SHRI SHIV SHANKAR SHARMA,MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 4(3), MUMBAI, MUMBAI

ITA 2682/MUM/2025

AI Insights

The case involves a series of appeals by both the revenue and the assessee, Shri Shiv Shankar Sharma, against the orders of the Commissioner of Income Tax (Appeals) concerning various assessment years from 2012-13 to 2021-22. The primary issues revolved around the validity of additions made under sections 68 and 37(1) of the Income Tax Act, 1961, following a search operation under section 132. The Tribunal examined the jurisdictional facts required for invoking section 153A, the authenticity and relevance of digital evidence and seized diaries, and the application of the peak credit method in calculating additions for unaccounted transactions. The Tribunal's decision highlighted the need for a clear jurisdictional basis and substantiated evidence for making additions under the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714434 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2013-2014
• Other Referred Cases: Ashok Commercial Enterprises vs ACIT, Smart Chip (P) Ltd vs ACIT, Maheshwaro Coal Benefication & Infrastructure P Ltd vs ACIT, CIT vs. Jet Airways, CIT vs. Ranbaxy Laboratories Ltd, CIT vs. Goldstone Cements Ltd, CIT vs. President Industries, CIT vs. Leo Formulations (P) Ltd, ITO vs. Aradhana Textile Mills
• Laws Referred To: Income Tax Act, 1961, Indian Evidence Act, 1872
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATYAPRAKASH R SINGH
• Assessee Lawyers: RAKESH JOSHI; ACCEPTING; ACCEPTING
• Keywords: Set aside; Business income; Business expenditure; Question of law; Corroborative evidences; Unexplained cash credit; Unexplained expenditure; Unexplained investment; Income from undisclosed sources; Document seized; Peak credit; Documents seized; Bogus purchase; Period of limitation; Gross profit estimation; Capital Gains; Search and seizure; Accommodation entries; Source of fund; Loose papers; Deemed to accrue or arise in india; Procedural lapse; Bogus
• Section: 143(3); 132; 153A; 68; 69C; 37; 37(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.2681/Mum/2025 to 2683/Mum/2025 (Assessment Year :2012-13 to 2014-15) ITA No. No.2159/Mum/2025 (Assessment Year :2016-17) ITA No. 2160/Mum/2025 to 2164/Mum/2025 (Assessment Year:2017-18 to 2021-22) ITA No. 2684/Mum/2025 (Assessment Year: 2015-16) Shri Shiv Shankar Sharma 103, Shantivan 2A Raheja Township Malad (E) Mumbai- 400 097 Vs. Deputy Commissioner of Income Tax Central Circle 4(3), Mumbai PAN/GIR No.ALVPS0379N (Appellant) .. (Respondent) ITA No.2728/Mum/2025 to 2731/Mum/2025 (Assessment Year: 2012-13 to 2015-16) & ITA No.1685/Mum/2025 to 1690/Mum/2025 (Assessment Year: 2016-17 to 2021-22) Deputy Commissioner of Income Tax Central Circle 8(1), Mumbai Vs. Shri Shiv Shankar Sharma 103, Shantivan 2A Raheja Township Malad (E) Mumbai- 400 097 PAN/GIR No.ALVPS0379N (Appellant) .. (Respondent) Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 2 Assessee by Shri Rakesh Joshi Revenue by Shri Satyaprakash R Singh Date of Hearing 28/07/2025 Date of Pronouncement 08/08/2025 आदेश / O R D E R PER BENCH: The aforesaid cross appeals have been filed against the order dated 09/01/2025, passed Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment years 2012-13 to 2021-22. 2. The facts in brief are that the assessee is an individual and is one of the key promoters of the Triton Group. He is also a proprietor of M/s Noble India Construction Company ('NICC') which is into the business of executing government contracts for irrigation projects in Maharashtra. A search u/s 132 of the Act was carried out by the Investigation Unit-4(3), Mumbai on 13.07.2020 on the Triton Group in which the assessee Shri Shiv Shankar Ramswaroop Sharma was also searched u/s 132 of the I.T Act. 3. During the course of the search, certain notebooks/diaries were found for the period 01/04/2015 onwards and seized from the premises of Shri Jiten Pujari who was an employee in the assessee‘s proprietorship. Shri Pujari in his statement recorded u/s 132(4) of the Act, had admitted that the diaries contained ―Kachaha Cash Hisab‖ and that the transactions mentioned therein were maintained on the instructions of Shri Ratankant Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 3 Sharma (assessee‘s son). The entries mentioned in the said diaries form the basis for majority of the additions made in the hands of the assessee. However, later during the cross examination, Shri Jiten Pujari reverted his original statement and stated that noting on the diaries has nothing to do with the business of the assessee. However, ld. AO has considered the same as afterthought and discussed in detail 11 evidences in the assessment order to correlate the statements recorded during the course of search, other evidences found in the search such as text messages and images found in the digital devices correlating with the diaries maintained by Shri Jiten Pujari to establish that these diaries are alternate books of accounts and not merely rough jottings as claimed by the assessee. AO has made addition of all the transaction recorded in such diaries and CIT(A) restricted the addition based on peak credit balance. 4. Both the parties filed appeal before us. In this backdrop, we shall firstly take up the appeals filed by the revenue and assessee for AY 2012-13 to 2014-15. For the sake of convenience, the grounds raised by the revenue and the assessee in their appeals for respective years are reproduced as under: Revenue’s grounds of appeal (AY 2012-13): 1. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in not considering the clear mention of commission being charged at an aggregate rate of 17% in the seized document in the form of pdf file 'Krishna-share- statement0001.pdf'.” 2. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in restricting the commission to 8% and allowing relief to the assessee of Rs. 53,02,600/- without considering the fact that the said addition had been made on Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 4 the basis of incriminating evidence in the form of the seized document 'Krishna-share-statement0001.pdf' from the Gmail backup of Shri Jiten Pujari.” Assessee’s grounds of appeal (AY 2012-13): 1. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making additions/disallowances in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case.” 2. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party.” 3. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary.” 4. “On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872.” 5. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in assessing the earlier four years beyond six assessment year without appreciating the fact that no income in the form of assets had escaped to tax, without considering the facts & circumstances of the case.” 6. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an addition u/s 68 of the Income Tax Act, 1961 amounting to Rs.5,26,26,315/- by treating the sales consideration on account of sale of shares of M/s. Krishnadeep Trade & Investment Ltd as alleged unexplained cash credit, without considering the facts & circumstances of the case.” Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 5 7. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the addition made by the Learned Assessing Officer to the extent of Rs.36,43,873/- u/s 69C of the Income Tax Act, 1961, on account of alleged commission paid on accommodation entry, without considering the facts & circumstances of the case.” Revenue’s grounds of appeal (AY 2013-14): 1. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the disallowance of Rs.1,47,19,272/- made u/s 37(1) of the Act without appreciating that the assessee was not able to substantiate the allowability of the said expenses, nor was the assessee able to explain as to why the signed blank cheque books of the said parties were lying at the premises of Shri Jiten Pujari (employee of the assessee).” 2. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee of Rs. 1,47,19,272/- out of disallowance made u/s 37(1) of the Act amounting to Rs.2,72,50,751/- relying on the reconciliation documents which were not produced before the Assessing Officer for verification during the assessment proceedings.” 3. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee by deleting the addition made in respect of unsecured loans amounting to Rs.2,05,000/- pertaining to loan taken from Meenu Sharma, not considering the findings during the search action and not considering that no evidences were furnished to establish creditworthiness and genuineness of the transactions in view of the findings during the search action.” Assessee’s grounds of appeal (AY 2013-14): 1. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making additions/disallowances in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case.” Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 6 2. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party.” 3. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary.” 4. “On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872” 5. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in assessing the earlier four years beyond six assessment year without appreciating the fact that no income in the form of assets had escaped to tax, without considering the facts & circumstances of the case.” 6. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.1,25,31,479/- u/s 37(1) of the Income Tax Act, 1961 by treating the genuine expense as alleged non- genuine expenses, without considering the facts & circumstances of the case.” 7. “The appellant craves leave to add, amend, alter or delete the said ground of appeal.” Revenue’s grounds of appeal (AY 2014-15): 1. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the disallowance of Rs.1,86,96,296/- made u/s 37(1) of the Act without appreciating that the assessee was not able to substantiate the allowability of the said expenses, nor was the assessee able to explain as to why the signed blank cheque books of the said parties were lying at the premises of Shri Jiten Pujari (employee of the assessee).” Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 7 2. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee of Rs 1,86,96,296/- out of disallowance made u/s 37(1) of the Act amounting to Rs.4,98,90,418/- relying on the reconciliation documents which were not produced before the Assessing Officer for verification during the assessment proceedings.” 3. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee by deleting the addition made in respect of unsecured loans amounting to Rs.1,34,64,988/- pertaining to loan taken, not considering the findings during the search action and not considering that no evidences were furnished to establish creditworthiness and genuineness of the transactions in view of the findings during the search action.” Assessee’s grounds of appeal (AY 2014-15): 1. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making additions/disallowances in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case.” 2. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party.” 3. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary.” 4. “On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872” 5. “On the facts and circumstances of the case as well as in Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 8 law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in assessing the earlier four years beyond six assessment year without appreciating the fact that no income in the form of assets had escaped to tax, without considering the facts & circumstances of the case.” 6. “On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.3,11,94,122 u/s 37(1) of the Income Tax Act, 1961 by treating the genuine expense as alleged non- genuine expenses, without considering the facts & circumstances of the case.” 7. “The appellant craves leave to add, amend, alter or delete the said ground of appeal.” 5. In this backdrop, we shall firstly take up the appeals filed by the revenue and assessee for AY 2012-13 to 2014-15. In stating so, we shall take up the assessee appeal for AY 2012-13 (ITA 2681/Mum/2025). For the said year, the assessee vide ground No. 5, has challenged the validity of the order dated 26.03.2022 passed u/s 153A of the Act on the ground that no order can be passed beyond six assessment year when no income in the form of assets had escaped to tax. 6. Mr. Rakesh Joshi, the ld. A.R. for the assessee explaining the facts and background of the case submitted that there was search action carried out on Triton Group on 13/7/2020. Assessing Officer issued notice U/s 153A for AY 2015-16 to 2020-21 on 21/10/2021. Later on 26/10/2021, she also issued notice U/s 153A for AY 2011-12 to 2014-15 invoking extended period of 10 Years. Later notice for AY 2011-12 was dropped being 11th year. To invoke provisions of clause (a) of 4th proviso to section 153A(1) for the relevant assessment year, AO relied Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 9 upon an email found from the digital data seized from residence of Mr Jiten Pujari, employee of the assessee. This email contains complete details of shares transaction of Krishnadeep Trade & Investment Ltd. and the sale date mentioned in the email is duly matching with the transaction recorded in the books of accounts of the assessee. He submitted that to invoke the extended period of 10 years, the evidence found during the course of search should relate to undisclosed transaction in the form of ‗assets‘. In this case the share sale transaction is duly recorded in the books of the assessee and also assessed earlier u/s 143(3) vide order dated 31/01/2015 and U/s 143(3) r.w.s. 147 vide order dated 21/12/2019. Hence, the same does not constitute an ‗asset‘ as defined in the fourth proviso to section 153A(1) and Explanation-2 to section 153A, which is sine qua non for issuing notice under section 153A for the relevant AY/ AYs' of section 153A(1) as amended by the Finance Act, 2017. He also referred Memorandum to Finance Act 2017 when these provisions were introduced in the statue for the first time. As per the said memorandum this provision was introduced as a replacement to section 197(c) to Finance Act 2016 which empower to tax any undisclosed assets wherever such assets come to the notice of the assessing officer. The said provision, based on various representation, was repealed from the statue and this new section was introduced which can be invoked when income escaped is more than Rs. 50 lakhs and the same was found in the form of an asset. The word ‘asset’ as defined in Explanation 2 to above proviso shall include immovable property being Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 10 land or building or both, shares and securities, loans and advances, deposits in bank account. In this case, assessment was made under section 153A dated 26.03.2022 for the assessment year 2012-13 to 2014-15, which is relevant AY/ AYs' as per section 153A(1) and additions have been made on account of sale of shares as unexplained cash credits under section 68, disallowance of expenses U/s 37(1) and unsecured loan U/s 68 of the Act. The Assessing Officer has not made any addition on account of undisclosed asset which is sine qua non/pre- condition for assuming valid jurisdiction for making assessment under section 153A for the relevant AY/ AYs' as per „fourth proviso' to section 153A(1) r/w Explanation-2 to section 153A as amended by the Finance Act, 2017 (w.e.f. 01/04/2017), the addition on account of unexplained cash credit could not have been made by the Assessing Officer, unless she first made the addition of undisclosed asset. As the Assessing Officer has not made any addition on account of undisclosed asset, there was no jurisdictional fact in the hands of the Assessing Officer or in her possession when she assumed jurisdiction under section 153A for the assessment year 2012-13 to 2014-15 in the first place itself. When the very usurpation of jurisdiction under section 153A is bad in law for want of jurisdiction, the Assessing Officer would be precluded from making any other addition in the relevant AY/ AYs, the action of the Assessing Officer in making addition under section 68 in the relevant AY/ AYs would be invalid for want of jurisdiction. In support of these arguments, he relied on the judgments of the Hon'ble Bombay High Court in Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 11 Ashok Commercial Enterprises VS ACIT (459 ITR 100); Hon'ble Delhi High Court in the case of Smart Chip (P) Ltd vs ACIT (476 ITR 389) and Nagpur ITAT in case of Maheshwaro Coad Benefication& Infrastructure P Ltd (171 taxmann.com 842). 7. Per-contra, the ld. DR supported the assessment order passed by the Assessing Officer. He submitted that as per Explanation 2 assets includes deposits in bank account and in this case sale proceeds of the shares were deposited in bank account, hence AO has jurisdiction to invoke extended period of 10 years. 8. In rejoinder, Ld. AR submitted that to invoke provisions of above section the requirement is not only to find an asset but also the said assets should be an undisclosed asset. The deposit in the bank account, as referred by Ld DR, is not an undisclosed transaction/ asset but assessee has duly disclosed these transactions in the return of income. He further submitted on the merits of the case that the allegation of Ld AO that an email found from the digital data seized from the residence of Shri Jiten Pujari is also incorrect. He referred Panchnama executed at residence of Shri Jiten Pujari vide warrant No. Sl. No. Mum C/U- 4/2020-21/009 dated 14/7/2020 and as per the said Panchnama no digital data was seized from the premises of the assessee. Therefore, the very basis of recording the satisfaction by AO to invoke extended period of 10 year is without any basis. 9. We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 12 record and the paper book filed before us along with supporting case laws. 10. Whether respondent has jurisdiction to take proceedings under section 153A of the Act for the relevant assessment year? Section 153A of the Act read as under : “153A (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day May, 2003, the Assessing Officer shall - (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and of the relevant assessment year or years: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 13 [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made [and for the relevant assessment year or years] : [Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless – (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1 - For the purposes of this sub-section, the expression \"relevant assessment year shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2 - For the purposes of the fourth proviso, \"asset\" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.] [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 14 appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner : Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation - For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates (i) in as applicable to such assessment year.” 11. A careful and purposive reading of section 153A(1)(b) of the Act reveals that the Assessing Officer, having jurisdiction under the said provision, is empowered to assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted, as well as the assessment year in which such search is undertaken. The scope of this jurisdiction is further explained by Explanation 1 to section 153A, which defines the expression ―relevant assessment years‖. The said explanation provides that the term ―relevant assessment years‖ shall mean the assessment years falling beyond the sixth year but not later than the tenth year preceding the assessment year relevant to the previous year in which the search is conducted. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 15 11.1. However, with the substitution of the fourth proviso to section 153A(1) by the Finance Act, 2017 with effect from 1 April 2017, a significant legislative condition has been introduced which empowers the Assessing Officer to extend the reach of proceedings beyond the conventional six-year period and cover assessments for up to ten years, but only upon satisfaction of certain stringent statutory conditions. 11.2. To invoke jurisdiction for such extended period that is, assessment years falling beyond the sixth year but not later than the tenth year preceding the assessment year relevant to the previous year in which the search is conducted the fourth proviso mandates that the Assessing Officer must possess books of account, documents, or other evidence which reveal that income represented in the form of an asset has escaped assessment and such income, in aggregate, is or is likely to be equal to or exceed fifty lakh rupees. The term ―asset‖ for this purpose is defined expansively in Explanation 2 to section 153A(1) to include immovable property, shares and securities, loans and advances, and bank deposits. 12. In the present case, the Assessing Officer has sought to assume jurisdiction for the extended period, specifically for the assessment years 2012-13 to 2014-15, based on certain email correspondence purportedly retrieved from the digital data of one Mr. Jiten Pujari. The said email, which has been reproduced in the assessment order, ostensibly refers to transactions involving sale of shares and payment of cash. However, it is evident upon scrutiny that the addition made by the Assessing Officer pertains Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 16 not to the alleged cash component, which could arguably fall within the realm of unaccounted assets, but to the sale proceeds of shares. 12.1. What is crucial to note is that the sale of shares is neither unexplained nor undisclosed. The assessee has duly reported the said transaction in its return of income, which was originally assessed under section 143(3) and subsequently reassessed under section 143(3) read with section 147 of the Act. There is no material on record to indicate that the sale proceeds of such shares constitute unaccounted income or that the shares themselves were not recorded in the regular books of account. 12.2. Thus, it becomes manifest that the precondition prescribed under the fourth proviso to section 153A(1) namely, the existence of an undisclosed asset of fifty lakh rupees or more, unaccounted and unearthed during the search is not satisfied in the present case. Absent such a foundational jurisdictional fact, the invocation of section 153A for the extended assessment years, that is, assessment years 2012-13 to 2014-15, cannot be sustained in law. Considering the date of search as 13 July 2020, the relevant previous year would be 2020–21, corresponding to assessment year 2021–22. Thus, the six immediately preceding assessment years would span from AY 2015–16 to AY 2020–21. Any year prior thereto namely AY 2012– 13, 2013–14, and 2014–15 would fall within the extended period and can be assessed only if the mandatory threshold and asset- related conditions under the fourth proviso are fulfilled. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 17 13. It is, therefore, imperative to appreciate that for the Assessing Officer to validly exercise jurisdiction under section 153A for the extended period, he must first and foremost establish that he is in possession of tangible evidence unearthed during the course of the search, which discloses an undisclosed asset of the value of fifty lakh rupees or more in aggregate. It is only upon such jurisdictional satisfaction premised upon the existence of an unaccounted asset as per the statutory definition that the Assessing Officer can proceed to make any further additions or disallowances in such extended years, including those which may not directly relate to the said asset. 13.1. In other words, unless the gateway condition of the fourth proviso is demonstrably met through cogent material indicating the existence of such undisclosed asset, no addition, whether in the nature of unexplained income, expenditure, investment, or credit, can be lawfully made for the extended years. The legislative intent is abundantly clear the rigour of the extended ten-year window must be tempered by a higher threshold of evidentiary burden, so as to avoid arbitrary fishing and roving inquiries into stale assessments. Any interpretation to the contrary would not only render the proviso otiose but also offend the principle of strict construction applicable to provisions conferring exceptional powers. 14. Upon careful perusal of the assessment orders impugned before us, it is manifest that the Assessing Officer has not made any addition in respect of any escaped or undisclosed asset for the relevant assessment years 2012-13 to 2014-15. Despite Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 18 seeking to invoke the extended jurisdiction under the said proviso, the foundation on which such jurisdiction must necessarily rest has not been laid. 15. We, therefore, find considerable merit in the submission advanced by the ld. Authorised Representative for the assessee that in the absence of any addition pertaining to a specified asset of the requisite monetary threshold, the Assessing Officer could not have legally ventured to make additions on other items such as disallowances under section 37(1), or unexplained cash credits under section 68. These heads of income do not qualify as ―assets‖ within the meaning ascribed in Explanation 2 to section 153A(1) and as such, cannot constitute the jurisdictional fact required to trigger the extended ten-year assessment window. 15.1. In this regard, a tabular representation of the additions made for the relevant assessment years is apposite: Assessment Year Nature and Quantum of Additions 2012–13 Rs.5,26,26,315 on account of alleged bogus long-term capital gains and Rs.36,43,873 as commission income, both treated as unexplained cash credits under section 68 2013–14 Rs.2,72,50,751 disallowed under section 37(1) and Rs.2,05,000 treated as unexplained loan under section 68 2014–15 Rs.4,98,90,418 disallowed under section 37(1) and Rs.1,34,64,988 treated as Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 19 unexplained loan under section 68, which was deleted by the CIT(A) 16. It is evident that these additions pertain either to unexplained credits or disallowances of expenses. None of them fall within the ambit of assets as envisaged under Explanation 2. More crucially, there is no addition on account of any asset be it immovable property, shares and securities, bank deposits, or loans and advances whose acquisition remains unexplained and which exceeds fifty lakh rupees in value. 16.1. The Assessing Officer, in the present case, has not brought on record any asset undisclosed or otherwise which could have clothed him with the requisite jurisdiction under the extended sweep of the fourth proviso. The additions made are either in the nature of disallowances of business expenditure or unexplained cash credits. It is now well settled that liabilities such as share capital or unsecured loans cannot be treated as assets merely because the source thereof may be unproven or dubious. In the absence of a jurisdictional trigger in the form of a qualifying undisclosed asset, the very foundation for issuance of notice under section 153A for the extended period crumbles. 16.2. The inexorable conclusion that flows from the foregoing discussion is that the Assessing Officer lacked the requisite jurisdictional fact at the threshold itself. The absence of any addition relating to an undisclosed asset of fifty lakh rupees or more is not a mere procedural lapse it is a substantive omission that strikes at the very root of the Assessing Officer‘s assumption Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 20 of jurisdiction. Once this jurisdictional foundation is found wanting, all consequential additions, including those relating to disallowances or unexplained credits, must necessarily fall. The Assessing Officer, having failed to satisfy the sine qua non laid down under the fourth proviso to section 153A(1), ought to have dropped the proceedings for assessment years 2012–13 to 2014– 15 at the threshold. 17. This legal position is no longer res integra. The Hon‘ble Bombay High Court in Ashok Commercial Enterprises vs. ACIT has categorically held that the existence of a jurisdictional fact, based on cogent material, is a precondition for valid assumption of jurisdiction. Absent such a foundational fact, the proceedings must be held to be vitiated in law. The relevant observation of the Hon'ble Bombay High Court in Ashok Commercial Enterprises VS ACIT (supra) held as under: “A plain reading of section 153A (1)(b) of the Act shows that respondent having jurisdiction under the said section is empowered to assess or re-assess the total income of six years immediately preceding the assessment year relevant to the previous year in which the search was conducted and for the relevant assessment year or years. Explanation 1 below section 153A of the Act defines the expression relevant assessment years as \" …….shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made\". In order to make an assessment for assessment year which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year, in which the search was conducted, the 4th proviso to section 153(A)(1) of the Act sets out certain further Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 21 conditions which are required to be fulfilled before a notice can be issued for the relevant assessment years. Clause - (a) of the 4th proviso requires that the Assessing Officer must have in his possession books, documents or evidence which reveal that income represented in the form of an asset which has escaped assessment amounts to or is likely to amount to rupees fifty lakhs or more. Explanation 2 to section 153A(1) of the Act sets out an expanded definition of the word \"asset\" for the purposes of the 4th proviso. In the instant case, the satisfaction note refers to two items. First, the loan account between petitioner and Hubtown Limited and the alleged escapement is only in respect of the part thereof which is written off during the year. That clearly, i.e., the writing-off of a bad debt cannot fall within the ambit of \"…. income, represented in the form of an asset…\". Further, in view of the fact that this has been considered and allowed in the original assessment proceedings, the same cannot be said to be income which has escaped assessment. Secondly, the other item referred to in the satisfaction note, that is to say, trading in shares of Hubtown Limited has been undertaken on the stock exchange, recorded in the books of account of petitioner, and the resulting gain offered for tax and the amounts taxed in the hands of petitioner. Finally, even in the impugned re-assessment order for A.Y. 2017-2018 no addition has been made on this account.” 18. Similar views have been taken by other High Courts as well. The Hon‘ble Delhi High Court in Smart Chip Private Limited vs. ACIT held that disallowance of expenses, in the absence of any asset being unearthed during search, would not satisfy the condition under clause (a) of the fourth proviso. The Court held that in the absence of books, documents, or evidence indicating an undisclosed asset exceeding the prescribed threshold, the extended period under section 153A cannot be invoked. It was further held that disallowances which do not result in the acquisition of an asset do not qualify for such extended jurisdiction. Similarly, the relevant observation of the Hon‘ble Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 22 Delhi HC in the case of Smart Chip (P) Ltd vs ACIT(Supra) reads as under: “17. It is clear from the above that there is no allegation that the income which has escaped assessment was represented in the form of an asset. Therefore, the conditions as stipulated in Clause (a) of the fourth proviso to Section 153A(1) of the Act are not satisfied. The AO does not have the possession any books of account, other documents or evidence, which reveals that the petitioner's income that is represented in the form of an asset has escaped assessment. 18. In terms of Explanation 2 to Section 153A(1) of the Act, the term 'asset' is defined to include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank accounts. 19. The AO seeks to disallow expenses on account of doubting the genuineness for the reason that the same were not incurred wholly or exclusively for the purpose of the petitioner's business. Absent any further material to establish that such expenses had resulted in the acquisition of any asset, the conditions stipulated in the fourth proviso to Section 153A(1) of the Act would remain unsatisfied. 20. In the aforesaid view the period of limitation for issuing a notice under Section 153A of the Act, in the given facts of this case, would necessarily have to be confined to a period of six assessment years immediately preceding the assessment year relevant to the previous year in which the search under Section 132 of the Act was conducted. 21. The search in question was conducted in financial year 2022- 23; thus, the relevant block of six assessment years would be the six assessment years preceding AY 2023-24, being the assessment year relevant to the previous year in which the search was conducted. Accordingly, AY 2016-17 falls beyond the block of six years.” 19. The coordinate bench of the Tribunal in Maheshwari Coal Benefication and Infrastructure Pvt. Ltd. has also held that in order to invoke jurisdiction under Section 153A or 153C of the Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 23 Income Tax Act for the extended period beyond six assessment years (up to ten years), the Assessing Officer must possess books of account, documents, or evidence revealing that income represented in the form of an undisclosed asset, as defined in Explanation 2 to Section 153A(1), has escaped assessment and the value of such asset is Rs.50 lakh or more (in aggregate). Unless such a jurisdictional fact exists and is substantiated through addition of a qualifying asset, the Assessing Officer cannot proceed to make any other addition or disallowance (such as unexplained credits under Section 68 or disallowance of expenses), which are not in the nature of ―assets‖. The jurisdictional fact of an undisclosed asset is the key to open the lock for reassessment of extended years. If that key is missing, incorrectly identified, or ultimately discarded, the entire proceeding collapses for lack of jurisdiction.This principle aligns with the jurisprudence laid down in CIT v. Jet Airways (Bombay HC), Ranbaxy Laboratories Ltd. (Delhi HC), Fortune Vanijya (Gauhati HC) and Goldstone Cements Ltd. (Gauhati HC), which hold that in the absence of the primary condition for reassessment, no further enquiry or addition is permissible. 20. In light of the above discussion, we are of the considered opinion that the very assumption of jurisdiction under section 153A of the Act for the assessment years 2012–13 to 2014–15 is invalid in law. Consequently, any additions made under section 68 or disallowances under section 37(1) are rendered unsustainable and without authority. Accordingly, we hold: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 24 (a) ITA No. 2681/Mum/2025 for Assessment Year 2012–13 – Ground No. 5 is allowed. (b) ITA No. 2682/Mum/2025 for Assessment Year 2013–14 – Ground No. 5 is allowed. (c) ITA No. 2683/Mum/2025 for Assessment Year 2014–15 – Ground No. 5 is allowed. 21. Consequently, since the invocation of section 153A is found to be bad in law, the appeals filed by the assessee for assessment years 2012–13 to 2014–15 are allowed, and the corresponding appeals filed by the Revenue are dismissed. 22. Now coming to the remaining assessment years, we shall now take AY 2015-16 to 2021-22. In these years the following three issue arises: A. Addition of unsecured loan u/s 68 of the Act. (Revenue appeal); B. Disallowance of addition U/s 37(1) of the Act (CIT(A) partially conformed so both assessee and revenue appeal) and C. Addition based on seized diary from the residence of Shri Jiten Pujari (CIT(A) partially conformed so both assessee and revenue appeal). Each of the issue is discussed as under: A. Addition of unsecured loan u/s 68 of the Act: 23. We have carefully heard the submissions of both parties at considerable length and have duly perused the voluminous documentary evidence filed before us. We have also examined the specific materials referred to by the ld. representatives during the Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 25 course of hearing. The crux of the Revenue‘s case rests on the allegation that blank signed cheque books pertaining to certain entities, from whom the assessee has availed loans, were discovered and seized during a search conducted at the residential premises of Shri Jiten Pujari. On that basis, it is alleged that these entities are dubious in nature or shell concerns, and since the assessee is stated to be in control or management of their bank accounts, the loan transactions are not genuine. Accordingly, it is the contention of the Revenue that the addition made by the Assessing Officer under section 68 deserves to be sustained. 23.1. On the other hand, the ld. counsel for the assessee has placed strong reliance on the findings recorded by the ld. CIT(A), and submitted that the assessee had fully discharged the initial burden cast under section 68 of the Act. It was pointed out that all the lenders in question are regular income tax assessees and have duly filed their confirmations. The loan transactions are routed entirely through banking channels and are recorded in the books of the assessee. Moreover, a significant portion of the loans were availed from related parties or family members of the assessee, and most of the loans were repaid either within the same financial year or in subsequent years. In this factual backdrop, it was urged that the additions made by the Assessing Officer are unwarranted and have been rightly deleted by the ld. CIT(A), who has rendered the following categorical findings: “From the above, it is evident that the appellant has furnished enough documentary evidence to prove the identity and Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 26 creditworthiness of all the lenders. Further, the entire loan in the case of Ashutosh Sharma, Ashok Sharma and Rambaboo Chonkar has been repaid during the same financial year. All the transactions are routed through the banking channel and reflected in the books of account. The AO relied mainly on the fact that their signed cheque books were found from the office premises of Shri Jiten Pujari and hence the genuineness of the transactions is doubtful. The appellant has explained that all these persons were relatives / close associates of the appellant and hence their cheque books were lying in the office of the appellant. Further, there is no adverse finding unearthed during the search which indicates that the transactions in the name of these persons are bogus. Therefore, once the appellant has discharged his onus as per the provisions of section 68 of the I.T. Act and the documents furnished prove the identity, creditworthiness of the lenders and genuineness of the transactions, the unsecured loans cannot be treated as unexplained cash credits merely on the fact that their blank cheque books were found during the search from the office premises of the appellant. Therefore, the addition made by the AO of Rs.1,34,64,988/- u/s 68 of the I.T. Act cannot be sustained. Accordingly, the AO is directed to delete the same. Appeal on this ground is thus ALLOWED.” 24. On an independent perusal of the records and materials placed before us, we find that the identity of all the lenders in question is duly established. The assessee has placed on record confirmations from each of the lenders, along with their respective Permanent Account Numbers, and copies of their income tax returns. To demonstrate the genuineness of the transactions, the assessee has also produced copies of bank statements, which clearly show that the funds were transferred through normal banking channels. The amounts received as loans are reflected in the books of the assessee and, notably, the bank statements of the creditors reveal that the transactions Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 27 were made through account payee instruments and not in cash. There is also material on record to show that a substantial portion of these loans was repaid either within the same financial year or shortly thereafter. With respect to the creditworthiness of the lenders, the financial records and ITRs reveal that the creditors had adequate sources of income to advance such loans. 25. The sole basis on which the Assessing Officer has doubted the genuineness of the loans is the fact that blank signed cheque books belonging to these persons were found at the premises of Shri Jiten Pujari. However, in the absence of any further material emerging from the search such as confessional statements, cash trails, or evidence of bogus layering no adverse inference can be drawn merely from the possession of cheque books, particularly when the assessee has satisfactorily explained that these individuals were close relatives and associates, and that the cheque books were lying at the premises for convenience. It is well settled that suspicion, however strong, cannot take the place of evidence. 25.1. There is no finding, either in the assessment order or during the course of appellate proceedings, to establish that these lenders were name-lenders or that the funds were routed back to the assessee. The legal requirement under section 68 is threefold: the assessee must establish the identity of the creditor, the genuineness of the transaction, and the creditworthiness of the creditor. On all three counts, the assessee has discharged the initial burden. In the absence of any rebuttal by the Revenue, Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 28 the additions made by the Assessing Officer are not legally sustainable. 25.2. We, therefore, find no infirmity in the detailed and reasoned findings recorded by the ld. CIT(A). Accordingly, the addition of Rs.1,34,64,988 made under section 68 is directed to be deleted and the order of the CIT(A) is confirmed. The ground raised by the Revenue is dismissed. B. Disallowance made u/s.37(1) of the Income Tax Act, 1961 in case of Piece rate workers (PRW) 26. During the course of search, signed cheque books of the party who raise invoice for the PRW expenses to the assessee. Further in the statement, Jiten Pujari & assessee admitted as under: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 29 27. The AO stated the reasons for treating these parties as non- genuine mentioning that in most of the cases, almost entire turnover of the PRWs was with Assessee. The AO reproduced the extracts of the diaries where it appears that transactions related to PRWs had been recorded. She also mentioned that a few of them shared their registered address with the assessee and that some of their Blank cheque books had also been found in the Assessee‘s office. AO made addition of such expenses U/s 37(1) for all the parties whose cheque books found from the premises of Shri Jiten Pujari. CIT(A) restricted to the disallowance to the extent admitted in the statement of Jiten Pujari & the assessee. Finding of the CIT(A) for AY 2015-16 on this issue is as under: “15.12 In view of the findings revealed during the search and specific admission by the concerned persons as discussed above, it is evident that the appellant has booked bogus expense on account of labour charges in the name of these alleged entities. The appellant has also failed to demonstrate with the documentary evidence that these alleged concerns have rendered any labour services to the appellant. Therefore, the expenditure debited in the books of accounts as labour charges in the name of these entities is a bogus expenditure and hence needs to be disallowed as business expenditure u/s 37 of the I.T Act. Accordingly, the disallowance made of Rs 52,61,732 is confirmed. ….. 15.14 During the appeal proceedings, the appellant has furnished the ledger accounts of these parties in the books of appellant, form no 26AS, financials of the alleged parties, etc. It is observed that the expenditure booked by the appellant has been offered as an income by these parties. Further, except for the fact that the cheque books were lying at the business premises of the appellant, no other documentary evidence or fact has been unearthed during the search which indicates that the expenditure debited in the name of these parties is bogus. As discussed above, Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 30 it was found that Shri Jiten Pujari has clearly noted down the cash received back from the alleged parties, namely M/s Moonlight Construction, M/s Unique Constructions, M/s Raj Enterprises, M/s Laxmi Enterprises, and M/s Joy Constructions. The appellant has also accepted that the expenditure booked in the name of these 5 parties is bogus. The appellant has not stated anything adverse about the other parties. Therefore, merely due to the fact that the cheque books were lying at the business premises of the appellant, the transaction cannot be held as bogus without any corroborative evidence. It is to be noted that the appellant is a contractor and requires labor for the same. Therefore, the entire expenditure debited as labor charges cannot be held as bogus on the basis of assumptions. Therefore, the disallowance made by the AO of Rs.38,24,608 cannot be sustained. Accordingly, the addition to the extent of Rs 38,24,608 gets deleted. Appeal on this ground is thus PARTLY ALLOWED.” 28. During the course of hearing before us, the Ld. Counsel of the assessee re-iterated the arguments made before the CIT (A) and requested that no disallowance should be made u/s 37(1) of the Act as the assessee has furnished all the documents to prove the genuineness of the transaction. Alternatively, he also argued that even if we accept the contention of the revenue, it is evident from the documents of Jiten pujari that various expenses in the form of wages to labour paid in cash was found noted, which clearly proves that the cash received from these persons were used for the purpose of business. He also stated that salary to these five people also paid in cash as evident from the seized documents, therefore entire payment cannot be disallowed. To support the contention AR filed copies of seized documents showing cash payment to labours and these five employees, which are as under: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 31 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 32 29. Per contra, the LD.DR relied upon the order of the AO and requested that the entire addition made by AO is sustainable as the nature and modus operandi is same in case of all the parties. Accordingly, he stated that relief granted by CIT(A) should be reversed. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 33 30. We have given our thoughtful consideration to the rival submissions advanced by both the parties and have carefully perused the material placed on record, including the documentary evidence unearthed during the course of the search, as well as the judicial pronouncements relied upon. A pivotal issue for determination before us pertains to the nature and admissibility of labour-related expenses incurred by the assessee through five individuals, who were functioning in the capacity of proprietors of various proprietary concerns. It is evident from the seized material and corroborative records that the bank accounts of these five individuals were used by the assessee to manage project-related cash flows, specifically for disbursement of wages and certain site-related expenses. The five individuals in question are: (i) Shri Venkatesh Shenoy, Proprietor of Moonlight Construction Co., (ii) Shri Ram Babu Chonkar, Proprietor of Joy Construction, (iii) Shri Ashok Sharma, Proprietor of Unique Construction Co., (iv) Shri Raj Kumar Sharma, Proprietor of Raj Enterprises, and (v) Shri Ashutosh Sharma, Proprietor of Laxmi Enterprises. 30.1. The documents seized during the search, including loose papers found at the premises of Shri Jiten Pujari, reflect entries pertaining to salary and payments made to these individuals. It is also not in dispute that these parties have filed their individual income tax returns and have disclosed income earned from the assessee. Moreover, the bank accounts operated in their names were found to be routed through for withdrawal of funds that Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 34 were subsequently used either for the disbursement of site wages or for their own salary. 30.2. On a careful evaluation of the overall factual matrix, we find merit in the contention of the assessee that these transactions were not entirely fictitious or sham in nature. There exists sufficient documentary evidence to demonstrate that the expenses incurred in relation to these five parties were, at least in part, genuine and connected to the execution of the assessee‘s contractual obligations. However, having regard to the nature of evidence unearthed during the search particularly the use of common cheque books and the close connection with Shri Jiten Pujari it cannot be said that the entire expenditure claimed is above board. 30.3. In the circumstances, and balancing the equities, we are of the considered view that a reasonable estimate of disallowance would meet the ends of justice. Accordingly, we direct that only 10% of the total expenditure incurred in relation to these five parties be disallowed, and the balance be allowed as genuine business expenditure. The Assessing Officer is, therefore, directed to restrict the addition to the extent of 10% of the total amount booked under labour expenses in respect of the said five parties. The ground of appeal raised by the assessee is thus partly allowed. 21. We now turn to the issue concerning disallowance of labour charges in respect of other parties not falling within the aforementioned group of five individuals. From the order of the CIT(A), it is evident that the disallowance made by the Assessing Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 35 Officer was primarily based on the general presumption that the assessee was engaged in generating accommodation entries, given the discovery of signed cheque books at the business premises. However, we are unable to accept the proposition that the mere presence of signed cheque books, without any corroborative evidence, is sufficient to brand all transactions as non-genuine. 31.1. The assessee is a contractor engaged in labour-intensive activities, and it is only natural that expenses on account of labour wages would be incurred as part of the business operations. To disregard the entirety of such expenses, without identifying any specific discrepancy or infirmity, would be contrary to settled principles of law. Importantly, the statement of Shri Jiten Pujari, which forms the basis of the Revenue‘s case, clearly identifies only the five individuals discussed earlier as being involved in providing questionable entries. No such adverse observation or incriminating material has been brought on record vis-à-vis the other parties. 31.2. Furthermore, the assessee has furnished supporting documents such as ledger accounts, bank statements, payment vouchers, and details of work orders executed. These documents were placed before the Assessing Officer and the CIT(A), and no defect has been pointed out in their authenticity or veracity. Therefore, we find no justification in disallowing the expenses pertaining to other labour contractors, who are not part of the five individuals specifically mentioned in the statement of Shri Jiten Pujari. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 36 31.3. Accordingly, we find no infirmity in the order of the ld. CIT(A) in granting relief to the assessee with respect to the balance labour expenses, and we uphold the said findings. The ground raised by the Revenue in this regard is dismissed. 32. We now address the issue relating to the additions made by the Assessing Officer on account of purchases from M/s Balaji Steel and M/s New Chamunda Steel for assessment years 2018- 19, 2019-20, and 2020-21. The basis of the addition lies in certain diary notings found during the search conducted in connection with Shri Jiten Pujari. In the said diary, there is reference to a cash transaction with these parties during assessment year 2020-21. However, the Assessing Officer has extrapolated this finding to the preceding years as well and made additions to the purchases shown in those years wherever there were transactions with these two entities. 32.1. Upon a detailed analysis of the assessment order as well as the findings of the ld. CIT(A), we are inclined to agree with the conclusion drawn by the first appellate authority. It is trite law that no addition can be made merely on the basis of extrapolation unless there is supporting evidence to demonstrate that the pattern of cash payments persisted in earlier years as well. In the instant case, apart from the noting in the diary for AY 2020-21, no such evidence has been found indicating similar cash payments in the preceding years. 32.2. The principle of extrapolation, particularly in the absence of any corroborative documents or seized material for the earlier years, cannot be invoked mechanically. Notably, even in the Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 37 diary entries, there is no reference to cash dealings with these entities for AYs 2018-19 or 2019-20. The ld. CIT(A) has, therefore, rightly restricted the addition only to the amount reflected in the diary entry for AY 2020-21 and deleted the balance additions made for earlier years. 32.3. We do not find any perversity or legal infirmity in such a finding. Consequently, both the ground raised by the Revenue, challenging the relief granted by the CIT(A), and the ground raised by the assessee, seeking deletion of the sustained addition, are devoid of merit. Accordingly, the findings of the CIT(A) on this issue are affirmed, and both appeals are dismissed. C. Addition of both receipts and payments found noted in diaries / loose papers seized from the residence of Mr Jiten Pujari 33. As discussed above, during the course of search at the residence of Shri Jiten Pujari, certain diaries / loose papers found and in the statement recorded u/s 132(4), Shri Jiten Pujari admitted that these are the unrecorded transaction maintained as per the instruction of Ratankant Sharma who is the son of the assessee. The AO noted that the noting in the seized diaries are actually the parallel books of account containing systematic data wise record of unaccounted transactions of the group including the assessee. AO has noted 11 evidences in his order to substantiate that the noting on these Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 38 diaries related to the business of the assessee and its group companies. 34. Ld AR submitted that these diaries cannot be used for making any addition in the hands of assessee. He submitted that the conclusions drawn by the Ld. Assessing Officer with respect to the seized diaries are fundamentally flawed and contrary to both the factual matrix and settled legal principles. The reliance placed upon the said diaries as systematic books of unaccounted transactions attributable to the assessee is unjustified for the following detailed reasons: I. Entries Already Recorded in Regular Books of Account: He submitted that a number of the transactions recorded in the seized diaries have already been duly reflected in the regular books of account maintained by various group entities of the assessee. A detailed reconciliation and summary of such accounted transactions was submitted to the AO as well as Ld CIT(A). Further in the seized documents various place wise/ site wise cash book was maintained which have number of entries showing transfer of cash from one cash book to other cash book. Such entry needs to be nullified being contra entry and does not require separate addition. This clearly establishes that the seized material does not represent independent or unrecorded financial activity, and hence, the presumption drawn by the Ld. AO is factually baseless. II. Lack of Authorship and Identification: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 39 A majority of the pages in the seized diaries bear unidentified signatures, initials, or markings. The name of the assessee or any of its group concerns is conspicuously absent from most of these pages. This raises serious doubts about the authorship, ownership, and relevance of the documents to the assessee. Thus, the inference that the assessee had knowledge of or control over the diary is wholly erroneous and lacks evidentiary support. III. Cancelled and Redundant Entries: Many pages in the diary stand cancelled, struck off, or overwritten. There are also instances of identical entries appearing multiple times. Despite the obvious non-finality and duplicity of such notings, the Ld. AO has proceeded to treat them as genuine, unaccounted business transactions on the basis of assumptions and surmises—contrary to settled principles of evidence and accounting. IV. Personal and Fictitious Noting by Mr. Jiten Pujari: During the course of cross-examination proceedings, Mr. Jiten Pujari, the individual in whose possession the diaries were found, categorically stated that: a. Several notings were random jottings made during personal time, including scores of games played with friends. b. Some pages were written to teach accounting to his daughter and therefore contain fictitious entries. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 40 c. Certain entries pertain to friends or associates of Shri Ratankant Sharma or the assessee, made without any financial implication. These statements demonstrate the informal and non-business nature of the notings, further eroding the evidentiary value of the diaries. V. Third-Party Confirmation: The statement recorded under section 132(4) of the Act from Mr. Ashok Ummat, a friend and associate of Shri Ratankant Sharma, corroborates the fact that certain entries in the diaries relate to personal information and associates of Mr. Pujari, with no nexus to the assessee. VI. Irrelevant and Illogical Entries: Numerous entries pertain to individuals and entities wholly unconnected to the assessee. Additionally, the diaries contain projections and estimates rather than actual transactions. For instance: a. Page 9 of Annexure 44 is titled ―monthly payment projections.‖ b. Page from Annexure 42 records a future expenditure estimate for Mr. Clive Gray of USD 6,300. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 41 These clearly demonstrate that the diary does not reflect real- time financial transactions and cannot be treated as a systematic record of unaccounted business activity. VII. Mental Health and Conduct of the Diary Author: It is relevant to note that Mr. Jiten Pujari was suffering from severe mental health issues, which significantly affected his behaviour and cognitive functions. Evidence substantiating this fact is enclosed in paper book on page 74-77. It has been brought on record that Mr. Pujari had a tendency to make arbitrary and illogical notings in his personal diaries, without reference to actual events or transactions. In the absence of corroborative evidence, the contents of such documents are wholly unreliable and inadmissible. VIII. Cash Flow Inconsistencies: A cash flow statement, prepared by the assessee based on the diary entries as interpreted by the Ld. AO, reveals persistent negative cash balances over the recorded period. Such a scenario is not just improbable, but impossible in a real-world business setting. This further confirms that the diary entries are incoherent, fictitious, or arbitrarily prepared. IX. Mismatch with Alleged Cash Balances: The Ld. AO has further erred in treating Pages 25–26 and 29–32 of Annexure 38 as reflecting actual cash balances. However, when matched with the summary cash flow derived from these very diaries, it is evident that the alleged balances do not align or Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 42 reconcile with any real-time cash status. This clear inconsistency further invalidates the use of the diaries as a basis for any addition X. Applicability of section 292C of the Act AO made the addition on the plea that assessee failed to explained the transaction recorded in the seized diary without appreciating the fact that these diaries are not seized from the premises of the assessee but from the residence of Shri Jiten Pujari. Since neither the documents were found from the possession of the assesse nor he was author of these documents hence provisions of section 292C is not applicable on the assessee. He relied upon the decision of Mumbai ITAT in the case of his group company Triton Hotels & Resorts P Ltd (ITA No. 3123/Mum/2023) where the coordinating bench held as under: ―12.We have carefully perused the findings of the ld. CIT(A) qua the additions. The seized annexure being a scanned copy which is exhibited elsewhere, does not contain the name of the assessee anywhere. The said document was found and seized from the residential premises of Mr. Jiten Pujari. Therefore, the presumption is that the said document pertains to Mr. Jiten Pujari. As the name of the assessee is nowhere mentioned in the said document the presumption that it belongs to the assessee does not hold any water and most importantly it does not bear any signature neither of the AO nor of the assessee nor of any witnesses to suggest that it was impounded during the search proceedings.” XI. Cross examination during assessment proceeding Assessee sought cross examination of Shri Jiten Pujari during the assessment proceeding where he categorically stated that the most of the transaction recorded in the diary not related to the Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 43 assessee or his group companies. He stated that only basis of making addition is the statement of Shri Jiten Pujari and during cross examination he retracted his statement as the same was not voluntary. Once the key witness of revenue retracted during cross examination the addition based on his earlier statement can notbe sustained. XII. Procedural lapses in seizure of digital evidence AR submitted that AO has relied upon various digital evidence to correlate the noting in diary with the assessee. However, during the course of search no compliance of section 65B of the Indian Evidence Act. In absence of such compliance these digital evidence can not be used against the assessee. Reliance is placed on the decision of Mumbai ITAT in case of ACIT Vs. Prashant Nilawar( ITA No. 5689& 5073/Mum/2024). XIII. Double addition of single entry in the hands of various group companies AR further submitted that AO was sure about entity to whom the transaction pertains and she has added the same entry in the hands of various group companies on protective/ substantive basis. This also shows that the assessment is being done on presumption basis. He further added that in some cases amount has been added in two group companies on substantive basis. He draw our attention to the assessment order of Vardha Enterprises Pvt Ltd (VEPL) (Paper book page 115-131) where Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 44 addition on account of inflated expenses was considered in the hands of VEPL and same amount also added as unrecorded transaction in the hands of assessee on the basis of ledger of Udaipur account. 35. On the contrary Ld CIT- relied upon the finding of the AO as well as CIT(A) on credibility of the evidences found during the course of search with Shri Jiten Pujari. On addition as per peak credit basis, Ld CIT-DR submitted that CIT(A) has accepted the peak credit without any opportunity to the AO and he requested to restore the addition made by AO. 36. We have considered the rival submissions advanced by both the parties and have examined the facts and material on record. It is a settled proposition of law that not every entry or notation found in seized documents can, by itself, form the basis for an addition, particularly in the absence of supporting corroborative evidence. In this context, we also take judicial note of the provisions of section 65B of the Indian Evidence Act, which require a certificate for the admissibility of digital evidence. Where such a certificate is lacking, the authenticity and veracity of digital data remains legally unverified and, therefore, susceptible to challenge. 36.1 However, at the same time, we are equally mindful of the concerted efforts made by the Department during the course of the search proceedings, wherein substantial material purporting to reflect unrecorded transactions was unearthed. While procedural shortcomings in the treatment or presentation of such material may impede its evidentiary admissibility in a strict Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 45 sense, they cannot be allowed to render the Revenue entirely remediless, especially when the material prima facie indicates a pattern of non-disclosure or suppression. 36.2. The challenge, therefore, lies in striking a balance between the sanctity of procedural law and the substantive right of the Revenue to bring to tax real income that may have escaped assessment. It is in this light that we shall evaluate the evidentiary weight and relevance of such seized material in the subsequent analysis. We thus concur with the following findings of Ld. CIT(A) : “11.3.6 The sum and substance of the above decisions is that unlike criminalproceedings where the charge has to be proved beyond doubt, income-tax proceedings are quasi-judicial. Tax liability in cases of suspicious transactions has to be assessed on the basis of the material available on record, surrounding circumstances, human conduct and preponderance of probabilities. Rules of evidence do not govern income tax proceedings and the AO is not fettered or boundby technical rules contained in the Indian Evidence Act and is entitled to act on material which may not be accepted as evidence in a court of law. 11.3.7 In the above background, the specific safeguards of presumptions laid down in the provisions of the Income Tax Act in favour of the department cannot be ignored. As regards the appellant‟s claim that certificate u/s 65B of the Indian Evidence Act was not provided, the same is not applicable to the facts of this case. In every search and seizure action, the seizure is made in the presence of independent witnesses and a detailed Panchnama including how the electronic evidences were handled/seized is given to the search person. The appellant had conveniently omitted to refer to them. Therefore, the WhatsApp chats and other electronic evidences seized during the search proceedings have ample evidentiary value to the extent they are corroborative in nature. The WhatsApp chats do show the nexus between the appellant and the other principal constituents of the group and that the transactions are within their knowledge. The Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 46 decisions relied upon by the appellant in case of other criminal/civil proceedings cannot be imported into the Income Tax proceedings mechanically, in view of the specific presumptions available in Sec. 132 and Sec. 292C. This part of the argument of the appeal stands rejected. 11.4 The evidence no 8 to evidence no 11 as discussed by the AO in the assessment order is based on the documents/diaries seized during the search. These entries recorded in the seized documents have also been accepted by Shri Jiten Pujari as unaccounted cash transactions, therefore the contention of the appellant that the same carries no evidential value has no merit. 11.5 The appellant has pointed out certain evidences to show that the seized diary is a dumb document. For instance, he has stated that some of the pages contain random jottings enumerating the scores of games played, teaching to daughter, information of other persons/companies, recorded transactions, repetitive noting, cancelled pages, etc. I am not able to accept this argument of the appellant to reject the evidentiary value of the entire note book/diaries. Further, the statements given by Shri Pujari as well as the appellant himself corroborate multiple entries mentioned in the said diaries. Thus, a blanket rejection of the notebooks/diaries cannot be accepted. 11.6 From the above discussion, it is evident that the transactions are recorded in the diaries in a systematic manner, first in the form of journal entries and then in a ledger format. Further, it is seen that the entries mentioned in the diaries are corroborated with the statements recorded during the course of search proceedings as well as the regular books of account of the appellant. Therefore, these diaries maintained by Shri Jiten Pujari are nothing but the parallel books of accounts of the appellant. These entries clearly record the unaccounted cash transactions of the appellant. Hence, the contention of the appellant that these diareses are dumbdocument has no merit. It is evident from the above that the incriminating materialhas been found during the search conducted on the appellant and the additionsmade in the assessment order are based on these incriminating material. Therefore, appeal on the ground no 1 is DISMISSED” 37. Accordingly, legal ground raised by assessee in each of the year dismissed. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 47 38. We now turn to the core issue concerning the quantum of addition to be made on the basis of the seized documents recovered during the course of the search proceedings. At the very outset, it is pertinent to clarify that any addition made solely on the basis of notings in a diary or ledger must be approached with circumspection and balance. It is a well-settled principle that the entries in such documents cannot be construed as conclusive evidence of income unless corroborated with supporting material. Moreover, a holistic view of the transactions recorded therein must be undertaken, rather than cherry-picking entries that suit the Revenue‘s interest. In the present case, we find considerable force in the argument that both the receipts and payments recorded in the seized documents cannot be subjected to addition simultaneously. A perusal of the relevant documents, including the notebook seized and marked as Annexure A-42, reveals that the entries therein pertain to a range of business transactions undertaken by the Triton Group. The said annexure contains ledger accounts in the names of multiple individuals and employees associated with the group, including Shri Venkatesh, Shri Jiten, Shri Dharmendra Borse, Shri Siyaram Pandey, Shri Suresh Prasad Singh, Shri Raju Sharma, Shri Ashutosh Sharma, Shri Bhanwarlal, Shri Madan Gawas, Shri A. Verma, Shri Sudhir Sawant, Shri Dibakar Padhy, and Shri A. V. Marulkar, among others. It also includes entries under Salary A/c, reflecting internal disbursements. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 48 A closer examination of the notings in these ledgers clearly indicates that they predominantly represent cash payments made towards salaries and other internal expenses, rather than unaccounted receipts or income. These transactions appear to have been regularly executed as part of the assessee‘s business operations, and the pattern of entries corresponds to standard payroll-related disbursements. Further, during the course of post-search proceedings, the assessee has submitted detailed explanations and supporting documents, demonstrating that the aforementioned individuals were regular employees on the payroll of NICC—a fact which the ld.AO himself appears to have partially acknowledged in the assessment order. The details of payments made to these employees, as compiled and referred to by the ld.AO for assessment year 2018–19, are extracted and discussed herein below:- Name of the Employee PAN Amount (Rs.) Venkatesh BIOPS2013L 5,00,000 Jiten Pujari AGSPP1181H 1,60,000 Dhamendra Borse AHFPB1720L 6,00,000 Siyaram Pandey AOLPP1352E 2,60,000 Suresh Prasad Singh NA 48,000 Raju Sharma ALFPS2220Q 2,51,000 Ashutosh Sharma ALLPS5957J 4,91,000 Bhanwarlal BIAPB3745C 1,45,500 Madan Gawas NA 52,500 A verma NA 1,00,000 Sudhir Sawant ASAPK0090J 3,75,000 Dibakar Padhy BJAPP4287J 90,000 Salary A/c - 27,28,000 Total 58,01,000 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 49 39. Similarly, the notebook seized vide Annexure A-45 which has been titled ―MUMBAI‖, shows the receipt details recorded in the aforesaid annexure, it is seen that there is cash receipt of Rs. 98,41,416/- from various persons. The date wise details of the cash receipts as mentioned by the AO in the assessment order for AY 2018-19 is reproduced as under: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 50 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 51 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 52 40. Further the same notebook seized vide Annexure A-45 has been titled ―MUMBAI‖, the details of payment/expense of Rs. 80,69,894 made to various persons. The date wise details of the cash receipts as mentioned by the AO in the assessment order for AY 2018-19 is reproduced as under: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 53 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 54 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 55 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 56 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 57 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 58 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 59 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 60 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 61 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 62 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 63 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 64 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 65 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 66 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 67 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 68 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 69 41. Further, during the course of search in the statement recorded Assessee admitted that he is receiving some commission from the vendors who supply material/ services to Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 70 his infra projects and various hotels owned by group companies in cash. Relevant statement is reproduced hereunder: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 71 41. Upon a careful reading of the preceding statements, it Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 72 becomes evident that the various cash receipts recorded under different individual names may, in fact, represent part of a broader pattern of commission-based transactions. The multiplicity of entries does not necessarily connote multiple independent transactions but could be reflective of a single underlying commercial activity spread across aliases or intermediary accounts. 42. Based on the foregoing analytical discussion, it is abundantly clear that the impugned transactions primarily relate to business-linked cash flows, including both inflows and outflows, which were integral to the operations of the assessee. A significant portion of these entries pertains to cash disbursements made towards labour wages under the head Piece Rate Worker (PRW) expenses, routed through employees and project site associates. The seized records demonstrate a cycle of transactions reflecting operational exigencies rather than unexplained or unaccounted income. 42.1. Moreover, it is imperative to draw attention to a particular extract from the seized material, which comprises the highest value of cash receipts forming the cornerstone of the peak credit analysis adopted by both the assessee and the ld. CIT(A) during the assessment proceedings. This extract, being critical to the computation methodology, is reproduced hereinafter for ready reference and objective appreciation of the pattern of receipts. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 73 43. Upon careful examination of the seized records and the corresponding peak credit computation, it has come to our notice that the ld.AO interpreted the first three entries in the cash ledger as representing a cumulative cash receipt of ₹30,00,00,000. However, what stands out starkly from the seized material is the absence of any specific date associated with these entries. While the broader table of business-related cash receipts and payments appears to have been arranged in a chronological sequence, the particular entry of ₹30 crores lacks any contemporaneous date marker, thereby casting serious doubt on the chronological accuracy of the ledger. 43.1. Despite this crucial omission, the assessee, in its peak credit analysis submitted before the First Appellate Authority, Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 74 appears to have arbitrarily treated this undated sum as having been received on 01.04.2017. In our considered view, such an unverified assumption, made without the support of any documentary evidence, materially undermines the credibility and sanctity of the peak credit methodology adopted. The entire computation, being based on a flawed premise, stands vitiated by this fundamental inaccuracy. 44. We, therefore, find substantial merit in the grievance raised by the Revenue on this issue. A peak working exercise, to be relied upon for determination of taxable income, must necessarily reflect core factual parameters—such as the actual dates of receipts, the precise quantum, and the nexus of such receipts to corresponding business expenditures. Where such vital details are either omitted or misrepresented, the resultant computation loses its evidentiary value and cannot be treated as a valid basis for making additions. 44.1. We are, thus, constrained to hold that the peak working relied upon by the ld. CIT(A), being both factually erroneous and procedurally flawed, cannot be sustained. At the same time, we have also examined the assessee‘s contention that certain entries represent mere internal transfers of cash between different sets of books or accounts maintained for operational purposes. These entries, it is contended, neither represent fresh receipts nor new expenditures. Upon verification of the records, we find this contention to be substantiated, and accordingly, the ld. CIT(A) Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 75 has rightly excluded such entries from the computation of total receipts and payments. 45. It is a well-established principle of law that if the seized documents reflect both income and expenditure components, the Revenue cannot selectively rely upon only the income side while ignoring the expenditure entries. This principle has been judicially affirmed by the Hon‘ble Delhi High Court in the case of CIT vs. Indeo Airways Pvt. Ltd. [(2013) 349 ITR 85 (Del)], where it was held that once reliance is placed on a document, the entirety of its contents must be considered in a holistic manner. 45.1. In the present case, it is undisputed that the assessee has carried out business operations involving cash receipts as well as cash outflows directly linked to such receipts. In such a scenario, it would be inequitable to bring to tax the entire gross cash receipt without allowing for corresponding expenses incurred in the conduct of business. In order to strike a balance between substantive justice and the statutory mandate, we are inclined to hold that only the profit element embedded in the impugned cash receipts should be brought to tax, after allowing deduction towards related unrecorded business expenditures. 46. This view also finds statutory support in section 4 of the Income Tax Act, 1961, which forms the charging section and stipulates as under: Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 76 “Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every person.” 46.1. The term ―income‖, as defined under section 2(24) of the Act, includes ―profits and gains of business or profession‖, but not the gross receipts or turnover. This statutory scheme makes it abundantly clear that what is chargeable to tax is income—in other words, the net accretion to wealth—and not the entire quantum of cash passing through the business. 46.2. Accordingly, we are of the firm view that any addition, if warranted, ought to be restricted only to the profit margin relatable to the impugned cash receipts and not to the entire gross amount. In support of this principle, we shall presently refer to a series of judicial precedents that have consistently upheld the ratio that only the profit embedded in unaccounted turnover is liable to be taxed. 47. Jurisdictional Bombay High Court in the case of CIT v. Hariram Bhambhani ITA NO. 313 of 2013, wherein the court has held that only profit element embedded in the on-money therein shall be liable to be taxed and not the entire amount. The relevant extract from the judgment is reproduced as under: “60…..Further, admittedly the on-money is merely receipts of sale proceeds as noted by the Assessing Officer in his order at Page No. 3 and what could be taxed is only income and not receipts. We further note that in various judgements relied on above it has been Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 77 categorically held that on-money receipts are in the nature of sale price and not income per se. In the case of CIT v. President Industries [258 ITR 654 (Guj)] it has been held that the entire sum of undisclosed sale proceeds cannot be treated as income. Similar view has been taken by the Hon'ble Bombay High Court in the case of CIT v. Hariram Bhambhani ITA NO. 313 of 2013 & M/s. Sumer Builders in ITXA No. 4915 & 5130/MUM/2016 (A.Y: 2011- 12). Further in the case of Guruprerna Enterprises (supra) relying on Abhishek Corporation v. DCIT [63 TTJ (Ahd) 651] it has been held as under: - \"Even though it is established from seized documents that assessee was receiving premium/'on money' on booking of flats belonging to third parties, entire receipts of 'on money'/premium cannot be treated as undisclosed income of assessee; only net profit rate can be applied on unaccounted sales/receipts for making addition.\" The other judgements relied on by the assessee also support its case. The Ld. DR has not brought on record any contrary judgements. We, therefore, agree with the consistent view expressed in these judgements that on-money receipts are in the nature of undisclosed receipts and not income per-se and therefore only profit element embedded therein be liable to be taxed and not the entire on-money receipts.” 48. Hon’ble Bombay High Court in the case of CIT Vs. Prime Developers ITA No. 2452 of 2013, held as under: “(e). The grievance of the revenue before us is that the adoption of net profit of 17.08% as determined by the Tribunal is not correct. Although the questions as formulated does not state that the adoption of any particular rate of net profit, in submissions it is submitted that it has to be replaced/submitted by 65% as net profit as arrived at by the Assessing Officer. (f). We find that the revenue seeks to substitute the estimated net profit arrived at by the Tribunal with a new figure of net profit. This without in any manner showing that the estimate arrived at Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 78 by the Tribunal in the impugned order is perverse. It is a settled position of law that in estimated net profit arrived at by the authorities is a question of fact and if the material on record does support the estimate arrived at by the Tribunal then it does not give rise to any substantial question of law (see CIT Vs. Piramal Spinning and Weaving Mills Ltd. 124 ITR 408). In this case, we find that the net profit estimated at 17.08% is a very possible view on the facts found. (g). In the above view, question no. 1 as proposed does not give rise to any substantial question of law. Thus, not entertained.” 49. Hon’ble Gujarat High Court in the case of CIT Vs. President Industries 258 ITR 654 wherein “the Tribunal found that the entire sale could not have been added as income of the appellant for the assessment year in question but only to the extent the estimated profits embedded in the sales for which the net profit rate was adopted entailing addition of income on the suppressed amount of sales. The Tribunal also found that there is no material on the record to suggest that the appellant made any investment outside books of accounts to make alleged unaccounted sales in respect of the aforesaid appellate order.” 50. Hon’ble High Court of Gujarat in the case of CIT Vs. Leo Formulations (P.) Ltd wherein it was held that ―The Commissioner of Income-tax (Appeals) has recorded a finding that the estimate of income has to be rightly rational as well as based on the material on record, and that the entire sales or processing Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 79 charges cannot be treated as income chargeable to tax, unless there is any material to come to such conclusion.” 51. In the case of ITO Vs. Aradhana Textile Mills ITA No. 968/Ahd/2009 dated May 13, 2011it was held that “the entire sales or processing charges would not be the income of the assessee but only the net profit would be subjected to tax” 52. In light of the foregoing discussion and on careful examination of judicial precedents cited before us, it stands well- settled that in cases involving unaccounted cash receipts and expenditures, the addition is to be restricted to the reasonable profit margin embedded in such receipts, rather than taxing the gross amount. This principle strikes a just balance between the object of revenue collection and the foundational tenet of taxing only real income under the Income Tax Act. 52.1. The ld. CIT(A), while adjudicating the matter, has prepared a year-wise peak working based on the total receipts and payments reflected in the seized documents. Notably, neither the ld. Authorised Representative (AR) for the assessee nor the ld.DR has raised any objection to the structure or methodology of the said working. However, a specific submission has been made by the AR to the effect that, in the case of the group entity Vardha Enterprises Pvt. Ltd. (VEPL) an undisputed addition had already been made on account of inflated expenses, and that the same set of cash receipts stands reflected in the books of VEPL as well. 52.2. It is contended that such cash receipts are already taxed in the hands of VEPL, and therefore, to avoid double taxation, the Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 80 same ought to be reduced from the total cash receipts considered in the assessee‘s peak computation. Upon verification of the assessment order of VEPL, which forms part of the paper book placed on record, we find the assessee‘s contention to be factually correct. Accordingly, we direct that the relevant amount of cash receipts, which has already suffered taxation in VEPL, be excluded from the assessee‘s total unaccounted receipts, in order to arrive at the net cash receipt for purposes of applying the gross profit estimation. 53. The assessee has further raised a specific ground for assessment year 2016-17, questioning the inclusion of certain protective additions particularly those made in the hands of VEPL and Shri Ratankant Sharma in the assessee‘s peak working. With respect to VEPL, we have perused the order of the Hon‘ble ITAT in its case and find that the amount of ₹30,00,000 has been brought to tax on a substantive basis in its hands. Therefore, no such addition is warranted again in the hands of the assessee. 53.1.However, as regards Shri Ratankant Sharma, the protective addition continues to remain under dispute before the ld. CIT(A), and the matter is yet to attain finality. In the absence of conclusive adjudication in Shri Sharma‘s case, we find it appropriate to affirm the protective addition in the hands of the present assessee, on a substantive basis, so as to safeguard the interest of the Revenue. It is, however, clarified that once the addition is taxed substantively in the hands of the assessee, the same amount shall not be brought to tax again in the hands of Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 81 Shri Ratankant Sharma, so as to avoid double taxation of the same income. 54. On the final issue pertaining to the estimation of the profit element, the ld. AR has pleaded for the adoption of a gross profit (GP) rate of 15%, contending that such a rate is in consonance with the declared book results of the assessee in the regular return of income. While we have considered this plea with due regard, we are also guided by the nature of business, the operational structure, and the characteristics of the seized materials. In our considered opinion, a GP rate of 20% would be fair and reasonable in the facts and circumstances of the case and would appropriately capture the profit component embedded in the unaccounted cash transactions. 54.1. It has also been brought to our notice that for AY 2016-17, there are no cash receipts recorded, but only cash expenses, which are claimed to have been incurred out of receipts from PRW disbursements in the current or earlier years. However, in the absence of demonstrable availability of such cash balance carried forward from prior years, a deemed receipt is required to be computed in order to complete the assessment. Accordingly, we direct that a deemed cash receipt be reconstructed for AY 2016-17 by applying a GP rate of 20% on such expenses, thereby ensuring that the profit component of unaccounted business activity does not escape taxation. 54.2. For the sake of clarity, a year-wise tabulation of total unaccounted receipts and payments, as per the working Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 82 submitted before the CIT(A) for peak working, is reproduced hereunder :- Shri. Shiv Shankar Sharma Year-wise summary of total payment, receipt and peak additions A.Y. Total Payment Total Receipts Peak Addition 2016-17 86,12,000 86,12,000 2017-18 1,38,48,400 1,11,81,285 64,49,115 2018-19 4,20,17,670 31,89,81,416 28,87,20,885 2019-20 23,86,90,673 15,58,56,000 - 2020-21 27,50,77,581 38,29,01,000 6,46,20,487 2021-22 43,79,200 - 58,26,25,524 86,89,19,701 36,84,02,487 55. The above receipt needs to be adjusted as per finding given in para 52-53 above, which is as under: Shri. Shiv Shankar Sharma Year-wise summary of total receipt and GP addition A.Y. Total Receipts Cash Receipts related to Vardha Enterprises P Ltd Profit percentage @ 20% on net receipt Net Receipt 2016-17 1,07,65,000 - 1,07,65,000 21,53,000 2017-18 1,11,81,285 - 1,11,81,285 22,36,257 2018-19 31,89,81,416 53,90,000 31,35,91,416 6,27,18,283 2019-20 15,58,56,000 4,75,79,000 10,82,77,000 2,16,55,400 2020-21 38,29,01,000 4,56,68,000 33,72,33,000 6,74,46,600 2021-22 54,74,000 - 54,74,000 10,94,800 Total 87,96,84,701 9,86,37,000 78,10,47,701 15,73,04,340 56. The assessee has also raised a specific ground challenging the applicability of Section 115BBE of the Act in relation to the Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 83 additions made on the basis of entries in the seized documents, which were ultimately restricted by the ld. CIT(A) to the peak credit balance. Having regard to our finding above wherein we have held that the income embedded in the seized cash receipts is to be taxed as business income of the assessee it necessarily follows that the provisions of section 115BBE, which apply to deemed incomes such as unexplained cash credits, investments, or expenditures under sections 68, 69, 69A, etc., cannot be invoked in the present context. 56.1. The nature and character of the transactions, as borne out from the records, relate to unaccounted business receipts and not to unexplained investments or assets of the kind contemplated under section 69A. Consequently, such income falls within the regular charging provisions and is liable to be taxed at the applicable slab rates under normal provisions of the Act, and not at the punitive rate prescribed under section 115BBE. Accordingly, this ground of appeal raised by the assessee merits acceptance and is hereby allowed. 56.2. The ld. AR has also brought to our attention that during the course of the search, an amount of ₹12.35 crores in cash was found and added under section 69A by the Assessing Officer. The ld. CIT(A) deleted the same on the reasoning that the cash found was already subsumed in the peak credit balance. Now that we have reversed the approach of taxing the peak balance and instead directed that income be taxed based on gross profit Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 84 estimation on unaccounted receipts, we find that the cumulative income worked out year-wise is sufficient to cover the amount of cash found during the search. 56.3. Thus, the addition made under section 69A is no longer required to be made separately, since the said cash stands explained and adequately covered within the profit component embedded in the unaccounted business receipts. Accordingly, the deletion of the addition by the CIT(A) is upheld, albeit on a modified reasoning. No further addition under section 69A is warranted on this account. 57. In view of the detailed findings rendered above on each issue, the individual grounds raised in the appeals by the Revenue as well as by the assessee stand adjudicated and are accordingly disposed of in terms indicated hereinabove. AY 2015-16 Revenue’s Ground of Appeal ITA No. 2731/Mum/2025 Grou nd No. Nature of Ground Findings 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs.38,24,608/- made u/s 37(1) of the Act without appreciating that the assessee was not able to substantiate the allowability of the said expenses, nor was the assessee able to explain as to why the signed blank cheque books of the said parties were lying at the premises of Shri Jiten Pujari (employee of the assessee). The said ground of revenue is dismissed based on the finding given in para 30. 2. Whether on the facts and circumstances of The said ground of Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 85 the case and in law, the Ld. CIT(A) erred in allowing relief to the assessee of Rs 38,24,608/- out of disallowance made u/s 37(1) of the Act amounting to Rs.90,86,340/- relying on the reconciliation documents which were not produced before the Assessing Officer for verification during the assessment proceedings. revenue is dismissed based on the finding given in para 30. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing relief to the assessee by deleting the addition made in respect of unsecured loans amounting to Rs.25,11,000/- pertaining to loan taken, not considering the findings during the search action and not considering that no evidences were furnished to establish creditworthiness and genuineness of the transactions in view of the findings during the search action. The said ground of revenue is dismissed based on the finding given in para 24. Assessee’s grounds of appeal ITA No. 2684/Mum/2025 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an additions/disallowance in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case. This ground of the assessee is dismissed based on the finding given in para 35. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party. This ground of the assessee is dismissed based on the finding given in para 35. 3. On the facts and circumstances of the case as well as in law, the Learned This ground of the assessee is dismissed Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 86 CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary. based on the finding given in para 35. 4. On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872. This ground of the assessee is dismissed based on the finding given in para 35. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in assessing the earlier four years beyond six assessment year without appreciating the fact that no income in the form of assets had escaped to tax, without considering the facts & circumstances of the case. This ground of the assessee is dismissed as not being pressed. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.52,61,732 u/s 37(1) of the Income Tax Act, 1961 by treating the genuine expense as alleged non-genuine expenses, without considering the facts & circumstances of the case. The said ground of the assessee is partly allowed as per finding given in para 29. AY 2016-17 Revenue’s Ground of Appeal 1685/Mum/2025 Ground No. Nature of Ground Findings 1. 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) The said ground of revenue is dismissed Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 87 erred in deleting the addition made u/s 68 of the Act in respect of the Unsecured loans of Rs.2,35,02,658/- since the assessee had failed to establish the creditworthiness of the loan parties during the assessment proceedings. Also, no explanation was filed to explain as to why the signed cheque-books of the Loan parties were lying at the residential premises of Shri Jiten Pujari, who is a key employee of the proprietary concern of the assessee viz Noble India Construction Company: based on the finding given in para 29. 2. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 68 of the Act in respect of unsecured loans of Rs.2,35,02,658/- without appreciating the fact that the assessee had failed to establish the identity, creditworthiness of the lenders and genuineness of the unsecured loans during the assessment proceedings; The said ground of revenue is dismissed based on the finding given in para 29. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in admitting the additional grounds filed by the assessee regarding adoption of Theory of Peak Credit without appreciating the fact that the ground of applicability of Peak Credit Theory had not been submitted before the Assessing Officer during the assessment proceedings owing to which the Assessing Officer was deprived from verifying the merits of the submissions pertaining to adoption of Peak Credit Theory by the assessee; The said ground of revenue is partly allowed based on the finding given in para 32-55. 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not forwarding the submissions pertaining to the additional grounds relating to Peak Credit to the Assessing Officer so as to allow him an opportunity to verify whether the assessee has The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 88 submitted documentary evidences that would establish that the entries of cash receipts have a direct nexus with the cash payments mentioned therein. 5. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing relief to the assessee by accepting the submission of the assessee regarding application of Peak Credit to the cash receipts and cash payments without appreciating the fact that the additions were made on the basis of noting found in the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cell phones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee. The said ground of revenue is partly allowed based on the finding given in para 32-55. 6. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the assessee had failed to explain the sources of the cash receipts found recorded in the notebooks/ diaries seized from residence of Shri Jiten Pujari, found recorded in the WhatsApp chats and images backup retrieved from the cell phones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action; The said ground of revenue is partly allowed based on the finding given in para 32-55. 7. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act of Rs.24,12,000/-on account of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cell phones of Shri Jiten Pujari and Shri The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 89 Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee; 8. 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act of Rs. 62,00,000/-on account of unexplained expenditure in respect of payments made to K L Kothari by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cell phones of Shri Jiten Pujari and Shri RatankantShurma during the search action containing details of unaccounted cash transactions of the assessee; The said ground of revenue is partly allowed based on the finding given in para 32-55. 9. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act of Rs.30,00,000/-on account of unexplained expenditure relating to payments made to Shri RavindraAdsureby adoption of Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cell phones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee; The said ground of revenue is dismissed being protective addition in hands of assessee and ITAT has confirmed addition in hands of Vardha as discussed in para 32- 55. 10. 5. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act of Rs.20,00,000/-on account of unexplained expenditure relating to payments reflected in the ledger account titled 'Ratan K Sharma' on the basis of adoption of Peak Credit The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 90 without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cell phones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee. Assessee’s grounds of appeal ITA No. 2159/Mum/2025 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an additions/disallowance in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case. This ground of the assessee is dismissed based on the finding given in para 35. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party. This ground of the assessee is dismissed based on the finding given in para 35. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary. This ground of the assessee is dismissed based on the finding given in para 35. 4. On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in This ground of the assessee is dismissed based on the finding Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 91 relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872. given in para 35. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making a disallowance of Rs.11,11,600/- u/s 37(1) of the Income Tax Act, 1961 by treating the genuine expenses as alleged non-genuine expenses, without considering the facts & circumstances of the case. The said ground of the assessee is partly allowed as per finding given in para 29. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the additions to the extent of Rs.86,12,000/- on the basis of the peak balance of alleged receipts and payments noted in the diaries maintained by Shri Jiten Pujari, without considering the facts & circumstances of the case. The said ground of assessee is partly allowed based on the finding given in para 32-55. 7. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in invoking the provision of Section 115BBE of the Act, without considering the facts & circumstances of the case. The said ground of assessee is allowed based on the finding given in para 56. 8. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in giving direction to the AO to calculate peak of all the transaction which are not related to assessee and/or not found at the premises of the assessee. The said ground of assessee is allowed based on the finding given in para 32-55. 9. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.24,12,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact The said ground of assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 92 that the said transaction does not belong to the appellant. 10. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s. 69C of the Income Tax Act, 1961 of Rs.62,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 11. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in allowing the addition of Rs.30,00,000/- by giving findings that the same has been considered in the peak working, without appreciating the fact that the said addition was made in the hands of the assessee on protective basis. The said ground of assessee is allowed as the same is being added on protective basis as per finding given in para 32-55. 12. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in allowing the addition of Rs. 20,00,000/- by giving findings that the same has been considered in the peak working, without appreciating the fact that the said addition was made in the hands of the assessee on protective basis. The said ground of assessee is partly allowed based on the finding given in para 32-55. AY 2017-18 Revenue’s Ground of Appeal 1686/Mum/2025 Ground of Appeal No. Nature of Ground Findings 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in admitting the additional grounds filed by the assessee regarding adoption of The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 93 Theory of Peak Credit without appreciating the fact that the ground of applicability of Peak Credit Theory had not been submitted before the Assessing Officer during the assessment proceedings owing to which the Assessing Officer was deprived from verifying the merits of the submissions pertaining to adoption of Peak Credit Theory by the assessee; 2. 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not forwarding the submissions pertaining to the additional grounds relating to Peak Credit to the Assessing Officer so as to allow him an opportunity to verify whether the assessee has submitted documentary evidences that would establish that the entries of cash receipts have a direct nexus with the cash payments mentioned therein; The said ground of revenue is partly allowed based on the finding given in para 32-55. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing relief to the assessee by accepting the submission of the assessee regarding application of Peak Credit to the cash receipts and cash payments without appreciating the fact that the additions were made on the basis of noting found in the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 94 4. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the assessee had failed to explain the sources of the cash receipts found recorded in the notebooks/ diaries seized from residence of Shri Jiten Pujari, found recorded in the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 5. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 11,88,000/- made u/s 69C of the Act, in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 6. 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 24,32,500/- made u/s 69C of the Act, in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 95 cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 7. 5. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 16,60,000 /- made u/s 69C of the Act, in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 8. 6. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 65,44,785/- u/s 69A of the Act, on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the Whatsapp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions. The said ground of revenue is partly allowed based on the finding given in para 32-55. 9. 7. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 46,36,500 /- u/s 69A of the Act, on account of unexplained money by adopting Peak Credit without appreciating that the The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 96 same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions. 10. 8. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 26,02,400/- u/s 69C of the Act, in respect of unexplained expenditur by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 11. 9. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 2,28,500/- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 12. Whether on the facts and circumstances of the case and in law, The said ground of revenue is partly Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 97 the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 37,00,000/- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. allowed based on the finding given in para 32-55. 13. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 5,00,000/- u/s 69A of the Act, on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions. The said ground of revenue is partly allowed based on the finding given in para 32-55. 14. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 15,22,000/- u/s 69C of the Act, in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 98 cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 15. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 12,50,000/- u/s 69C of the Act, in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Assessee’s grounds of appeal ITA No. 2160/Mum/2025 1. 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an additions/disallowance in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee. This ground of the assessee is dismissed based on the finding given in para 35. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party. This ground of the assessee is dismissed based on the finding given in para 35. 3. 2. On the facts and circumstances of This ground of the Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 99 the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary. assessee is dismissed based on the finding given in para 35. 4. On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872. This ground of the assessee is dismissed based on the finding given in para 35. 5. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the additions to the extent of Rs.64,49,115/- on the basis of the peak balance of alleged receipts and payments noted in the diaries maintained by Shri Jiten Pujari, without considering the facts & circumstances of the case. The said ground of assessee is partly allowed based on the finding given in para 32-55. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in invoking the provision of Section 115BBE of the Act, without considering the facts & circumstances of the case. The said ground of assessee is allowed based on the finding given in para 56. 7. 4. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in giving direction to the AO to calculate peak of all the transaction which are not The said ground of assessee is allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 100 related to assessee and/or not found at the premises of the assessee. 8. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.11,88,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 9. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.24,32,500/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 10. 7. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.16,60,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 11. 8. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by The said ground of assessee is partly allowed based on the finding given in para Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 101 the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.65,44,785/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. 32-55. 12. 9. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.46,36,500/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 13. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.26,02,400/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 14. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.2,28,500/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 102 15. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.37,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 16. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.5,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. 17. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.15,22,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. The said ground of assessee is partly allowed based on the finding given in para 32-55. AY 2018-19 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 103 Revenue’s Ground of Appeal ITA No. 1687/Mum/2025 Ground No. Nature of Ground Findings 1 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in admitting the additional grounds filed by the assessee regarding adoption of Theory of Peak credit without appreciating the fact that the ground of applicability of Peak Credit Theory had not been submitted before the Assessing Officer during the assessment proceedings owing to which the Assessing Officer was deprived from verifying the merits of the submissions pertaining to adoption of Peak Credit Theory by the assessee; The said ground of revenue is partly allowed based on the finding given in para 32-55. 2 Whether on the facts and circumstances of the case and in law, the Ld. CITA) erred in not forwarding the submissions pertaining to the additional grounds relating to Peak Credit to the Assessing Officer so as to allow him an opportunity to verify whether the assessee has submitted documentary evidences that would establish that the entries of cash receipts have a direct nexus with the cash payments mentioned therein; The said ground of revenue is partly allowed based on the finding given in para 32-55. 3 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing relief to the assessee by accepting the submission of the assessee regarding application of Peak Credit to the cash receipts and cash payments without The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 104 appreciating the fact that the additions were made on the basis of noting found in the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee. 4 Whether on the facts and circumstances of the case and in law, the Ld. CI(A) erred in not appreciating the fact that the assessee had failed to explain the sources of the cash receipts found recorded in the notebooks/ diaries seized from residence of Shri Jiten Pujari, found recorded in the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 5 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 5,53,400/- u/s 68 of the Act in respect of unsecured loans without appreciating the fact that the assessee had failed to establish the identity, creditworthiness of the lenders and genuineness of the unsecured loans during the assessment proceedings. Further, the Ld. CIT(A) erred in not appreciating that the above loans were not opening balances but were loans obtained during the financial year relevant to A. Y. 2021-22. Also, The said ground of revenue is dismissed based on the finding given in para 24. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 105 no cogent explanation was filed to explain as to why the signed blank cheque-books of the Loan parties were lying at the residential premises of Shri Jiten Pujari, who is a key employee of the proprietary concern of the assessee viz Noble India Construction Company: 6 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance u/s 37(1) of the Act made on account of bogus purchases of Rs 1,54,629/- from New Chamunda Steel for the reason that no incriminating material was found in respect of the above entity relevant to the instant assessment year even though the Id CIT(A) had confirmed the disallowance made in respect of the same entities while adjudicating on the Issue in appeal for AY. 2020- 21 The said ground of revenue is dismissed based on the finding given in para 31. 7 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 58,01,000 in respect of unexplained expenditure as payments made to various employees by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 106 8 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 60,16,200 in respect of unexplained expenditure pertaining to Mumri project by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 9 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs. 98,41,416 in respect of unexplained money pertaining to Mumbai project by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 10 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 26,29,894 in respect of unexplained expenditure pertaining to Mumbai Project by adopting Peak Credit without appreciating that the The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 107 same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 11 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs. 1,21,40,000 in respect of unexplained money in respect of ledger titled \"Mumbai Cash Book\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 12 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 3,50,000 in respect of unexplained expenditure in respect of ledger titled \"Mumri Project account\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 108 13 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 17,00,000 in respect of unexplained expenditure in respect of payments made to KI. Kothari by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 14 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 18,16,263 in respect of unexplained expenditure in respect of ledger titled \"MV nair\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 15 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 4,00,000 in respect of unexplained expenditure in respect of ledger titled MEP by adopting Peak Credit without appreciating that the The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 109 same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 16 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 39,03,982 in respect of unexplained expenditure in respect of ledger titled Foreign exchange by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 17 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 45,00,000 in respect of unexplained expenditure in respect of ledger titled Sh SS ji a/c by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 110 18 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs. 30,00,00,000 in respect of unexplained money pertaining to ledger titled Udaipur A/c and Rec‟d by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 19 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 70,993 in respect of unexplained expenditure pertaining to ledger titled Air Ticket by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 20 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 1,89,848 in respect of unexplained expenditure pertaining to ledger titled \"Misc\" by adopting Peak Credit without appreciating that the The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 111 same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 21 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 70,903 in respect of unexplained expenditure pertaining to ledger titled \"Medical Jaipur” by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 22 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 50,000 in respect of unexplained expenditure pertaining to ledger titled \"Raju Sharma School Fees\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 112 23 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 92,74,951 in respect of unexplained expenditure pertaining to ledger titled \"Flat Interior Decoration by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 24 Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 4,00,000 in respect of unexplained expenditure pertaining to ledger titled \"PS Kamlesh interest account\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Assessee’s grounds of appeal 2161/Mum/2025 Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 113 1 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an additions/disallowance in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case. This ground of the assessee is dismissed based on the finding given in para 35. 2 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party. This ground of the assessee is dismissed based on the finding given in para 35. 3 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary. This ground of the assessee is dismissed based on the finding given in para 35. 4 On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872 This ground of the assessee is dismissed based on the finding given in para 35. 5 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing The said ground of assessee is partly allowed based on the finding given in Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 114 Officer in making a disallowance of Rs.19,32,300/- u/s 37 of the Income Tax Act, 1961 by treating the genuine expenses as alleged non-genuine expenses, without considering the facts & circumstances of the case. para 29. 6 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the additions to the extent of Rs.28,87,20,885/- on the basis of the peak balance of alleged receipts and payments noted in the diaries maintained by Shri Jiten Pujari, without considering the facts & circumstances of the case. This ground of the assessee is dismissed based on the finding given in para 32-55. 7 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in invoking the provision of Section 115BBE of the Act, without considering the facts & circumstances of the case. The said ground of assessee is allowed based on the finding given in para 56. 8 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in giving direction to the AO to calculate peak of all the transaction which are not related to assessee and/or not found at the premises of the assessee This ground of the assessee is allowed based on the finding given in para 32-55. 9 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.58,01,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 115 not belong to the appellant. 10 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.60,16,200/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 11 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.98,41,416/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 12 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.26,29,894/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 13 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.1,21,40,000/- as alleged This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 116 unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. 14 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.3,50,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 15 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.17,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 16 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.18,16,263/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 17 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned This ground of the assessee is partly allowed based on the finding given in Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 117 Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.4,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. para 32-55. 18 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.39,03,982/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 19 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.45,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 20 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.30,00,00,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 118 21 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.70,993/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 22 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.18,98,484/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 23 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.70,903/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 24 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.50,000/- as alleged unexplained expenditure, under the peak working, without This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 119 appreciating the fact that the said transaction does not belong to the appellant. 25 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.92,74,951/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 26 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.4,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. AY 2019-20 Revenue’s Ground of Appeal ITA No. 1688/Mum/2025 Ground No. Nature of Ground Findings 1 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in admitting the additional grounds filed by the assessee regarding adoption of Theory of Peak Credit without appreciating the fact that the ground The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 120 of applicability of Peak Credit Theory had not been submitted before the Assessing Officer during the assessment proceedings owing to which the Assessing Officer was deprived from verifying the merits of the submissions pertaining to adoption of Peak Credit Theory by the assessee; 2 Whether on the facts and circumstances of the case and in law, the Ld CITA) erred in not forwarding the submissions pertaining to the additional grounds relating to Peak Credit to the Assessing Officer so as to allow him an opportunity to verify whether the assessee has submitted documentary evidences that would establish that the entries of cash receipts have a direct nexus with the cash payments mentioned therein; The said ground of revenue is partly allowed based on the finding given in para 32-55. 3 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee by accepting the submission of the assessee regarding application of Peak Credit to the cash receipts and cash payments without appreciating the fact that the additions were made on the basis of noting found in the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 121 4 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that the assessee had failed to explain the sources of the cash receipts found recorded in the notebooks/ diaries seized from residence of Shri Jiten Pujari, found recorded in the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 5 Whether on the facts and circumstances of the case and in law, the ld CIT(A) erred in deleting the disallowance u/s 37(1) of the Act made on account of bogus purchases of Rs 33,09,656/- from New Chamunda Steel and Balaji Steel and deleting addition u/S 69C in respect of commission of Rs.1,69 975/-for the reason that no incriminating material was found in respect of the above entity relevant to the instant assessment year even though the Id CIT(A) had confirmed the disallowance made in respect of the same entities while adjudicating on the Issue in appeal for AY. 2020- 21 The said ground of revenue is dismissed based on the finding given in para 31. 6 Whether on the facts and circumstance of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee of Rs.67,35,760/- out of disallowance made u/s 37(1) of the Act amounting to Rs.2,89,73, 175/- relying on documents which were not produced before the Assessing Officer for verification during the assessment proceedings The said ground of revenue is dismissed based on the finding given in para 30. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 122 7 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs. 14,57,656 /- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions The said ground of revenue is partly allowed based on the finding given in para 32-55. 8 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 24,78,000/- in respect of unexplained expenditure in respect of payments made to various employees by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 9 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs 30,56,000 /- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 123 diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions 10 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 40,51,365 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 11 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs. 3,68,00,000/- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions The said ground of revenue is partly allowed based on the finding given in para 32-55. 12 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the The said ground of revenue is partly allowed based on the finding given in para Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 124 Act, of Rs. 4,70,00,000/- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions 32-55. 13 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 6,67,71,025/- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri JitenPujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 14 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 30,58,397/- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 125 15 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 30,00,000/- in respect of unexplained expenditure in respect of payments made to KI. Kothari by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 16 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs.15,54,30,000/- in respect of unexplained expenditure in respect of ledger titled Sh SS ji a/c by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 17 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs. 65000000/- on account of unexplained money pertaining to ledger titled Udaipur A/c and Rec‟d by adopting Peak Credit without appreciating that the same had been The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 126 made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions 18 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 24,886 /- in respect of unexplained expenditure pertaining to ledger titled \"Medical Jaipur\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 19 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 25,000 /- in respect of unexplained expenditure pertaining to ledger titled \"Raju Sharma School Fees\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 127 20 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 7,90,000/- in respect of unexplained expenditure pertaining to ledger titled \"PS KamleshImprest A/c” by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 21 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 40,12,000/- in respect of unexplained expenditure pertaining to ledger titled \"Jaipur FunitureNareshMewada\" by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 22 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. \" 300000/- in respect of unexplained expenditure in respect of payments made to Shri The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 128 RavindraAdsure by adopting Peak Credit without appreciating that the same had been made on the basis of notings found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. Assessee’s grounds of appeal ITA No. 2162/Mum/2025 1 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an addition /disallowance in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case. This ground of the assessee is dismissed based on the finding given in para 35. 2 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party. This ground of the assessee is dismissed based on the finding given in para 35. 3 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself This ground of the assessee is dismissed based on the finding given in para 35. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 129 has denied during cross examination before Assessing Officer about authenticity of data in seized diary. 4 On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872 This ground of the assessee is dismissed based on the finding given in para 35. 5 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.2,22,37,415/-u/s 37(1) of the Income Tax Act, 1961 by treating the genuine expenses as alleged non-genuine expenses, without considering the facts & circumstances of the case. The said ground of assessee is partly allowed based on the finding given in para 29. 6 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in invoking the provision of Section 115BBE of the Act, without considering the facts & circumstances of the case. This ground of the assessee is allowed based on the finding given in para 56. 7 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in giving to the AO to calculate peak of all the transaction which are not related to assessee and/or not found at the premises of the assessee. This ground of the assessee is allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 130 8 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.14,57,656/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 9 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.24,78,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 10 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.30,56,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 11 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.40,51,365/- as alleged unexplained expenditure, under the This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 131 peak working, without appreciating the fact that the said transaction do not belong to the appellant. 12 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.3,68,00,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 13 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.4,70,00,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 14 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.6,67,71,025/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 132 15 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.30,58,397/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 16 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.30,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 17 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.15,54,30,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 18 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.6,50,00,000/- as alleged unexplained money, under the peak This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 133 working, without appreciating the fact that the said transaction does not belong to the appellant. 19 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.24,886/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 20 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.25,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 21 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.7,90,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 134 22 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.40,12,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 23 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.3,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. AY 2020-21 Revenue’s Ground of Appeal ITA No. 1689/Mum/2025 Ground No. Nature of Ground Findings 1. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in admitting the additional grounds filed by the assessee regarding adoption of Theory of Peak Credit without appreciating the fact that the ground of applicability of Peak Credit Theory The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 135 had not been submitted before the Assessing Officer during the assessment proceedings owing to which the Assessing Officer was deprived from verifying the merits of the submissions pertaining to adoption of Peak Credit Theory by the assessee; 2. Whether on the facts and circumstances of the case and in law, the Ld CITA) erred in not forwarding the submissions pertaining to the additional grounds relating to Peak Credit to the Assessing Officer so as to allow him an opportunity to verify whether the assessee has submitted documentary evidences that would establish that the entries of cash receipts have a direct nexus with the cash payments mentioned therein; The said ground of revenue is partly allowed based on the finding given in para 32-55. 3. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee by accepting the submission of the assessee regarding application of Peak Credit to the cash receipts and cash payments without appreciating the fact that the additions were made on the basis of noting found in the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 136 4. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that the assessee had failed to explain the sources of the cash receipts found recorded in the notetrooks/ diaries seized from residence of Shri Jiten Pujari, found recorded in the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and ShrlRatankant Sharma during the search action; The said ground of revenue is partly allowed based on the finding given in para 32-55. 5. Whether on the facts and circumstances of the case and in law, the ta CIT(A) erred in deleting the disallowance u/s 37(1) of the Act made on account of bogus purchases to the extent of Rs.82,90,734/- from New Chamunda Steel, Sagar Enterprises and Balaji Steel out of total disallowance of Rs. 1,14,86,320/- for the reason that no incriminating material was found in respect of the above entities in respect of the amount of Rs.82,90,734/-even though the Ld CIT(A) had confirmed the disallowance made in respect of the same, entities for the balance amount of Rs.31,95,386/- claimed to have been effected from the same parties: The said ground of revenue is dismissed based on the finding given in para 31. 6. Whether on the facts and circumstance of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee of Rs. 1,58,67,325/- relying on documents which were not produced before the Assessing Officer for verification during the assessment proceedings The said ground of revenue is dismissed based on the finding given in para 31. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 137 7. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 3,60,000 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 8. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs. 35,16,56,000/- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions The said ground of revenue is partly allowed based on the finding given in para 32-55. 9. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 25,00,000 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 138 images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 10. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs. 98,90,244 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 11. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 78,42,356 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 12. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 5,47,50,460 /- in respect of unexplained expenditure by The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 139 adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 13. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs 68,00,000 /- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions The said ground of revenue is partly allowed based on the finding given in para 32-55. 14. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 41,70,410 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 140 15. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 1,52,83,900 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 16. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs 2,14,45,000 /- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions The said ground of revenue is partly allowed based on the finding given in para 32-55. 17. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs 35,00,000 /- on account of unexplained money by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from, residence of Shri Jiten Pujari, the WhatsApp chats and The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 141 images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search actions 18. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 28,06,510 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 19. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 30,00,000 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 20. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 12,50,000 /- in respect of unexplained expenditure by adopting The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 142 Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 21. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 12,11,967 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 22. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 10,10,000 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 143 23. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 7,58,50,000 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 24. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 10,03,25,000 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. 25. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 16,16,48,260 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 144 WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 26. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 88,50,484 /- in respect of unexplained expenditure by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. The said ground of revenue is partly allowed based on the finding given in para 32-55. Assessee’s grounds of appeal ITA No. 2163/Mum/2025 1 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making additions/disallowance in the assessment completed u/s 143(3) r.w.s. 153A of the Act without any incriminating documents being found during the course of search at premise of the assessee, without considering the facts and circumstances of the case. This ground of the assessee is dismissed based on the finding given in para 35. 2 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on This ground of the assessee is dismissed based on the finding given in para 35. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 145 the basis of the evidence found at the premises of the third party. 3 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary. This ground of the assessee is dismissed based on the finding given in para 35. 4 On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872. This ground of the assessee is dismissed based on the finding given in para 35. 5 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.1,52,57,040/- u/s 37(1) of the Income Tax Act, 1961 by treating the genuine expenses as alleged non-genuine expenses, without considering the facts & circumstances of the case. The said ground of assessee is partly allowed based on the finding given in para 29. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 146 6 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the disallowance made by the Learned Assessing Officer to the extent of Rs.31,95,386/- u/s 37(1) of the Income Tax Act, 1961 by treating the genuine expenses as alleged non-genuine expenses, without considering the facts & circumstances of the case. The said ground of assessee is dismissed based on the finding given in para 31. 7 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in restricting the additions to the extent of Rs.6,46,20,487/- on the basis of the peak balance of alleged receipts and payments noted in the diaries maintained by Shri Jiten Pujari, without considering the facts & circumstances of the case. This ground of the assessee is partlyallowed based on the finding given in para 32-55. 8 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in invoking the provision of Section 115BBE of the Act, without considering the facts & circumstances of the case. This ground of the assessee is allowed based on the finding given in para 56. 9 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in giving direction to the AO to calculate peak of all the transaction which are not related to assessee and/or not found at the premises of the assessee This ground of the assessee is allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 147 10 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.3,60,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 11 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.35,16,56,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 12 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.25,00,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 148 13 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.98,90,244/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 14 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.78,42,356/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. N.A. 15. This ground of the assessee is partly allowed based on the finding given in para 32-55. 15 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.5,47,50,460/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 149 16 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.68,00,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 17 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.41,70,410/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 18 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.1,52,83,900/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 150 19 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.2,14,45,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 20 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69A of the Income Tax Act, 1961 of Rs.35,00,000/- as alleged unexplained money, under the peak working, without appreciating the fact that the said transaction does not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 21 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.28,06,510/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 22 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.30,00,000/- as alleged unexplained expenditure, under the This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 151 peak working, without appreciating the fact that the said transaction do not belong to the appellant. 23 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.12,50,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 24 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.12,11,967/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 25 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.10,10,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 152 26 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.7,58,50,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 27 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.16,16,48,260/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 28 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.88,50,484/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. AY 2021-22 Revenue’s Ground of Appeal ITA No. 1690/Mum/2025 Ground No. Nature of Ground Findings 1 Whether on the facts and The said ground of revenue is Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 153 circumstances of the case and in law, the Ld CIT(A) erred in admitting the additional grounds filed by the assessee regarding adoption of Theory of Peak Credit without appreciating the fact that the ground of applicability of Peak Credit Theory had not been submitted before the Assessing Officer during the assessment proceedings owing to which the Assessing Officer was deprived from verifying the merits of the submissions pertaining to adoption of Peak Credit Theory by the assessee; partly allowed based on the finding given in para 32-55. 2 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in not forwarding the submissions pertaining to the additional grounds relating to Peak Credit to the Assessing Officer so as to allow him an opportunity to verify whether the assessee has submitted documentary evidences that would establish that the entries of cash receipts have a direct nexus with the cash payments mentioned The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 154 therein; 3 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee by accepting the submission of the assessee regarding application of Peak Credit to the cash receipts and cash payments without appreciating the fact that the additions were made on the basis of noting found in the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action containing details of unaccounted cash transactions of the assessee The said ground of revenue is partly allowed based on the finding given in para 32-55. 4 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that the assessee had failed to explain the sources of the cash receipts found recorded in the notebooks/ diaries seized from residence of Shri Jiten Pujari, found recorded in the WhatsApp chats and The said ground of revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 155 images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 5 Whether on the facts and circumstances of the case and in law, the ta CIT(A) erred in deleting the disallowance u/s 37(1) of the Act made on account of bogus purchases to the extent of Rs.82,90,734/- from New Chamunda Steel, Sagar Enterprises and Balaji Steel out of total disallowance of Rs. 1,14,86,320/- for the reason that no incriminating material was found in respect of the above entities in respect of the amount of Rs.82,90,734/-even though the Ld CIT(A) had confirmed the disallowance made in respect of the same, entities for the balance amount of Rs.31,95,386/- claimed to have been effected from the same parties. The said ground of revenue is dismissed based on the finding given in para 31. 6 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, in respect of unexplained expenditure pertaining to bogus The said ground of revenue is dismissed based on the finding given in para 31. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 156 purchases of Rs 72,228/- from New Chamunda Steel and commission of Rs.3611/- by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. 7 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69A of the Act, of Rs 12,35,30,000/- on account of unexplained money in the form of cash found during the search action adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. Cash found during search do not require separate addition as the same will subsume in the addition made on account of gross profit addition which is more than the cash found during search, hencethis ground dismissed as discussed in para 56 above. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 157 8 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 1,05,00,000 /- in respect of unexplained expenditure in respect of ledger account titled „ShSsji a/c‟ by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. This ground of the revenue is partly allowed based on the finding given in para 32-55. 9 Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition made u/s 69C of the Act, of Rs 6,54,000 /- in respect of unexplained expenditure pertaining to note book titles “Kawdas” by adopting Peak Credit without appreciating that the same had been made on the basis of noting found the notebooks/ diaries seized from residence of Shri Jiten This ground of the revenue is partly allowed based on the finding given in para 32-55. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 158 Pujari, the WhatsApp chats and images backup retrieved from the cellphones of Shri Jiten Pujari and Shri Ratankant Sharma during the search action. Assessee’s grounds of appeal ITA No. 2164/Mum/2025 1 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition/disallowance on the basis of the evidence found at the premises of the third party This ground of the assessee is dismissed based on the finding given in para 35. 2 On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in making an addition based on statement of Jiten Pujari without appreciating the fact that he himself has denied during cross examination before Assessing Officer about authenticity of data in seized diary. This ground of the assessee is dismissed based on the finding given in para 35. 3 On the facts and circumstances of the case, the Learned CIT(A) as well as the Learned Assessing Officer has erred in relying upon the digital evidences without issuing any certificate u/s 65B of the Indian Evidence Act,1872 This ground of the assessee is dismissed based on the finding given in para 35. 4 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in invoking the provision of Section 115BBE of the Act, without considering the facts & This ground of the assessee is allowed based on the finding given in para 56. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 159 circumstances of the case. 5 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in giving direction to the AO to calculate peak of all the transaction which are not related to assessee and/or not found at the premises of the assessee. This ground of the assessee is allowed based on the finding given in para 32-55. 6 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.1,05,00,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 7 On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in considering the addition made by the Learned Assessing Officer u/s.69C of the Income Tax Act, 1961 of Rs.6,54,000/- as alleged unexplained expenditure, under the peak working, without appreciating the fact that the said transaction do not belong to the appellant. This ground of the assessee is partly allowed based on the finding given in para 32-55. 58. Accordingly all the appeals filed by the revenue are dismissed and the assessee‘s appeals are partly allowed in the manner given above. Printed from counselvise.com ITA No.2681/Mum/2025 and others Shri Shiv Shankar Sharma 160 59. In the result, all the appeals filed by the revenue are dismissed and the assessee’s appeals are partly allowed. Order pronounced on 8th August, 2025. Sd/- (GIRISH AGRAWAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 08/08/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "