Ashok Chunilal Mali Vs ACIT (ITAT Mumbai)
The Mumbai ITAT deleted additions made under Section 69 in a 153C proceeding arising from the Rubberwala Group search, where the AO alleged on-money payments for shop purchases based on third-party evidence.
The additions were primarily based on:
- Excel data found in a pen drive of a third-party employee, and
- Statements recorded from Rubberwala Group personnel claiming cash components in transactions.
The Tribunal observed that:
- The assessee had denied any cash payment, and no incriminating material was found from the assessee.
- The entire case of the AO rested on third-party statements and documents, without any independent corroboration.
- Crucially, the assessee was not provided cross-examination, violating principles of natural justice.
Relying on a consistent line of decisions in identical Rubberwala cases, the ITAT held that such additions cannot survive merely on unverified third-party material.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
All the three appeals filed by the assessee comprising of different Assessment Years are against the orders of ld. CIT(A)-52, Mumbai vide order Nos.-
i) ITBA/APL/S/250/2025-26/1081459163(1)
ii) ITBA/APL/S/250/2025-26/1081458967(1) and
iii) ITBA/APL/S/250/2025-26/1081459416(1)
all dated 06.10.2025, passed against the assessment order dated 12.03.2024 by ACIT, CC-4(2), Mumbai.
2. Assessee has filed revised grounds of appeal. The same are reproduced below:
