Third-Party Excel Sheets & Statements Without Corroboration Have No Evidentiary Value

Ajaram Adararam Mali Vs DCIT (ITAT Mumbai)

ITAT Mumbai Deletes Section 69 Additions: Third-Party Excel Sheets & Statements Without Corroboration Have No Evidentiary Value

In a crucial ruling, the ITAT Mumbai held that additions under Section 69 cannot be sustained solely on the basis of third-party statements and excel sheet data found during search, without independent corroborative evidence linking the assessee.

The case involved alleged cash (“on-money”) payments for property purchase based on data recovered from a pen drive belonging to an employee of the developer group. The assessee denied any such payments.

The Tribunal emphasized:

• No incriminating material was found from the assessee.
• Alleged evidence (excel sheets, statements) was not confronted nor cross-examination allowed, violating natural justice.
• Unverified electronic data and third-party statements lack evidentiary value unless corroborated.

It further held:

• Admission of on-money by the developer does not automatically implicate the buyer.
• Reliance on third-party data without nexus to assessee is legally untenable.
• Consistent ITAT rulings in similar Rubberwala group cases were followed.

Result:

• Entire additions (₹17.61 lakh across years) deleted
• Appeals of assessee fully allowed

A strong reaffirmation that “no addition without evidence”-mere third-party data or statements, without confrontation and corroboration, cannot justify additions under Section 69.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

A bunch of appeal of the same assessee filed against the common order of the Ld. Commissioner of Income Tax(Appeal)-52, Mumbai [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Years 2017-18 to 2019-2020, date of order 06.10.2025. The impugned order emanated from the orders of the Ld. Assistant Commissioner of Income Tax C.C. 4(2), Mumbai (for brevity the ‘Ld. AO’) order passed under section 153C of the Act date of all the orders 31.03.2024.

2. Since all three appeals arise from same assessee, identical facts and involved a common issue, for convenience they are heard together and are being disposed by way of this common order. ITA No.7315/Mum/2025 is treated as lead case and the decision rendered therein shall apply mutatis mutandis to all other appeals.

ITA No.7315/Mum/2025, AY 2017-18

3. The brief facts of the case is that the assessee filed the original return by declaring total income Rs.4,18,940/-. A search and seizure action u/sec. 132 of the Act was conducted on 17.03.2021 in Rubberwala Group and other. During the search action, it is gathered that the assessee has purchased a shop no 108 at 1st Floor, located in Platinum Mall building, Girgaon Mumbai with agreement value of Rs.18,09,000/- where as the stamp duty value determined by the stamp duty authority amount to Rs.13,29,597/-. The investigating authority found that the amount of Rs.17,61,000/- was paid in cash on acquisition of property in three installments for AY 2017-18 to AY 2019-20 amount to Rs.1,00,000/-, Rs.9,71,000/-and Rs.6,90,000/- respectively. Finally the assessment was completed u/sec. 153C of the Act. In the assessment proceeding the Ld. AO found that the premises was developed by M/s Rubberwala Housing and Infrastructure Ltd. (RHIL), its promoter and director and Shri Tabrez Shaikh and key employee of the RHIL Shri Imran Ansari who was handling sale and registration of shop in Platinum Mall Project of RHIL were covered. On statement of oath, Shri Imran Ansari had admitted that total price of the shops contained cash component and banking channel component and these components are decided by Shri Tabrez Shaikh. He further admitted that the said data maintained by him in excel sheet are related to sale of shops in Platinum Mall. The Ld. AO found that the assessee for purchase of shops for Assessment Years 2017-18 to 2019-20 had paid the cash total amount to Rs.17,61,000/- out of that in impugned A.Y. 2017-18 assessee paid Rs.1,00,000/-. Accordingly, the amount of Rs.1,00,000/- was added back u/sec. 69 of the Act. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) upheld the observations of the Ld. AO and rejected the appeal for the assessee. Being aggrieved the assessee filed an appeal before us.

4. The Ld. AR filed a paper book containing pages 1 to 30, which has been placed on record. The Ld. AR contended that the assessee has categorically denied having made any cash payment to RHIL in connection with the purchase of the said commercial property. It was further submitted that no opportunity of cross-verification was granted to the assessee in respect of the additions made by the Ld. AO. The Ld. AR respectfully placed reliance on the order of the Coordinate Bench of the ITAT, Mumbai, in the case of Ankit Jems (P.) Ltd. vs. ITO reported in (2025) 178 com 454 (Mum-Trib), wherein it was held that an addition under section 69, made solely on the basis of information received from investigation proceedings in another group case, could not be sustained in the absence of any cogent evidence against the assessee, particularly when the assessee had denied the transactions and the purchase records did not reflect any such entries.

5. The Ld. AR further contended that an identical factual issue had already been adjudicated by the Coordinate Bench of the ITAT, Mumbai, in cases arising out of the search conducted in the Rubberwala Group. The Coordinate Bench has consistently held that additions relating to alleged cash payments for the purchase of commercial properties, based solely on third-party statements, cannot be sustained. In support, reliance was placed on the decisions in Bhavana Vikram Jain vs. ACIT (ITA Nos. 6363 & 6364/Mum/2025, order dated 10.12.2025), Akhraj Pukhraj Chopra vs. DCIT (ITA Nos. 5553 & 5555/Mum/2025, order dated 12.11.2025), and Kulsum Aaqib Memon vs. DCIT (ITA No. 6540/Mum/2025, order pronounced on 06.01.2026). In all these cases, the Coordinate Bench of the ITAT has taken a consistent view that, in the absence of any cogent incriminating material, additions made merely on the basis of excel sheets or third-party statements are unsustainable.

6. The Ld. AR respectfully relied on the order of the Coordinate Bench of ITAT Mumbai in case of Pravin Khetaram Purohit vs. DCIT in ITA Nos. 4742 to 4744/Mum/2025 date of pronouncement 15/10/2025. The identical fact is adjudicated by the Bench & relevant observations are reproduced as below:-

“11. From the above we find that the Coordinate bench has consider the same facts and rightly decided the issue in favour of the assessee and since the facts of the present case are also identical with the facts of Rajesh Jain’s (supra) case, therefore the said decision will be application on the facts of the present case as well. Moreover, the assessee categorically denied having paid any amount in cash over and above the agreement value. The AO has neither confronted assessee with any of the material found during the search on Rubberwala group and even noevidence or seized document has been referred to where any name of the assessee has been explicitly mentioned on account of paying any ‘on-money.

12. Although it has been claimed in the order of assessment that the assessee had paid on money, but again no such statement has been confronted, neither the seized material/documents/pendrive was confronted to the assessee nor the copy of statement of Key person was confronted.

13. Therefore, in our view, the information if any found in the pendrive etc., cannot be considered as ‘credible evidence’, unless they have been corroborated with any other evidence. Since the assessee was not provided with the adverse material, if any, based on which notice u/s 153 of the Act, was issued, in our view, it hampers the primary and fundamental requirement of natural justice.

14. As far as the information claimed in pendrive is concerned, the same was not found from the possession of the assessee but was found as per order of assessment, during the search and seizure conducted in the case of third party therefore, in the absence of corroborative evidence to establish that the contents of pendrive are correct and authenticated to the extent assessee paid ‘on-money’ in cash, no addition can be made and even otherwise during the entire reassessment proceedings the veracity and reliability of the data recorded in the pendrive was not checked or tested. Therefore, in such a scenariono addition is warranted in the case of assessee. Reliance in this regard has been placed on the decision in case of HeenaDashrathJhanglani ITA no.1665/Mum./2018 (Assessment Year: 2007-08) wherein the Coordinate Bench of ITAT had decided the issue in favour of assessee and the relevant portion is being reproduced herein below:”

7. The Ld.AR advanced his argument and relied on the order of the Coordinate Bench of ITAT Mumbai ‘D’ Bench in the case of Dimple Shailesh Jain vs DCIT, in ITA No.6732 and 6733/Mum/2025 date of order 01.09.2025. The relevant paragraph no.12 of the said order is reproduced as below:

“12. Having heard the parties and perusing the material available on record and giving thoughtful consideration to the peculiar facts and circumstances of the case and rival claims of the parties, it is observed that from the assessment order that it clearly appears that the Assessing Officer made the addition mainly on the basis of the excel sheet retrieved from 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.”

8. The Ld. DR argued and contended that the RHIL group had accepted the cash transactions with the parties. So, the cash transactions are duly accepted on basis of the recorded statement. Though the RHIL declared the cash component during the search action and declared net profit @8% and paid the tax. So, the Ld.DR supported and relied upon the orders of the revenue authorities. He respectfully relied on the order of the Hon’ble Gujrat High Court in case of Kamleshbhai Dharamshibhai Patel vs. CIT reported in [2013] 31 taxmann.com 50 (Guj). The Ld. DR invited our attention in relevant paragraph of the impugned appellate order which is reproduced as below:-

“8.8 Further, at the same time, it is seen that full facts were not placed before the Hon’ble ITAT and it has also not been examined that Excel sheet clearly stated the agreement value as well cash component both. Imran Ashfaque Ansari was employee of Rubberwala group and his statement was also recorded on oath at his residence. Vide question no. 11 of the said statement dt. 17.03.2021, Imran Ansari was questioned about his roles and responsibilities in M/s. Rubberwala Housing & Infrastructure Ltd (RHIL). In response, he stated that he had been working with Rubberwala group of entities since 2010 and inter-alia handling sale and registration of the shops in “Platinum Mall” Project of M/s. Rubberwala Housing & Infrastructure Ltd (RHIL, that he was handling said excel sheet. It was not case where unrelated person statements were recorded. This statement was further reinforced by Shri Tabrez Ahmed Shaikh, Director and Promoter of RHIL, in his post-search deposition dated 19.08.2021. He verified the contents of the Excel file and affirmed the truth of Shri Imran Ansari’s statement. Moreover, the Rubberwala Group itself admitted to having received such on-money (cash component), offered the same as additional income, and paid taxes thereon.”

9. The Ld. DR further argued and invited our attention in impugned appellate order paragraph 6. The observation of the ld. CIT(A) is reproduced as below:

“6. I have considered the facts of the case. In this case, a search under section 132 was carried out on 17.03.2021 in the case of the Rubberwala Group. During the course of the search at the premises of Shri Imran Ansari (an employee of M/s Rubberwala Housing & Infrastructure Ltd.), electronic data in the form of excel sheets was seized. These sheets contained details of cash received against sale of shops in the “Platinum Mall” project, including name-wise transaction details. The seized sheet recorded that the appellant has paid Rs. 17,61,000/-in cash towards Shop in Platinum Mall during A.Y. 2017-18 & A.Y. 2018-19 of Rs. 1,00,000/- Rs. 9,71,000/and also paid Rs. 6,90,000/-in A.Y. 2019-20. This was corroborated by the statement of Shri Imran Ansari recorded under section 132(4), as well as the statement of Shri Tabrez Shaikh, themanaging director of RHIL. Based on this material, the AO issued notice under section 153C and completed the assessment under section 153C r.w.s. 143(3), making an addition of Rs. 1,00,000/- in AY 2017-18 & Rs.9,71,000/- in A.Y. 2018-19 &Rs. 6,90,000/- in AY 2019-20 under section 69 and taxing it under section 115BBE of the Act. Aggrieved by the order of AO, the appellant filed appeal before undersigned. The grounds of appeal raised by the appellant are dealt as under:”

10. The Ld. DR advanced his argument by submitting the satisfaction note of the Assessing Officer of searched assessee, Rubberwalla Group including the RHIL. The relevant part of the submission is reproduced as below:-

“Satisfaction Note recorded by the Assessing officer of the searched assessee, Rubberwala group and others (including M/s. Rubberwala Housing & Infrastructure Ltd) for issuing Notice u/s 153C of the IT Act in the case of Mr./Ms.M/s. AjaramAdararam Mali(PAN:AQKPM6632J).

1. A Search & Seizure action was initiated on Rubberwala group and others on 17.03.2021. During search proceedings, M/s. Rubberwala Housing & Infrastructure Ltd (RHIL in short), the flagship company of the Rubberwala group, was also covered. The Project “Platinum Mall” has been developed by M/s Rubberwala Housing & Infrastructure Ltd especially to cater for the needs of the business of mobile accessories.

1.1 During the course of search action, carried out in the case of Rubberwala Group, a 16 GB Sandisk pen drive was found & seized from the residential premises of Mr. Imran Ansari (employee/key person of the Rubberwala group handling sale & registration of shops in Platinum Mall project) located at “109/120 PrabhatSadan, 2nd Floor, Room No. 109 R.B. Chandorkar Marg, Near Agripada Police Station Agripada- Mumbai-400011. While verifying the content of the said pen drive, an excel file named as “consolidated 1 2 3 balance” found & seized containing detailed data related to sale of shops in project “Platinum Mall”. All information regarding sale of shops/units in Platinum Mall such as name of the person who has booked shops/name of the person in whose name shops are registered, area per sq. ft., total sale value, agreement value, payment received in cash, payment received in cheque, balance of cash receivable, balance of cheque payments receivable etc. are found to be recorded in the excel sheet named “Master” (the said excel sheet is provided herewith as an enclosure). The names of the persons in whose name respective shops/units are registered are given in Column C of the said excel sheet.

1.2 It has 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 is not accounted for in the books of M/s. RHIL. Such cash component/on-money has been received from various buyers of 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 is given in Column AE of the said excel sheet. For ready reference, relevant part of the statement of Shri Imran Ansari is provided herewith as an enclosure.

2. From the said seized excel sheet, it is seen that shop(s) is(are) registered in the name of your assessee and that cash has been paid in various A.Ys. against the purchase/booking of these shop(s) as per following details:

The above mentioned cash amount(s) against the booking/purchase of the shops/units mentioned above has/have not been accounted-for by M/s. RHIL in its books of account. It is also to mention that the sources of the above mentioned cash may be spread over or attributable to the unaccounted income generated in financial years falling beyond the years wherein cash has been paid to M/s. RHIL and hence, such years, as per the applicable provisions of the Act, are also subject to the assessment to prevent any loss to the revenue, to facilitate a coordinated and proper assessment of the persons involved in cash transactions and, thereby, to make an effective and holistic assessment in case of the assessee.

3. In view of the facts mentioned hereinabove, I am of the considered opinion that documents found and seized during the course of search proceedings u/s 132 of the IT Act in the Rubberwala group and others, have bearing on the assessment for the years from A.Y. 2015-16 to 2021-22 of Mr. Ms. M/s.

AjaramAdararam Mali(PAN:AQKPM6632J).

4. Now, the provision of section 153C of the IT Act entails as under:-

Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,-

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or

(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to,

a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for therelevant assessment year or years referred to in sub-section (1) of section 153A]

5. In view of the fact mentioned above, the assessee Mr./Ms./M/s. Ajaram Adararam Mali (PAN:AQKPM66321) is squarely covered within the provision of section 153C of the IT Act as the information contained in the seized document relates to person other than searched person i.e. the assesse. Therefore, assessee’s case is a fit case to initiate proceedings 153C of the IT Act. Accordingly, natice u/s 1530 of the IT Act is being issued in this case for A.Y. 2015-16 το Α.Υ. 2021-22.”

11. Per Contra, the Ld.AR contended that the identical fact was duly considered by the Hon’ble Gujrat High Court in the case of PCIT vs Kaushik Nanubhai Majithia in R/Tax Appeal No.20 of 2024 date 06.03.2024. The relevant paragraphs 2 and 3 are reproduced as below:

“2. The excel sheet, according to the learned Counsel for the Revenue, contained the details of payment made by the assessee to the developer, with respect to which tax had been paid by the developer before the Settlement Commissioner. The findings returned by the CITA and ITAT on the issue is sought to be assailed on the ground that the payment of tax by the developer, in whose premises search was conducted, before the Settlement Commissioner, with respect to the amount entered in the excel sheet found from the possession of the assistant working with the developer, is sufficient proof of the transaction between the assessee and the developer.

3. We find inherent fallacy in this submission, inasmuch as, there is no basis for conducting proceedings against the assessee merely for the fact that the developer had paid tax on the amount shown in the excel-sheet. There is no adjudication with regard to the payment, which was shown in the excel-sheet to the effect that the same was actually paid by the assessee to the developer. Even otherwise, the concurrent findings returned by the CITA and ITAT are that the document found from the premises of the third party namely excel-sheet, which is the basis of the proceedings was without any signature and there is no corroborative material to substantiate the said document. The nature of the document has not been explained by the Assessing Officer while proceeding against the assessee. The statements of the persons recorded during search with reference to the alleged, seized material, was not provided to the assessee and hence, the entire proceedings under Section 153C of the IT Act of 1961 stood vitiated.”

12. We have heard the rival submissions and perused the material available on record. The undisputed factual position is that the impugned addition under section 69 has been made solely on the basis of third-party statements recorded during the course of search in the case of the Rubberwala Group and certain excel sheet data allegedly retrieved from a pen drive belonging to an employee of the said group. It is an admitted position that no incriminating material whatsoever has been found from the possession or control of the assessee. Further, no seized document directly evidencing any cash payment by the assessee has been brought on record by the Ld. AO. We find considerable merit in the contention of the Ld. AR that the entire addition is founded on uncorroborated third-party material, which was neither confronted to the assessee nor subjected to cross-examination. Such an approach is in clear violation of the principles of natural justice. It is a settled proposition of law that any adverse material used against the assessee must be put to him for rebuttal, failing which such material loses its evidentiary value. We further note that on identical facts arising out of the very same search in the Rubberwala Group, the Coordinate Bench of the ITAT, Mumbai has consistently held that additions made merely on the basis of excel sheets or third-party statements, without any independent corroborative evidence linking the assessee, are unsustainable in law. Respectfully following the judicial discipline and the binding precedents in the cases of Bhavana Vikram Jain (supra), Akhraj Pukhraj Chopra (supra), Kulsum Aaqib Memon (supra), Dimple Shailesh Jain (supra) and Pravin Khetaram Purohit (supra), we hold that no addition can be sustained in the hands of the present assessee.

13. As regards the contention of the Ld. DR that the developer group has admitted receipt of on-money and paid tax thereon, we find that such admission by a third party cannot ipso facto lead to an inference that the assessee has made corresponding cash payments, in the absence of any independent evidence establishing such nexus. This precise issue has been examined by the Hon’ble Gujarat High Court in Kaushik Nanubhai Majithia (supra), wherein it was categorically held that payment of tax by the developer on alleged on-money does not, by itself, constitute evidence against the purchaser unless there is material to establish actual payment by such purchaser. The reliance placed by the Ld. DR on the decision of the Hon’ble Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) is clearly misplaced and distinguishable on facts. In that case, the addition was supported by cogent and direct evidence demonstrating undisclosed investment by the assessee. However, in the present case, there is a complete absence of any such corroborative material. The addition is based merely on generalized statements and unverifiable excel data recovered from a third party, which has neither been authenticated nor linked specifically to the assessee.

14. Further, even the so-called seized excel sheet does not carry any evidentiary sanctity in the absence of independent verification, authentication, and corroboration. The veracity of such electronic data has not been tested by the Ld. AO, nor has any effort been made to establish its reliability vis-à-vis the assessee. In such circumstances, the same cannot be treated as credible evidence for making addition under section 69 of the Act.

In view of the foregoing discussion, we hold that the addition made by the Ld. AO and sustained by the Ld. CIT(A) is unsustainable both on facts and in law. Accordingly, we set aside the impugned appellate order and direct the Ld. AO to delete the addition made under section 69 of the Act.

15. Since identical facts and issues are involved in the remaining appeals, the decision rendered in ITA No. 7315/Mum/2025 shall apply mutatis mutandis to the other appeals as well.

16. In the result, the appeals of the assessee bearing ITA Nos. 7313 to 7315/Mum/2025 are allowed.

Order pronounced in the open court on 08^th day of April 2026.