JITENDRA MAFATLAL JAIN ,MUMBAI vs. ACIT, CENTRAL CIRCLE 4(2), MUMBAI

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ITA 7742/MUM/2025Status: DisposedITAT Mumbai20 February 2026AY 2019-2018 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the grounds raised by the assessee were covered by previous decisions of the Coordinate Bench. The Tribunal referred to a case where the assessment under Section 153C was based on materials found during a search, but the assessee denied cash payments, and the Tribunal found that the addition was based on uncorroborated third-party statements.

What were the facts?

The assessee appealed against the CIT(A)'s orders for AYs 2019-20 and 2020-21, which upheld additions made under Section 153C and Section 69 of the Income Tax Act. The primary dispute revolved around the validity of the notice issued under Section 153C and the basis for the unexplained investment addition.

What were the issues?

The key issues were the legality of the notice and assessment under Section 153C, the validity of additions for unexplained investments based on third-party statements, and the applicability of Section 115BBE.

Which sections of the Income-tax Act were involved?

Section 153C,Section 69,Section 147,Section 148,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, F BENCH MUMBAI

Before: HONBLE SHRI SANDEEP GOSAIN& SHRI BIJAYANANDA PRUSETH

For Appellant: Shri Bharat Kumar
For Respondent: Shri Vivek Perampurna, CIT DR
Hearing: 29.01.2026Pronounced: 20.02.2026

PER SANDEEP GOSAIN, JM: The present appeals have been preferred by the assessee against the separate orders dated 11.10.2025 passed by the National Faceless Appeal Centre / CIT(A), Mumbai for the A.Ys 2019-20 & 2020-21 Since all the issues involved in these two 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 ITA No. 7742/Mum/2025, A.Y 2019-20 as lead case and facts narrated therein. ITA No. 7742/Mum/2025, A.Y 2019-20 1The Ld. CIT(A) failed to appreciate that the notice issued by the jurisdictional AO is bad-in-law and illegal; 2 The Ld. CIT(A) erred in upholding the validity of the notice issued and assessment framed under Section 153C of the Act. The Ld. CIT(A) failed to appreciate that provisions of section 147 r.w.s. 148 of the Act is applicable and not the provisions of section 153C. The issuance of the said notice and consequent assessment farmed u/s.153C is bad in law, illegal, without jurisdiction and void ab-initio; 3 On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the AO has not referred to any incriminating material in the satisfaction note issued to the Appellant; 4 The Ld. CIT(A) erred in confirming the assessment order by not appreciating that the Assessing Officer (AO) had failed to provide the opportunity for cross- examination of the third party whose statement and/or material was relied upon to frame the assessment. Under the circumstances and in law, the Assessment Order passed u/s.153C is against the principal of natural justice, bad-in-law and liable to be quashed;

5.

1 The Ld. CIT(A) erred in confirming the addition of Rs.2,50,000/- u/s.69 of the Income Tax Act, 1961 as unexplained investments on account of alleged cash payment towards the purchase of shop premises over and above the agreement value of shop. The Ld. CIT(A) failed to appreciate that the addition is based solely on the uncorroborated statement of third party/parties and there is no tangible and incriminating material on record. The addition confirmed is bad- in-law and based on surmises, conjectures and unreliable evidences and liable to be deleted;

5.

2 The Ld. CIT(A) erred in confirming the addition of Rs. 2,50,000/- made in the assessment year 2019-20 and failed to appreciate that no material is brought on record to establish that the alleged payment was made during the year under consideration. The appellant had neither purchased any property nor made any payment to the alleged party during the year under consideration. In the absence of any conclusive documentary evidence linking the date of transaction to the relevant assessment year, the addition is arbitrary, bad in law, and liable to be deleted. 6 The Ld. CIT(A) erred in confirming the tax computed as per the provisions of section 115BBE of the Act. The Ld. CIT(A) failed to appreciate that the AO has not invoked the provisions of section 115BBE of the Act in the Assessment order. However, in computation sheet, the AO has calculated tax invoking the provisions of section 115BBE of the Act. The application of the special tax rate is invalid and without jurisdiction, and therefore, the tax should have been computed at the normal applicable rates.

3.

At the very outset Ld. AR submitted that the grounds in question raised by the assessee are squarely covered by the series of the decisions of the Coordinate Bench of ITAT in the following cases:

1.

ITA Nos. 4742 to 4744/Mum/2025, Pravin K Purohit Vs. DCIT

2.

ITA Nos. 5553 to 5555/Mum/2025, Akhraj P Chopra Vs. DCIT

3.

ITA Nos. 6363 to 6365/Mum/2025, Bhavana V. Jain Vs. ACIT

4.

ITA Nos. 6523 to 6525/Mum/2025, Bharat Solanki Vs. DCIT.

5.

ITA Nos. 5499 to 5501/Mum/2025, Manish K Seksaria Vs. DCIT

6.

ITA Nos. 5552 & 5556/Mum/2025, Mishra Ganesha ITA Nos. 6571, 6569 & 6568/Mum/2025, Manish Mali Vs. DCIT

8.

ITA Nos. 5488 to 5489/Mum/2025, Darpan H Mehta Vs. DCIT

9.

ITA Nos. 6480, 6479 & 6479/Mum/2025, Dinesh Megharam Choudhary.

3.

In the case of Pravin K Purohit (supra), the coordinate Bench of ITAT Mumbai Bench had decided the issue in favour of the assessee, the operative portion of the same is reproduced herein below:

8.

We have heard the arguments for both the parties and have also perused the material placed on record, judgements cited before me and the orders passed by the revenue authorities. From the records, we noticed that the assessment was completed u/s 153C on account of the fact that a search and seizure action was conducted on 17.03.2021 on Rubberwala group. In search action, premises of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL), its promoter and director-Shri Tabrez Shaikh, and a key employee of Rubberwala group Shri Imran Ansari, who was handling sale & registration of shops in “Platinum Mall” project of RHIL were covered. Among others, statement of these persons were recorded on oath on various dates during the course of search as well as post search proceedings. The employee of Rubberwala group confirmed that the cash has been collected from the respective buyers of the shops. However, on the other hand, the assessee denied payment of cash. We noticed that during the search a pendrive with the details of cash transactions with respect to Rubberwala group was found, which was confirmed through statement of Shri Imran Ansari recorded U/s 132(4) of the Act and on this basis, 153C order was framed and the same was upheld by the Ld.CIT(A).

9.

We noticed that Ld. CIT(A) although referred the decision of the coordinate bench in case of Rajesh Jain on identical issue but misplace its reliance. After having gone through the basic facts of Rajesh Jain case which is mentioned by Ld. CIT(A) in its order and the same is reproduced as under:

5.1.

On 17.03.2021, the residential premise of the assessee was also covered by way of search action u/s 132 of the IT Act, 1961. Search action was also initiated on Rubberwala group on 17.03.2021. In such action along with premises (offices/sites/others) of Rubberwala group entities, residences of various key persons including its promoter and director Shri Tabrez Shaikh, and Shri Imran Ansari a key employee of Rubberwala group handling sale & registration of shops in “Platinum Mall” project of RHIL were covered under section 132 of the Act. Among others, statement of these persons were recorded on oath on various dates during search as well as post search proceedings.

5.2.

During the action on Rubberwala Group, among other, residence (at 109, 2nd Floor, Prabhat Sadan, 109/120 RBC Marg, Agripada, Mumbai Central 400011) of Shri Imran Ashfaque Ansari was covered under section 132 of the I.T. Act, 1961. His statement was also recorded on oath at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, Shri Imran Ansari was questioned about his roles and responsibilities in M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, Shri Imran Ansari stated that he has been working with Rubberwala group of entities since 2010 and inter-alia handling sale and registration of the shops in “PlatinumMall” Project of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL).

5.3.

Shri Imran Ansari in his response to question no. 13 & 14 of the said statement explained the complete procedure of the of the sale of shops in the “Platinum Mall

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