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UMMESALMA HUZEFA GHADIALI,MUMBAI vs DCIT-CENTRAL CIRCLE 4(2), MUMBAI, MUMBAI | BharatTax

UMMESALMA HUZEFA GHADIALI,MUMBAI vs. DCIT-CENTRAL CIRCLE 4(2), MUMBAI, MUMBAI

ITA 8186/MUM/2025Status: DisposedITAT Mumbai26 February 2026AY 2018-19Bench: HON’BLE SHRI SANDEEP GOSAIN (Judicial Member), SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages

AI SummaryAllowed

Facts

The assessee appealed against orders confirming the addition of 'on-money' payments made during the purchase of shops. These additions were based on a search and seizure operation on the Rubberwala group, where documents related to cash collection on sales were found. The AO relied on third-party statements and seized materials, but the assessee denied making such payments.

Held

The Tribunal held that additions made solely on third-party information without corroboration and without providing the assessee an opportunity for cross-examination are unsustainable. The lack of independent material and the failure to grant cross-examination violate the principles of natural justice.

Key Issues

Whether the addition of 'on-money' payment is sustainable without corroborative evidence and without affording the assessee the opportunity for cross-examination.

Sections Cited

153C of the Income-tax Act, 1961, 132(4) of the Act, 69B of the Act, 153 of the Act

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH MUMBAI

Before: HON’BLE SHRI SANDEEP GOSAIN& SHRI BIJAYANANDA PRUSETH

For Appellant: Shri Pratik Jain

For Respondent: Shri Vivek Perampurna, CIT DR& Shri

Hearing: 24.02.2026Pronounced: 26.02.2026

Date of Hearing 24.02.2026 Date of Pronouncement 26.02.2026 आदेश / ORDER PER BENCH: The present appeals have been preferred by the assessee against the separate orders dated 13.09.2025 passed by the National Faceless Appeal Centre / CIT(A), Mumbai for the A.Ys 2017-18 to 2019-20. 2 Since all the issues involved in these appeals are common and identical, therefore, they have been clubbed, heard together and consolidated order is being passed for the sake of convenience and brevity. We shall take A.Y 2017-18as lead case and facts narrated therein.

, A.Y 2017-18 The following grounds of appeal have been raised by the assessee:

1. On the facts and circumstances of the Appellant's case and in law the Id. CIT(A) erred in passing an ex-parte order without providing adequate opportunity of being heard to the appellant.

2. On the facts and circumstances of the Appellant's case and in law, the Id. CIT(A) erred in confirming the action of the ld. AO in passing the impugned assessment u/s 153C of the Income- tax Act, 1961 ('the Act) in the absence of any incriminating material found during the course of search, making the assessment order illegal and without jurisdiction.

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

4.

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

10. I have considered rival submissions and perused material on record. Undisputedly, the genesis of the addition made of ` 42 lakh on account of alleged payment of on–money in cash towards purchase of a flat lies in a search and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing Officer has not discussed in detail the nature of incriminating material / evidence available on record to indicate payment of on–money in cash by the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th March 2015, which is reproduced by the Assessing Officer in the assessment order, it appears that the incriminating materials are in the form of pen drive found and seized from the residence of one of the employees of Hiranandani Group and a statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani, Director and Promoter of the Group, wherein, the details of on– money paid by buyers / prospective buyers to Hiranandani Group concerns are mentioned and further, in the statement recorded under section 132(4) of the Act on 14th March 2014, Shri Niranjan Hiranandani, has admitted receipt of on–money in cash towards sale of flats / shops. Thus, it is clear that except these two pieces of evidences the Assessing Officer had no other evidence on record which demonstrates that the assessee had paid on–money in cash for purchase of the flat. It is further relevant to observe, from the assessment stage itself the assessee has requested the Assessing Officer to provide him with all adverse materials and full text of the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also requested the Assessing Officer for allowing her to cross–examine Shri Niranjan Hiranandani and other parties whose statements were relied upon. Apparently, this request of the assessee was not acceded to by the Assessing Officer. When the assessee took up the 11 aforesaid issue before the first appellate authority, the learned Commissioner (Appeals) in letter dated 18th July 2016, had clearly directed the Assessing Officer to provide the assessee all adverse materials / documentary evidences available with him indicating payment of on–money. However, on a perusal of the remand report dated 23th June 2017, a copy of which is at Page–53 of the paper book, it is very much clear that the Assessing Officer has completely avoided the issue and there is no mention whether the assessee was provided with all the adverse material and if, not so, whether he has provided them to the assessee as per the directions of the learned Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of ` 42 lakh made on account of on–money payment in cash is without complying with the primary and fundamental requirement of rules of natural justice. It is well settled proposition of law that if the Assessing Officer intends to utilize any adverse material for deciding an issue against the assessee he is required to not only confront such adverse materials to the assessee but also offer him a reasonable opportunity to rebut / contradict the contents of the adverse material. Further, the assessment order reveals that the Assessing Officer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for making the disputed addition. However, it is the allegation of the assessee, which prima–facie appears to be correct, that the Assessing Officer has not provided the full text of such statement recorded and has also not allowed the assessee an opportunity to cross–examine Shri Niranjan Hiranandani, and other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural justice and against the basic principle of law. In this context, I may refer to the decision of the Tribunal, Mumbai Bench, in Nikhil Vinod Agarwal (supra). Thus, for the aforesaid reason, the addition made cannot be sustained.

11.

Even otherwise also, the addition made is unsustainable because of the following reasons. As discussed earlier in the order, the basis for addition on account of on–money is the information contained in the pen drive found during the search and seizure operation and the statement recorded under section 12 132(4) of the Act. As regards the information contained in the pen drive, it is the contention of the assessee that the said pen drive was not found from the possession of the assessee but in course of search and seizure operation conducted in case of a third party. Therefore, in absence of further corroborative evidence to establish that the contents of the pen drive are correct and authentic to the extent that the assessee paid on–money in cash, no addition can be made under section 69B of the Act. Further contention of the assessee is that in the statement recorded under section 132(4) of the Act, Shi Niranjan Hirandani has not made any reference to the assessee, therefore, in absence of any other corroborative evidence to establish that assessee has paid on–money in cash, no addition can be made. I find substantial merit in the aforesaid submissions of the assessee. In my view, neither the information contained in the pen drive nor the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani are enough to conclusively establish the factum of payment of on–money by the assessee. At best, they can raise a doubt or suspicion against the conduct of the assessee triggering further enquiry / investigation to find out and bring on record the relevant fact and material to conclusively prove the payment of on–money by the assessee over and above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / material on record to prove the payment of on–money by the assessee. More so, when the assessee from the very beginning has stoutly denied payment of on–money in cash. Notably, while dealing with a case involving similar nature of dispute concerning similar transaction with another concern of Hiranandani Group, the Tribunal in case of Shri Anil Jaggi v/s ACIT (supra) has held as under:– ……..