DEEPAK KAKUBHAI MEHTA,MUMBAI V. DCIT, CENTRAL CIRCLE 4(1), MUMBAI

ITA 6508/MUM/2025

AI Insights

The case involves multiple appeals by the assessee, Deepak Kakubhai Mehta, against the orders of the Commissioner of Income Tax (Appeals), Mumbai, for the assessment years 2012-13 to 2018-19. The appeals were consolidated due to the commonality of issues arising from a search and seizure operation conducted under section 132 of the Income Tax Act, 1961, on December 18, 2017. The primary issues revolved around the legality of the additions made under sections 69, 56, and 69A of the Act, which were challenged on grounds of lack of incriminating material and reliance on third-party documents and statements. The Tribunal's decision emphasized the need for incriminating material found at the assessee's premises to justify additions under section 153A, particularly for completed assessments.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827562 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 11-10-2025
• Other Referred Cases: Mehta Parekh & Co. vs. CIT, PCIT vs AbhisarBuildwell (P) Ltd, Kailashben Manharlal Chokshi v. CIT, CIT v. Harjeev Aggarwal, PCIT vs. Pavitra Realcon Pvt. Ltd. and Others, CIT vs. Sinhgad Technical Education Society, PCIT vs. Anand Kumar Jain (HUF), Bipin Savla vs. DCIT, Bharat Girdharlal Rughani vs. DCIT, Parag Motilal Savla vs. DCIT, Shantilal Savla vs. DCIT, Rajeshkumar Rameshchandra Shah vs. DCIT, Nilesh Bharani vs. DCIT, Hemendra Ramji Vira vs DCIT, Leshark Global LLP vs DCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMA SHANKAR PRASAD; WAY OF CROSSEXAMINATION OR
• Assessee Lawyers: VINOD KUMAR BINDAL
• Keywords: Unexplained investment; Document seized; Documents seized; Gift; Retraction; Search and seizure; Block assessment; Loose papers; Notional interest; Recovery proceedings; Tangible material
• Section: 143(3); 56; 132; 153A; 69; 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.6505/Mum/2025 to 6511/Mum/2025 (Assessment Year :2012-13 to 2018-19) Deepak Kakubhai Mehta 801, Krishna Kunj Plot No.50, 7th Road JVPD, Opp. Jamnabai School, Vile Parle (W) Mumbai-400 049 Vs. DCIT, Central Circle- 4(1) PAN/GIR No.AAAPM7668Q (Appellant) .. (Respondent) Assessee by Shri Vinod Kumar Bindal (virtually present) and Shri Satish Kumar (physically present) Revenue by Shri Umashankar Prasad, CIT DR Date of Hearing 16/12/2025 Date of Pronouncement 06/01/2026 आदेश / O R D E R PER AMIT SHUKLA (J.M): These appeals, being ITA Nos. 6505 to 6511/Mum/2025, have been preferred by the assessee, Shri Deepak Kakubhai Mehta, against separate but similarly worded orders passed by the learned Commissioner of Income Tax (Appeals), Mumbai, pertaining to Assessment Years Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 2 2012-13 to 2018-19. Since the issues involved in all the appeals arise from a common search action, rest on an identical factual matrix, and involve overlapping questions of law and jurisdiction, the same were heard together and are being disposed of by this consolidated order, for the sake of convenience, consistency, and judicial economy. 2. The assessee was subjected to a search and seizure action under section 132 of the Income-tax Act, 1961, on 18 December 2017, as per the panchnama drawn in his name. The search proceedings continued over multiple days and concluded on 21 December 2017. Simultaneously, survey proceedings under section 133A of the Act were also carried out at the business premises of the assessee. Consequent to the said search, assessments for Assessment Years 2012-13 to 2017-18 were framed under section 153A read with section 143(3) of the Act, while the assessment for Assessment Year 2018-19 was framed under section 143(3). 3. In the assessment orders so passed, the Assessing Officer made various additions, primarily on account of: • alleged cash loans advanced to Shri Nilesh Bharani / Evergreen Enterprises, treated as unexplained investment under section 69 of the Act; • notional interest computed thereon and brought to tax under section 56 of the Act; and Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 3 • for Assessment Year 2018-19, addition on account of alleged unexplained jewellery under section 69A of the Act. 4. The year-wise details of the additions made by the Assessing Officer are tabulated below: AY Reasons of Addition Amount (Rs.) 2012-13 (i) Cash loan to Nilesh Bharani u/s 69 (ii) Notional interest earned thereon u/s 56 4,85,00,000/- 30,01,167/- 2013-14 (i) Cash loan to Nilesh Bharani u/s 69 (ii) Notional interest earned thereon u/s 56 8,10,00,000/- 1,38,22,867/- 2014-15 (i) Cash loan to Nilesh Bharani u/s 69 (ii) Notional interest earned thereon u/s 56 2,50,00,000/- 1,93,60,917/- 2015-16 (i) Notional interest earned thereon u/s 56 1,96,30,917/- 2016-17 (i) Notional interest earned thereon u/s 56 1,96,30,917/- 2017-18 (i) Notional interest earned thereon u/s 56 1,70,18,783/- 2018-19 (i) Notional interest earned thereon u/s 56 (ii) Unexplained Jewellery u/s 69A 1,61,51,250/- 41,99,700/- 5. The assessee has raised multiple grounds of appeal for each of the assessment years. However, the grounds, in substance, revolve around the following principal grievances: Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 4 (i) that the additions have been made in the absence of any incriminating material found during the course of search at the premises of the assessee, and therefore, in respect of completed / unabated assessment years, the assumption of jurisdiction under section 153A itself is invalid; (ii) that the Assessing Officer has relied upon materials and documents found during income-tax searches conducted in the cases of third parties, without there being any common warrant or joint search, and without invoking the provisions of section 153C of the Act; (iii) that the additions are founded almost entirely on statements recorded under section 132(4), which statements were later retracted and are not supported by any incriminating material; (iv) that the approval granted under section 153D of the Act was mechanical and without application of mind; and (v) that the addition under section 69A in respect of jewellery for Assessment Year 2018-19 has been made without properly appreciating the explanation, evidences, and family ownership of the jewellery. 6. During the course of the search action conducted at the residential premises of the assessee on 18 December 2017 and thereafter till its conclusion on 21 December 2017, statements of the assessee were recorded under section 132(4) of the Act on multiple occasions. It is an admitted position on record, and also borne out from the assessment Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 5 orders themselves, that no books of account, documents, loose papers, cash, or other incriminating material relating to the additions ultimately made were found or seized from the premises of the assessee. 6.1. It is also an undisputed fact that whatever material has been referred to by the Assessing Officer in the assessment orders was already available with the authorised officers at the relevant time, having been procured from independent income-tax searches conducted earlier in the cases of other persons, including Shri Nilesh Bharani / Evergreen Enterprises. In none of the panchnamas drawn in those searches did the name of the assessee figure, nor was there any common warrant or joint search covering the assessee and those third parties. 7. The Assessing Officer’s primary reliance was on certain statements recorded under section 132(4) during the course of search on the assessee, wherein he was confronted with statements recorded elsewhere and with documents seized from the premises of third parties. These statements, according to the Assessing Officer, constituted incriminating material justifying the additions under section 153A. 8. It is further an admitted fact on record that the assessee, by way of a detailed communication dated 03 January 2019, addressed to the Investigation Wing, Mumbai, retracted the statements recorded during the course of search. In the said retraction, the assessee categorically stated that the statements were not based on any Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 6 incriminating material found at his premises but were recorded on the basis of statements and materials pertaining to third parties, and that the admissions, if any, were obtained under mental pressure. It has also been stated before us that the said retraction has never been controverted by the Revenue. No cross-examination was carried out, nor was any independent enquiry conducted to disprove the assertions made in the retraction. In law, therefore, the contents of the retraction remain unchallenged. Ld. Counsel for the assessee Mr. Bindal placed reliance on Mehta Parekh & Co. vs. CIT-(1956) 30 ITR 181 (SC) wherein it was held that where an affidavit or retraction remains uncontroverted, the same must be accepted as true. 9. Shri Vinod Kumar Bindal, submitted that the entire assessment proceedings suffer from a foundational jurisdictional defect. It was contended that no incriminating material whatsoever was found during the course of search at the premises of the assessee which could justify the additions made in the assessment orders. The learned counsel emphasised that the assessment orders themselves do not refer to any seized material found from the assessee. Mr Bindal the Ld. Counsel of the assessee submitted that in the statements recorded u/s 132(4) of the Act on 18/12/2017, the assessee was shown the statements recorded u/s 132(4) elsewhere about the money lent in cash to Nilesh Bharani / Evergreen Enterprises outside the regular books of account. The additions made are only in respect of the alleged cash loans given to Evergreen Enterprises / Nilesh Bharani and Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 7 some jewellery in the AY 2018-19.The Ld. Counsel of the assessee further submitted as was pleaded before the lower authorities also forming part of the paper book submitted that all these questions and answers relevant to the additions made in the hands of the assessee in the respective AYs clearly demonstrate and confirm the contention of the assessee that no such evidence much less incriminating the assessee in any manner was found during the course of search in the premises of the assessee searched u/s 132 of the Act and therefore, by following the judgment of the Apex Court in PCIT vs AbhisarBuildwell (P) Ltd [2023] 149 taxmann.com 399 (SC), no addition at all could be made in any assessment order passed u/s 153A of the Act. 10. It was further submitted that the questions put to the assessee during the course of recording of statement under section 132(4) were based entirely on statements recorded in the cases of third parties and on documents seized elsewhere. Such statements, even if assumed to be admissions, cannot override the settled legal position that for completed assessment years, additions under section 153A must be based on incriminating material found during the search on the assessee himself. The learned counsel also submitted that a bare reading of the questions and answers recorded under section 132(4) clearly demonstrates that the assessee never unequivocally admitted having advanced cash loans in the manner alleged by the Assessing Officer. On the contrary, the assessee repeatedly stated that details were to be verified from records maintained at the office and that recovery Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 8 proceedings had already been initiated in respect of certain transactions. 11. The learned counsel then drew our attention to the specific questions and answers recorded during the course of search of the assessee which have been heavily relied upon by the Assessing Officer. The said questions and answers are placed on record and are reproduced hereunder. Q. 37 I am showing you the statement of Mr Nilesh Shamji Bharani recorded on oath on 11.10.2017 u/s 132(4) of the Income tax Act, 1961 during the course of search proceedings in the case of M/s Evergreen Enterprises, 12, Sharda Sadan, 7, S. G. Marg, Dadar (E), Mumbai-400014. Please go through it and confirm the same. Ans. Yes, I confirm that I have gone through the statement. Q.38 Please refer to replies given from Q.No. 20 to 35 and Q.No. 101 to 103 of the above statement and offer your comments. Ans. Sir, I have gone through Q.No. 20 to 35 and Q.No. 101 to 103. As per my knowledge, we have given cash finance may be 2 to 3 years back to two of their parties viz. Nilesh Bharani’s parties against whom we have lodged case against them since they have replied that they have given back this money to Nilesh Bharani. I have not given cash loans to any other parties and cash receipts regarding cash loans given the above two parties are available in my office and the same will be produced before you in due course. Q.39 Please provide the details of the relevant parties against whom you lodged the FIR/case. Also provide the quantum of cash loans given to them. Ans. Sir, all these details are available in our office and will be provided in due course of time. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 9 Q.40 Please go through copy of page No. 154 and 155 of the material containing Deepakbhai Bachubhal DM Steel cash ledger seized from the premise of Mr. Nilesh Shamji Bharani during the course of search proceeding in the case of M/s Evergreen Enterprises, 12, Sharda Sadan, 7, S.G. Marg, Dadar (E), Mumbai-400014. Please go through it and confirm the same. Please also offer your comments. Ans. Yes, I confirm that I have gone through the statement. Out of this ledger I am not sure to whom we have gone through the court matter. We will provide the said details in our office. Q.41 In reply to Q. No. 38 above you have stated that the cash loans were given to a couple of parties only and that too, 2 to 3 years back whereas in the cash ledgers shown to you in Q.No. 40 are of the dates pertaining to July, 2016 please explain. Ans. Sir, they may be written by pencil. I don‘t rely on them. We have gone through court matter on few parties to whom we have given cash loans which I will give the details after referring to our books. Q.43 Please provide the names of the parties against which inflated purchases invoices have been generated. Ans. Sir, at this moment I don‘t remember the parties. However, if you give me some time I will refer from my office and produce the details. Statement of Mr Deepak Mehta resumed on 21/12/2017 at 12.30 p.m. (PB page no. 25, 29 and 30) Q.51 Please state the name of the parties to whom you have given cash loans as stated in reply to your Q. No. 50 above. Ans. Sir, I can provide you the names of the parties after verifying the records at my office. Q.67 Do you want to say anything else? Ans. Sir, in reply to Q. No. 40 I have stated that I could not recollect the names of two parties. Since, I could recollect the names of the two parties against whom cases were filed. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 10 The names of the two parties are M/s Uma Medical and other one is Dr. Sadiwala. I do not wish to say anything else. For Jewellery Q.62. I am showing you Annexure-3 having the details of Inventory of the Jewellery found in your premises which was valued at Rs. 2,05,17,200/-. Please state the details of the persons who owns the jewellery and also give the details of the source of income for its purchase. Ans. Sir, the jewellery valued at Rs. 2,05,17,200/- and inventorised by you as Annexure-3. Out of the jewellery mentioned in Annexure-3, I am submitting the supporting documents for jewellery valued at Rs. 1,63,17,500/- and the same is duly reflecting in the returns of Income filed by my family members and submitting bills as proof for the jewellery purchased after 01.04.2017. Q.63 The jewellery valued at Rs. 1,63,17,500/- and duly inventorised as annexure-3 was returned back to you. Please confirm having received back the jewellery as reflecting in Annexur-3. Ans. Yes sir, I confirm that I have received back jewellery valued at Rs. 1,63,17,500/- which was duly inventorised as Annexure-3 by you. Q64. I am showing you Annexure-J having the details of inventory of the jewellery found in your premises which was valued at Rs. 41,99,700/-. Please state the details of the persons who owns the jewellery and also give the details of the source of income for its purchase. Ans. Sir, the jewellery inventorised by you as Annexure-J valued at Rs. 41,99,700/- pertains to all my family members. Some of the jewellery was received as \"streedhan\" from the parents of my wife at the time of our marriage. Some of the jewellery is purchased by my wife out of her own savings and received as gifts from the near ones and relatives on special occasions. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 11 Q.65 I am showing you Annexure-J mentioned above having the details of Jewellery valued at Rs. 41,99,700/- which is being seized, since, you have not provided the supporting documents towards source for purchasing the same. Ans. Sir, some of the jewellery was received as gift by my son and my family members from my relatives during his engagement ceremony held on 16.12.2017. We will submit the bills/gift deeds and sources of the funds for purchasing the jewellery in due course. Some of the jewellery is received by my wife from her parents as \"streedhan\" and some of the jewellery is received as gifts during the family occasions. I confirm that the jewellery valued at Rs. 41,99,700/- inventorised as per Annexure-J is seized by you for keeping in the custody of the Income tax department. 12. During the course of the search proceedings conducted at the residential premises of the assessee commencing on 18 December 2017 and concluding on 21 December 2017, the authorised officers recorded statements of the assessee under section 132(4) of the Act on multiple occasions. It is pertinent to note that the recording of statements continued over several days of the search, and the assessee was confronted with statements recorded earlier in the cases of third parties, as well as with certain documents and loose papers seized during independent income-tax searches conducted in the cases of those third parties. 13. The Assessing Officer has placed substantial reliance on certain questions and answers recorded during the course of such statements to support the additions made in the assessment orders. According to the Assessing Officer, these statements constitute incriminating material unearthed Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 12 during the search, justifying the additions under section 153A of the Act. 14. At this juncture, it is necessary to record that the statements relied upon by the Assessing Officer are not statements recorded in isolation or in reference to any document found during the search at the assessee’s premises. On the contrary, the assessee was shown statements recorded under section 132(4) in the cases of other persons, including Shri Nilesh Shamji Bharani, and was asked to offer his comments thereon. 15. A perusal of the above statement reveals that the assessee was specifically confronted with statements recorded during the course of search proceedings in the case of M/s Evergreen Enterprises and Shri Nilesh Shamji Bharani. The assessee was asked to go through such statements and offer his comments. In his responses, the assessee stated, inter alia, that cash finance may have been given two to three years back to certain parties, against whom recovery proceedings had already been initiated, and that details would be produced after verification of records maintained at the office. The assessee also expressed inability to recollect exact details at that stage and stated that the same would be furnished in due course. 16. It is significant to note that the assessee did not, at any point during the course of the statement, quantify the alleged cash loans in the manner subsequently worked out by the Assessing Officer. Nor did the assessee admit that the alleged Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 13 cash loans were advanced by him personally, outside the regular books of account, in the quantum ultimately assessed. 17. The statement of the assessee was again resumed on 21 December 2017. The relevant questions and answers recorded on that date, as relied upon by the Assessing Officer, are part of record but same is not reproduced for the sake of brevity. 18. A careful reading of the questions and answers demonstrates that even on resumption of the statement, the assessee reiterated that details could be provided only after verification of records. The assessee also clarified that he could recollect the names of two parties against whom recovery suits had been filed and did not wish to say anything further. 19. Thus, the statements, when read in their entirety and in proper context, do not reflect any clear, categorical, or unambiguous admission of undisclosed income or unexplained investment by the assessee. On the contrary, the statements consistently reflect uncertainty, lack of immediate recollection, and a request for time to verify records. 19.1. Based on the aforesaid statements and on material seized during independent searches conducted in the cases of third parties, the Assessing Officer proceeded to allege that the assessee had advanced substantial cash loans to Shri Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 14 Nilesh Bharani / Evergreen Enterprises over multiple assessment years. 19.2. According to the Assessing Officer, the alleged cash loans were not recorded in the regular books of account of the assessee and represented unexplained investments liable to be brought to tax under section 69 of the Act. The Assessing Officer further alleged that the assessee had earned interest on such cash loans, which was also not disclosed and was liable to be assessed as income under section 56 of the Act. 19.3. In support of the above allegations, the Assessing Officer relied upon certain loose papers, cash ledgers, and notings seized from the premises of Shri Nilesh Bharani during the course of a search conducted earlier in October 2017. These documents, according to the Assessing Officer, reflected cash transactions allegedly involving the assessee. 20. It is an admitted and undisputed fact that none of these documents were found or seized from the premises of the assessee during the search conducted on him. The assessment orders do not record discovery of any document, paper, or asset from the assessee evidencing the alleged cash loans. Despite this, the Assessing Officer treated the entries appearing in the documents seized from the premises of Shri Nilesh Bharani as reflecting cash loans advanced by the assessee and proceeded to quantify such alleged loans assessment year-wise. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 15 21. The Assessing Officer prepared detailed working charts in the assessment orders, setting out the alleged opening balances, cash loans advanced during the year, repayments received, and closing balances, as well as the notional interest computed thereon. 21.1. The working of the alleged cash loans, as reproduced by the Assessing Officer in paragraph 5.30 of the assessment order for Assessment Year 2012-13, is placed on record and is reproduced hereunder. 5.30. In the light of the above discussion, the cash loans given by the assessee to Shri Nilesh Bharani are assessed as undisclosed investment in loans amounting to Rs. 15,45,00,000/- for the AYs 2012-13 to 2018-19, u/s 69 of the IT Act as detailed below. Assessme nt year Opening Balance Cash loan given during the year Cash loan received back during the year Balance outstanding cash loan Amt in ‗000 Amt in ‗000 Amt in ‗000 Amt in ‗000 2012-13 48500 48500 2013-14 48500 81000 129500 2014-15 129500 25000 154500 2015-16 154500 154500 2016-17 154500 154500 Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 16 2017-18 154500 26000 128500 2018-19 128500 128500 Total 154500 26000 5.31 Further the interest earned / receivable on cash loan lent by you amounting to Rs.10,86,16,817/- for the AYs2012-13 to 2018-19, is to added to the total income of the assessee AY wise as detailed below: Assessment year Interest of Current Year Loans Interest of earlier year loans Total Interest for the Year Amt in Rs. Amt in Rs. Amt in Rs. A B C 2012-13 30,01,167 30,01,167 2013-14 77,39,533 60,83,333 1,38,22,866 2014-15 30,15,000 1,63,45,917 1,93,60,917 2015-16 1,96,30,917 1,96,30,917 2016-17 1,96,30,917 1,96,30,917 2017-18 1,70,18,783 1,70,18,783 2018-19 1,61,51,250 1,61,51,250 Total 1,37,55,700 9,48,61,117 10,86,16,817 22. Similarly, the working of notional interest allegedly earned on the aforesaid cash loans, as reproduced by the Assessing Officer in paragraph 5.31 of the assessment order, is placed on record and is reproduced hereunder. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 17 5.31 Further the interest earned / receivable on cash loan lent by you amounting to Rs.10,86,16,817/- for the AYs2012-13 to 2018-19, is to added to the total income of the assessee AY wise as detailed below: Assessment year Interest of Current Year Loans Interest of earlier year loans Total Interest for the Year Amt in Rs. Amt in Rs. Amt in Rs. A B C 2012-13 30,01,167 30,01,167 2013-14 77,39,533 60,83,333 1,38,22,866 2014-15 30,15,000 1,63,45,917 1,93,60,917 2015-16 1,96,30,917 1,96,30,917 2016-17 1,96,30,917 1,96,30,917 2017-18 1,70,18,783 1,70,18,783 2018-19 1,61,51,250 1,61,51,250 Total 1,37,55,700 9,48,61,117 10,86,16,817 23. On the basis of the aforesaid workings, the Assessing Officer made additions under section 69 of the Act on account of alleged cash loans and under section 56 of the Act on account of notional interest thereon for the respective assessment years. 24. The assessee, as noted earlier, retracted the statements recorded during the course of search by filing a detailed letter dated 03 January 2019 before the Investigation Wing, Mumbai. In the said retraction, the assessee categorically Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 18 stated that the statements recorded during the course of search were not based on any incriminating material found at his premises and were obtained under mental pressure. 24.1. The assessee further stated that the questions put to him during the recording of statements were based on statements and documents pertaining to third parties, and that he had merely stated that details would be verified from records maintained at the office. 25. The retraction filed by the assessee is part of the record and has been relied upon before the authorities below as well as before us. The contents of the retraction have not been controverted by the Revenue by way of cross-examination or by bringing any independent material on record. 26. The learned counsel for the assessee submitted that the entire addition rests on a fundamentally flawed premise, namely, that statements recorded under section 132(4), even in the absence of any incriminating material found during the search at the assessee’s premises, can justify additions under section 153A of the Act. 26.1. It was contended that a plain reading of the statements relied upon by the Assessing Officer clearly demonstrates that no incriminating material was unearthed during the search on the assessee. The questions put to the assessee were based on material found elsewhere, and the assessee’s responses were tentative and conditional. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 19 27. The learned counsel further submitted that the Assessing Officer has not brought on record any material to establish that the alleged cash loans were actually advanced by the assessee, that the alleged amounts flowed from the assessee to the alleged borrower, or that the assessee had the financial capacity to advance such loans in cash. 28. It was emphasised that despite the search and survey proceedings continuing over several days, and despite the presence of multiple officers at the premises of the assessee, no incriminating material whatsoever was found. This, according to the learned counsel, itself demonstrates the absence of any undisclosed activity on the part of the assessee. 29. The learned Departmental Representative supported the orders of the authorities below. It was contended that the statement recorded under section 132(4) constituted incriminating material and that the assessee had admitted the fact of cash lending, at least to some extent. It was further argued that the materials found in the case of Mr. Nilesh Bharani, read together with the assessee’s statement, were sufficient to justify the additions. 30. We have carefully considered the rival submissions, examined the material placed on record, and perused the assessment orders and appellate orders in the light of the statutory scheme governing assessments pursuant to a search under section 132 of the Act. Before embarking upon an examination of the merits of the additions, we consider it Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 20 necessary to adjudicate the jurisdictional challenge raised by the assessee, as the same goes to the very root of the validity of the impugned assessments. 31. It is an admitted and undisputed position emerging from the record that, on the date of search conducted on 18 December 2017, the assessments for Assessment Years 2012- 13 to 2017-18 had already been completed and had attained finality. None of these assessments were pending or open before the Assessing Officer on the date of search. These assessment years, therefore, fall squarely within the category of completed or unabated assessments, as judicially understood in the context of section 153A of the Act. 31.1. The legal position governing the scope and extent of the Assessing Officer’s powers under section 153A, particularly in relation to completed assessments, is now well settled and no longer res integra. While section 153A undoubtedly confers jurisdiction upon the Assessing Officer to assess or reassess six assessment years preceding the year of search, such jurisdiction is not absolute, uncanalised, or unguided. In respect of completed assessments, the exercise of power under section 153A is circumscribed by a fundamental jurisdictional condition namely, the existence of incriminating material unearthed during the course of search. 32. The rationale underlying this limitation is firmly rooted in the principle of finality of proceedings. A completed assessment represents a closed chapter in the assessment cycle and cannot be reopened or disturbed merely because a Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 21 search has taken place, unless the search itself yields tangible material revealing undisclosed income pertaining to such completed year. To hold otherwise would render the concept of finality illusory and would effectively convert section 153A into a de facto review provision, a consequence clearly not intended by the legislature. 33. The Hon’ble Supreme Court in the case of Abhisar Buildwell (P) Ltd., has now authoritatively settled this position by holding, in clear and unequivocal terms, that in the absence of incriminating material found during the course of search, no addition can be made in respect of completed or unabated assessments while framing an assessment under section 153A of the Act. 33.1. The legal consequence flowing from the aforesaid pronouncement is that the jurisdiction of the Assessing Officer to disturb a completed assessment under section 153A is inextricably linked to the discovery of incriminating material during the search conducted at the premises of the assessee. Absent such material, the jurisdiction itself fails. 34. The expression “incriminating material” has not been defined in the Act. Its contours, therefore, have been shaped and refined through consistent judicial exposition. Broadly speaking, incriminating material must be material which is discovered as a direct result of the search under section 132, found at the premises of the assessee or under his control, relatable to the assessment year in question, and indicative of undisclosed income or assets not disclosed in the regular Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 22 books of account or returns of income. It is equally well settled that mere suspicion, conjecture, or inference drawn from material found in the case of a third party does not satisfy the test of incriminating material. Nor does a post- search analytical exercise, howsoever elaborate, elevate itself to the status of incriminating material if it is not founded on something tangible unearthed during the search at the assessee’s premises. 35. When the facts of the present case are examined through the prism of the above legal principles, a glaring deficiency becomes apparent. A careful and close reading of the assessment orders reveals that the Assessing Officer has not identified even a single document, paper, ledger, or asset found during the course of search at the premises of the assessee which evidences the alleged cash loans or the earning of interest thereon. The assessment orders are conspicuously silent on this foundational requirement. Instead, the entire edifice of the additions rests upon loose papers and ledgers seized during the course of a search conducted in the case of another person, namely Shri Nilesh Bharani / Evergreen Enterprises, statements recorded under section 132(4) in the cases of such third parties, and the statement of the assessee recorded during the search, wherein he was confronted with such third-party material. Such material, even if assumed to be incriminating in the hands of the person from whose possession it was found, cannot automatically assume the character of incriminating material in the hands of the assessee. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 23 36. The Act draws a clear and deliberate distinction between material found during the search of the assessee and material found during the search of another person. Where the Revenue seeks to rely upon documents, books, or assets seized in the case of a third party for making additions in the hands of the assessee, the statute provides a specific and exclusive mechanism under section 153C of the Act. 36.1. Section 153C mandates, as a condition precedent, the recording of satisfaction that the seized material belongs to or pertains to the assessee, followed by the lawful transmission of such material to the Assessing Officer having jurisdiction over the assessee. Only upon fulfilment of these statutory preconditions can proceedings be validly initiated against the assessee on the basis of such third-party material. 37. In the present case, it is an admitted position that no proceedings under section 153C were initiated, notwithstanding the fact that the material relied upon by the Assessing Officer was found during the search of another person. The Assessing Officer, having consciously chosen not to invoke section 153C, could not have indirectly achieved the same result by stretching the scope of section 153A beyond its permissible limits. 38. It is a settled principle of law that where the statute prescribes a particular manner for doing a thing, it must be done in that manner alone, or not at all. Any deviation from the statutory mandate vitiates the action at its very inception. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 24 39. Considerable reliance has been placed by the Revenue on the statements recorded under section 132(4) of the Act. It therefore becomes necessary to examine, with some degree of doctrinal clarity, the evidentiary value of such statements in the context of search assessments. 39.1. There can be no quarrel with the proposition that a statement recorded under section 132(4) has evidentiary value and may be used in proceedings under the Act. However, it is equally well settled that a statement, by itself and in the absence of corroborative incriminating material, cannot constitute incriminating material for the purposes of section 153A. 40. Courts have repeatedly cautioned against placing blind or mechanical reliance on statements recorded during search proceedings, particularly when such statements are recorded over extended hours, under circumstances of mental stress, and without reference to contemporaneous documentary evidence. A statement recorded in such circumstances is, at best, a piece of information, which must be tested and corroborated by independent material. 41. The consistent judicial view, as emerging from decisions of various High Courts, is that a statement recorded under section 132(4) assumes the character of evidence only when it is supported by material found during the search. In the absence of such corroboration, additions founded solely on statements are legally unsustainable. In support of the proposition heavy reliance was placed on the Judgment of the Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 25 Delhi High Court in the case of PCIT vs. Pavitra Realcon Pvt. Ltd. and Others in ITA No. 579/2018, where the principle was emphatically reiterated. ―20. However, it is an undisputed fact that the statement recorded under Section 132(4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements. 21. In the case of Kailashben Manharlal Chokshi v. CIT', the Gujarat High Court held that the additions could not be made only on the basis of admissions made by the assessee, in the absence of any corroborative material. The relevant paragraph no. 26 of the said decision has been reproduced hereinbelow: - 26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority, We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission, We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence, there is no reason not to disbelieve the retraction made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has com mitted an error in ignoring the retraction made by the assessee. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 26 22. Further, the position with respect to whether a statement recorded under Section 132(4) of the Act could be a standalone basis for making assessment was clarified by this Court in the case of CIT v. Harjeev Aggarwal, wherein, it was held that merely because an admission has been made by the assessee during the search operation, the same could not be used to make additions in the absence of any evidence to corroborate the same. The relevant paragraph of the said decision is extracted herein below: \"20. In our view, a plain reading of section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words \"evidence found as a result of search\" would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the Explanation to section 132(4) of the Act. However, such statements on a stand alone basis without reference to any other material discovered during search and seizure operations would not empower the Assessing Officer to make a block assessment merely because any admission was made by the assessee during search operation. 23. In our opinion, the Act does not contemplate computing of undisclosed income solely on the basis of statements made during a search. However, these statements do constitute information, and if they relate to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under Section 132(4) of the Act. Nonetheless, such statements alone, without any other material discovered during the search which would corroborate said statements, do not grant the AO the authority to make an assessment. 24. Coming to the findings of the ITAT with respect to incriminating material in the case of M/s PavitraRealconPvt. Ltd and M/s Delicate Real Estate Pvt. Ltd, it is seen that the Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 27 ITAT has explicitly held in paragraph no. 18 that no addition has been made on the basis of any incriminating material found during the course of search. Further, the ITAT relied on the decision of the Supreme Court in the case of CIT v. Sinhgad Technical Education Society and held as follows: - \"18. Further, while writing the order, it has come to our notice that the Hon'ble Apex Court in the case of Sinhgad Technical Education Society has held that section 153C can be invoked only when incriminating materials assessment year-wise are recorded in satisfaction note which is missing here. Therefore, the proceedings drawn u/s 143(3) as against 153C are invalid for want of any incriminating material found for the 19. In view of the above, the additional grounds raised by the assessee in the case of M/s PavitraRealconPvt. Ltd. And Mis Delicate Real Estate Pvt. Ltd. are accepted. Since the assessee succeeds on this legal ground, we refrain ourselves from adjudicating the issue on merit as far as these two cases are concerned.\" 25. Also, the Supreme Court in the case of CIT v. Abhisar Buildwell (P) Ltd., has clarified that in case no incriminating material is found during the search conducted under Section 132 of the Act, the AO will have no jurisdiction to make an assessment. The relevant paragraph is reproduced herein below: - \"36.4. In case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132-A of the 1961 Act.‖ 42. Similarly, the Hon’ble Delhi High Court in the case of PCIT vs. Anand Kumar Jain (HUF) in ITA No.23/2021 and other appeals vide judgment and order dated 12/02/2021 had held that statement u/s.132(4) does not construe Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 28 incriminating material for carrying out the assessment u/s.153A of the Act and statement cannot justify the additions made by the ld. AO. Similarly, other judgments which have been referred and relied upon by the ld. Counsel and which are not repeated but underlying principle is that for making the addition within the scope and ambit of Section 153A for unabated assessment years, statement alone cannot be treated as an incriminating material to make an addition. Albeit in case of assessment u/s153A (searched person) wherein the addition for unabated assessment has to be confined on the basis of incriminating material found during the course of search. 43. The counsel of the assessee also relied on the decisions of the Mumbai Benches of the ITAT on the same set of facts in Bipin Savla – ITA No. 6493 to 6499/Mum/2024, Bharat Girdharlal Rughani – ITA No. 1511 to 1517/M/2023 and Parag Motilal Savla – ITA No. 4220/M/2023 praying for deletion of the additions made including in the assessment years which were pending during the six years period before the date of search. 44. The ld. Counsel of the assessee also submitted that during the course of the search itself the assessee informed on 21/12/2017 in his statement as answer to question no. 67 the names of the two parties to whom cash loans were given by his wife Mrs Urvi Deepak Mehta and not by the assessee at all and the fact that the said amounts are duly recorded in the books of account as stated in the answer nos. 41 and 43 Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 29 of his statement u/s 132(4) as extracted herein above. The ld. Counsel also submitted that the assessee categorically stated that copies of the recovery suits filed wee in his office admittedly the office of the assessee was also surveyed u/s 133A simultaneously by the investigation unit and the same document was well with the revenue since then. 45. In the present case, the statements relied upon by the Assessing Officer do not refer to any document found during the search at the assessee’s premises. On the contrary, the assessee repeatedly stated that he did not recollect details at that stage and that the same would be verified from records maintained at the office. Such responses, when read in their proper context, cannot be elevated to the status of a clear, voluntary, and unequivocal admission of undisclosed income. 46. More importantly, the assessee retracted the statements at the earliest available opportunity. The retraction has remained uncontroverted. No cross-examination was carried out, nor was any independent enquiry undertaken to disprove the assertions made therein. The Revenue has thus failed to discharge the burden that lay upon it once the retraction was placed on record. 47. In the backdrop of the aforesaid legal position, and upon a cumulative and holistic consideration of the facts on record, we are of the considered view that no incriminating material was found during the search conducted at the premises of the assessee which could justify the additions made in respect of the completed assessment years. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 30 47.1. The additions made by the Assessing Officer are founded entirely on third-party material and uncorroborated statements, which, by no stretch of legal reasoning, can be treated as incriminating material for the purposes of section 153A of the Act. 47.2. Consequently, the assumption of jurisdiction by the Assessing Officer to make additions in respect of Assessment Years 2012-13 to 2017-18 under section 153A is vitiated in law and cannot be sustained. 48. Having held so, the additions made for these years are liable to be deleted on this jurisdictional ground alone. Nevertheless, since the Assessing Officer and the learned Commissioner (Appeals) have dealt with the merits of the additions at considerable length, and since extensive submissions have been advanced before us on merits as well, we proceed to examine the substantive sustainability of the additions, so as to render a complete and conclusive adjudication and to avoid any remand-driven uncertainty. 49. Having adjudicated the jurisdictional infirmity attending the impugned assessments for the completed assessment years, we now proceed to examine the substantive sustainability of the additions made on merits, so as to render a complete and conclusive adjudication of the controversy. 49.1. The addition under section 69 of the Act has been made on the allegation that the assessee had advanced Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 31 substantial sums by way of cash loans to Shri Nilesh Bharani / Evergreen Enterprises over multiple assessment years, which loans were not recorded in the regular books of account and represented unexplained investments. The Assessing Officer has proceeded on the premise that the entries appearing in certain loose papers and ledgers seized from the premises of Shri Nilesh Bharani reflected actual cash transactions involving the assessee. 50. At the outset, it must be noted that section 69 postulates a clear statutory requirement: before an amount can be treated as unexplained investment, the Revenue must establish that the assessee has in fact made such investment and that the assessee has failed to satisfactorily explain the nature and source thereof. The provision does not permit additions to be made on conjectures, surmises, or inferential assumptions divorced from reliable evidence. 51. In the present case, the primary material relied upon by the Assessing Officer consists of loose sheets, cash ledgers, and notings seized during the course of a search conducted in the case of a third party. It is an admitted position that no such documents were found or seized from the premises of the assessee during the search conducted on him. The assessment orders also do not record the discovery of any corroborative material from the assessee’s possession evidencing the alleged advancement of cash loans. 51.1. The evidentiary value of loose papers and uncorroborated notings is, at best, weak. Courts have Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 32 consistently held that such documents, unless supported by independent and reliable evidence, do not constitute proof of actual transactions. In the present case, the Assessing Officer has not brought on record any independent material to demonstrate that the alleged cash loans were actually advanced by the assessee, that the alleged amounts flowed from the assessee to the alleged borrower, or that the assessee had the financial capacity to advance such loans in cash. 52. Equally important is the conduct of the alleged borrower. The record reflects that the statements recorded during the search proceedings in the case of Shri Nilesh Bharani were subsequently retracted. The alleged borrower denied the transactions and furnished explanations regarding the entries appearing in the seized documents. Once such retractions are on record, the burden squarely shifts to the Revenue to establish, through cogent and affirmative evidence, that the original statements represented the true state of affairs. That burden has remained undischarged. 53. The Assessing Officer, however, proceeded to draw adverse inferences without undertaking any meaningful enquiry. No attempt was made to trace the alleged flow of cash, to examine bank withdrawals corresponding to the alleged cash advances, or to verify the recovery proceedings stated to have been initiated by the assessee or his family members. The assessment orders thus rest on inference piled upon inference, without a firm evidentiary foundation. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 33 54. It is also relevant to note that during the course of the statement recorded under section 132(4), the assessee consistently stated that details would be verified from records maintained at the office and that recovery proceedings had already been initiated in respect of certain transactions. These assertions were not examined in depth by the Assessing Officer, despite the availability of ample legal authority to do so. The failure of the Revenue to conduct such enquiry cannot be substituted by presumptions adverse to the assessee. 55. Viewed thus, even on merits, the alleged cash loans have not been established by reliable and cogent evidence. The addition made under section 69 of the Act, therefore, does not survive on merits. 56. The controversy before us is not res integra. Multiple coordinate benches of the Tribunal have had occasion to examine identical factual situations arising from the same set of searches and involving the same alleged borrower. In these cases, the Tribunal has undertaken an exhaustive analysis of the evidentiary record and has consistently held that additions on account of alleged cash loans are unsustainable in law. In these decisions, the Tribunal has noted that despite the magnitude of the alleged cash transactions, not a single piece of incriminating material was found in the possession of the assessee concerned. The improbability of substantial cash transactions leaving no trace at the lender’s end has been emphasised. The absence of corroborative evidence and the Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 34 impermissibility of resting additions solely on statements and third-party documents have been highlighted. 57. The relevant findings recorded by the coordinate benches, which squarely apply to the facts of the present case, are placed on record and are reproduced hereunder. 16. In Shantilal Savla - ITA No. 357 to 363/Mum/2025 DoD 22/05/2025 13. We have heard the rival submissions and perused the material available on record. The issue pertaining to the existence of incriminating material for the assumption of jurisdiction by the Ld. AO under section 153A of the Act has been duly challenged by the assessee before the Ld. CIT(A) and the Hon‘ble ITAT. The incriminating material relied upon by the revenue was found at the premises of Mr. Nilesh Bharani and M/s Evergreen Enterprises, and the statements of the partners therein were recorded as evidence of undisclosed income. It is an undisputed fact that Mr. Nilesh Bharani is engaged in the business of finance, particularly in cash lending and borrowing, and has earned income in cash. However, based on the statement of the assessee, it is evident that the assessee merely advanced a loan of Rs. 35 lakhs to Mr. Nilesh Bharani through banking channels. The assessee was also subjected to a search under section 132 of the Act on 18/12/2017, but no incriminating documents or material were found at the premises of the assessee. The entire addition in the present case is based solely on presumptions and pertains to third parties involved in the same search proceedings. Factually, the same issue has already been adjudicated in favour of the assessee. We respectfully rely on the decisions of the Coordinate Bench of the ITAT-Mumbai in the cases of RajeshkumarRameshchandra Shah vs. DCIT (supra) and Rupal Kashyap Mehta (supra), and observe that the Hon‘ble Supreme Court's ruling in AbhisarBuildwell (P.) Ltd. is squarely applicable to the facts of the present case. 14. Accordingly, as there is no incriminating material found in the possession of the assessee during the search, the additions Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 35 made for AYs. 2012–13 to 2016–17 are beyond the jurisdiction of the Ld. AO under section 153A of the Act. Consequently, Ground Nos. 1 to 3 raised by the assessee are allowed. 17. RajeshkumarRameshchandra Shah - ITA No. 5568 to 5573/M/2024 12. As could be seen from the above extract, in the cross examination taken on oath, on a specific question asked by the assessee, Shri NileshShamji Bharani denied of having entered into any cash loan transaction with the assessee. Thus, the facts on record reveal that except the so called incriminating material seized from the premises of Shri Nilesh Shamji Bharani and some statements recorded u/s. 132(4) of the Act from individuals related to M/s. Evergreen Enterprises, the A.O. had no other corroborative evidence available with him to establish that the assessee had actually advanced any cash loan to Shri Nilesh Shamji Bharani. Moreover, the assessee from the very beginning had emphatically denied of having any cash loan transaction with Shri Nilesh Shamji Bharani. Even, a couple of days after recording of statements u/s. 132(4) of the Act, the concerned persons including Shri Nilesh Shamji Bharani had retracted their statements. In fact, Shri Nilesh Shamji Bharani had filed an Affidavit before the A.O. in course of assessment proceedings completely denying the fact of cash loan transaction and had explained that the entries appearing in the seized document, in reality, represents the cash given to him by his father. 13. When the assessee as well as Shri Nilesh Shamji Bharani and other individuals have denied of alleged cash transaction in subsequent events, the duty of the A.O. was to gather more corroborative evidence to establish on record that the entries appearing in the seized material actually represent cash loan transaction of the assessee. However, except the seized material and the statements recorded u/s. 132(4) of the Act from some third-party individuals, the A.O. has absolutely no other evidence on record to corroborate the alleged cash loan transaction of the assessee. Pertinently, though, during the time search and seizure operation was carried out in case of M/s. Evergreen Enterprises and Shri Nilesh Shamji Bharani, a search and seizure operation was also carried out in case of Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 36 the assessee, however, not a single piece of incriminating material was recovered from the assessee indicating involvement of assessee in the alleged cash loan transaction or any other illegal activity. In fact, it is relevant to observe, in the statement recorded u/s. 132(4) of the Act, Shri Jagdish T Ramani, who allegedly was assisting Shri Nilesh Shamji Bharani in his work, had stated that Shri Nilesh Shamji Bharani had instructed him to follow up with the lender, i.e., the assessee, to determine the modality of payment. He had stated that he instructed one of the office boys to collect money from the lender and after the money is collected, it is given to the borrower on execution of a promissory note. He had further stated that after the money is delivered to the borrower and promissory note is obtained, he had instructed the office boy to deliver the promissory note to the lender. It is quite surprising that considering the magnitude of the alleged cash loan transaction appearing in the seized document, not a single piece of incriminating material relating a cash loan transaction was recovered from the assessee during the search and seizure operation conducted on assessee. If the version of Mr. Jagdish T Ramani that the promissory note given by the borrower is delivered to the lender is to be taken on face value, then at least if not all few such promissory notes would have been recovered in course of search and seizure operation carried out in case of the assessee. It is quite improbable that such huge amount of cash loan transaction would not leave any trace of incriminating material /evidence with the assessee. Thus, on cumulative analysis of facts and materials available on record, we are of the opinion that is no conclusive evidence was available with the A.O. to establish on record that the entries appearing in the seized material actually represent cash loan transaction of the assessee. 14. In view of the aforesaid, we have no hesitation in holding that the additions made on account of unexplained investment on account of alleged cash loan transaction and addition made on account of notional interest thereon being not based on cogent evidence, are unsustainable. Accordingly, we direct the A.O. to delete the additions in all the years under dispute. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 37 18. Hemendra Ramji Vira vs DCIT in ITA No. 2470 to 2472/Mum/2025 (DoD: 26/06/2025) (relevant paras only) 43. Further, similarly for the AY 2016-17 to 2018-19, the additions were made by the AO by working out the unexplained cash loan given by the assessee to one Mr Nilesh Bharani relying on some information found in a different search and premises of Mr Nilesh Bharani where the name of the assessee was not there in any panchnama by stating that since Mr Nilesh Bharani had admitted in his statement recorded u/s 132(4), receipt of such cash loan from the assessee outside the declared sources in the return of income of the assessee is to be assessed u/s 153A. The said fact was though initially partly admitted by the assessee without actually quantifying the same, yet lateron also retracted by him through an affidavit filed on 09/12/2019 and Mr Nilesh Bharani later also retracted his statement recorded u/s 132(4) vide his letter addressed to the investigation Unit on 14/10/2017. The charts of the additions made are given below: Para 5.33 for alleged cash loan given in the assessment orders 5.33 In the light of the above discussion, the cash loans given by the assessee to Shri Nilesh Bharani are assessed as undisclosed investment in loans amounting to Rs. 29,34,00,000/- for AY 2012-13 to 2018-19, u/s 69 of the IT Act as detailed below. Assessment year Opening Balance Cash loan given during the year Cash loan received back during the year Balance outstanding cash loan Amt in Rs Amt in Rs Amt in Rs Amt in Rs 2012-13 0000 0000 0000 0000 2013-14 0000 0000 0000 0000 2014-15 0000 0000 0000 0000 Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 38 2015-16 0000 0000 0000 0000 2016-17 000 2,05,00,000 2,05,00,000 2017-18 2,05,00,000 27,29,00,000 29,34,00,000 2018-19 29,34,00,000 0000 29,34,00,000 Total 29,34,00,000 Para 5.34 for estimated interest earned on the above loans 5.34 Further the interest earned / receivable on cash loan lent by you amounting to Rs. 6,33,67,134/- for AY 2012-13 to 2018-19, is to added to the total income of the assessee AY wise as detailed below: Assessment year Interest of Current Year Loans Interest of earlier year loans Total Interest for the year Amt in Rs Amt in Rs Amt in Rs A B C 2012-13 0000 0000 0000 2013-14 0000 0000 0000 2014-15 0000 0000 0000 2015-16 0000 0000 0000 2016-17 12,05,425 0000 12,05,425 2017-18 2,44,93,710 24,60,000 2,69,53,710 2018-19 0000 3,52,08,000 3,52,08,000 Total 3,94,000 21,34,582 25,28,582 ……… 49. Upon a comprehensive consideration of the rival submissions and a meticulous perusal of the material on record, as well as the decisions rendered by the coordinate benches, we find ourselves in respectful agreement with the contention advanced by the learned counsel. The additions sought to be made solely on the basis of an uncorroborated statement of the assessee cannot, in law, be sustained—at least within the contours of assessment under section 153A of the Act. A solitary statement, unbacked by any cogent or credible material unearthed during the search, cannot, by any judicial reckoning, be construed as incriminating material. The absence of corroborative evidence renders such a statement Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 39 insufficient to invoke or justify additions under the said provision. …….. 53. It is undisputed fact that no material much less incriminating material was found during the course of search from the premises of the assessee in support of the additions, made for the quantum amounts of the alleged cash loans given and the estimated interest thereon in all AYs as per chart herein above is deleted. We direct accordingly to delete the additions as above. 19. Leshark Global LLP vs DCIT in ITA No. 3177 to 3183/Mum/2025 (DoD: 31/07/2025) (relevant paras) 10. Upon a careful consideration of the facts of the case, the rival submissions, and the material available on record, we find that the core issue arising in the present appeals pertains to the additions made under Section 69 of the Act towards alleged cash loans purportedly advanced by the assessee to one Mr. Nilesh Bharani and his associates, as well as the notional interest computed thereon under Section 56. It is undisputed that these additions are founded solely upon certain loose sheets, coded ledger extracts, and statements recovered and recorded during the course of search proceedings conducted not on the assessee but in the case of a third party, namely, Mr. Nilesh Bharani and entities associated with him. 11. As rightly contended by the learned counsel for the assessee, Shri Vinod Kumar Bindal, this precise issue, both in law and in fact has been deliberated upon by the Co-ordinate Benches of the Tribunal in several matters involving identical allegations and evidentiary foundations. He specifically drew our attention to the decisions of the Tribunal in the cases of:  Ms. Rupal Kashyap Mehta vs. DCIT in ITA Nos. 6191 to 6196/Mum/2024 (order dated 27.02.2025), Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 40  Rajesh Kumar Rameshchandra Shah vs. DCIT in ITA Nos. 5568 to 5573/Mum/2024 (order dated 31.01.2025), and  Nilesh Bharani vs. DCIT in ITA No. 612/Mum/2020 (order dated 28.02.2023). In each of these matters, the additions made under Sections 69 and 56 were based exclusively on the so-called ―incriminating‖ material seized from the premises of Mr. Nilesh Bharani, which included handwritten ledgers, coded entries, and statements recorded during investigation. The Co-ordinate Benches, after a meticulous examination of the evidentiary trail and the legal framework governing search assessments, unequivocally held that such third-party material howsoever incriminating it may appear cannot be used to make additions in the hands of another assessee under Section 153A, unless the procedural mandate of Section 153C is duly followed. 12. This Tribunal in Nilesh Bharani (supra), while elaborating the statutory architecture, observed that the jurisdiction under Section 153A is strictly confined to the material unearthed during the course of search conducted on the assessee himself. Where the Revenue seeks to act on the basis of documents found during the search of another person, the only lawful recourse is via Section 153C requiring satisfaction to be recorded that the material belongs to or pertains to the assessee and in the absence of such compliance, the jurisdiction exercised under Section 153A would be rendered invalid and the consequential assessment orders, non-est in law. 13. The same reasoning was echoed in Rupal Kashyap Mehta (supra), where this Tribunal found that the alleged transactions were neither corroborated by any material found during the search on the assessee nor independently supported by any verifiable documentation, and that even the statement relied upon by the Revenue had been retracted, unauthenticated, or was otherwise uncorroborated. On those grounds alone, the additions were deleted. 14. In light of the binding ratio laid down by the Hon‟ble Supreme Court in PCIT vs. AbhisarBuildwellPvt. Ltd. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 41 [(2023) 149 taxmann.com 399 (SC)], which held that no addition can be made under Section 153A in respect of unabated assessments in the absence of incriminating material found during the search on the assessee, and following the aforementioned consistent judicial pronouncements of the Co- ordinate Benches, we hold that the additions made in the present case resting entirely on documents recovered from the search conducted in the case of Mr. Nilesh Bharani are legally untenable. The Revenue has neither invoked nor complied with the provisions of Section 153C, and hence, the assumption of jurisdiction under Section 153A in respect of these additions stands vitiated. Consequently, the additions made under Section 69 of the Act across all the assessment years under appeal are hereby directed to be deleted. 15. Consequentially, the additions made under Section 56 of the Act towards notional interest income on the said alleged cash loans quantified and tabulated by the Assessing Officer in paragraphs 5.29 and 5.30 of the assessment order for A.Y. 2012–13 are devoid of any independent legal or factual basis. These additions are purely derivative in nature, arising only from the presumption of unexplained investments having been made, and hence, cannot stand once the substantive additions under Section 69 have been found to be unsustainable. There is neither any primary transaction nor any independently discovered evidence which could justify the estimation of such income. In the absence of any corroborative or incriminating material found during the search, such additions are wholly speculative and deserve to be deleted. Accordingly, all the grounds of appeal pertaining to the additions made under Sections 69 and 56 across the assessment years in question are allowed, and the impugned additions are directed to be deleted in full. 58. Judicial discipline thus mandates that in the absence of any distinguishing feature brought on record by the Revenue, a consistent view taken by coordinate benches on identical facts ought to be followed. We see no reason to depart from the settled position. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 42 59. Accordingly, even on merits, the additions made under section 69 of the Act on account of alleged cash loans are unsustainable and are liable to be deleted. 60. The Assessing Officer has further brought to tax notional interest allegedly earned on the aforesaid cash loans under section 56 of the Act. The computation of such interest is based on estimated rates and on the assumption that the principal amount of cash loans was advanced and remained outstanding over the years. 61. At the threshold, it must be observed that the addition on account of notional interest is purely derivative in nature. It presupposes the existence of the principal transaction, namely, the advancement of cash loans. Once the substantive addition under section 69 is found to be unsustainable, the superstructure built thereon necessarily collapses. 61.1. Even otherwise, the Act does not permit taxation of hypothetical or imaginary income. Income-tax is levied on real income, and unless there is evidence of accrual or receipt of interest, no addition can be sustained. In the present case, there is no evidence to demonstrate that any interest was agreed upon, accrued, or received by the assessee. 62. The Assessing Officer has merely extrapolated figures based on assumptions, without any contractual basis or corroborative evidence. Such an exercise, howsoever arithmetically detailed, does not meet the threshold of legal sustainability. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 43 63. Accordingly, the additions made under section 56 of the Act towards notional interest on the alleged cash loans are devoid of legal and factual basis and are liable to be deleted. 64. We now turn to the addition of ₹41,99,700/- made under section 69A of the Act in Assessment Year 2018-19 on account of jewellery found during the course of search and treated by the Assessing Officer as unexplained in the hands of the assessee. 65. The factual position, as emerging from the record, is that jewellery aggregating to ₹2,05,17,200/- was inventorised during the search. Out of the said jewellery, items valued at ₹1,63,17,500/- were accepted as explained and released. The balance jewellery valued at ₹41,99,700/- was seized, leading to the impugned addition. 66. Section 69A requires the Revenue to establish that the assessee is the owner of the jewellery and that the assessee has either offered no explanation regarding its acquisition or that the explanation offered is unsatisfactory. In the present case, the assessee consistently stated, both during the course of search and in subsequent proceedings, that the jewellery belonged to various family members, including his wife and son, and that it represented streedhan, gifts received on ceremonial occasions, and purchases made out of explained sources. 67. The relevant questions and answers recorded during the course of search, wherein the assessee and his wife explained Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 44 the ownership and source of the jewellery have already been reproduced in the earlier part of the order. 68. The explanations furnished by the assessee were supported by documentary evidence placed on record during the assessment proceedings. However, the assessment order does not reveal any item-wise examination of such evidence. The rejection of the explanation is summary and conclusory, without assigning cogent reasons for disbelieving the assessee’s version. 69. It is well recognised that in Indian households, possession of jewellery by women and family members is a social norm, and the law does not require mathematical precision or contemporaneous bills for every item of jewellery held over decades. The Assessing Officer was duty-bound to examine the explanation in a holistic manner, keeping in view the social and economic background of the family. In the absence of any finding that the assessee was the exclusive owner of the jewellery, the addition made entirely in his hands under section 69A is misconceived. The provision cannot be invoked on surmises or presumptions. 70. On an overall consideration of the facts and circumstances, we are satisfied that the assessee has discharged the onus cast upon him under section 69A. The Revenue has failed to bring on record any material to dislodge the explanation offered. Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 45 71. We therefore hold that the addition of ₹41,99,700/- made under section 69A of the Act in Assessment Year 2018- 19 is unsustainable and is directed to be deleted. 72. In view of the foregoing discussion and findings, all the additions made under sections 69, 56, and 69A of the Act for the assessment years under consideration are deleted. 73. Since the appeals have been decided on the above grounds, the remaining grounds raised by the assessee, including those relating to procedural aspects and approvals, are rendered academic and are not adjudicated. 74. In the result, all the appeals filed by the assessee are allowed. Order pronounced on 6th January, 2026. Sd/- (ARUN KHODPIA) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 06/01/2026 KARUNA, sr.ps Printed from counselvise.com ITA No.6505/Mum/2025 to 6511/Mum/2025 Deepak Kakubhai Mehta 46 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "