Bharti Jayanti Jain Vs ACIT (ITAT Mumbai)
In Bharti Jayanti Jain vs ACIT (A.Ys. 2017-18 to 2019-20), additions were made u/s 69 based on alleged on-money payments for purchase of shops in a mall project, relying mainly on statements and excel data found during search in the Rubberwala Group. The assessee contended that no incriminating material was provided, no independent evidence existed, and opportunity for cross-examination was denied.
The ITAT observed that the additions were solely based on third-party statements and electronic data recovered during search on another party, without any corroborative evidence linking the assessee to cash payments. The Tribunal noted that neither seized material nor statements were properly confronted to the assessee and no cross-examination was allowed, resulting in violation of principles of natural justice.
Relying on earlier co-ordinate bench decisions in similar Rubberwala group matters, the Tribunal held that suspicion based on third-party information cannot substitute proof and additions cannot survive without independent verification. Accordingly, additions u/s 69 for all three assessment years were deleted and the assessee’s appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These three appeals by assessee directed against the separate orders of ld. CIT(A) -52, Mumbai all dated 01.10.2025 for A.Y. 2017-18, 2018-19 & 201920. Certain facts in all the appeals are common, the assessee has raised certain common ground of appeal, therefore, with the consent of parties both all the appeals were clubbed, heard together and are decided by common order to avoid the conflicting decision. For appreciation of fact, facts in A.Y. 2017-18 in ITA No. 7323/M/2025 is treated as lead case. The assessee has raised following grounds of appeal:
“1. On the facts and under the circumstances of the case and in law, the learned CTT(A) erred in passing order u/s 250 which is bad in law.
2. On the facts and under the circumstances of the case and in law, the learned CIT(A) erred in confirming addition u/s 69 without appreciating the fact that AO had failed to provide a copy of incriminating material (i.e excel sheet) to the appellant on basis of which such impugned addition was made. Hence denial of principle of natural justice
3. On the basis of facts and under the circumstances of the case and in law, the learned CIT(A) erred in deciding the appeal against the appellant without providing an opportunity to cross examine the alleged party based on the documents/statements which is purportedly treated as evidence by the Assessing officer for confirming the addition,
4. On the basis of facts and under the circumstances of the case and in law, the learned CTT(A) erred in relying on figures in excel sheet and confirmed the addition without appreciating the fact that how did AO derive at the specific assessment years for making addition in the absence of date of payment in the extract of excel sheet provided to the appellant vide satisfaction note
5. On the facts and under the circumstances of the case and in law, the learned CIT(A) erred in confirming addition without appreciating the fact the addition made by AO was solely on the basis of a third-party statement wherein name of the appellant was not mentioned in the extract of statement provided and AO had blindly relied only on statement and excel sheet rather than making independent verification to obtain corroborative conclusive evidence.
6. On the basis of facts and under the circumstances of the case and in law, the learned CIT(A) erred by not following the decision of Mumbai Tribunal in case of one of the other appellants in the matter of Rubberwala group in true sense and fashion wherein it was clearly held by the Tribunal that addition cannot be made in the absence of corroborative material and failure by the department to provide an opportunity of cross examination [Rajesh Jain-ITA Nos 3842 & 3841/MUM/2023]. Thus CIT(A) has wrongly distinguished the said case without going into the principles on which the said judgement was delivered.
7. a) On the facts and under the circumstances of the case and in law, the learned CTT(A) erred in confirming addition u/s 69 without appreciating the fact that the Assessing officer had made an addition merely on the premise that the counter party has accepted the addition without appreciating the fact that the additions were accepted by the counter-party only to buy peace of mind and to refrain from entering into unwarranted litigation
b) On the facts and under the circumstances of the case and in law, the learned CIT(A) erred in confirming addition u/s 69 without appreciating the fact that acceptance of addition in income by one party cannot warrant the truthfulness of transaction and thereby rippling the effect of addition on the appellant.
The appellant craves for leave to add to alter to amend or to delete any of the above grounds of appeal if necessary.”
2. Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that grounds of appeal raised by assessee is covered by various decisions of Mumbai Tribunal including in case of Rajesh Jain in ITA Nos. 3842 & 3841/M/2023, Bhavana Vikram Jain in ITA No. 6363 to 6365/M/2025, Akhraj Pukhraj Chopra in ITA No. 5553, 5555, 5554 & 5557/M/2025 and Pravin Khetaramm Purohit in ITA No. 4742 to 4744/M/2025.
