JAYANTILAL JESARAM PUROHIT ,MUMBAI vs. DCIT, CENTRAL CIRCLE 4(2), MUMBAI

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ITA 7457/MUM/2025Status: DisposedITAT Mumbai28 January 2026AY 2019-2018 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the additions were unsustainable due to the Assessing Officer's failure to provide the assessee with an opportunity to cross-examine the witnesses whose statements were relied upon. This was considered a violation of the principles of natural justice, and the evidence from the third-party search was deemed insufficient without corroboration and proper adherence to legal procedures.

What were the facts?

The assessee filed three appeals against the orders of the NFAC for AYs 2017-18, 2018-19, and 2019-20. The additions were primarily based on information and statements gathered during a search and seizure operation on the 'Rubberwala group', alleging undisclosed cash payments by the assessee for shop purchases.

What were the issues?

Whether additions based on third-party search material and statements are valid without providing the assessee with an opportunity for cross-examination and without sufficient corroborative evidence. Whether the breach of natural justice principles renders such additions void.

Which sections of the Income-tax Act were involved?

Section 153C,Section 69,Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, F BENCH MUMBAI

Before: HON’BLE SHRI SANDEEP GOSAIN& HON’BLE SHRI ARUN KHODPIA

For Respondent: Shri Vivek Permpurna, CIT DR
Hearing: 12.01.2026Pronounced: 28.01.2026

Heard together (3 matters)

ITA No.7457/Mum/2025
ITA No.7458/Mum/2025
ITA No.7459/Mum/2025

Read from the judgment's own cause title. This page is filed under one of them.

PER SANDEEP GOSAIN, JM: These three appeals have been filed by the assessee challenging the different impugned orders 01.10.2025 and passed u/s 250 of the Income Tax Act, 1961 (‘the Act'), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment years 2017-18, 2018-19 and 2019-20. Jesaram DCIT, Central Circle – 4(2) Kautilya Bhawan, C41-43, Avenue 3, near Videsh Bhavan, G Block, BKC, Gilban Area – 400051. (Respondent) Since all the issues involved in these appeals are common and identical and belongs to one assessee therefore, they have been clubbed, heard together and consolidated order is being passed. Firstly we shall take ITA No. 7459/Mum/2025, A.Y 2017-18 as lead case and facts narrated therein. ITA No. 7459/Mum/2025, A.Y 2017-18

2.

The assessee has raised the following grounds of appeal:

1.

On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming the stand of A.O. about that issuing the notice u/s 153C of the Act without DIN. It is blatant contravention of the Circular No. 19/2019, dated 14-8-2019 issued by the CBDT

2.

On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming addition without referring to any incrementing document. Besides, he has not referred to any incriminating material in the satisfaction note issued to the Appellant.

3.

On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. for not sharing incrementing documents found during the course of search of rubberwala group which was pertained to the appellant.

4.

On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. about the not providing statement and materials used by him against the appellant.

5.

On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming stand of A.O. about opportunity of cross examination of the person whose statements were used against the appellant.

6.

On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming addition of Rs 4,45,275 /- u/s 69 of the Act.

7.

On the facts and circumstances of the case, the CIT(A) erred in holding that a combined satisfaction note is valid in the eyes of law, as current legal and judicial precedent overwhelmingly requires separate satisfaction notes for each

assessment year and/or entity; the recording of a combined or consolidated satisfaction note has consistently been held to vitiate the proceedings under section 153C of the Income Tax Act.

8.

The Appellant keeps his right reserve to add/modify/delete any ground of appeal during the appellant proceedings.

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

7.

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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