NARENDRA VISHNU SAWANT,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE 4(2), MUMBAI, MUMBAI

ITA 8798/MUM/2025

AI Insights

The case involves appeals by Narendra Vishnu Sawant against the additions made by the Assessing Officer under section 153C of the Income-tax Act, 1961, based on alleged 'on-money' payments for shop purchases in Platinum Mall, as recorded in an Excel sheet during a search operation on the Rubberwala Group. The Tribunal examined whether the additions were justified based on the materials and statements provided during the search. The key legal issues revolved around the admissibility of third-party statements and documents as evidence, the lack of direct confrontation of the assessee with the primary material, and the denial of cross-examination opportunities.

• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2018-2019
• Appeal Filed On: 18-12-2025
• Other Referred Cases: CIT vs. Hotel Meriya, Praveen Khetaram Purohit vs. ITO, Bhavana Vikram Jain vs. ITO, Manish Mali & Others vs. ITO, Chetan Mafatlal Chopra vs. ITO, Rajesh Jain vs. ITO, Naren Premchang Nagda vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KANTI DATTA
• Assessee Lawyers: PRATEEK JAIN; KHUSHALI DESAI
• Keywords: Corroborative evidences; Unexplained investment; Document seized; Principle of natural justice; Third party statement; Search and seizure; Opportunity of cross examination
• Section: 132; 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER ITA No. 8798/Mum/2025 Assessment Year: 2018-19 & ITA No. 8799/Mum/2025 Assessment Year: 2019-20 & ITA No. 8800/Mum/2025 Assessment Year: 2020-21 Narendra Vishnu Sawant 117 Om Sai Sadan Co-op HSG, Gorai, Borivali West, S.O, Mumbai-400092 PAN: AZHPS5062L Vs. Deputy Commissioner of Income Tax- Central Circle 4(2), Mumbai Kautilya Bhavan, Mumbai- 400051 (Appellant) (Respondent) Assessee by Shri Prateek Jain, & Ms. Khushali Desai Department by Shri Arun Kanti Datta (CIT-DR) Date of Hearing 17.03.2026 Date of Pronouncement 23.03.2026 Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 2 ORDER Per Bench: 1. These appeals filed by the assessee are directed against the common order passed by the Ld. Commissioner of Income Tax (Appeals), Mumbai dated 17.10.2025, arising out of assessments framed by the Assessing Officer under section 153C of the Income-tax Act, 1961 for the assessment years 2018-19 to 2020-21. Since common issues are involved in all the appeals and the assessee is the same, these appeals were heard together and are being disposed of by way of this consolidated order for the sake of convenience. 2. The brief facts emerging from the record are that a search and seizure action under section 132 of the Act was conducted in the case of Rubberwala Group on 17.03.2021. During the course of search, statement of Shri Imran Ansari, stated to be an employee of the group handling sale and registration of shops in Platinum Mall, was recorded and certain digital data in the form of an Excel sheet was stated to have been found from his possession. Based on the said material, the Assessing Officer formed a belief that the present assessee had purchased shops in Platinum Mall and had allegedly paid cash component aggregating to Rs.17,00,000/- spread over the impugned assessment years.Based on the said material, the AO observed that the assessee’s name figured in the Excel sheet and that the assessee allegedly paid “on-money” as under:- • A.Y. 2018-19 : Rs.5,00,000/- • A.Y. 2019-20 : Rs.5,00,000/- • A.Y. 2020-21 : Rs.7,00,000/- Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 3 On the basis of the statement of Shri Imran Ansari and in the absence of any reply to the show cause notice, the AO made the additions in the respective years. The CIT(A) confirmed the additions. Aggrieved, the assessee is in appeal before the Tribunal.For brevity the grounds raised in A.Y 2018-19 are reproduced as under.: “1. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) had erred in confirming the action of the Ld. A.O. in passing the impugned assessment order u/s 153C of the Income-tax Act, 1961 ('the Act') in the absence of any incriminating material found during the course of search, making the assessment order illegal and without jurisdiction. 2. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) had erred in confirming the action of the Ld. A.O. in making the addition in the absence of any incriminating material found during the course of search action, as per the grounds contained in the assessment order or otherwise. 3. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) had erred in confirming the action of the Id. A.O. in merely relying on the statement of Shri. Imran Ansari, without any cogent evidence on record, for the reasons mentioned in the impugned order or otherwise. 4. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) had erred in confirming the action of the Id. A.O. in holding that the appellant has paid cash in the form of on-money on purchase of immovable property, for the reasons mentioned in the impugned order or otherwise. 5. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) had erred in confirming the action of the Id. A.O. in making an addition of Rs.5,00,000/- being cash paid on purchase of immovable property by the appellant treating the same as unexplained investment, by invoking the provisions of section 69 of the Act, for the reasons stated in the impugned order or otherwise. 6. The Appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing.” 3. The effective grievance of the assessee is against confirmation of the additions towards alleged “on-money” in respect of purchase of shop, based solely on documents and statements found during the Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 4 course of search in the Rubberwala Group, in proceedings initiated under section 153C. 4. The Ld. Authorised Representative submitted that the assessee has not paid any on-money whatsoever in respect of the purchase of the shop. It was contended that the registered agreement for purchase of the shop was executed on 05.11.2020, whereas the alleged on- money payments have been attributed by the Assessing Officer to earlier assessment years, which renders the allegation factually inconsistent and inherently improbable. The Ld. AR further submitted that the additions have been made solely on the basis of the statement of Shri Imran Ansari, without furnishing to the assessee a copy of the alleged Excel sheet in which the assessee’s name is stated to appear. It was pointed out that even in the assessment order, the Assessing Officer has neither reproduced the relevant entries nor brought on record any date-wise details or specific linkage of the alleged cash payments with the assessee. The Ld. AR emphasized that in the absence of such primary material being confronted to the assessee, the addition cannot be sustained. It was further submitted that no independent corroborative evidence has been brought on record by the Revenue to substantiate the allegation of payment of on-money. The Ld. AR also submitted that reliance placed on third-party statements without affording an opportunity of cross-examination is in clear violation of the principles of natural justice. In support of these contentions, reliance was placed on various orders of the coordinate benches of the Tribunal rendered on identical facts arising from the search in the case of Rubberwala Group, wherein such additions based on similar Excel sheets and statements were deleted on account of lack of corroboration and denial of cross-examination. Accordingly, it was prayed that the additions be deleted. The Ld. AR further placed reliance Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 5 on the decisions of the coordinate benches in the cases of Praveen Khetaram Purohit, Bhavana Vikram Jain, Manish Mali & Others and Chetan Mafatlal Chopra, wherein under identical factual circumstances arising out of the same search, the additions made on the basis of alleged Excel sheets and third-party statements were deleted. 5. Per contra, the Ld. Departmental Representative supported the orders of the lower authorities and submitted that the Excel sheet seized during the course of search constitutes incriminating material evidencing receipt of on-money in respect of sale of shops in Platinum Mall. It was contended that the said digital evidence is duly corroborated by the statement of Shri Imran Ansari, who was directly involved in handling the sale and registration of shops and who has explained the contents of the Excel sheet and the modus operandi of receipt of cash. It was further submitted that the statement of Shri Tabrez Shaikh, promoter of the Rubberwala Group, also lends corroboration to the said material. The Ld. DR contended that the evidentiary value of such material cannot be disregarded merely on the ground that it was found from a third party and placed reliance on the decision of the Hon’ble Kerala High Court in the case of CIT vs. Hotel Meriya. 6. The Ld. DR further submitted that the case laws relied upon by the Ld. AR are distinguishable on facts and in law, inasmuch as the grounds of appeal and factual matrix involved therein are materially different from the present case. It was contended that the reliance placed on such decisions is misplaced and does not advance the case of the assessee. 7. On the issue of opportunity of cross-examination, the Ld. DR submitted that the assessee was duly confronted with the material through a show cause notice dated 24.03.2024, wherein the relevant Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 6 contents of the Excel sheet, the statement of Shri Imran Ansari and the confirmation by Shri Tabrez Shaikh were specifically brought to the notice of the assessee. It was submitted that despite such opportunity, the assessee neither filed any reply nor sought cross-examination of the concerned persons, and therefore, it is not open to the assessee to raise such a contention at this stage. It was further submitted that the failure of the assessee to respond to the show cause notice, despite being afforded adequate opportunity, in essence amounts to acceptance of the contents thereof. 8. The Ld. DR further submitted that in the context of real estate transactions, particularly those involving on-money, it is unrealistic to expect formal documentation or issuance of receipts for such cash transactions, as such transactions are inherently outside the books of account. It was contended that the digital evidence in the form of Excel sheets maintained contemporaneously by the concerned employee serves as a reliable record of such transactions and cannot be brushed aside merely in the absence of physical documentation. It was also submitted that the assessee has not raised any objection during the assessment proceedings to the material relied upon by the Assessing Officer. 9. The Ld. DR further contended that the disclosure of additional income by the Rubberwala Group on account of on-money received from sale of shops provides strong corroboration to the entries found in the Excel sheet. It was submitted that the said disclosure cannot be attributed to any source other than cash received from purchasers of shops, including the present assessee, and therefore, the denial by the assessee is not sufficient to dislodge the evidentiary value of such material. According to the Ld. DR, the statements recorded during the course of search clearly establish the modus operandi of receipt of on- Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 7 money and the additions have been rightly made and confirmed by the lower authorities. 10. We have heard the rival submissions and perused the material available on record. We have also carefully gone through the assessment orders, the impugned appellate order and the judicial precedents relied upon by the parties. It is an admitted factual position that the additions in the present case have been made primarily on the basis of the statement of Shri Imran Ansari and the alleged Excel sheet seized from his possession. It is further noticed that the Assessing Officer has neither supplied the Excel sheet to the assessee nor reproduced the specific entries allegedly relating to the assessee in the assessment orders. Even the date-wise details of the alleged cash payments have not been properly brought on record. 11. In our considered view, when the entire addition is founded upon a document seized from a third party, the Assessing Officer is duty bound to strictly comply with the principles of natural justice by confronting the assessee with the primary material and by establishing a clear nexus between the seized material and the assessee. In the present case, such essential exercise has not been carried out. The assessee has consistently denied having paid any on-money and once such denial is made, the burden squarely shifts upon the Revenue to bring cogent and independent corroborative evidence on record. However, we find that the Revenue has not brought any supporting material such as cash trail, confirmation from the builder, seized receipt, withdrawal linkage or any other incriminating material belonging to the assessee. 12. We further note that the Assessing Officer has heavily relied upon the statements of Shri Imran Ansari and Shri Tabrez Shaikh, but no Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 8 effective opportunity of cross-examination was granted to the assessee. It is now well settled that where an addition is based on third-party statement, denial of cross-examination amounts to violation of principles of natural justice and such addition cannot be sustained. The coordinate benches of the Tribunal in the case of Praveen Khetaram Purohit (supra) has examined this issue in detail and held that in absence of corroboration and in absence of due confrontation, such additions cannot be sustained as under : 8. We have heard the arguments for both the parties and have also perused the material placed on record, judgements cited before me and the orders passed by the revenue authorities. From the records, we noticed that the assessment was completed u/s 153C on account of the fact that a search and seizure action was conducted on 17.03.2021 on Rubberwala group. In search action, premises of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL), its promoter and director-Shri Tabrez Shaikh, and a key employee of Rubberwala group Shri Imran Ansari, who was handling sale & registration of shops in “Platinum Mall” project of RHIL were covered. Among others, statement of these persons were recorded on oath on various dates during the course of search as well as post search proceedings. The employee of Rubberwala group confirmed that the cash has been collected from the respective buyers of the shops. However, on the other hand, the assessee denied payment of cash. We noticed that during the search a pendrive with the details of cash transactions with respect to Rubberwala group was found, which was confirmed through statement of Shri Imran Ansari recorded U/s 132(4) of the Act and on this basis, 153C order was framed and the same was upheld by the Ld. CIT(A). 9. We noticed that Ld. CIT(A) although referred the decision of the coordinate bench in case of Rajesh Jain on identical issue but misplace its reliance. After having gone through the basic facts of Rajesh Jain case which is mentioned by Ld. CIT(A) in its order and the same is reproduced as under: 5.1. On 17.03.2021, the residential premise of the assessee was also covered by way of search action u/s 132 of the IT Act, 1961. Search action was also initiated on Rubberwala group on 17.03.2021. In such action along with premises Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 9 (offices/sites/others) of Rubberwala group entities, residences of various key persons including its promoter and director Shri Tabrez Shaikh, and Shri Imran Ansari - a key employee of Rubberwala group handling sale & registration of shops in “Platinum Mall” project of RHIL were covered under section 132 of the Act. Among others, statement of these persons were recorded on oath on various dates during search as well as post search proceedings. 5.2. During the action on Rubberwala Group, among other, residence (at 109, 2nd Floor, Prabhat Sadan, 109/120 RBC Marg, Agripada, Mumbai Central - 400011) of Shri ImranAshfaque Ansari was covered under section 132 of the I.T. Act, 1961. His statement was also recorded on oath at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, Shri Imran Ansari was questioned about his roles and responsibilities in M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, Shri Imran Ansari stated that he has been working with Rubberwala group of entities since 2010 and inter-alia handling sale and registration of the shops in “PlatinumMall” Project of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). 5.3. Shri Imran Ansari in his response to question no. 13 & 14 of the said statement explained the complete procedure of the of the sale of shops in the “Platinum Mall” project. While explaining further about the price structure of the shops, Shri Imran Ansari in response to Q. no. 15 categorically revealed that the total price of the shops contains cash component and banking channel component, and these components are decided by Shri Tabrez Shaikh (Director/CMD of RHIL and Promoter of Rubberwala Group). On probing further, Shri Imran Ansari, in response to Q. no. 16, stated that these prices, as decided by Shri Tabrez Shaikh, are communicated to him orally. He also revealed in response to Q. no. 17 of the said statement that data related to shops is maintained by him in excel sheets. Corroborating to the fact that data is being maintained by Shri Imran Ansari in excel sheet, during search proceedings at the residence of Shri Imran Ansari, a 16GB Pendrive was retrieved from his possession. The said pen drive is accepted by Shri Imran Ansari belonging to him and he also accepted that this pen drive is containing data maintained for the sale of shops in Platinum Mall. Shri Imran Ansari explained that this data is prepared by him. Shri Imran Ansari’s this acceptance also corroborates with the fact that the said data was retrieved from the residential premises of Shri Imran Ansari and not from any office of Rubberwala Group. Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 10 5.4. It was ascertained that the data is being maintained by Shri Imran Ansari in an excel file namely “consolidated 1 2 3 balance”. In the said file sheets with different name viz “Master”, “Payment” and “Cheque” etc. are found to be maintained. It is also found out that in respect of the sale of shops in the said project, comprehensive data is being maintained in these excel sheets, and in this regard, it isimportant to mention that the sheet “Master” is so elaborate that the data in the said sheet is spread across 98 columns. Shri Imran Ansari has explained all 98 columns of “Master” sheet and such explanation of each and every column by Shri Imran Ansari further support the fact that the he was maintaining the said data and therefore could explain all these columns with relevance and purpose. Shri Imran Ansari in response to Question no. 22, 23 and 24, has explained in detail the meaning and relevant of each and every column. In column B, against the name of ‘Raj Bhai Jain’/‘Raj BhaiJain(I.S)’, total 27 shops have been entered. Further, these 27 shops are stated (by Shri Imran Ansari) to be booked by the assessee only. Also, ShriTabrez Ahmed Shaikh, Director and Promoter of the RHIL, while deposing statement during post search proceedings on 19.08.2021 categorically confirmed the admission made by Shri Imran Ansari, and has confirmed the data of the said excel to be true byconfirming facts stated by Shri Imran Ansari in his statement. It is also important to note here that the phone number mentioned above i.e., 9892196071 against all 27 shops, is of Shri Rajesh Jain. 5.5. Regarding the frequency of updating the said excel file/sheet, Shri Imran Ansari, in response to Q. no. 25, stated that this sheet is updated on the same day when a payment is received either in cash or cheque (or banking channel). The column A to AR of the sheet “Master” are stated to be updated till 16.03.2021 and other sheets of the said excel file are also stated to be updated till 16.03.2021. It is revealed in the above response that he takes the parties to ShriAbrar Ahmed (who during the search established to be a person handing cash for the Rubberwala Group). ShriAbrar Ahmed, after receiving the cash confirms to Shri Imran Ansari who update the diariesand the said excel file. Such detailed mechanism in place further upholds the facts stated by Shri Imran Ansari on oath. It is also important to note here that Shri Imran Ansari also used to call and follow up with the buyers on the numbers saved in his data. As aforementioned, the number, for the shops for which the assessee has paid the cash component, is mentioned as Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 11 9892196071, which is the assessee’s own number. Thus, it makes clear that for the cash payment part, for all the above mentioned 27 shops, Shri Imran Ansari used to follow up with Shri Rajesh Jain/assessee only………………… 10. We also noticed that the decision of the Coordinate Bench of ITAT in the case of Rajesh Jain in ITA No. 3842& 3841 & ITA No. 3954,3952,3951 and 3950/Mum/2023 on the identical facts is reproduced herein below: 12. The appeal filed by the revenue for AY 2020-21 is with regard to the relief granted by Ld CIT(A) holding that the cash payments relating to the shops purchased by others cannot be assessed in the hands of the assessee. The decision rendered by us in AY 2018-19 and 2019-20 on an identical issue on merits in the earlier paragraphs would apply in this year also. Following the same, we affirm the order passed by LdCIT(A) on this issue. 13. In the appeal filed by the assessee, the addition of alleged cash payment of Rs.18,64,200/- in respect of purchase of shop confirmed by Ld CIT(A) is being assailed. 14. We noticed earlier that the assessee had purchased a shop in the commercial premises developed by Rubberwala group. During the course of search conducted in their hands, incriminating documents containing details of cash collected on sale of various shops were found. The employee of Rubberwala group confirmed that the cash has been collected from the buyers of shops. However, the assessee denied payment of cash. However, the AO relied upon the materials found in the case of Rubberwala group and accordingly made addition of Rs.18,64,200/- in AY 2020-21. The LdCIT(A) also confirmed the same. 15. The ld A.R submitted that the addition was made on the basis ofthird party statement and documents found from the premises of third party. As per the deposition made by the employee of Rubberwala group, the buyers were given a diary, in which, the details of cash received were acknowledged. The Ld A.R submitted the search officials did not find any such diary with the assessee during the course of search operation conducted in his hands. Hence the statement so given by the employee stands disproved. He submitted that the AO has simply relied upon third party statement without bringing any independent material to support the same. The AO also did not provide the opportunity of cross examination despite beingasked by the assessee. Accordingly, by placing reliance on various case laws, the Ld A.R submitted that this addition should be deleted. Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 12 16. We heard Ld D.R and perused the record. We notice that the AO has made the addition on the basis of evidence found in the premises of third party and alsoon the basis of deposition made by the employee of the third party. No corroborative material was brought on record to support the statement so given, which is mandatory when the assessee denies any such payment. Further, the AO also did not provide opportunity of cross examination to the assessee, even after the said request was made by the assessee. Under these set of facts, we are of the view that the impugned addition of Rs.18,64,200/- cannot be sustained. In this regard, we may take support from the decision rendered by SMC bench of Mumbai Tribunal in the case of Naren Premchang Nagda vs. ITO (IT Appeal No.3265/Mum/2015 dated 08-07-2016), wherein an identical issue was decided as under:- 17. We also notice that the AO did not provide opportunity to cross examine the persons from Rubberwala group, on whose statements the AO had placed reliance upon. The Hon‟ble Supreme Court has held in the case of Andaman Timber Industries vs. Commissioner of Central Excise (2015)(62 taxmann.com 3)(SC) that not providing opportunity to cross examine is a serious flaw and it will make the order nullity, as it amounts to violation of principle of natural justice. We are of the view that the above said decision of Hon‟ble Supreme Court shall apply to the facts of the present case. Similarly, in Rajesh Jain and other connected matters, it was held that when the AO relies upon third-party statement and material, denial of cross-examination and lack of supporting evidence renders the addition unsustainable. 13. In the present case also, there is no independent material brought on record to establish that the assessee has actually paid on- money. Further, the assessee was not even confronted with the Excel sheet or the exact entries allegedly pertaining to him. Considering the totality of facts and circumstances of the case and respectfully following the consistent view taken by the coordinate benches of the Tribunal on identical set of facts, we are of the considered opinion that the additions made by the Assessing Officer and confirmed by the Ld. Printed from counselvise.com ITA Nos.8798 to 8800/M/2025 Narendra Vishnu Sawant 13 CIT(A) are unsustainable in law. Accordingly, the additions made in all the three assessment years are directed to be deleted. 14. In the result, all the appeals filed by the assessee are allowed. Order pronounced in the open court on 23/03/2026. Sd/- Sd/- (SANDEEP GOSAIN) Judicial Member (JAGADISH) Accountant Member Mumbai, Dated: 23/03/2026 Ashwani Rao Sr. Private Secretary Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "