxmann.com 288 (Del HC).
Now let us get into the applicability of provisions of section 69A of the Act per se. The mandatory requirement under Section 69A of the Act is that the assessee must be found to be the owner of the money, which has not been established. No evidence of cash with the Mutreja Brothers has been found during the search. Besides, the source of the cash is withdrawal out of bank accounts of M/s Dream and M/s Fast. Where the source of cash is established, addition in respect of unexplained money u/s 69A of the Act cannot be made. Hence we are in agreement with the arguments advanced by the Learned AR in this regard.
In view of the aforesaid factual findings and the inapplicability of section 69A of the Act, the addition of Rs. 2,08,03,272 for AY 2014-15 made under section 69A of the Act is deleted. The grounds raised by the assessee in this regard are hereby allowed.
Since the facts and circumstances and the grounds raised by the assessee for AYs 2015-16 to 2020-21 are identical, except with variance in figures, the findings given by us hereinabove for AY 2014-15 shall apply mutatis mutandis to those assessment years as well qua this issue of addition under section 69A of the Act on account of cash withdrawals made by third party companies being allegedly paid to Mutreja Brothers.
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
The assessee vide Ground Nos. 6 to 6.2. for AY 2014-15 had challenged the addition of Rs 9,75,000 being 50% of the expenses incurred by M/s Fast on Mutreja Brothers in respect of purchase of foreign currency from M/s Pheroze Framroze & Company Ltd on account of summer trip taken by them. Hence according to M/s Fast, this is purely personal expenses of Mutreja Brothers and therefore to be added in their hands under section 69A of the Act.
We have heard the rival submissions and perused the materials available on record. At the outset, we hold that the applicability of provisions of section 69A of the Act itself should be tested as to whether the same could be made applicable to the impugned transaction. We find Section 69A of the Act applies only in cases where the assessee is found to be the owner of money, bullion, jewellery, or other valuable articles not recorded in the books of account. In the present case, the foreign currency expenditure was duly incurred and recorded in the regular books of account of M/s Fast. The source of such expenditure was the disclosed bank account of M/s Fast, forming part of its audited financial statements. Once the transactions are duly recorded in the books and the source is traceable to the disclosed bank account of M/s Fast, the essential preconditions for invoking Section 69A of the Act cease to exist. The findings given by us hereinabove on the applicability of provisions of section 69A of the Act shall apply with equal force for these grounds also. Further we find that the purchase of foreign currency expense has been incurred by M/s Fast and they had claimed the same as revenue expenditure in their hands. If it is found to be personal expenses of Mutreja Brothers, then the said expenditure should be considered for disallowance in the hands of M/s Fast and no addition could be made in the hands of the assessee herein for the same as there is no agreement Page | 31
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
between the company and Mutreja Brothers for providing any benefit in cash or any kind other than consultancy fees. It is not in dispute that the consultancy fees received by the assessee had been duly offered to tax in his returns. Further we find that there is nothing to show that there was any obligation of the company to provide for foreign expenses of the Mutreja Brothers and, there is nothing to suggest that expense has not been allowed in the hands of the company. Hence, the addition being 50% of Rs. 19,50,000/- i.e. Rs. 9,75,000/- in the hands of Sameer Mutreja, assessee herein is hereby deleted.
Ground Nos. 6 & 6.2 for AY 2017-18 challenges a sum of Rs. 1,17,88,154/- being legal expenses incurred by M/s Dream relating to arbitration case against M/s WPP in Singapore.
We have heard the rival submissions and perused the materials available on record. We find that according to the revenue, this legal expense has nothing to do with M/s Dream and is for personal expenditure of Mutreja Brothers and, therefore to be treated as unexplained money under section 69A of the Act in the hands of the assessee. It is not in dispute that the said legal expenses had been claimed as deduction in the books of account of M/s Dream and the same is sourced out of its disclosed bank account. Further it was submitted by the Learned AR that there is no agreement between the company and Mutreja Brothers which enjoins the company to incur this expenditure on behalf of Mutreja Brothers. The Learned AR submitted that this is an expense incurred at the direction of M/s SALT for the survival of its own business operation since any adverse decision in the arbitration proceeding between M/s WPP in Singapore and the assessee could have adversely affected the business
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
of M/s SALT. The Learned AR drew our attention to the submissions dated 18-3- 2024 made by the assessee before the Learned AO enclosed in Page 302 of the Paper Book 1. We are convinced that the impugned amount pertains to expenditure incurred and duly recorded in the regular books of account of M/s Dream, the source whereof is the disclosed bank account of M/s Dream. Once the source stands established and traceable to the books of account, the foundational requirement for invoking Section 69A of the Act ceases to exist. Further, the expenditure in question does not represent money, bullion, jewellery, or other valuable articles or things as contemplated under Section 69A of the Act. Accordingly, Section 69A of the Act is held to be inapplicable to the present case and the addition made in this regard in the hands of the assessee is hereby deleted.
Since the facts and circumstances and the grounds raised by the assessee in this regard for AYs 2018-19 and 2019-20 are identical with AY 2017-18, except with variance in figures, the findings given by us hereinabove for AY 2017-18 shall apply mutatis mutandis to these assessment years as well.
Ground No. 6.3. raised by the assessee challenges the addition of Rs. 23,14,375/- made in respect of AY 2017-18 under section 69A of the Act on account of cash generated through bogus purchase and purportedly handed over to Mutreja Brothers for their personal use and enrichment.
We have heard the rival submissions and perused the materials available on record. We find that in the assessment order, it has been alleged that M/s SALT, M/s Scoop and M/s Dream were engaged in making bogus purchases from certain shell entities, namely M/s Creative Mind Media Pvt. Ltd., M/s Impulse Page | 33
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
Business Convergence Pvt. Ltd., and M/s Optim Ad-Media Pvt. Ltd. It is further alleged that these entities declared a meagre income of approximately 1% and withdrew cash corresponding to the payments received from M/s SALT, M/s Scoop and M/s Dream against such purchases. The said cash, according to the Learned AO, was thereafter handed over to the Mutreja Brothers, Hemant Dahiya and Abhishek Mehta. According to the Inspector’s report, the address all of the three companies namely M/s Creative Mind Media Pvt. Ltd., M/s Impulse Business Convergence Pvt. Ltd. and M/s Optim Ad-Media Pvt. Ltd were incorrect and the persons living there had no knowledge about these companies. The directors of the company Shri Mahendra Pal (Director of M/s Impulse Business Convergence Pvt. Ltd.) and Shri Rakesh Kumar (Director of M/s Creative Mind Media Pvt. Ltd.) conceded that the said companies were bogus and would only raise bogus sales invoices on M/s SALT, M/s Dream and M/s Scoop and would withdraw cash and hand over the same to Mutreja Brothers. According to Mr. Kumar Rajesh Raman, a total amount of Rs. 17,81,47,900/- (Rs. 6,21,33,000/-, Rs. 5,52,68,500/- and Rs. 6,07,46,400/-) was booked for various years from the shell entities, namely M/s Creative Mind Media Pvt. Ltd., M/s Impulse Business Convergence Pvt. Ltd. and M/s Optim Ad-Media Pvt. Ltd., and the cash generated was distributed in the ratio of 35% to Sameer Mutreja, 35% to Sachin Mutreja, 25% to Hemant Dahiya and 5% to Abhishek Mehta. The Learned AR submitted that no incriminating material whatsoever was found during the course of search to establish that any cash was handed over to the Mutreja Brothers or to any other person as alleged. It was further clarified that Mr. Kumar Rajesh Raman, Mr. Mahender Pal and Mr. Rakesh Kumar were, in fact, defrauding the company, and their actions cannot be attributed to the Mutreja
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
Brothers herein. The Learned AR categorically submitted that the Mutreja Brothers had no association with the said companies in any capacity, whether as shareholders or directors, and therefore, the allegation of cash being generated for personal use and enrichment of the company or its officials and attributing the assessee to be the beneficiary of those cash is wholly baseless and devoid of any supporting evidence. The cross examination sought was not allowed and that the statement given by Mr. Kumar Rajesh Raman and Mr. Mahender Pal were self-serving in nature. The Learned AR submitted that as per the Learned AO, Mr. Rakesh Kumar and Mr. Mahender Pal are admittedly the director in M/s Impulse Business Convergence Pvt. Ltd. and M/s Creative Mind Media Pvt. Ltd respectively. No relationship in terms of shareholding or directorship has been shown in respect of these companies’ vis-a-vis Mutreja Brothers. In fact, there is no linkage of the Mutreja Brothers, Mr. Hemant Dahiya and Mr. Abhishek Mehta with the said three companies as per the assessment order or any other document. Hence the findings given hereinabove by us for AY 2014-15 with regard to the ownership of cash in the hands of the assessee within the meaning of section 69A of the Act shall apply for this issue also raised for the AY 2017-18. Hence we hold that the application of provisions of section 69A of the Act in the hands of the assessee is totally flawed and the addition made thereon is hereby deleted in the hands of the assessee in the sum of Rs 23,14,375 for AY 2017-18.
Since the facts and circumstances in AYs 2018-19 and 2019-20 are identical and the additions on account of cash generated through bogus purchase and purportedly handed over to Mutreja Brothers therein have been made on the same set of allegations and material, our findings recorded
ITA Nos. 5098 to 5104/Del/2025 Sameer Mutreja ITA Nos. 4951 to 4957/Del/2025 Sachin Mutreja
hereinabove for AY 2017-18 shall apply mutatis mutandis to AYs 2018-19 and 2019-20 also qua this issue, except with variance in figures.
In view of our decision given hereinabove for other grounds supra, the Ground Nos. 5, 7,8,9,10,11, 12 & 16 raised by the assessee for AY 2014-15 are left open. Similar grounds raised for AYs 2015-16 to 2020-21 are also left open.
All the grounds adjudicated hereinabove for Shri Sameer Mutreja shall apply mutatis mutandis for his brother Shri Sachin Mutreja also.
In the result, all the appeals of the assessee are allowed.
Order pronounced in the open court on 02/04/2026.
-Sd/- -Sd/- (MAHAVIR SINGH) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER
Dated: 02/04/2026 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi