Manish Mali Vs DCIT (ITAT Mumbai)
On-Money Additions u/s 69 Collapse Without Cross-Examination & Corroboration — ITAT Mumbai
ITAT Mumbai (D Bench) in a batch of appeals led by Manish Mali vs DCIT (ITA Nos. 6571, 6569 & 6568/Mum/2025 for AYs 2017-18 to 2019-20; along with connected appeals of Darpan Hiralal Mehta & Dinesh Megharam Choudhary; order dated 24.12.2025) has allowed all appeals, deleting on-money additions u/s 69 made pursuant to search-based assessments u/s 153C arising from the Rubberwala Group search.
The additions were founded on third-party Excel sheets seized from the builder group and statements u/s 132(4) of the builder’s director/employee alleging cash receipts for shops in Platinum Mall. The Assessees categorically denied any cash payments. The AO nonetheless made additions for alleged on-money across multiple years; CIT(A) sustained them.
Reversing the lower authorities, ITAT held that:
- Third-party material (Excel sheets) without independent corroboration does not conclusively prove on-money
- Statements relied upon were not furnished, and cross-examination was denied, vitiating the assessment (Andaman Timber Industries, SC)
- No cash trail, dates, mode, or nexus linking the Assessees to the alleged cash entries was established
- Mere admission by the seller group or generalized search material cannot be used against buyers without due process
The Tribunal followed a consistent line of Mumbai ITAT decisions in identical Rubberwala-group matters (Pravin K. Purohit; Bhavana V. Jain; Akhraj Chopra; Lilaram; Heena D. Jhanglani), holding that additions based solely on untested third-party material and statements are unsustainable.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
