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Facts
During a search action, it was found that the assessee had paid Rs. 32,45,300/- in cash for the purchase of a commercial property from M/s. Rubberwala Housing and Infrastructure Ltd. (RHIL). The AO made an addition of this amount to the assessee's income under section 69C of the Act, which was upheld by the CIT(A).
Held
The Tribunal held that the addition made solely on the basis of information received from investigation proceedings in another group case and third-party statements, without any cogent evidence against the assessee, particularly when the assessee denied the transactions, cannot be sustained. This was in line with previous decisions of the Coordinate Bench.
Key Issues
Whether the addition made on account of alleged cash payment for purchase of property, based on third-party statements and without direct evidence, is sustainable?
Sections Cited
250, 132, 153C, 69C
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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI MAKARAND VASANT MAHADEOKAR
Huwaida Iqbal Sayed vs DCIT, Central Circle-4(2), Mumbai 1102, 11th floor, Yusuf Manzil, 419, Kautilya Bhavan, BandraKurla Dr. Anandrao Nair Road Complex, Mumbai-400051 Agripada, Mumbai-400011 PAN : DLDPS9405N APPELLANT RESPONDENT Assessee by : Shri Prashant Ghumare Respondent by : Shri Ritesh Misra (CIT DR) Date of hearing : 22/01/2026 Date of pronouncement : 29/01/2026 O R D E R Per Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the Ld. Commissioner of Income-tax (Appeals)-52, Mumbai [for brevity, ‘Ld.CIT(A)’], order passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act), date of order 11.10.2025 for the Assessment Year 2021-22. The impugned order emanated from the order of the Learned Deputy Commissioner of Income-tax
We heard the rival submission and considered the document available in the record. The assessee filed the original return by declaring total income Rs.3,66,810/-. Further a search and seizure action under section 132 of the Act was carried out on 17.03.2021 in Rubberwala Group and Others. During the search action the evidence was gathered and it was found that the assessee had purchased shop in Platinum Mall Building, Girgaon, Mumbai and amount of Rs.32,45,300/-. The assessee paid the cash on acquisition of the said commercial property. Accordingly, notice u/sec. 153C of the Act was issued on 27.07.2023 and duly served to the assessee. In response to the notice u/sec. 153C the assessee filed the return and declaring total income 3,66,810/-. During the assessment the Ld. AO noted that during the search action the said property was purchased from promoter, M/s. Rubberwala Housing and Infrastructure Ltd. (RHIL) & the promoter and director, Shri Tabrez Sheikh a key employee of RHIL. Mr. Imran Ansari, the employee of RHIL who was handling sale and registration of shops made a statement on oath that they have admitted that the total price of the shop contains cash component and banking channel component as per decision of the director of RHIL. He further admitted that the said data maintained in excel sheet are related sale to the shops in Platinum Mall. The Ld. AO directed the assessee about the explanation for payment made in cash amount to Rs.32,45,300/- to the RHIL. The assessee denied the entire transactions related to payment of cash. Finally, the amount of Rs.32,45,300/- was unexplained and was Huwaida Iqbal Sayed added back with the total income of the assessee u/sec. 69C of the Act. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) upheld the addition. Being aggrieved the assessee filed an appeal before us.
The Ld. AR filed a paper book containing pages 1 to 85, which has been taken on record. The Ld. AR contended that the assessee has categorically denied having made any cash payment to RHIL in connection with the purchase of the said commercial property. It was further submitted that no opportunity of cross- verification was granted to the assessee in respect of the additions made by the Ld. AO. The Ld. AR respectfully placed reliance on the order of the Coordinate Bench of the ITAT, Mumbai, in the case of Ankit Jems (P.) Ltd. vs. ITO reported in (2025) 178 taxmann.com 454 (Mum-Trib), wherein it was held that an addition under section 69C, made solely on the basis of information received from investigation proceedings in another group case, could not be sustained in the absence of any cogent evidence against the assessee, particularly when the assessee had denied the transactions and the purchase records did not reflect any such entries.
The Ld. AR further contended that an identical factual issue had already been adjudicated by the Coordinate Bench of the ITAT, Mumbai, in cases arising out of the search conducted in the Rubberwala Group. The Coordinate Bench has consistently held that additions relating to alleged cash payments for the purchase of commercial properties, based solely on third-party statements, cannot be sustained. In support, reliance was placed on the decisions in Bhavana
Huwaida Iqbal Sayed Vikram Jain vs. ACIT (ITA Nos. 6363 & 6364/Mum/2025, order dated 10.12.2025), Akhraj Pukhraj Chopra vs. DCIT (ITA Nos. 5553 & 5555/Mum/2025, order dated 12.11.2025), and Kulsum Aaqib Memon vs. DCIT (ITA No. 6540/Mum/2025, order pronounced on 06.01.2026). In all these cases, the Coordinate Bench of the ITAT has taken a consistent view that, in the absence of any cogent incriminating material, additions made merely on the basis of excel sheets or third-party statements are unsustainable.
The Ld. DR supported and relied upon the orders of the revenue authorities. However, he was unable to place on record any contrary judicial precedent to rebut the submissions advanced by the Ld. AR.
Upon careful consideration, we find that the identical factual issue has already been examined and decided by the Coordinate Bench of the ITAT, Mumbai, in the cases of Bhavana Vikram Jain (supra), Akhraj Pukhraj Chopra (supra), and Kulsum Aaqib Memon (supra). Respectfully following the ratio laid down in the aforesaid decisions, we hold that the impugned addition cannot be sustained. Accordingly, the impugned appellate order is set aside, and the addition of Rs.32,45,300/- is hereby deleted.