HARIRAM JAGAJI CHAUDHARY ,MUMBAI V. DCIT,CENTRAL CIRCLE 4(2), MUMBAI

ITA 8343/MUM/2025

AI Insights

The case revolves around a series of appeals by Hariram Jagaji Chaudhari against the additions made to his income by the Income Tax Department, which were based on the findings from a search and seizure operation conducted on the Rubberwala Group. The operation revealed digital material and statements from key employees, suggesting that the transactions involved both accounted and unaccounted components. The Tribunal examined whether the additions could be sustained solely on these findings without independent corroborative evidence and without providing the assessee an opportunity for cross-examination. The Tribunal concluded that the additions were not sustainable, referencing several precedents where similar circumstances led to the deletion of such additions.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 850260 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2021-2022
• Appeal Filed On: 03-12-2025
• Other Referred Cases: Pravin K Purohit VS DCIT Central Circle 4(2), Akhraj P Chopra VS DCIT Central Circle 4(2), Lilaram VS DCIT Central Circle 4(2), Bhavana V Jain VS ACIT Central Circle 4(2), Bharat Solanki VS DCIT Central Circle 4(2), Manish K Seksaria VS DCIT Central Circle 4(2), Mishra Ganesha Ram VS DCIT Central Circle 4(2), Manish Mali VS DCIT Central Circle 4(2), Darpan H Mehta VS DCIT Central Circle 4(2), Dinesh Megharam Choudhary VS DCIT Central Circle 4(2), Kulsum Aaqib Memon VS DCIT Central Circle 4(2), Ganpat H Purohit VS DCIT Central Circle 4(2), Gaurav Kumar Ashok Kumar Jain VS DCIT Central Circle 4(2), Hiralal Mehta VS DCIT Central Circle 4(2), Jayantilal Purohit VS DCIT Central Circle 4(2), Nikhil V Agarwal VS DCIT Central Circle 4(2), Khetaramm Purohit VS DCIT Central Circle 4(2), Heena Dashrath Jhanglani VS DCIT Central Circle 4(2), Shri Anil Jaggi VS ACIT Central Circle 4(2), Kishinchand Chellaram v. CIT, Andaman Timber Industries v. CCE
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RITESH MISRA
• Assessee Lawyers: BHARAT KUMAR
• Keywords: Unexplained investment; Principle of natural justice; Search and seizure; Opportunity of cross examination; Procedural lapse
• Section: 132; 69; 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 8340/MUM/2025 (A.Y 2017-18) ITA No. 8341/MUM/2025 (A.Y 2018-19) ITA No. 8342/MUM/2025 (A.Y 2019-20) & ITA No. 8343/MUM/2025 (A.Y 2021-22) Hariram Jagaji Chaudhari 5th Floor, 518/B, B Wing, Shiv shakri Chs, Tikal Bhavan, Kakasaheb Gadgil Marg, Dadar (W) Shivaji Park, Bhawani shankar Rd. SO Mumbai – 400028. Vs. DCIT Central Circle 4(2), Mumbai Kautilya Bhawan, C41-43, Avenue 3, near Videsh Bhavan, G Block BKC, Gilban Area, Bandra Kurla Complex, Bandra East, Mumbai- 400051 PAN NO. ALEPC0380Q Appellant Respondent Assessee by : Mr. Bharat Kumar Revenue by : Mr. Ritesh Misra, CIT. DR Date of Hearing : 25/03/2026 Date of pronouncement : 27/03/2026 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee are directed against a common order dated 01.10.2025 passed by the Ld. Commissioner of Income- tax- 52, Mumbai [in short ‘the Ld.CIT(A)] for assessment years 2017-18, 2018-19, 2019-20 & 2021-22. Printed from counselvise.com 2. Briefly stated, the facts giving rise to the present proceedings are that a search and Income-tax Act, 1961 (hereinafter referred to as “the Act”) was conducted in the case of M/s. Rubberwala Housing Infrastructure Limited (RHIL), its promoter and director, Shri Tabrez Shaikh, and a key employee of the Rubberwala Group, Shri Imran Ansari, who was entrusted with the work of sale and registration of shops in the “Platinum Mall” project developed by RHIL. 2.1 RHIL had constructed a commercial complex known as “Platinum Mall”, wherein various shops were purchasers, including the assessee. During the course of the search proceedings, certain digital material in the form of an Excel sheet was found and seized from the possession of Shri Imran Ansari. In his statement, he explained that the in “Platinum Mall” comprised both accounted (cheque) and unaccounted (cash) components, and that the quantum of such cash component was determined by Shri Tabrez Shaikh. 2.2 The information so gathered during the course of subsequently disseminated to the Assessing Officers having jurisdiction over the respective purchasers of the shops, including the assessee herein, for appropriate action in accordance with law. 3. The assessee filed its original returns of inc relevant assessment years declaring the following incomes: for A.Y. Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 Briefly stated, the facts giving rise to the present proceedings are that a search and seizure action under section 132 of the tax Act, 1961 (hereinafter referred to as “the Act”) was conducted in the case of M/s. Rubberwala Housing Infrastructure Limited (RHIL), its promoter and director, Shri Tabrez Shaikh, and a Rubberwala Group, Shri Imran Ansari, who was entrusted with the work of sale and registration of shops in the “Platinum Mall” project developed by RHIL. RHIL had constructed a commercial complex known as “Platinum Mall”, wherein various shops were sold to different purchasers, including the assessee. During the course of the search proceedings, certain digital material in the form of an Excel sheet was found and seized from the possession of Shri Imran Ansari. In his statement, he explained that the consideration for sale of shops in “Platinum Mall” comprised both accounted (cheque) and unaccounted (cash) components, and that the quantum of such cash component was determined by Shri Tabrez Shaikh. The information so gathered during the course of subsequently disseminated to the Assessing Officers having jurisdiction over the respective purchasers of the shops, including the assessee herein, for appropriate action in accordance with law. The assessee filed its original returns of income for the relevant assessment years declaring the following incomes: for A.Y. Hariram Jagji chaudhary 2 8340, 8341, 8342 & 8343/MUM/2025 Briefly stated, the facts giving rise to the present proceedings seizure action under section 132 of the tax Act, 1961 (hereinafter referred to as “the Act”) was conducted in the case of M/s. Rubberwala Housing Infrastructure Limited (RHIL), its promoter and director, Shri Tabrez Shaikh, and a Rubberwala Group, Shri Imran Ansari, who was entrusted with the work of sale and registration of shops in the RHIL had constructed a commercial complex known as sold to different purchasers, including the assessee. During the course of the search proceedings, certain digital material in the form of an Excel sheet was found and seized from the possession of Shri Imran Ansari. In consideration for sale of shops in “Platinum Mall” comprised both accounted (cheque) and unaccounted (cash) components, and that the quantum of such cash component was determined by Shri Tabrez Shaikh. The information so gathered during the course of search was subsequently disseminated to the Assessing Officers having jurisdiction over the respective purchasers of the shops, including the assessee herein, for appropriate action in accordance with law. ome for the relevant assessment years declaring the following incomes: for A.Y. Printed from counselvise.com 2017–18 on 31.03.2018 declaring total income of A.Y. 2018–19 on 30.03.2019 declaring total income of for A.Y. 2019–20 on 24.12.2019 declaring tota ₹4,13,150/-; and for A.Y. 2021 income of ₹10,63,210/- 3.1 Pursuant to the information pertaining to the assessee emanating from the search action conducted in the case of the Rubberwala Group, notices under sec issued for A.Ys. 2017 information indicated that the assessee had purchased a shop in “Platinum Mall”, Girgaon, Mumbai, and had allegedly made cash payments aggregating to year-wise break-up of the alleged cash component was stated as ₹2,00,000/- in A.Y. 2017 ₹3,78,300/- in A.Y. 2019 3.2 On the basis of the seized material, namely the Ex and the statement of Shri Imran Ansari, it was alleged that the assessee had paid the aforesaid amount as unaccounted “on money” in connection with the purchase of the shop, spread across the aforesaid assessment years. The assessee, however, categorically denied having made any such cash payments. 3.3 The Assessing Officer, placing primary reliance on the statement of Shri Imran Ansari and the entries contained in the Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 18 on 31.03.2018 declaring total income of ₹5,39,350/ 19 on 30.03.2019 declaring total income of ₹ 20 on 24.12.2019 declaring total income of ; and for A.Y. 2021–22 on 17.12.2021 declaring total -. Pursuant to the information pertaining to the assessee emanating from the search action conducted in the case of the Rubberwala Group, notices under section 153C of the Act were issued for A.Ys. 2017–18, 2018–19, 2019–20 and 2021 information indicated that the assessee had purchased a shop in “Platinum Mall”, Girgaon, Mumbai, and had allegedly made cash payments aggregating to ₹17,50,700/- towards such purchase. The up of the alleged cash component was stated as in A.Y. 2017–18, ₹9,34,900/- in A.Y. 2018 in A.Y. 2019–20 and ₹2,37,500/- in A.Y. 2021 On the basis of the seized material, namely the Ex and the statement of Shri Imran Ansari, it was alleged that the assessee had paid the aforesaid amount as unaccounted “on money” in connection with the purchase of the shop, spread across the aforesaid assessment years. The assessee, however, egorically denied having made any such cash payments. The Assessing Officer, placing primary reliance on the statement of Shri Imran Ansari and the entries contained in the Hariram Jagji chaudhary 3 8340, 8341, 8342 & 8343/MUM/2025 5,39,350/-; for ₹4,07,970/-; l income of 22 on 17.12.2021 declaring total Pursuant to the information pertaining to the assessee emanating from the search action conducted in the case of the tion 153C of the Act were 20 and 2021–22. The information indicated that the assessee had purchased a shop in “Platinum Mall”, Girgaon, Mumbai, and had allegedly made cash such purchase. The up of the alleged cash component was stated as in A.Y. 2018–19, in A.Y. 2021–22. On the basis of the seized material, namely the Excel sheet and the statement of Shri Imran Ansari, it was alleged that the assessee had paid the aforesaid amount as unaccounted “on- money” in connection with the purchase of the shop, spread across the aforesaid assessment years. The assessee, however, egorically denied having made any such cash payments. The Assessing Officer, placing primary reliance on the statement of Shri Imran Ansari and the entries contained in the Printed from counselvise.com seized Excel sheet, proceeded to make additions of A.Y. 2017–18, ₹9,34,900/ 2019–20 and ₹2,37,500/ 4. Aggrieved, the assessee is in appeal before the of raising grounds as reproduce 5. We have heard rival submission of the parties and relevant material on record. Before us ld. counsel of the assessee submitted that addition made in the case of other customers of the “Platinum Mall” on the basis of statement Shri. Imran Ansari and the excel sheet found fr bench of the Tribunal in the series of decisions. The ld. counsel filed a list of such decision before (i) Before Hon'ble ITAT Mumbai \"A\" bench in case of Pravin K Purohit VS DCIT Central Circle 4(2), ITA No 4742 4744/MUM/2025 order pronounced on 15th October 2025 (AY 2017-18, 2018 (ii) Before Hon'ble ITAT Mumbai \"C\" bench in case of Akhraj P Chopra VS DCIT Central Circle 4(2), ITA No 5553 5555/MUM/2025 AND Lilaram VS DCIT Central Circle 4(2), ITA No 5554-5557/MUM/ November 2025 (AY 2019 Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 seized Excel sheet, proceeded to make additions of ₹2,00,000/ 9,34,900/- for A.Y. 2018–19, ₹3,78,300/ 2,37,500/- for A.Y. 2021–22. the assessee is in appeal before the Tribunal reproduce above. We have heard rival submission of the parties and relevant material on record. Before us ld. counsel of the assessee submitted that addition made in the case of other customers of the “Platinum Mall” on the basis of statement Shri. Imran Ansari and the excel sheet found from him has been deleted by the C bench of the Tribunal in the series of decisions. The ld. counsel filed a list of such decision before us as under: Before Hon'ble ITAT Mumbai \"A\" bench in case of Pravin K Purohit VS DCIT Central Circle 4(2), ITA No 4742 5 order pronounced on 15th October 2025 18, 2018-19 & 2020-2021) Before Hon'ble ITAT Mumbai \"C\" bench in case of Akhraj P Chopra VS DCIT Central Circle 4(2), ITA No 5553 5555/MUM/2025 AND Lilaram VS DCIT Central Circle 4(2), 5557/MUM/2025 order pronounced on 10th November 2025 (AY 2019-20 & AY 2020-2021) Hariram Jagji chaudhary 4 8340, 8341, 8342 & 8343/MUM/2025 2,00,000/- for 3,78,300/- for A.Y. Tribunal by way We have heard rival submission of the parties and perused the relevant material on record. Before us ld. counsel of the assessee submitted that addition made in the case of other customers of the “Platinum Mall” on the basis of statement Shri. Imran Ansari and ed by the Coordinate bench of the Tribunal in the series of decisions. The ld. counsel filed Before Hon'ble ITAT Mumbai \"A\" bench in case of Pravin K Purohit VS DCIT Central Circle 4(2), ITA No 4742- 5 order pronounced on 15th October 2025 Before Hon'ble ITAT Mumbai \"C\" bench in case of Akhraj P Chopra VS DCIT Central Circle 4(2), ITA No 5553- 5555/MUM/2025 AND Lilaram VS DCIT Central Circle 4(2), 2025 order pronounced on 10th Printed from counselvise.com (iii) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bhavana V Jain VS ACIT Central Circle 4(2), ITA No 6363 6365/MUM/2025 order pronounced on 10th December 2025 (AY 2017-18, 2018 (iv) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bharat Solanki VS DCIT Central Circle 4(2), ITA No 6523 6525/MUM/2025 order pronounced on 23th December 2025 (AY 2017-18, 2018 (v) Before Hon'ble ITAT Mumbai \"D\" bench in case of Manish K Seksaria VS DCIT Central Circle 4(2), ITA No 5499 5501/MUM/2025 order pronounced on 23th December 2025 (AY 2017-18, 2018 (vi) Before Hon'ble ITAT Mumbai \"E\" bench in case of Mishra Ganesha Ram VS DCIT Central Circle 4(2), ITA No 5552 & 5556/MUM/2025 order pronounced on 23th December 2025 (AY 2019-20 & AY 2020 (vii) Before Hon'ble ITAT Mumbai \"D\" bench in case of Manish Mali VS DCIT Central Circle 4(2), ITA No 6571, 6569 & 6568/MUM/2025 (AY 2017 Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 Before Hon'ble ITAT Mumbai \"B\" bench in case of Bhavana V Jain VS ACIT Central Circle 4(2), ITA No 6363 6365/MUM/2025 order pronounced on 10th December 2025 18, 2018-19 & 2019-20) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bharat Solanki VS DCIT Central Circle 4(2), ITA No 6523 6525/MUM/2025 order pronounced on 23th December 2025 18, 2018-19 & 2019-20) Before Hon'ble ITAT Mumbai \"D\" bench in case of Manish K ksaria VS DCIT Central Circle 4(2), ITA No 5499 5501/MUM/2025 order pronounced on 23th December 2025 18, 2018-19 & 2019-20) Before Hon'ble ITAT Mumbai \"E\" bench in case of Mishra Ganesha Ram VS DCIT Central Circle 4(2), ITA No 5552 & 5 order pronounced on 23th December 2025 20 & AY 2020-21) Before Hon'ble ITAT Mumbai \"D\" bench in case of Manish Mali VS DCIT Central Circle 4(2), ITA No 6571, 6569 & 6568/MUM/2025 (AY 2017-18, 2018-19 & 2019 Hariram Jagji chaudhary 5 8340, 8341, 8342 & 8343/MUM/2025 Before Hon'ble ITAT Mumbai \"B\" bench in case of Bhavana V Jain VS ACIT Central Circle 4(2), ITA No 6363- 6365/MUM/2025 order pronounced on 10th December 2025 Before Hon'ble ITAT Mumbai \"B\" bench in case of Bharat Solanki VS DCIT Central Circle 4(2), ITA No 6523- 6525/MUM/2025 order pronounced on 23th December 2025 Before Hon'ble ITAT Mumbai \"D\" bench in case of Manish K ksaria VS DCIT Central Circle 4(2), ITA No 5499- 5501/MUM/2025 order pronounced on 23th December 2025 Before Hon'ble ITAT Mumbai \"E\" bench in case of Mishra Ganesha Ram VS DCIT Central Circle 4(2), ITA No 5552 & 5 order pronounced on 23th December 2025 Before Hon'ble ITAT Mumbai \"D\" bench in case of Manish Mali VS DCIT Central Circle 4(2), ITA No 6571, 6569 & 19 & 2019-20) AND Printed from counselvise.com Darpan H Mehta VS DCIT 5489/MUM/2025 (AY 2018 Dinesh Megharam Choudhary VS DCIT Central Circle 4(2), ITA No 6480, 6479 & 6478/MUM/2025 (AY 2017 2019-20) order pronounced on 24th December 2025 (viii) Before Hon'ble ITA K Purohit VS DCIT Central Circle 4(2), ITA No 4747 & 4746/MUM/2025 order pronounced on 20th January 2026 (AY 2017-18, 2018 (ix) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bharat H Purohit VS DCIT Central Circle 4(1) 5832/MUM/2025 order (AY 2017-18, 2018 (x) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bhavesh H Solanki VS DCIT Central Circle 4(2), ITA No 7460 7462/MUM/2025 order pronounced on 20th January 2026 (AY 2017-18, 2018 (xi) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bipin F Jain VS DCIT Central Circle 4(2), ITA No 7021, 7023 & 7022/MUM/2025 order pronounced on 19th January 2026 (AY 2017-18, 2018 Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 Darpan H Mehta VS DCIT Central Circle 4(2), ITA No 5488 5489/MUM/2025 (AY 2018-19 & AY 2019-20) AND Dinesh Megharam Choudhary VS DCIT Central Circle 4(2), ITA No 6480, 6479 & 6478/MUM/2025 (AY 2017-18, 2018 20) order pronounced on 24th December 2025 Before Hon'ble ITAT Mumbai \"A\" bench in case of Arvind K Purohit VS DCIT Central Circle 4(2), ITA No 4747 & 4746/MUM/2025 order pronounced on 20th January 2026 18, 2018-19) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bharat H Purohit VS DCIT Central Circle 4(1), ΓΓΑ Νο 5831 & 5832/MUM/2025 order pronounced on 19th January 2026 18, 2018-19) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bhavesh H Solanki VS DCIT Central Circle 4(2), ITA No 7460 7462/MUM/2025 order pronounced on 20th January 2026 18, 2018-19 & 2019-20) Before Hon'ble ITAT Mumbai \"B\" bench in case of Bipin F Jain VS DCIT Central Circle 4(2), ITA No 7021, 7023 & 7022/MUM/2025 order pronounced on 19th January 2026 18, 2018-19 & 2019-20) Hariram Jagji chaudhary 6 8340, 8341, 8342 & 8343/MUM/2025 Central Circle 4(2), ITA No 5488- 20) AND Dinesh Megharam Choudhary VS DCIT Central Circle 4(2), ITA 18, 2018-19 & 20) order pronounced on 24th December 2025 T Mumbai \"A\" bench in case of Arvind K Purohit VS DCIT Central Circle 4(2), ITA No 4747 & 4746/MUM/2025 order pronounced on 20th January 2026 Before Hon'ble ITAT Mumbai \"B\" bench in case of Bharat H , ΓΓΑ Νο 5831 & pronounced on 19th January 2026 Before Hon'ble ITAT Mumbai \"B\" bench in case of Bhavesh H Solanki VS DCIT Central Circle 4(2), ITA No 7460- 7462/MUM/2025 order pronounced on 20th January 2026 Before Hon'ble ITAT Mumbai \"B\" bench in case of Bipin F Jain VS DCIT Central Circle 4(2), ITA No 7021, 7023 & 7022/MUM/2025 order pronounced on 19th January 2026 Printed from counselvise.com (xii) Before Hon'ble ITAT Mumbai \"F\" b Purohit VS DCIT Central Circle 4(2), ITA No 5682 5684/MUM/2025 order pronounced on 30th December 2025 (AY 2017-18, 2018 (xiii) Before Hon'ble ITAT Mumbai \"E\" bench in case of Kulsum Aaqib Memon VS DCIT Central Circle 6450/MUM/2025 order pronounced on 06th January 2026 (AY 2021-22) (xiv) Before Hon'ble ITAT Mumbai \"G\" bench in case of Ganpat H Purohit VS DCIT Central Circle 4(2), ITA No 5827 5830/MUM/2025 order pronounced on 22th January 2026 (AY 2017-18, 2018 (xv) Before Hon'ble ITAT Mumbai \"G\" bench in case of Gaurav Kumar Ashok Kumar Jain VS DCIT Central Circle 4(2), ITA No 7199-7201/MUM/2025 order pronounced on 22th January 2026 (AY 2017-18, 2018 (xvi) Before Hon'ble ITAT Hiralal Mehta VS DCIT Central Circle 4(2), ITA No 5492 & 5493/MUM/2025 order pronounced on 06th February 2026 (AY 2018-19 & AY 2019 Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 Before Hon'ble ITAT Mumbai \"F\" bench in case of Jayantilal Purohit VS DCIT Central Circle 4(2), ITA No 5682 5684/MUM/2025 order pronounced on 30th December 2025 18, 2018-19 & 2019-20) Before Hon'ble ITAT Mumbai \"E\" bench in case of Kulsum Aaqib Memon VS DCIT Central Circle 4(2), ITA No 6450/MUM/2025 order pronounced on 06th January 2026 Before Hon'ble ITAT Mumbai \"G\" bench in case of Ganpat H Purohit VS DCIT Central Circle 4(2), ITA No 5827 5830/MUM/2025 order pronounced on 22th January 2026 18, 2018-19, 2019-20 & 2020-21) Before Hon'ble ITAT Mumbai \"G\" bench in case of Gaurav Kumar Ashok Kumar Jain VS DCIT Central Circle 4(2), ITA No 7201/MUM/2025 order pronounced on 22th January 18, 2018-19, 2019-20 & 2020-21) Before Hon'ble ITAT Mumbai \"F\" bench in case of Veena Hiralal Mehta VS DCIT Central Circle 4(2), ITA No 5492 & 5493/MUM/2025 order pronounced on 06th February 2026 19 & AY 2019-20) Hariram Jagji chaudhary 7 8340, 8341, 8342 & 8343/MUM/2025 ench in case of Jayantilal Purohit VS DCIT Central Circle 4(2), ITA No 5682- 5684/MUM/2025 order pronounced on 30th December 2025 Before Hon'ble ITAT Mumbai \"E\" bench in case of Kulsum 4(2), ITA No 6450/MUM/2025 order pronounced on 06th January 2026 Before Hon'ble ITAT Mumbai \"G\" bench in case of Ganpat H Purohit VS DCIT Central Circle 4(2), ITA No 5827- 5830/MUM/2025 order pronounced on 22th January 2026 Before Hon'ble ITAT Mumbai \"G\" bench in case of Gaurav Kumar Ashok Kumar Jain VS DCIT Central Circle 4(2), ITA No 7201/MUM/2025 order pronounced on 22th January Mumbai \"F\" bench in case of Veena Hiralal Mehta VS DCIT Central Circle 4(2), ITA No 5492 & 5493/MUM/2025 order pronounced on 06th February 2026 Printed from counselvise.com (xvii) Before Hon'ble ITAT Mumbai \"D\" bench in case of Dhiraj Solanki VS DCIT Central Circle order pronounced on 04th February 2026 (AY 2019 (xviii) Before Hon'ble ITAT Mumbai \"D\" bench in case of Suresh Sonaji Purohit VS DCIT Central Circle 4(2), ITA No 8859 & 8860/MUM/2025 order pronounced on 09th February 2026 (AY 2019-20) 6. The Relevant observation in the case of Shri Arvi 4746/M/2025 is reproduced as under “4. We have heard rival submissions of the parties and perused the relevant materials on record. referred by the Assessing Officer is an excel sheet wherein name of the assessee is appearing and entry of cash payment is recorded, which has been further explained by Shri Imran Ansari key e other evidence has been referred either by the Assessing Officer or by the Ld. CIT(A) 4.1 The controversy before us is narrow and lies in a short compass as to whether the alleged unexplained investment in the purchase of the shop can be sustained solely on the basis of third statements, without any independent corroborative evidence and without affording the assessee an effective opportunity of cross It is an undisputed position that the enti addition rests on (i) an Excel sheet recovered from the possession of a third party during search, and (ii) the statement of Shri Imran Ansari explaining the said entries. On the basis of said material and statement of key person, the said company RHIL accepted the fact of the on in cash and declared 8% of the net profit for undisclosed income but no material evidencing actual payment of cash acknowledgments, or contemporaneous documents o to the assessee to alleged cash payment has been found from the Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 Before Hon'ble ITAT Mumbai \"D\" bench in case of Dhiraj Solanki VS DCIT Central Circle 4(2), ITA No 6526/MUM/2025 order pronounced on 04th February 2026 (AY 2019 Before Hon'ble ITAT Mumbai \"D\" bench in case of Suresh Sonaji Purohit VS DCIT Central Circle 4(2), ITA No 8859 & 8860/MUM/2025 order pronounced on 09th February 2026 Relevant observation of the Coordinate bench of Tribunal Shri Arvind K Purohit Vs DCIT in ITA No. is reproduced as under: We have heard rival submissions of the parties and perused the materials on record. We find that only evidence which have been referred by the Assessing Officer is an excel sheet wherein name of the assessee is appearing and entry of cash payment is recorded, which has been further explained by Shri Imran Ansari key employee of the RHIL. No other evidence has been referred either by the Assessing Officer or by the The controversy before us is narrow and lies in a short compass as to whether the alleged unexplained investment in the purchase of the shop can be sustained solely on the basis of third-party digital records and statements, without any independent corroborative evidence and without affording the assessee an effective opportunity of cross-examination. It is an undisputed position that the entire edifice of the impugned addition rests on (i) an Excel sheet recovered from the possession of a third party during search, and (ii) the statement of Shri Imran Ansari explaining the said entries. On the basis of said material and statement of key , the said company RHIL accepted the fact of the on-money received in cash and declared 8% of the net profit for undisclosed income but no material evidencing actual payment of cash—such as receipts, diaries, acknowledgments, or contemporaneous documents or corroborative linking to the assessee to alleged cash payment has been found from the Hariram Jagji chaudhary 8 8340, 8341, 8342 & 8343/MUM/2025 Before Hon'ble ITAT Mumbai \"D\" bench in case of Dhiraj 4(2), ITA No 6526/MUM/2025 order pronounced on 04th February 2026 (AY 2019-20) Before Hon'ble ITAT Mumbai \"D\" bench in case of Suresh Sonaji Purohit VS DCIT Central Circle 4(2), ITA No 8859 & 8860/MUM/2025 order pronounced on 09th February 2026 of the Coordinate bench of Tribunal ITA No. 4747 and We have heard rival submissions of the parties and perused the We find that only evidence which have been referred by the Assessing Officer is an excel sheet wherein name of the assessee is appearing and entry of cash payment is recorded, which has mployee of the RHIL. No other evidence has been referred either by the Assessing Officer or by the The controversy before us is narrow and lies in a short compass as to whether the alleged unexplained investment in the purchase of the shop party digital records and statements, without any independent corroborative evidence and without examination. re edifice of the impugned addition rests on (i) an Excel sheet recovered from the possession of a third party during search, and (ii) the statement of Shri Imran Ansari explaining the said entries. On the basis of said material and statement of key money received in cash and declared 8% of the net profit for undisclosed income but no such as receipts, diaries, r corroborative linking to the assessee to alleged cash payment has been found from the Printed from counselvise.com assessee. Even the alleged diary, repeatedly referred to in the statements, was never recovered either from the assessee or during the search of RHIL. 4.2 There is no contemporaneous documents and no corroborative linking to the assessee to alleged cash payment has been referred by the lower authorities. It is further evident that despite a specific request, the assessee was den the opportunity to cross relied upon does not speak for itself and derives its evidentiary value entirely from the explanation furnished by the very person whose statement was relied upon. In such circums examination causes manifest prejudice and strikes at the root of the principles of natural justice. 4.3 We find that identical issues arising out of the same search action on the Rubberwala Group have been consistently decided in assessees by various Coordinate Benches of the Tribunal, wherein additions based solely on such uncorroborated third statements were deleted. The Revenue has not been able to point out any distinguishing feature or bring on to persuade us to take a different view. 4.4 Identical addition made in the case of Bharat Solanki in ITA No. 6523/Mum/2025, the Co observing as under: “8.5 The Ld. counsel for the assessee submitted that said Rubberwala Group has credited 100% amount of the cash in its books of accounts against offering 8% of income on such declaration. In other words, they have generated huge amount of income in their hands income of the cash declared. For example, if the assessee get credited Rs.100 in its books of accounts against cash received then it has paid taxes @ 33% on the Rs.8 which work out to Rs.2.6. The Ld. counsel for the assessee submitted that this was one of the beneficial declaration and therefore, they have admitted and paid the taxes. The Ld. counsel for the assessee submitted that the assessee has never paid such cash on be their own money which they had brought i money for tax benefit. 8.6 We are of opinion that though the Rubberwala Group has admitted receipt of unaccounted cash and offered a percentage thereof to tax, such admission by the seller cannot, by itself, fasten liability u unless there is cogent evidence establishing that the purchaser actually made such payment. The disclosure by the developer may explain the source of its own funds, but it does not dispense with the burden on the Revenue to prove the assessee’s investment or expenditure. Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 assessee. Even the alleged diary, repeatedly referred to in the statements, was never recovered either from the assessee or during the search of There is no receipt, no diary, no acknowledgement, no contemporaneous documents and no corroborative linking to the assessee to alleged cash payment has been referred by the lower authorities. It is further evident that despite a specific request, the assessee was den the opportunity to cross-examine Shri Imran Ansari. The digital material relied upon does not speak for itself and derives its evidentiary value entirely from the explanation furnished by the very person whose statement was relied upon. In such circumstances, denial of cross examination causes manifest prejudice and strikes at the root of the principles of natural justice. We find that identical issues arising out of the same search action on the Rubberwala Group have been consistently decided in assessees by various Coordinate Benches of the Tribunal, wherein additions based solely on such uncorroborated third-party material and statements were deleted. The Revenue has not been able to point out any distinguishing feature or bring on record any fresh or independent material to persuade us to take a different view. Identical addition made in the case of Bharat Solanki in ITA No. 6523/Mum/2025, the Co-ordinate Bench has deleted the addition The Ld. counsel for the assessee submitted that said Rubberwala Group has credited 100% amount of the cash in its books of accounts against offering 8% of income on such declaration. In other words, they have generated huge amount of income in their hands at 33% of tax on the 8% income of the cash declared. For example, if the assessee get credited Rs.100 in its books of accounts against cash received then it has paid taxes @ 33% on the Rs.8 which work out to Rs.2.6. The Ld. counsel for the assessee ed that this was one of the beneficial declaration and therefore, they have admitted and paid the taxes. The Ld. counsel for the assessee submitted that the assessee has never paid such cash on-money and it might be their own money which they had brought into books in garb of cash on money for tax benefit. We are of opinion that though the Rubberwala Group has admitted receipt of unaccounted cash and offered a percentage thereof to tax, such admission by the seller cannot, by itself, fasten liability upon the purchaser unless there is cogent evidence establishing that the purchaser actually made such payment. The disclosure by the developer may explain the source of its own funds, but it does not dispense with the burden on the Revenue to prove ssee’s investment or expenditure. Hariram Jagji chaudhary 9 8340, 8341, 8342 & 8343/MUM/2025 assessee. Even the alleged diary, repeatedly referred to in the statements, was never recovered either from the assessee or during the search of receipt, no diary, no acknowledgement, no contemporaneous documents and no corroborative linking to the assessee to alleged cash payment has been referred by the lower authorities. It is further evident that despite a specific request, the assessee was denied examine Shri Imran Ansari. The digital material relied upon does not speak for itself and derives its evidentiary value entirely from the explanation furnished by the very person whose tances, denial of cross- examination causes manifest prejudice and strikes at the root of the We find that identical issues arising out of the same search action on the Rubberwala Group have been consistently decided in favour of the assessees by various Coordinate Benches of the Tribunal, wherein party material and statements were deleted. The Revenue has not been able to point out any record any fresh or independent material Identical addition made in the case of Bharat Solanki in ITA No. ordinate Bench has deleted the addition The Ld. counsel for the assessee submitted that said Rubberwala Group has credited 100% amount of the cash in its books of accounts against offering 8% of income on such declaration. In other words, they have at 33% of tax on the 8% income of the cash declared. For example, if the assessee get credited Rs.100 in its books of accounts against cash received then it has paid taxes @ 33% on the Rs.8 which work out to Rs.2.6. The Ld. counsel for the assessee ed that this was one of the beneficial declaration and therefore, they have admitted and paid the taxes. The Ld. counsel for the assessee money and it might nto books in garb of cash on- We are of opinion that though the Rubberwala Group has admitted receipt of unaccounted cash and offered a percentage thereof to tax, such pon the purchaser unless there is cogent evidence establishing that the purchaser actually made such payment. The disclosure by the developer may explain the source of its own funds, but it does not dispense with the burden on the Revenue to prove Printed from counselvise.com 8.7 The Ld. counsel for the assessee specifically brought to our attention that Shri Imran Ansari in his answer to question No. 13 of the statement dated 17.03.2021 stated that after receipt of alleged cash from the custom a small diary was being used to provide containing cash details received from the customers. The Ld. counsel for the assessee submitted that no such diary has been recovered from the assessee nor any kind of receipt issued by Rubberwala Group having si premises of the Rubberwala group or from the assessee. The Ld. counsel submitted that in the case of one of the customer sh Rajesh Jain search was conducted by the Department but no such document in the form found which could corroborate statement of Shri Imran Ansari. According to him, Shri Imran Ansari cooked up a story of cash on for benefiting interest of their company. 8.8 We are of opinion that Shri Imran Ansari hims payments were recorded in a diary provided to buyers but no such diary was recovered from the assessee. Even in other cases arising from the same search, including that of Shri Rajesh Jain, no such diary was found despite search action. This materially weakens the evidentiary value of the statement. 8.9 Further, although the assessment was framed under section 153C of the Act, the incriminating material forming the basis of satisfaction was admittedly not furnished to the assessee in en specifically sought cross constitutes the fulcrum of the addition. The request was declined on the premise that the statement was not the sole basis of the addition. However, on a careful examination of the record, we find that there is no other independent evidence apart from the said statement and the Excel sheet maintained by the same person. 8.10 It is well settled that while income by strict rules of evidence, the principles of natural justice cannot be diluted where additions are founded on adverse material collected from third parties. Where such material is relied upon as substantive evidence, denial of effective opportunity to rebut or cross the proceedings. 8.11 In the absence of any corroborative material directly connecting the assessee with the alleged cash payment, and in the absence of cross examination of the person whose statement is relied up on suspicion and presumption rather than proof. 8.12 It is well settled that mere furnishing of copies of statements or documents does not, by itself, satisfy the requirement of natural justice, where such material is sought to be us the assessee specifically disputes its correctness. The learned Commissioner (Appeals) has proceeded on the assumption that since extracts of statements, Excel data, and pen notice, the principles of natural justice stood fully complied with. This approach conflates disclosure of material with testing of material, which are legally distinct concepts. The reliance placed by the learned Commissioner (Appeals) on Andaman T internally contradictory. The said decision has been cited to suggest that cross-examination is necessary only where the third “sole basis” of the addition. This reading is incorrec Excel sheets and the pen Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 The Ld. counsel for the assessee specifically brought to our attention that Shri Imran Ansari in his answer to question No. 13 of the statement dated 17.03.2021 stated that after receipt of alleged cash from the custom a small diary was being used to provide containing cash details received from the customers. The Ld. counsel for the assessee submitted that no such diary has been recovered from the assessee nor any kind of receipt issued by Rubberwala Group having signature of the assessee has been found from the premises of the Rubberwala group or from the assessee. The Ld. counsel submitted that in the case of one of the customer sh Rajesh Jain search was conducted by the Department but no such document in the form of diary was found which could corroborate statement of Shri Imran Ansari. According to him, Shri Imran Ansari cooked up a story of cash on-money in his statement for benefiting interest of their company. We are of opinion that Shri Imran Ansari himself stated that cash payments were recorded in a diary provided to buyers but no such diary was recovered from the assessee. Even in other cases arising from the same search, including that of Shri Rajesh Jain, no such diary was found despite . This materially weakens the evidentiary value of the Further, although the assessment was framed under section 153C of the Act, the incriminating material forming the basis of satisfaction was admittedly not furnished to the assessee in entirety. The assessee also specifically sought cross-examination of Shri Imran Ansari, whose statement constitutes the fulcrum of the addition. The request was declined on the premise that the statement was not the sole basis of the addition. However, careful examination of the record, we find that there is no other independent evidence apart from the said statement and the Excel sheet maintained by the same person. It is well settled that while income-tax proceedings are not governed es of evidence, the principles of natural justice cannot be diluted where additions are founded on adverse material collected from third parties. Where such material is relied upon as substantive evidence, denial of effective opportunity to rebut or cross-examine strikes at the root of fairness of In the absence of any corroborative material directly connecting the assessee with the alleged cash payment, and in the absence of cross examination of the person whose statement is relied upon, the addition rests on suspicion and presumption rather than proof. 8.12 It is well settled that mere furnishing of copies of statements or documents does not, by itself, satisfy the requirement of natural justice, where such material is sought to be used adversely against an assessee and the assessee specifically disputes its correctness. The learned Commissioner (Appeals) has proceeded on the assumption that since extracts of statements, Excel data, and pen-drive contents were supplied through the show notice, the principles of natural justice stood fully complied with. This approach conflates disclosure of material with testing of material, which are legally distinct concepts. The reliance placed by the learned Commissioner (Appeals) on Andaman Timber Industries is, with respect, misconceived and internally contradictory. The said decision has been cited to suggest that examination is necessary only where the third-party statement is the “sole basis” of the addition. This reading is incorrect. In the present case, the Excel sheets and the pen-drive data have no independent evidentiary value Hariram Jagji chaudhary 10 8340, 8341, 8342 & 8343/MUM/2025 The Ld. counsel for the assessee specifically brought to our attention that Shri Imran Ansari in his answer to question No. 13 of the statement dated 17.03.2021 stated that after receipt of alleged cash from the customers a small diary was being used to provide containing cash details received from the customers. The Ld. counsel for the assessee submitted that no such diary has been recovered from the assessee nor any kind of receipt issued by gnature of the assessee has been found from the premises of the Rubberwala group or from the assessee. The Ld. counsel submitted that in the case of one of the customer sh Rajesh Jain search was of diary was found which could corroborate statement of Shri Imran Ansari. According to money in his statement elf stated that cash payments were recorded in a diary provided to buyers but no such diary was recovered from the assessee. Even in other cases arising from the same search, including that of Shri Rajesh Jain, no such diary was found despite . This materially weakens the evidentiary value of the Further, although the assessment was framed under section 153C of the Act, the incriminating material forming the basis of satisfaction was tirety. The assessee also examination of Shri Imran Ansari, whose statement constitutes the fulcrum of the addition. The request was declined on the premise that the statement was not the sole basis of the addition. However, careful examination of the record, we find that there is no other independent evidence apart from the said statement and the Excel sheet tax proceedings are not governed es of evidence, the principles of natural justice cannot be diluted where additions are founded on adverse material collected from third parties. Where such material is relied upon as substantive evidence, denial of examine strikes at the root of fairness of In the absence of any corroborative material directly connecting the assessee with the alleged cash payment, and in the absence of cross- on, the addition rests 8.12 It is well settled that mere furnishing of copies of statements or documents does not, by itself, satisfy the requirement of natural justice, ed adversely against an assessee and the assessee specifically disputes its correctness. The learned Commissioner (Appeals) has proceeded on the assumption that since extracts of statements, drive contents were supplied through the show-cause notice, the principles of natural justice stood fully complied with. This approach conflates disclosure of material with testing of material, which are legally distinct concepts. The reliance placed by the learned Commissioner imber Industries is, with respect, misconceived and internally contradictory. The said decision has been cited to suggest that party statement is the t. In the present case, the drive data have no independent evidentiary value Printed from counselvise.com dehors the explanation and interpretation supplied by Shri Imran Ansari. The alleged cash component, the attribution of entries to specific buyers, and th linkage of the assessee to such entries emanate entirely from his statement. The digital material does not speak for itself. Consequently, the statement is not collateral or incidental evidence but the very foundation of the addition. Much emphasis has b that income-tax proceedings are not governed by the strict provisions of the Indian Evidence Act. There can be no quarrel with this settled proposition. However, it is equally settled that relaxation o imply abrogation of natural justice. Even material which is otherwise admissible must still satisfy the minimum requirement of fairness when used against an assessee. The Hon’ble Supreme Court in Kishinchand Chellaram v. CIT (125 ITR 713) has unequivocally held that any material collected behind the back of the assessee, if proposed to be used against him, must be subjected to an opportunity of rebuttal in a meaningful manner, which necessarily includes cross 8.13 Considerable reliance has been placed on the alleged admission by the Rubberwala Group that it received on This, however, cannot be determinative of the assessee’s liability. It is trite law that an admission by one party cannot be used as conclusive evidence against another, unless the latter is afforded an opportunity to test and rebut such admission. The assessee is not estopped from disputing the correctness or applicability of such admission t payment is denied and no independent corroboration exists. 8.14 The learned Commissioner (Appeals) has sought to distinguish the coordinate Bench decision in Rajesh Jain primarily on the ground that the assessee therein was subjected to search, whereas the present assessee was not. This distinction is wholly irrelevant to the core issue of evidentiary reliance on third reliance has been placed on the alleged adm that it received on be determinative of the assessee’s liability. The ratio of Rajesh Jain rests squarely on two pillars: 1. absence of corroborative material against the 2. denial of cross 8.15 Both these features are present in the case before us. Judicial discipline mandates that a coordinate Bench decision on identical facts be followed unless shown to be per incuriam, wh 8.16 The ld CIT(A) relied on various decisions to contend that providing cross examination of sh Ansai was not required. These authorities do not lay down a blanket proposition dispensing with cross contrary, they consistently hold that the requirement depends on the nature of evidence, its role in the adjudication, and the prejudice caused. In the present case: • the assessee has payment; • no cash, diary, or corroborative assessee; • the alleged diary, though repeatedly referred to in statements, was never recovered; and Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 dehors the explanation and interpretation supplied by Shri Imran Ansari. The alleged cash component, the attribution of entries to specific buyers, and th linkage of the assessee to such entries emanate entirely from his statement. The digital material does not speak for itself. Consequently, the statement is not collateral or incidental evidence but the very foundation of the addition. Much emphasis has been placed by the lower authorities on the proposition tax proceedings are not governed by the strict provisions of the Indian Evidence Act. There can be no quarrel with this settled proposition. However, it is equally settled that relaxation of evidentiary rules does not imply abrogation of natural justice. Even material which is otherwise admissible must still satisfy the minimum requirement of fairness when used against an assessee. The Hon’ble Supreme Court in Kishinchand Chellaram 25 ITR 713) has unequivocally held that any material collected behind the back of the assessee, if proposed to be used against him, must be subjected to an opportunity of rebuttal in a meaningful manner, which necessarily includes cross-examination where facts are disputed. Considerable reliance has been placed on the alleged admission by the Rubberwala Group that it received on-money and offered the same to tax. This, however, cannot be determinative of the assessee’s liability. It is trite an admission by one party cannot be used as conclusive evidence against another, unless the latter is afforded an opportunity to test and rebut such admission. The assessee is not estopped from disputing the correctness or applicability of such admission to his case, particularly when the alleged payment is denied and no independent corroboration exists. The learned Commissioner (Appeals) has sought to distinguish the coordinate Bench decision in Rajesh Jain primarily on the ground that the erein was subjected to search, whereas the present assessee was not. This distinction is wholly irrelevant to the core issue of evidentiary reliance on third-party material without cross-examination. Considerable reliance has been placed on the alleged admission by the Rubberwala Group that it received on-money and offered the same to tax. This, however, cannot be determinative of the assessee’s liability. The ratio of Rajesh Jain rests squarely on two pillars: absence of corroborative material against the assessee, and denial of cross-examination despite specific request. Both these features are present in the case before us. Judicial discipline mandates that a coordinate Bench decision on identical facts be followed unless shown to be per incuriam, which is not the case here. The ld CIT(A) relied on various decisions to contend that providing cross examination of sh Ansai was not required. These authorities do not lay down a blanket proposition dispensing with cross-examination. On the hey consistently hold that the requirement depends on the nature of evidence, its role in the adjudication, and the prejudice caused. In the present the assessee has categorically denied having made any cash payment; no cash, diary, or corroborative document was found from the assessee; the alleged diary, though repeatedly referred to in statements, was never recovered; and Hariram Jagji chaudhary 11 8340, 8341, 8342 & 8343/MUM/2025 dehors the explanation and interpretation supplied by Shri Imran Ansari. The alleged cash component, the attribution of entries to specific buyers, and the linkage of the assessee to such entries emanate entirely from his statement. The digital material does not speak for itself. Consequently, the statement is not collateral or incidental evidence but the very foundation of the addition. een placed by the lower authorities on the proposition tax proceedings are not governed by the strict provisions of the Indian Evidence Act. There can be no quarrel with this settled proposition. f evidentiary rules does not imply abrogation of natural justice. Even material which is otherwise admissible must still satisfy the minimum requirement of fairness when used against an assessee. The Hon’ble Supreme Court in Kishinchand Chellaram 25 ITR 713) has unequivocally held that any material collected behind the back of the assessee, if proposed to be used against him, must be subjected to an opportunity of rebuttal in a meaningful manner, which acts are disputed. Considerable reliance has been placed on the alleged admission by money and offered the same to tax. This, however, cannot be determinative of the assessee’s liability. It is trite an admission by one party cannot be used as conclusive evidence against another, unless the latter is afforded an opportunity to test and rebut such admission. The assessee is not estopped from disputing the correctness o his case, particularly when the alleged The learned Commissioner (Appeals) has sought to distinguish the coordinate Bench decision in Rajesh Jain primarily on the ground that the erein was subjected to search, whereas the present assessee was not. This distinction is wholly irrelevant to the core issue of evidentiary examination. Considerable ission by the Rubberwala Group money and offered the same to tax. This, however, cannot be determinative of the assessee’s liability. The ratio of Rajesh Jain rests assessee, and Both these features are present in the case before us. Judicial discipline mandates that a coordinate Bench decision on identical facts be ich is not the case here. The ld CIT(A) relied on various decisions to contend that providing cross examination of sh Ansai was not required. These authorities do not lay examination. On the hey consistently hold that the requirement depends on the nature of evidence, its role in the adjudication, and the prejudice caused. In the present having made any cash document was found from the the alleged diary, though repeatedly referred to in statements, Printed from counselvise.com • the entire edifice of the addition rests on third and electronic data interpreted by those very persons. 8.17 In such circumstances, denial of cross prejudice and cannot be brushed aside as a mere procedural irregularity. 8.18 We find that, in identical factual circumstances relating to alleged cash “on-money” payments for purchase of sho Rubberwala Group, the Co Khetaramm Purohit v. DCIT similar additions. The learned also placed reliance upon another decision of the Co-ordinate Bench of the Tribunal in Akhraj Pukhraaj Chopra vs DCIT and Lilaram Vs DCIT in ITAs No.5553 and 5554/Mum/2025, vide o 12.11.2025, wherein similar addition was made on the basis of search and seizure action on Rubberwala Group. Reliance in this regard has been also placed on the decision in case of Heena Dashrath Jhanglani ITA no.1665/Mum./2018 (Assessment Year Bench of ITAT had decided the issue in favour of assessee and the relevant portion is being reproduced herein below: 10. I have considered rival submissions and perused material on record. Undisputedly, the genesis of the made of 42 lakh on account of alleged payment of on cash towards purchase of a flat lies in a search and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing Officer has not discussed in detail the nature of incriminating material/ evidence available on record to indicate payment of on–money in cash by the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th March 2015, which is reproduc the assessment order, it appears that the incriminating materials are in the form of pen drive found and seized from the residence of one of the employees of Hiranandani Group and a statement recorded under section 132(4) of Shri Niranjan Hiranandani, Director and Promoter of the Group, wherein, the details of on buyers to Hiranandani Group concerns are mentioned and further, in the statement recorded under section 132(4) of the Act on 14th March 2014, Shri Niranjan Hiranandani, has admitted receipt of on shops. Thus, it is clear that except these two pieces of evidences the Assessing Officer had no other evidence on record which demonstrates money in cash for purchase of the flat. It is further relevant to observe, from the assessment stage itself the assessee has requested the Assessing Officer to provide him with all adverse materials and full text of the state 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also requested the Assessing Officer for allowing her to cross parties whose statements were relied upon. Apparently, request of the assessee was not accededto by the Assessing Officer. When the assessee took up the aforesaid issue before the first appellate authority, the learned Commissioner Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 the entire edifice of the addition rests on third-party statements and electronic data interpreted by those very persons. such circumstances, denial of cross-examination causes manifest prejudice and cannot be brushed aside as a mere procedural irregularity. We find that, in identical factual circumstances relating to alleged money” payments for purchase of shops in Platinum Mall Rubberwala Group, the Co-ordinate Bench of the Tribunal in Khetaramm Purohit v. DCIT (ITA Nos. 4742 to 4744/Mum/2025) has deleted similar additions. The learned also placed reliance upon another decision of ordinate Bench of the Tribunal in Akhraj Pukhraaj Chopra vs DCIT and Lilaram Vs DCIT in ITAs No.5553 and 5554/Mum/2025, vide o 12.11.2025, wherein similar addition was made on the basis of search and seizure action on Rubberwala Group. Reliance in this regard has been also placed on the decision in case of Heena Dashrath Jhanglani ITA no.1665/Mum./2018 (Assessment Year : 2007–08) wherein the Coordinate Bench of ITAT had decided the issue in favour of assessee and the relevant portion is being reproduced herein below: I have considered rival submissions and perused material on record. Undisputedly, the genesis of the addition made of 42 lakh on account of alleged payment of on–money in cash towards purchase of a flat lies in a search and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing has not discussed in detail the nature of incriminating material/ evidence available on record to indicate payment of money in cash by the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th March 2015, which is reproduced by the Assessing Officer in the assessment order, it appears that the incriminating materials are in the form of pen drive found and seized from the residence of one of the employees of Hiranandani Group and a statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani, Director and Promoter of the Group, wherein, the details of on– money paid by buyers / prospective buyers to Hiranandani Group concerns are mentioned and further, in the statement recorded under section 132(4) of the Act on 14th March 2014, Shri Niranjan Hiranandani, has admitted receipt of on–money in cash towards sale of flats / shops. Thus, it is clear that except these two pieces of evidences the Assessing Officer had no other evidence on record which demonstrates that the assessee had paid on money in cash for purchase of the flat. It is further relevant to observe, from the assessment stage itself the assessee has requested the Assessing Officer to provide him with all adverse materials and full text of the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also requested the Assessing Officer for allowing her to cross–examine Shri Niranjan Hiranandani and other parties whose statements were relied upon. Apparently, request of the assessee was not accededto by the Assessing Officer. When the assessee took up the aforesaid issue before the first appellate authority, the learned Commissioner Hariram Jagji chaudhary 12 8340, 8341, 8342 & 8343/MUM/2025 party statements and electronic data interpreted by those very persons. examination causes manifest prejudice and cannot be brushed aside as a mere procedural irregularity. We find that, in identical factual circumstances relating to alleged Platinum Mall from the ordinate Bench of the Tribunal in Praveen (ITA Nos. 4742 to 4744/Mum/2025) has deleted similar additions. The learned also placed reliance upon another decision of ordinate Bench of the Tribunal in Akhraj Pukhraaj Chopra vs DCIT and Lilaram Vs DCIT in ITAs No.5553 and 5554/Mum/2025, vide order dated 12.11.2025, wherein similar addition was made on the basis of search and seizure action on Rubberwala Group. Reliance in this regard has been also placed on the decision in case of Heena Dashrath Jhanglani ITA 08) wherein the Coordinate Bench of ITAT had decided the issue in favour of assessee and the relevant I have considered rival submissions and perused addition money in cash towards purchase of a flat lies in a search and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing has not discussed in detail the nature of incriminating material/ evidence available on record to indicate payment of money in cash by the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th ed by the Assessing Officer in the assessment order, it appears that the incriminating materials are in the form of pen drive found and seized from the residence of one of the employees of Hiranandani Group the Act from Shri Niranjan Hiranandani, Director and Promoter of the Group, money paid by buyers / prospective buyers to Hiranandani Group concerns are mentioned and further, in the statement recorded under section 132(4) of the Act on 14th March 2014, Shri Niranjan Hiranandani, has money in cash towards sale of flats / shops. Thus, it is clear that except these two pieces of evidences the Assessing Officer had no other evidence on that the assessee had paid on– money in cash for purchase of the flat. It is further relevant to observe, from the assessment stage itself the assessee has requested the Assessing Officer to provide him with all adverse ment recorded under section 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also requested the Assessing Officer for allowing examine Shri Niranjan Hiranandani and other parties whose statements were relied upon. Apparently, this request of the assessee was not accededto by the Assessing Officer. When the assessee took up the aforesaid issue before the first appellate authority, the learned Commissioner Printed from counselvise.com (Appeals) in letter dated 18th July 2016, had clearly directed the Assess materials / documentary evidences available with him indicating payment of on remand report dated 23th June 2017, a copy of which is at Page–53 of the paper book, it is ver Assessing Officer has completely avoided the issue and there is no mention whether the assessee was provided with all the adverse material and if, not so, whether he has provided them to the assessee as per the directions of the learn Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of ` 42 lakh made on account of on with the primary and fundamental requirement of rules of natural justice. It Assessing Officer intends to utilize any adverse material for deciding an issue against the assessee he is required to not only confront such adverse materials to the assessee but also offer him a reasonable contents of the adverse material. Further, the assessment order reveals that the Assessing Officer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for making the disputed addition. Howeve the assessee, which prima Assessing Officer has not provided the full text of such statement recorded and has also not allowed the assessee an opportunity to cross other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural justice and against the basic principle of law. In this context, I may refer to the decision of the Tribunal, Mumbai Bench, in Nikhil V Agarwal (supra). Thus, for the aforesaid reason, the addition made cannot be sustained. 11. Even otherwise also, the addition made is unsustainable because of the following reasons. As discussed earlier in the order, the basis for addition on account money is the information contained in the pen drive found during the search and seizure operation and the statement recorded under section 132(4) of the Act. As regards the information contained in the pen drive, it is the contention of the assessee possession of the assessee but in course of search and seizure operation conducted in case of a third party. Therefore, in absence of further corroborative evidence to establish that the contents of t that the assessee paid on made under section 69B of the Act. Further contention of the assessee is that in the statement recorded under section 132(4) of the Act, Shi Ni to the assessee, therefore, in absence of any other corroborative evidence to establish that assessee has paid on Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 (Appeals) in letter dated 18th July 2016, had clearly directed the Assessing Officer to provide the assessee all adverse materials / documentary evidences available with him indicating payment of on–money. However, on a perusal of the remand report dated 23th June 2017, a copy of which is at 53 of the paper book, it is very much clear that the Assessing Officer has completely avoided the issue and there is no mention whether the assessee was provided with all the adverse material and if, not so, whether he has provided them to the assessee as per the directions of the learn Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of ` 42 lakh made on account of on–money payment in cash is without complying with the primary and fundamental requirement of rules of natural justice. It is well settled proposition of law that if the Assessing Officer intends to utilize any adverse material for deciding an issue against the assessee he is required to not only confront such adverse materials to the assessee but also offer him a reasonable opportunity to rebut / contradict the contents of the adverse material. Further, the assessment order reveals that the Assessing Officer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for making the disputed addition. However, it is the allegation of the assessee, which prima–facie appears to be correct, that the Assessing Officer has not provided the full text of such statement recorded and has also not allowed the assessee an opportunity to cross–examine Shri Niranjan Hiranandani, and other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural justice and against the basic principle of law. In this context, I may refer to the decision of the Tribunal, Mumbai Bench, in Nikhil V Agarwal (supra). Thus, for the aforesaid reason, the addition made cannot be sustained. Even otherwise also, the addition made is unsustainable because of the following reasons. As discussed earlier in the order, the basis for addition on account of on money is the information contained in the pen drive found during the search and seizure operation and the statement recorded under section 132(4) of the Act. As regards the information contained in the pen drive, it is the contention of the assessee that the said pen drive was not found from the possession of the assessee but in course of search and seizure operation conducted in case of a third party. Therefore, in absence of further corroborative evidence to establish that the contents of the pen drive are correct and authentic to the extent that the assessee paid on–money in cash, no addition can be made under section 69B of the Act. Further contention of the assessee is that in the statement recorded under section 132(4) of the Act, Shi Niranjan Hirandani has not made any reference to the assessee, therefore, in absence of any other corroborative evidence to establish that assessee has paid on Hariram Jagji chaudhary 13 8340, 8341, 8342 & 8343/MUM/2025 (Appeals) in letter dated 18th July 2016, had clearly directed ing Officer to provide the assessee all adverse materials / documentary evidences available with him money. However, on a perusal of the remand report dated 23th June 2017, a copy of which is at y much clear that the Assessing Officer has completely avoided the issue and there is no mention whether the assessee was provided with all the adverse material and if, not so, whether he has provided them to the assessee as per the directions of the learned Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of ` 42 lakh made on money payment in cash is without complying with the primary and fundamental requirement of rules of is well settled proposition of law that if the Assessing Officer intends to utilize any adverse material for deciding an issue against the assessee he is required to not only confront such adverse materials to the assessee but also opportunity to rebut / contradict the contents of the adverse material. Further, the assessment order reveals that the Assessing Officer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for r, it is the allegation of facie appears to be correct, that the Assessing Officer has not provided the full text of such statement recorded and has also not allowed the assessee an andani, and other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural justice and against the basic principle of law. In this context, I may refer to the decision of the Tribunal, Mumbai Bench, in Nikhil Vinod Agarwal (supra). Thus, for the aforesaid reason, the addition Even otherwise also, the addition made is unsustainable because of the following reasons. As discussed of on– money is the information contained in the pen drive found during the search and seizure operation and the statement recorded under section 132(4) of the Act. As regards the information contained in the pen drive, it is the contention of that the said pen drive was not found from the possession of the assessee but in course of search and seizure operation conducted in case of a third party. Therefore, in absence of further corroborative evidence to establish that the he pen drive are correct and authentic to the extent money in cash, no addition can be made under section 69B of the Act. Further contention of the assessee is that in the statement recorded under section 132(4) ranjan Hirandani has not made any reference to the assessee, therefore, in absence of any other corroborative evidence to establish that assessee has paid on– Printed from counselvise.com money in cash, no addition can be made. I find substantial merit in the aforesaid submissions of t neither the information contained in the pen drive nor the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani are enough to conclusively establish the factum of payment of on can raise a doubt or suspicion against the conduct of the assessee triggering further enquiry / investigation to find out and bring on record the relevant fact and material to conclusively prove the payment of on over and above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / material on record to prove the payment of on assessee. More so, when the assessee from the very beginning has stoutly denied paym while dealing with a case involving similar nature of dispute concerning similar transaction with another concern of Hiranandani Group, the Tribunal in case of Shri Anil Jaggi v/s ACIT (supra) has held as under: …….. 8.19 The consistent factual matrix emerging from above decisions is that the additions were made solely on the basis of (i) statements of Shri Imran Ansari, an employee of the Rubberwala Group, recorded during the course of search, and (ii) data contained in a found from his possession. No incriminating material was found from the assessee. The assessee, from the inception, categorically denied having paid any cash over and above the documented consideration. 8.20 The Co-ordinate Bench, after an exhaustive examination of the facts, has held that such third by any independent evidence and not directly linking the assessee to the alleged cash payment, do not constitute addition under section 69 of the Act. The Bench further noted that, despite specific requests, the assessee was neither confronted with the complete adverse material nor afforded an opportunity to cross Ansari or any other person whose statements were relied upon. 8.21 It is well settled that while the rigours of the Evidence Act do not strictly apply to income founded on material which is reliable, assessee. Third-party statements, cannot be treated as conclusive unless supported by independent corroborative evidence. At best, such material may give rise to suspicion, but suspicion, however strong, cannot take proof. 8.22 Equally well settled is the principle that if the Assessing Officer proposes to rely upon any adverse material to the detriment of the assessee, such material must be confronted to the assessee, and a reasonable opportunity must be addition rests substantially on a third examination strikes at the very root of the matter and amounts to a serious breach of the principles of natural justice. The Hon’bl Andaman Timber Industries v. CCE(supra) grant such opportunity renders the order a nullity. 8.23 In the present case, it is undisputed that: Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 money in cash, no addition can be made. I find substantial merit in the aforesaid submissions of the assessee. In my view, neither the information contained in the pen drive nor the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani are enough to conclusively establish the factum of payment of on–money by the assessee. At best, they can raise a doubt or suspicion against the conduct of the assessee triggering further enquiry / investigation to find out and bring on record the relevant fact and material to conclusively prove the payment of on–money by the assessee above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / material on record to prove the payment of on–money by the assessee. More so, when the assessee from the very beginning has stoutly denied payment of on–money in cash. Notably, while dealing with a case involving similar nature of dispute concerning similar transaction with another concern of Hiranandani Group, the Tribunal in case of Shri Anil Jaggi v/s ACIT (supra) has held as under:– The consistent factual matrix emerging from above decisions is that the additions were made solely on the basis of (i) statements of Shri Imran Ansari, an employee of the Rubberwala Group, recorded during the course of search, and (ii) data contained in an Excel sheet retrieved from a pen drive found from his possession. No incriminating material was found from the assessee. The assessee, from the inception, categorically denied having paid any cash over and above the documented consideration. ordinate Bench, after an exhaustive examination of the facts, has held that such third-party statements and electronic records, uncorroborated by any independent evidence and not directly linking the assessee to the alleged cash payment, do not constitute credible evidence for sustaining an addition under section 69 of the Act. The Bench further noted that, despite specific requests, the assessee was neither confronted with the complete adverse material nor afforded an opportunity to cross-examine Shri Imra Ansari or any other person whose statements were relied upon. It is well settled that while the rigours of the Evidence Act do not strictly apply to income-tax proceedings, additions must nevertheless be founded on material which is reliable, cogent, and has a direct nexus with the party statements, cannot be treated as conclusive unless supported by independent corroborative evidence. At best, such material may give rise to suspicion, but suspicion, however strong, cannot take Equally well settled is the principle that if the Assessing Officer proposes to rely upon any adverse material to the detriment of the assessee, such material must be confronted to the assessee, and a reasonable opportunity must be granted to rebut or contradict the same. Where the addition rests substantially on a third-party statement, denial of cross examination strikes at the very root of the matter and amounts to a serious breach of the principles of natural justice. The Hon’ble Supreme Court in Andaman Timber Industries v. CCE(supra) has categorically held that failure to grant such opportunity renders the order a nullity. In the present case, it is undisputed that: Hariram Jagji chaudhary 14 8340, 8341, 8342 & 8343/MUM/2025 money in cash, no addition can be made. I find substantial he assessee. In my view, neither the information contained in the pen drive nor the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani are enough to conclusively establish the best, they can raise a doubt or suspicion against the conduct of the assessee triggering further enquiry / investigation to find out and bring on record the relevant fact and material to money by the assessee above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / money by the assessee. More so, when the assessee from the very beginning money in cash. Notably, while dealing with a case involving similar nature of dispute concerning similar transaction with another concern of Hiranandani Group, the Tribunal in case of Shri Anil Jaggi v/s The consistent factual matrix emerging from above decisions is that the additions were made solely on the basis of (i) statements of Shri Imran Ansari, an employee of the Rubberwala Group, recorded during the course of n Excel sheet retrieved from a pen drive found from his possession. No incriminating material was found from the assessee. The assessee, from the inception, categorically denied having paid ordinate Bench, after an exhaustive examination of the facts, has party statements and electronic records, uncorroborated by any independent evidence and not directly linking the assessee to the credible evidence for sustaining an addition under section 69 of the Act. The Bench further noted that, despite specific requests, the assessee was neither confronted with the complete examine Shri Imran It is well settled that while the rigours of the Evidence Act do not tax proceedings, additions must nevertheless be cogent, and has a direct nexus with the party statements, cannot be treated as conclusive unless supported by independent corroborative evidence. At best, such material may give rise to suspicion, but suspicion, however strong, cannot take the place of Equally well settled is the principle that if the Assessing Officer proposes to rely upon any adverse material to the detriment of the assessee, such material must be confronted to the assessee, and a reasonable granted to rebut or contradict the same. Where the party statement, denial of cross- examination strikes at the very root of the matter and amounts to a serious e Supreme Court in has categorically held that failure to Printed from counselvise.com • no incriminating document or diary evidencing cash paymen from the assessee; • the alleged electronic data was found from the possession of a third party; • the statements relied upon do not specifically record any admission by the assessee; and • the assessee was not provided copies of the complete stateme electronic data, nor was cross 8.24 In the absence of any independent corroborative evidence establishing that the assessee had, in fact, paid cash “on threshold required for sustaining an addition unde Act remains unmet. 8.25 During the hearing before us, the learned Departmental Representative could not bring on record any distinguishing fact or fresh material to persuade us to take a view different from that consistently adopted by the Co arising from the same search action. Judicial discipline requires that, in the absence of distinguishing features, such co followed. 8.26 On a holistic c we hold that the impugned addition has been made solely on the basis of uncorroborated third assessee an effective opportunity to confront or rebu violation of the principles of natural justice. Such an addition cannot be sustained in law. 8.27 Accordingly, the addition of the Act for the assessment year under consideration is deleted.” 4.5 It is well settled that while strict rules of evidence do not apply to income-tax proceedings, additions must nonetheless be founded on cogent, reliable material having a direct nexus with the assessee. Suspicion, however strong, cannot substitute proof. An by the seller cannot, by itself, fasten liability on the purchaser in the absence of independent evidence establishing actual payment. 4.6 In view of the above discussion, and respectfully following the consistent decisions of that the addition made on account of alleged unexplained investment in purchase of the shop cannot be sustained. Accordingly, the addition made for the assessment year 2017 7. The core issue for adjudication is whether the additions can be sustained solely on the basis of third records, without any independent corroborative evidence and without affording the assessee an effective opportunity of cross examination. The entire foundation of the impugned additions rests Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 no incriminating document or diary evidencing cash paymen from the assessee; the alleged electronic data was found from the possession of a third the statements relied upon do not specifically record any admission by the assessee; and the assessee was not provided copies of the complete stateme electronic data, nor was cross-examination permitted. In the absence of any independent corroborative evidence establishing that the assessee had, in fact, paid cash “on-money”, the evidentiary threshold required for sustaining an addition under section 69 or 69C of the Act remains unmet. During the hearing before us, the learned Departmental Representative could not bring on record any distinguishing fact or fresh material to persuade us to take a view different from that consistently ted by the Co-ordinate Benches of the Tribunal in identical matters arising from the same search action. Judicial discipline requires that, in the absence of distinguishing features, such co-ordinate decisions be respectfully On a holistic consideration of the facts and circumstances of the case, we hold that the impugned addition has been made solely on the basis of uncorroborated third-party material and statements, without affording the assessee an effective opportunity to confront or rebut the same, and in violation of the principles of natural justice. Such an addition cannot be Accordingly, the addition of N1,00,000/- made under section 69C of the Act for the assessment year under consideration is deleted.” t is well settled that while strict rules of evidence do not apply to tax proceedings, additions must nonetheless be founded on cogent, reliable material having a direct nexus with the assessee. Suspicion, however strong, cannot substitute proof. An admission or disclosure made by the seller cannot, by itself, fasten liability on the purchaser in the absence of independent evidence establishing actual payment. In view of the above discussion, and respectfully following the consistent decisions of the Coordinate Benches on identical facts, we hold that the addition made on account of alleged unexplained investment in purchase of the shop cannot be sustained. Accordingly, the addition made for the assessment year 2017–18 is deleted.” issue for adjudication is whether the additions can be sustained solely on the basis of third-party statements and digital records, without any independent corroborative evidence and without affording the assessee an effective opportunity of cross ion. The entire foundation of the impugned additions rests Hariram Jagji chaudhary 15 8340, 8341, 8342 & 8343/MUM/2025 no incriminating document or diary evidencing cash payment was found the alleged electronic data was found from the possession of a third the statements relied upon do not specifically record any admission by the assessee was not provided copies of the complete statements or In the absence of any independent corroborative evidence establishing money”, the evidentiary r section 69 or 69C of the During the hearing before us, the learned Departmental Representative could not bring on record any distinguishing fact or fresh material to persuade us to take a view different from that consistently ordinate Benches of the Tribunal in identical matters arising from the same search action. Judicial discipline requires that, in the ordinate decisions be respectfully onsideration of the facts and circumstances of the case, we hold that the impugned addition has been made solely on the basis of party material and statements, without affording the t the same, and in violation of the principles of natural justice. Such an addition cannot be made under section 69C of t is well settled that while strict rules of evidence do not apply to tax proceedings, additions must nonetheless be founded on cogent, reliable material having a direct nexus with the assessee. Suspicion, admission or disclosure made by the seller cannot, by itself, fasten liability on the purchaser in the absence of independent evidence establishing actual payment. In view of the above discussion, and respectfully following the the Coordinate Benches on identical facts, we hold that the addition made on account of alleged unexplained investment in purchase of the shop cannot be sustained. Accordingly, the addition made issue for adjudication is whether the additions can be party statements and digital records, without any independent corroborative evidence and without affording the assessee an effective opportunity of cross- ion. The entire foundation of the impugned additions rests Printed from counselvise.com on two pieces of material:(i) an Excel sheet recovered from a third party; and (ii) the statement of Shri Imran Ansari explaining the entries therein. Admittedly, no incriminating material, such as receipts, diaries, confirmations, or any contemporaneous documents, has been found from the assessee. It is a settled principle that third-party material, by itself, cannot constitute conclusive evidence unless it is corroborated by independent material directly linking the assessee to the alleged transaction. At best, such material may give rise to suspicion; however, suspicion, howsoever strong, cannot take the place of proof. 7.1 Further, the evidentiary value of the Excel sheet is entirely dependent upon the statement of the person who prepared it. The document does not speak for itself. In such circumstances, denial of the opportunity to cross causes serious prejudice and strikes at the root of the principles of natural justice. 7.2 It is undisputed that despite specific requests, the assessee was not afforded an opportunity to cross Ansari. The law is well settled that where an addition is founded on a third-party statement, denial of cross evidence unreliable and the resulting addition unsustainable. 7.3 Equally, an admission made by the seller or developer cannot, by itself, fasten liability upon the purchaser unless there is cogent Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 on two pieces of material:(i) an Excel sheet recovered from a third party; and (ii) the statement of Shri Imran Ansari explaining the entries therein. Admittedly, no incriminating material, such as receipts, diaries, confirmations, or any contemporaneous documents, has been found from the assessee. It is a settled party material, by itself, cannot constitute conclusive evidence unless it is corroborated by independent ial directly linking the assessee to the alleged transaction. At best, such material may give rise to suspicion; however, suspicion, howsoever strong, cannot take the place of proof. 7.1 Further, the evidentiary value of the Excel sheet is entirely nt upon the statement of the person who prepared it. The document does not speak for itself. In such circumstances, denial of the opportunity to cross-examine the maker of the statement causes serious prejudice and strikes at the root of the principles of It is undisputed that despite specific requests, the assessee was not afforded an opportunity to cross-examine Shri Imran Ansari. The law is well settled that where an addition is founded on party statement, denial of cross-examination renders such evidence unreliable and the resulting addition unsustainable. Equally, an admission made by the seller or developer cannot, by itself, fasten liability upon the purchaser unless there is cogent Hariram Jagji chaudhary 16 8340, 8341, 8342 & 8343/MUM/2025 on two pieces of material:(i) an Excel sheet recovered from a third party; and (ii) the statement of Shri Imran Ansari explaining the entries therein. Admittedly, no incriminating material, such as cash receipts, diaries, confirmations, or any contemporaneous documents, has been found from the assessee. It is a settled party material, by itself, cannot constitute conclusive evidence unless it is corroborated by independent ial directly linking the assessee to the alleged transaction. At best, such material may give rise to suspicion; however, suspicion, 7.1 Further, the evidentiary value of the Excel sheet is entirely nt upon the statement of the person who prepared it. The document does not speak for itself. In such circumstances, denial of examine the maker of the statement causes serious prejudice and strikes at the root of the principles of It is undisputed that despite specific requests, the assessee examine Shri Imran Ansari. The law is well settled that where an addition is founded on mination renders such evidence unreliable and the resulting addition unsustainable. Equally, an admission made by the seller or developer cannot, by itself, fasten liability upon the purchaser unless there is cogent Printed from counselvise.com evidence establishing that the purch payment. The burden lies on the Revenue to prove the alleged investment; it cannot be discharged merely on the basis of generalized disclosures made by another party. 7.4 We further note that in a series of decisions mentioned above arising out of the very same search action on the Rubberwala Group, coordinate benches of the Tribunal have consistently held that additions based solely on such uncorroborated third material and statements are unsustainable in law. The Revenue has not brought on record any distinguishing feature or fresh material to warrant a different view. Judicial discipline, therefore, requires us to follow the consistent view already taken. On a cumulative consideration of the facts, it is evident that material was found from the assessee; emanates from a third party; corroboration; and (iv) violated by denial of cross evidentiary threshold required to sustain an addition under section 69/69C of the Act is not met. 7.5 In view of the foregoing discussion, we hold that the additions made on account of alleged unexplained cash payment for purchase of the shop are unsustainable in law. made in the case of the assessee 2019-20; and 2021-22 Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 evidence establishing that the purchaser actually made such payment. The burden lies on the Revenue to prove the alleged investment; it cannot be discharged merely on the basis of generalized disclosures made by another party. We further note that in a series of decisions mentioned above arising out of the very same search action on the Rubberwala Group, coordinate benches of the Tribunal have consistently held that additions based solely on such uncorroborated third material and statements are unsustainable in law. The Revenue has not brought on record any distinguishing feature or fresh material to warrant a different view. Judicial discipline, therefore, requires us to follow the consistent view already taken. On a cumulative consideration of the facts, it is evident that(i) no in material was found from the assessee; (ii) the alleged evidence emanates from a third party; (iii) there is no independent (iv) principles of natural justice have been violated by denial of cross-examination. In such circumst evidentiary threshold required to sustain an addition under section 69/69C of the Act is not met. In view of the foregoing discussion, we hold that the additions made on account of alleged unexplained cash payment for purchase e unsustainable in law. Accordingly, t made in the case of the assessee for the A.Ys. 2017-18; 2018 22 is here by deleted. Hariram Jagji chaudhary 17 8340, 8341, 8342 & 8343/MUM/2025 aser actually made such payment. The burden lies on the Revenue to prove the alleged investment; it cannot be discharged merely on the basis of We further note that in a series of decisions mentioned above arising out of the very same search action on the Rubberwala Group, coordinate benches of the Tribunal have consistently held that additions based solely on such uncorroborated third-party material and statements are unsustainable in law. The Revenue has not brought on record any distinguishing feature or fresh material to warrant a different view. Judicial discipline, therefore, requires us to follow the consistent view already taken. On a cumulative i) no incriminating the alleged evidence there is no independent principles of natural justice have been examination. In such circumstances, the evidentiary threshold required to sustain an addition under section In view of the foregoing discussion, we hold that the additions made on account of alleged unexplained cash payment for purchase the addition 18; 2018-19; Printed from counselvise.com 8. In the result, all the four Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 27/03/202 KRK, Sr. PS Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Hariram Jagji ITA No. 8340, 8341, 8342 & 8343 all the four appeals of the assessee are allowed. Order pronounced in the open Court on 27/03/2026 Sd/- SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Hariram Jagji chaudhary 18 8340, 8341, 8342 & 8343/MUM/2025 of the assessee are allowed. /2026. OM PRAKASH KANT) ACCOUNTANT MEMBER (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "