On-Money Addition Deleted – No Evidence Beyond Third-Party Pen Drive & Statements

Ramesh Kumar Puraji Jain Vs DCIT (ITAT Mumbai)

Mumbai ITAT deleted additions made u/s 69 towards alleged on-money payment in cash for purchase of a shop in the Platinum Mall project (Rubberwala Group search cases).

The Tribunal held that:

• The entire addition was based on a pen drive (Excel sheets) seized from a third party and statements of builder’s employees, without any direct evidence against the assessee
• No cash receipt, voucher, ledger, or incriminating document linking the assessee to cash payment was found
• The assessee had paid full consideration through banking channels, even higher than stamp duty value, negating the allegation of on-money
• Opportunity of cross-examination was not provided, violating principles of natural justice
• Electronic evidence (pen drive data) lacked Section 65B certification, making it unreliable

Relying on consistent coordinate bench rulings in identical Rubberwala cases, the ITAT held that mere suspicion or third-party material without corroboration cannot sustain addition.

Accordingly, the addition was deleted in full, and both appeals of the assessee were allowed.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The above captioned appeals have been preferred by the assessee against the orders of even dates as passed by the Learned Commissioner of Income-tax, Appeal, CIT(A)-52, Mumbai [hereinafter referred to as “CIT(A)”] pertaining to the orders passed u/s. section 153C r.w.s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Years [A.Ys.] 2019-20 & 2020-21. Since some of the issues are common and also the fact that appeals were heard together, they are being taken up together for adjudication vide this composite order for the sake of brevity.

2. The grounds of appeal are as under:

ITA No. 8519/MUM/2025(AY 2019-20)

1. On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming an addition of Rs.5,00,000 on account of unaccounted cash paid against the purchase of shops treating the same as unaccounted investment and added the same to the income of the assessee u s. 69 of the Income Tax Act, 1961.

2. Grounds with respect to the order passed by the Ld. AO under section 153C of income tax Act against the principal of natural justice

a) On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the order passed by the Ld. AO under section 153C of Income tax Act which is passed against the principal of natural justice.

b) On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the order passed by the Ld. AO under 153C of income tax act without providing opportunity to rebut the material relied by him during the assessment proceedings which is against the principles of natural justice and hence the said order is liable to be quashed.

c) On the facts and in the circumstances of the case and in law, The Ld. CIT(A) and Ld. AO erred in not providing opportunity to cross examine person whose statement had been relied upon which is against the Natural Principal of justice.

d) On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the order passed by the Ld. AO merely on suspicion but Mere suspicion cannot take the place of evidence.

e) On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the order passed by the Ld. AO without providing the approval taken by the Ld. AO of the competent Authority.

3. On the facts and in the circumstances of the case and in ław, The Ld. CIT(A) erred in confirming the order under Section 153C passed by the Ld. Assessing Officer (AO) who has passed a consolidated satisfaction note for multiple assessment years, which is not in accordance with the law. In absence of separate satisfaction notes the proceedings should have been declared Void ab Initio as held by the ITAT Nagpur bench in the case of Maheshwari Coal Benefication & Infrastructure (P.) Ltd. v. Dy. Commissioner of Income-tax Central Circle-1(1) wherein During search and seizure conducted at premises of one Rubberwala group, some documents were seized which were alleged to be pertaining to assessee-company Accordingly, search assessment made under section 153C was made against assessee. It was noted that Assessing Officer of searched person had recorded consolidated satisfaction note for different assessment years and subsequently Assessing Officer of assessee, non-searched party had further recorded consolidated satisfaction note for assessment years 2009-10 to 2013-14-Whether satisfaction note was required to be recorded under section 153C for each assessment year – Held, yes -Whether since there was no co-relation with documents year-wise to clearly point out as to how documents pertained to assessee, in absence of required satisfaction note for each year separately, entire assessment under section 153C would be vitiated – Held, yes [Para 33] [In favour of assessee).

4. On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the order passed by the Ld. Assessing Officer (AO) by basing the entire assessment on Inadmissible evidence, thereby violating the provisions of the Indian Evidence Act, 1872 and the principles of natural justice. The impugned order, being founded on such illegal evidence and denying the appellant the crucial right to cross-examine witnesses, is void ab initio and deserves to be quashed.

5. On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the order passed by the Ld. Assessing Officer (AO) who has relied heavily on the data from the electronic record (pen drive) to establish the existence of parallel books of accounts, broker ledgers, and the alleged accommodation entry business For any electronic record (like a pen drive) to be admitted as evidence in a judicial proceeding, it is a mandatory requirement under Section 65B(4) of the Indian Evidence Act to obtain a certificate affirming the proper functioning of the computer system and the accuracy of the electronic record produced. A perusal of the assessment records and the Impugned order clearly shows that no such certificate, as mandated by law, was ever obtained by the AO from the person responsible for the computer resource from which the data was extracted. In the absence of this statutory certificate, the contents of the pen drive are inadmissible as evidence and cannot be relied upon for making any addition. The Honble Madras High Court in SKM Animal Feeds and Foods (India) (P.) Ltd. v. ACIT 2023 156 com 385 (Madras) has squarely held that electronic devices and pen drives relied upon by the assessing authority must be certified in terms of Section 65B of the Evidence Act. Consequently, the core evidence against the appellant is non-est in the eyes of law, rendering the entire assessment based on it null and void.

6. On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the order passed by the Ld. Assessing Officer (AO) on account of alleged on-money is unjustified and unsustainable in law and on facts, as the same is based solely on information contained in a pen drive and a statement recorded under section 132(4) of the Act. It is submitted that the said pen drive was not recovered from the possession of the assessee but from a third party during search and seizure proceedings. In the absence of any corroborative evidence to establish the correctness and authenticity of S the contents of the said pen drive and its nexus with the assessee, the addition lacks merit and deserves to be deleted.

7. On the facts and circumstances of case and in law the Assessment order Is bad-in-law since the Seized Material do not belong to the appellant.

8. On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the charging of Penalty proceeding under section 271AAC of the Income Tax Act 1961.

9. On the facts and in the circumstances of the case and in law, The Ld. CIT(A) erred in confirming the charging of Interest under section 234A, 234B & 234C of the Income Tax Act 1961.

3. Brief facts of the case are that the assessee, an individual, filed the return of income for the relevant year declaring total income of Rs. 12,58,380/- for AY 2019-20 and Rs. 5,38,770/- for AY 2020-21. He purchased a Shop No.165 admeasuring 74 sq. ft. situated on the 4th Floor of “The Platinum Mall”, 243 Patthe Bapurao Marg, Mumbai 400004 from M/s Rubberwala Housing & Infrastructure Ltd. The Agreement for Sale was dated 31.12.2020. While, the total consideration as per registered agreement was Rs. 17,87,100/-, the Stamp Duty Value was Rs. 15,17,292/-.

4. According to the assessment order, a search and seizure action under section 132 of the Act was conducted on 17.03.2021 on the Rubberwala Group, including: M/s Rubberwala Housing & Infrastructure Ltd.Promoter/Director Shri Tabrez Shaikh and employee Shri Imran Ansari. During the search, the department recovered a pen drive from the residence of Shri Ansari containing certain Excel sheets allegedly relating to sale of shops in the Platinum Mall project. Based on this material, the AO initiated proceedings against the assessee by issuing notice under section 153C of the Act alleging that the assessee had paid on-money in cash towards purchase of Shop No.165 and made additions under section 69 of the Act and consequently made additions as stated above aggregating to Rs 17.46 lakh. The addition made was upheld by the ldd.CIY(A).

5. Before us, the ld.AR has contended that the addition was not justified as the same was made solely on the basis of the Excel sheet allegedly found in the pen drive and statements recorded from third parties ignoring the payments were made entirely through banking channels. The payment details are as follows:

5.1 The above payments are supported by Registered Agreement for Sale dated 31.12.2020, Bank statements of the assessee, Receipts issued by the builder and Slab-wise payment schedule. The stamp duty valuation of the property was Rs. 15,17,292/-, whereas the assessee purchased the shop for Rs. 17,87,10/-, which is higher than the stamp duty valuation. Therefore, the allegation of payment of on-money is contrary to the documented transaction value the entire addition is based on Excel sheet allegedly found in a pen drive seized from a third party and Statements recorded from persons associated with the builder. However, no document evidencing cash payment by the assessee was found, no receipt or acknowledgment of cash payment exists, the Excel sheet did not contain verifiable transaction details and assessee’s name was not specifically linked with any confirmed cash transaction. Besides, opportunity to cross-examine the persons whose statements were relied upon was denied. The alleged electronic evidence relied upon by the department originates from a pen drive seized from a third party. However, no certificate under Section 65B of the Indian Evidence Act, 1872 had been produced. The authenticity of the electronic record had not been established and the authorship and accuracy of the Excel data remained unverified. It is also stated that section 69 of the Act was not applicable to the facts of the case. Attention has been drawn to a catena of decisions of the coordinate bench of ITAT, Mumbai wherein on similar issue, such additions have been consistently deleted.

6. The ld.CIT(DR) on the other hand, supported the action of the authorities below stating that that the addition was made as cash payments had been accepted by Shri Imran Ansari and Shri Tabrez Shaikh, CMD of the Rubberwala group, in their respective statements recorded on oath, that the said excel file contains data of cash component (i.e., on-money) received from the sale of shops in the project Platinum Mall and that such cash was not accounted for in the books of M/s. RHIL. Such cash component/on-money had been received from various buyer’s shops in the said project. Date-wise entries of the cash received against each shop/unit are maintained from Column K to Column T of the said excel sheet. Furthermore, the total cash received against each shop was given in Column AE of the said excel sheet. From the said seized excel sheet, it was seen that shop was registered in the name of assessee and that cash had been paid against the purchase/booking of the shop.

7. We have given a careful thought to the entire factual matrix of the case. We note that the Mumbai Bench in a plethora of cases involving similar transaction with RHIL group of the same set of facts has been deleting similar addtions. In this connection, it would be worthwhile to place reliance on the decision in the case of Ishwarlal Javahara Ram Purohit in ITA No.7196/7197/7198/M/2025 4(2), Mumbai on 13 February, 2026 wherein the Bench deleted similar addition. Relevant parts of the order are extracted as under:

“This appeal has been preferred by the Assessee against the common order dated 03.09.2025, impugned herein, passed by Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Ys. 2017-18, 2018-19 and 2019-20.

2. As the appeals under consideration are having involved identical facts and issues thus, for the sake of brevity, the same were heard together and are being disposed of by this composite order by taking into consideration the facts and issues involved in ITA No. Ishwarlal Javahara Ram Purohit 7196/M/2025 as the lead case and the result of the same shall apply mutatis mutandis to both the appeals under consideration.

3. Coming to ITA No. 7196/M/2025, it is observed that, in the instant case, a search and seizure operation was conducted on 17.03.2021 on the Rubberwala Group, including the premises of Rubberwala Group Housing and Infrastructure Limited (RHIL), its Promoter and Director Shri Tabrez Shaikh, and a key employee, Shri Imran Ansari. During the search and seizure action at the premises of Shri Ansari, one 16 GB pen drive was retrieved from his possession, and his statement was recorded, wherein he accepted that he had maintained data related to shops in Excel sheets and the company i.e. RHIL had also received consideration for sale of shops in Platinum Mall in cash. Thus, on the basis of the aforesaid peculiar facts and circumstances, notice under section 153C of the Act was issued on 30.03.2023, which ultimately resulted into making the addition of Rs.2,00,000/- being the cash component paid by the Assessee during the year under consideration over and above the total consideration of Rs.14,66,100/- paid though banking channel for purchase of Shop No. 242, situated on the second floor of Platinum Mall.

4. The Assessee, though, challenged the said addition by filing a first appeal raising various grounds before the Ld. Commissioner; however, could not get any relief, as the Ld. Commissioner not only affirmed the said addition and the assessment order on legal aspects but also on merits by passing the impugned order.

5. Thus, the Assessee, being aggrieved has challenged the impugned order sustaining the addition by the Ld. Commissioner.

6. The Assessee controverted the findings of the authorities below, whereas the Ld. DR supported the same.

7. We have heard the parties and perused the material available on record. We observe that various Hon’ble Co-ordinate Benches of the Tribunal have elaborately dealt with the identical addition made in the identical facts and circumstances, the same search and seizure operation, recovery of the same pen drive and excel sheet, same statement of Mr. Ansari, and on the same fact that RHIL has declared income @ 8% of the undisclosed income qua cash component, as involved in this case and ultimately deleted such addition, by respective orders. For brevity and ready reference, conclusion drawn by co­ordinate Bench in the case of Veena Hiralal Mehta Vs. DCIT Central Circle 4(2) {ITA No.5492 & 5493/M/2025 decided on 06-02- 2026} is reproduced herein as under: –

” 18. Heard the parties and perused the material available on record. From the assessment order, it clearly appears that the Assessing Officer made the addition mainly on the basis of the pen drive recovered from the premises of Mr. Ansari, the statement of Mr. Ansari wherein he admitted receipt of the cash component by the company, and the statement of the Director of the RHIL Group wherein he admitted statement made and the Excel sheet prepared by Mr. Ansari as true and offered income 8% of the cash amounts/component, as unaccounted receipts.

19. The Assessee, at the outset, had submitted that in the assessment order, it nowhere appears “as to what material and/or which Excel sheet the addition has been made”. Further, the Assessing Officer made the addition without confronting the incriminating material and/or without providing any opportunity of cross-examination of the witnesses, whose statements were mainly relied upon by the Assessing Officer. Even otherwise there is no independent material available on record to substantiate the addition made and affirmed by the authorities below.

20. On the contrary, the Ld. DR submitted that the assessee was provided with the show-cause notice dated 17.01.2024 along with the relevant details and documents. Further, in the satisfaction note, all the details are mentioned and communicated to the assessee, which also contains the Excel sheets, detailing the shop number, area, level, total amount, etc.. Further there is direct evidence for making the addition, such as statement of MR. Ansari, excel sheets, pen drive and a fact that Director of RHIL has offered income @ 8% of the unaccounted cash component and therefore, the orders passed by the authorities below cannot be faulted with.

21. We have given thoughtful consideration to the peculiar facts and circumstances of the case and rival claims of the parties. Admittedly, during the search and seizure operation carried out in the premises of Rubberwala Group and Mr. Ansari or otherwise from the Assessee, no cash voucher, receipt, ledger or document signed by the Assessee and incriminating material directly connected with the Assessee, was ever found. Whereas, the Assessee specifically claimed before the Assessing Officer that she has not made any cash payment for the purchase of the shops purchased by her.

22. Even otherwise, the Assessee had purchased the shop/property under consideration for a consideration/value, more than the value determined by the Stamp Duty Valuation Authority. Further, the Assessing Officer also failed to brought on record any comparable case in the same shopping mall, so as to ascertain the actual rate of transactions made.

23. Thus, in the aforesaid facts and circumstances, as no incriminating material directly connected with the assessee, such as cash voucher, receipt, ledger or any document signed by the Assessee, was ever found during the search or post- search proceedings, either from the Rubberwala Group or Mr. Ansari, whose statement has been made the foundation for making the addition, in that eventuality, the onus shifts upon the Revenue Department to substantiate/corroborate the evidence collected during the search proceedings and to offer an opportunity for confrontation or cross-examination of the witnesses, whose statements were relied upon, while making the addition. Which the Revenue failed to substantiate the evidence collected and also failed to give any opportunity of cross examinations of the witnesses whose statements were relied on and/or made a foundation for making the addition.

24. We further observe that identical shops in same”

Shopping Mall i.e. Platinum Mall ” were also purchased by various other Assessees, wherein in their cases as well, identical additions were made, and therefore their cases travelled upto the Hon’ble Coordinate Benches of the Tribunal, who dealt with the cases in detail in the context of the same Ishwarlal Javahara Ram Purohit search and seizure operation, same pen drive, same statements and same offering of income at the rate of 8% on the unaccounted cash components by the Director of the RHIL Group.

25. The Hon’ble co-ordinate Bench of the Tribunal in Rajesh Jain v. DCIT (ITA Nos. 3842 &Ors/2023, ITAT Mumbai, order dated 26-11-2024), also dealt with identical addition made on the basis of third-party statements and pen drive and excel entries, allegedly recovered from the same search and seizure operation as involved in this case and ultimately deleted the identical addition by observing as under: –

“16. We heard Ld D.R and perused the record. We notice that the AO has made the addition on the basis of evidence found in the premises of third party and also on the basis of deposition made by the employee of the third party. No corroborative material was brought on record to support the statement so given, which is mandatory when the assessee denies any such payment. Further, the AO also did not provide opportunity of cross examination to the assessee, even after the said request was made by the assessee. Under these set of facts, we are of the view that the impugned addition of Rs.18,64,200/- cannot be sustained. In this regard, we may take support from the decision rendered by SMC bench of Mumbai Tribunal in the case of Naren Premchang Nagda vs. ITO (IT Appeal No.3265/Mum/2015 dated 08-07-2016), wherein an identical issue was decided as under: –

………………………………………………………………………………………………..

17. We also notice that the AO did not provide opportunity to cross examine the persons from Rubberwala group, on whose statements the AO had placed reliance upon. The Hon’ble Supreme Court has held in the case of Andaman Timber Industries vs. Commissioner of Central Excise (2015)(62 taxmann.com3)(SC) that not providing opportunity to cross examine is a serious flaw and it will make the order nullity, as it amounts to violation of principle of natural justice. We are of the view that the above said decision of Hon’ble Supreme Court shall apply to the facts of the present case.

18. …………………………………………………………………………………

19. In view of the foregoing discussions, we are of the view that the addition of Rs.18,64,200/- made by the AO cannot be sustained. Accordingly, we set aside the order passed by Ld CIT(A) and direct the AO to delete this addition.”

26. The Hon’ble co-ordinate Bench of the Tribunal in Pravin Khetaramm Purohit (or Parveen Kheta Ram) vs. DCIT (ITA Nos. 4742 to 4744/M/2025, decided on 15.10.2025) also dealt with identical addition based on the same search and seizure and material recovered and statements recorded and ultimately deleted the identical addition by observing and holding as under:

“18. From the records we also noticed that no statement was provided to the assessee, and none of the persons, whose statements were relied upon were produced for cross-examination. Even the extract of the statement mentioned in the assessment order does not indicate the name of the assessee.

19. Apart, the AO during the course of assessment also failed to provide the opportunity to cross examine of the witnesses, whose statements were relied upon by the revenue which resulted in ‘breach of principles of natural justice’. In this regard, reliance is being placed upon the decision of Hon’ble Supreme Court in the case of Andaman Timber Industries Vs. CCE reported in (2015)281 CTR 241 (SC) wherein it has been held that ‘failure to give the assessee the opportunity to cross examine witness, whose statements are relied upon, results in breach of principles of Natural Justice. It is a serious flaw which renders the order a nullity’.

20. In the case of CIT Vs. Odeon Builders Pvt. ltd. (418ITR315), it was held that the ‘addition/disallowance made solely on third party information without subjecting it to further scrutiny and denying the opportunity of cross examination of the third 20 party renders the addition/disallowance bad in law’.

21. In the case ofR. Mehta v/s Assistant Commissioner of Income-tax, Mumbai 72 taxmann.com110 (Bombay) wherein it was held as under:

In the light of the fact that the money was advanced apparently by the account payee cheque and was repaid vide account payee cheque the least that the Assessing Officer should have done was to grant an opportunity to the assessee to meet the case against him by providing the material sought to be used against him in arriving before passing the order of assessment. This not having been done, the denial of such opportunity goes to root of the matter and strikes at the very foundation of the assessment and, therefore, renders the orders passed by the Commissioner (Appeals) and the Tribunal vulnerable. The assessee was bound to be provided with the material used against him apart from being permitting him to cross examine the deponents whose statements were relied upon by him. Despite the request seeking an opportunity to cross examine the deponents and furnish the assessee with copies of statements and disclose material, these were denied to him.

22. Taking into consideration the entire facts and circumstances and legal prepositions as discussed by us above, we direct the AO to delete the addition.”

27. We further observe that the Tribunal in case of Heena Dashrath Jhanglani ITA no.1665/Mum./2018 (Assessment Year: 2007-08) has also dealt with identical addition made on the basis of Pen drive recovered during the search and without any corroborative material qua alleged cash / on money and ultimately deleted the addition by observing and holding as under:

“10. I have considered rival submissions and perused material on record. Undisputedly, the genesis of the addition made of ` 42 lakh on account of alleged payment of on-money in cash towards purchase of a flat lies in a search and seizure operation conducted in case of Hiranandani Group and related persons. Though, in the assessment order the Assessing Officer has not discussed in detail the nature of incriminating material / evidence available on record to indicate payment of on-money in cash by the assessee to M/s. Crescendo Associates, however, from the show cause notice dated 4th March 2015, which is reproduced by the Assessing Officer in the assessment order, it appears that the materials are in the form of pen drive found and seized from the residence of one of the employees of Hiranandani Group and a statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani, Director and Promoter of the Group, wherein, the details of onmoney paid by buyers / prospective buyers to Hiranandani Group concerns are mentioned and further, in the statement recorded under section 132(4) of the Act on 14th March 2014, Shri Niranjan Hiranandani, has admitted receipt of on-money in cash towards sale of flats / shops. Thus, it is clear that except these two pieces of evidences the Assessing Officer had no other evidence on record which demonstrates that the assessee had paid on-money in cash for purchase of the flat. It is further relevant to observe, from the assessment stage itself the assessee has requested the Assessing Officer to provide him with all adverse materials and full text of the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani. The assessee had also requested the Assessing Officer for allowing her to cross- examine Shri Niranjan Hiranandani and other parties whose statements were relied upon. Apparently, this request of the assessee was not acceded to by the Assessing Officer. When the assessee took up the aforesaid issue before the first appellate authority, the learned Commissioner (Appeals) in letter dated 18th July 2016, had clearly directed the Assessing Officer to provide the assessee all adverse materials / documentary evidences available with him indicating payment of on- money. However, on a perusal of the remand report dated 23th June 2017, a copy of which is at Page-53 of the paper book, it is very much clear that the Assessing Officer has completely avoided the issue and there is no mention whether the assessee was provided with all the adverse material and if, not so, whether he has provided them to the assessee as per the directions of the learned Commissioner (Appeals). Thus, from the aforesaid facts, it is patent and obvious that the addition of ` 42 lakh made on account of on-money payment in cash is without complying with the primary and fundamental requirement of rules of natural justice. It is well settled proposition of law that if the Assessing Officer intends to utilize any adverse material for deciding an issue against the assessee he is required to not only confront such adverse materials to the assessee but also offer him a reasonable opportunity to rebut / contradict the contents of the adverse material. Further, the assessment order reveals that the Assessing Officer has heavily relied upon the statement recorded from Shri Niranjan Hiranandani, for making the disputed addition. However, it is the allegation of the assessee, which prima-facie appears to be correct, that the Assessing Officer has not provided the full text of such statement recorded and has also not allowed the assessee an opportunity to cross-examine Shri Niranjan Hiranandani, and other persons whose statements were relied upon. This, in my view, is in gross violation of rules of natural justice and against the basic principle of law. In this context, I may refer to the decision of the Tribunal, Mumbai Bench, in Nikhil Vinod Agarwal (supra). Thus, for the aforesaid reason, the addition made cannot be sustained.

11. Even otherwise also, the addition made is unsustainable because of the following reasons. As discussed earlier in the order, the basis for addition on account of on-money is the information contained in the pen drive found during the search and seizure operation and the statement recorded under section 132(4) of the Act. As regards the information contained in the pen drive, it is the contention of the assessee that the said pen drive was not found from the possession of the assessee but in course of search and seizure operation conducted in case of a third party. Therefore, in absence of further corroborative evidence to establish that the contents of the pen drive are correct and authentic to the extent that the assessee paid on-money in cash, no addition can be made under section 69B of the Act. Further contention of the assessee is that in the statement recorded under section 132(4) of the Act, Shi Niranjan Hirandani has not made any reference to the assessee, therefore, in absence of any other corroborative evidence to establish that assessee has paid on-money in cash, no addition can be made. I find substantial merit in the aforesaid submissions of the assessee. In my view, neither the information contained in the pen drive nor the statement recorded under section 132(4) of the Act from Shri Niranjan Hiranandani are enough to conclusively establish the factum of payment of on-money by the assessee. At best, they can raise a doubt or suspicion against the conduct of the assessee triggering further enquiry / investigation to find out and bring on record the relevant fact and material to conclusively prove the payment of on-money by the assessee over and above the declared sale consideration. Apparently, the Assessing Officer has failed to bring any such evidence / material on record to prove the payment of on- money by the assessee. More so, when the assessee from the very beginning has stoutly denied payment of on-money in cash.”

28. We further observe that the Hon’ble Co-ordinate Bench of the Tribunal consisting both of us, in the case of Deputy Commissioner of Income Tax vs. Dhiren Shah [2025] 180 Taxmann.com 370 (Mumbai – Trib.), in ITA No. 4294/M/2024, decided on 27.10.2025, has also dealt with an identical addition made on the basis of allegation of cash paid over and above the sale value of an immovable property having been paid through banking channel and ultimately affirmed the order of the Ld. CIT(A) by dismissing the appeal of the Revenue by observing and holding as under:-

“7. We have carefully perused the records and have also taken note of the rival submissions. We are of the considered view that there is no authenticity of the impugned screenshot which does not bear any signature of government authority. It appears to be a rough calculation only. Moreover, we find that the AO has also not brought on record any comparable case of the said locality so as to ascertain the actual rates of transactions made. The market rate adopted by the AO is contrary the Stamp Duty rate which is government fixed rate of the property under consideration that has been brushed aside by the AO without finding any infirmity in the same. Moreover, no investigation has been made with the Registration office/Stamp Duty authorities in this regard but he made the addition of such a huge sum without making any effort to corroborate his findings. The WhatsApp chat/post is nothing more than rough working communication between buyer’s son and his accountant. It does not specifically mention either the name of the assessee or even the impugned property transaction. The assessee was searched by the Department. However, no corroborative evidence of receipt of any cash over and above the disclosed amount has been brought on record by the AO.

7.1 The AO has placed considerable reliance on the digital evidence in the form of chats. However, we find that the order is completely silent on whether the requirements of section 65B of the India Evidence Act, 1972 have been satisfied or not since the provisions require that to be admissible, they must be accompanied with a valid certificate under section 65B(4). Mere screenshots or forwarded chats have no evidentiary value since they are susceptible to tampering or fabrication. Unless the source devise is produced or section 65B certificate is produced, such chats cannot be relied upon.

7.2 In view of the discussion above, we hold that the addition made by the AO is based more on conjectures and surmises rather than on concrete evidence. Therefore, we do not find any infirmity in the appellate order deleting the addition made. Consequently, all the grounds of appeal which are interlinked to each other are hereby dismissed.

8. In the result, the appeal of the Revenue is dismissed.

29. We reiterate that the identical addition has elaborately been dealt with by the Hon’ble Coordinate Benches of the Tribunal in the cases referred to above, which is otherwise unsustainable on the aforesaid analyzation made by us independently specific to the effect that no incriminating material directly connected with the assessee, such as cash voucher, receipt, ledger or any document signed by the Assessee, was ever found during the search or post-search proceedings, either from the Rubberwala Group or Mr. Ansari, whose statement has been made the foundation for making the addition, and thus in that eventuality, the onus shifts upon the Revenue Department to substantiate/corroborate the evidence collected during the search proceedings and to offer an opportunity for confrontation or cross-examination of the witnesses, whose statements were relied upon, while making the addition. The AO though provided the relevant material collected during the search proceedings but in the Assessment order nowhere mentioned such material/documents, except as referred to above such as pen derive, excel sheet and statement of Mr. Ansari etc.. The AO also failed to substantiate the evidence collected and give any opportunity of cross examinations of the witnesses, whose statements were relied on and/or made a foundation for making the addition without considering peculiar fact that the Assessee otherwise has purchased the Shop/property under consideration on a consideration/value, which is otherwise more than the stamp duty value, as determined by the Stamp Duty Valuation Authority. Further, the Assessing Officer also failed to brought on record any comparable case in the same shopping mall, so as to ascertain the actual rate of transactions made. Thus, in cumulative effects, the addition under consideration is deleted by allowing the appeal i.e. ITA No. 5492/M/2025 filed by the Assessee.”

8. In light of the facts and circumstances involved in the present matter, identical to the facts of cases decided by the ITAT Mumbai in various cases, relied upon by the assessee and also dealt with above, in absence of any contradictory material, fact or decision submitted by the revenue to rebut in defence, respectfully following the observation and legal prepositions by the Co-ordinate Bench of ITAT, we find substance in the contention raised by ld. AR. Accordingly, grounds raised by the assessee, assailing the issue qua the impugned addition are allowed setting aside the appellate order and the AO is, thus, directed to delete the addition made.

9. Since the substantive quantum in the present case is directed to be deleted by us, therefore the remaining grounds of appeal of assessee are rendered to academic only, hence no adjudication is required.

10. In result, the appeal of the assessee stands allowed.

11. ITA No. 8520/MUM/2025(AY 2020-21)

12. Since, this appeal is on identical facts and circumstances, our decision rendered in ITA No. 8519/Mum/2025 applies mutatis mutandis to the instant appeal as well, the appeal stands allowed.

13. In combined result, both the aforesaid captioned appeals of the assessees are allowed.

Order pronounced in the open court on 21/04/2026.