Section 68 Addition Deleted in Search Case – No Incriminating Material Dumb Documents Rejected

Jayant Warping Works Vs DCIT (ITAT Mumbai)

Section 68 Addition Deleted in Search Case – No Incriminating Material “Dumb Documents” Rejected

Mumbai ITAT delivered a detailed ruling deleting additions made u/s 68 and 69C in search assessments, holding that in absence of incriminating material, no addition can be sustained in unabated assessments.

On unsecured loans (₹50 lakh u/s 68):

• Assessee furnished complete documentary evidence:
  • PAN, ITR, financials, confirmations, bank statements
• AO relied on:
  • Investigation Wing reports (Kolkata)
  • Third-party statements (later retracted)
• Tribunal held:
  • Issue already covered in group cases involving same lender (Vinam Finance Pvt. Ltd.)
  • Identity, genuineness, and creditworthiness established
  • No independent enquiry to disprove evidence

Addition u/s 68 deleted on merits

On legal ground (search assessment):

• No incriminating material found during search
• Relying on SC in Abhisar Buildwell:
  • In unabated assessments, additions cannot be made without incriminating material

Addition also deleted on legal ground

On interest disallowance:

• Held consequential → allowed

On ₹4.00 lakh addition u/s 69C (seized papers):

• Based on handwritten rough notings (pages 9 & 10)
• Tribunal observed:
  • These were mere estimates/jottings, not actual transactions
  • No cash trail, no corroboration, no third-party verification
  • Department failed to link entries specifically to assessee

Treated as “dumb documents” → addition deleted

Key principles laid down:

• No addition u/s 153A without incriminating material
• Statements without corroboration = weak evidence
• Rough notings ≠ proof of actual expenditure
• Once primary evidence is filed, burden shifts to AO

Result:

• All additions deleted
• Appeals allowed (substantially in favour of assessee)

Takeaway:

“Search additions must rest on solid incriminating evidence—not borrowed statements or loose papers.”

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The present appeals have been filed by the assessee challenging the impugned order dated 20.01.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the Office of the for the assessment years 2015-16 to 2020­2021. The following grounds raised by the assessee are reproduced below:

a. “On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/-u/s 68 of the Act made by the Ld. Assessing Officer in the assessment order passed u/s 143(3) r.w.s 153A of the Income Tax Act dated 28.09.2021 on account of unsecured loan received by the Assessee from M/s Vinam Finance Pvt. Ltd. which was treated as unexplained cash credits though the Assessee had duly discharged its onus under section 68, by submitting all the relevant documentary evidences to prove identity and creditworthiness of the lender company and genuineness of the transactions of unsecured loan.

b. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 50,00,000/- holding the company as paper/shell/non-genuine entity even though the company was MCA Active at the time of taking of such loan.

c. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appels) has erred in making addition u/s 68 r.w.s. 115BBE on account of unsecured loan amounting to Rs. 50,00,000/- treating the same as unexplained cash credits disregarding and completely ignoring the relevant material placed on record to substantiate the loan thus resulting in grave injustice and arbitrariness.

d. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- in absence of any incriminating material whatsoever found during the course of search & seizure action, pertaining to the year under consideration.

e. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- on account of unsecured loan without there being any evidence of cash paid at the time of receipt of alleged non-genuine unsecured loan from the above company.

f. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income tax (Appeals) erred in relying on the retracted statements of Shri Minesh Dodhia, Shri Bhavik Jakharia and Shri Bhadresh Dodhia who had sworn affidavits dated 08.03.2020 retracting their statements recorded under such circumstances.

g. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not quashing the assessment order wherein the Assessing Officer has made addition solely on the basis of information received from other sources and without making any enquiries on his own.

h. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not quashing the assessment order and deleting the addition made even when the Ld. Assessing Officer did not follow the basic principles of natural justice by

i. supplying the Assessee with materials collected at its back,

ii. supplying copies of all relevant statements of third parties,

iii. supplying copies of reports of Investigation and

iv. affording opportunity to cross examine the third parties whose statement was relied upon to draw inference against the Assessee, despite specific request made by the Assessee in response to show cause notice filed by the Assessee.

i. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- even though no unaccounted assets in the form of cash, jewellery or stock were found.

j. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the disallowance of Rs. 25,270/- u/s 37(1) of the Act in respect of interest paid on alleged bogus unsecured loans where the interest expenditure is actually incurred.

k. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the levy of interest u/s 234B of the Income Tax Act, 1961.

l. On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the initiation of penalty u/s 271(1)(c) of the Income Tax Act, 1961.

m. The Assessee craves leave to add to, alter, amend, modify and /or delete all or any of the foregoing grounds of appeal.”

2. The year wise additions against which the Assessee company has preferred an appeal before this Tribunal is produced hereunder:

Findings of Search [Relevant for AY 2015-16 to 2020­21]:

3. The statement of Shri Bhadresh M. Dodhia, Shri Pradeep Dodhia, Shri Minesh Dodhia and Shri Bhavik Jakharia, were recorded during the course of search on 29.11.2019. Shri Bhadresh Dodhia was confronted with other statements of accommodation entry operators and in reply to question no. 70, Shri Bhadresh Dodhia accepted that Dodhia Group was having cash available from various sources which was routed to books of accounts of various entities, through M/s. Vinam Finance Pvt. Ltd. In reply to question no. 72, Shri Bhadresh Dodhia accepted that amount of Rs. 43 crores approximately was routed through M/s. Vinam Finance Pvt. Ltd.

4. The Assessee contented that the CIT(A) and the Assessing Officer has heavily relied upon statements of certain persons namely Shri Minesh Dodhia, Shri Bhadresh Dodhia and Shri Bhavik Jhakharia recorded u/s 132(4) of the Act, which are not in the context of any incriminating corroborative material seized from the Assessee. In any case, the said statements stood retracted later. Nevertheless, the lower authorities have not brought on record any incriminating material either from the premise of the Assessee or any other person covered under the search in relation to the unsecured loan otherwise genuinely received by the Assessee from M/s Vinam Finance P Limited. Therefore, the said third party statements neither have evidentiary value nor have any relevance to be called incriminating to Assessee and therefore, no additions could have been made u/s 153A read with section 132(4) of the Act in an unabated assessment without incriminating material as held by the Hon’ble Supreme Court Abhisar Buildwell P Limited [(2023) 454 ITR 212 (SC)].

5. The AO has also observed that various entities of Dodhia Group had taken accommodation entries in the form of unsecured loans from various shell entities as per the pre-search information received from Investigation Wing Kolkata. The AO had also issued the commission u/s. 131(1)(d) of the Act to Investigation Wing, Kolkata. The DDIT, Investigation Unit- 2(4), Kolkata replied that the Inspector deputed to verify the existence of these companies, reported that the no such company was found at the given address. Similarly, the summons issued to the companies remained unserved. With above background, the AO required the assessee to substantiate the genuineness of these loans taken during the year.

Facts and Background of the Case for A.Y. 2015-16 (being the lead year):

6. The original return of income was filed u/s 139(1) on 16.10.2015 declaring total income at Rs. 25,73,850/-. Thereafter, on the basis of an information received from DDIT (Inv.), Unit-2(1), Kolkata, the case was reopened for the first time and a notice u/s. 153A of the Act was issued on 04.01.2021. The assessment u/s. 153A was completed on 28.09.2021, wherein, an addition of Rs. 50,00,000/- was made on account of bogus unsecured loan and an addition of Rs 25,270/- was made on account of interest on unsecured loan.

7. Various Issues arising from the appellate order of the Ld. CIT(A) and forming part of the grounds of appeal of both sides are dealt in following paragraphs.

Additions made by AO u/s 68 of the Act on account of unsecured loans [Relevant for AY 2015-16]

8. Regarding the additions made by the AO u/s. 68 of the Act, the Ld. CIT(A) has observed that various entities of Dodhia Group had taken accommodation entries in the form of unsecured loans/share capital from various shell entities as per information received from Investigation Wing Kolkata.

9. During the assessment proceedings, the AO had issued the commission u/s. 131(1)(d) of the Act to Investigation Wing, Kolkata. The DDIT, Investigation Unit-2(4), Kolkata reported that the Inspector deputed to verify the existence of these companies, reported that the no such company was found at the given address. Similarly, the summons issued to the companies remained unserved. With above background, the AO required the assessee to substantiate the genuineness of these loans taken during the year.

10. During the assessment proceedings, the Assessee vide reply dated 25.09.2021 submitted the following documents to prove the identity, genuineness and creditworthiness of the loans received from M/s Vinam Finance Private Limited to discharge the onus:

a. Copy of PAN

b. Certificate of Incorporation, Memorandum of Association and Articles of Association

c. MCA Active Compliant Status

d. Acknowledgement of Return of Income for AY 2015-16.

e. Audited Financial Statements viz. Independent Auditor’s report and annexure thereto, Audited Balance Sheet, Audited Profit and Loss Account, significant accounting policies and notes to accounts forming part of the audited financial statements for the year ended 31.03.2015 relevant to Assessment Year 2015-16.

f. Acknowledgement of Return of Income for AY 2015-16 filed in response to notice u/s 153A of the Act.

g. Copy of Form 26AS; Annual tax statement u/s 203AA of the Act of the lender company showing credit of the tax deducted at source by the assessee.

h. Copy of the ledger account of assessee in the books of the lender company.

i. Copy of Confirmation Letter signed by the lender company.

j. Copy of the duly signed ledger account of lender party in the books of the assessee.

k. Copy of bank statement of assessee showing the loan transactions with the lender company.

11. Relying on the above evidences/details, the Assessee contended that the identity of the lenders had been established on the basis of the PAN, return of income, account confirmation of above-mentioned parties. The genuineness of the transactions had also been established on the basis of account confirmation & bank statements filed before the Assessing Officer, where all the loans taken from above mentioned parties by account payee cheques are reflected in the bank statements. The creditworthiness of the lenders was established on the basis of balance sheet of above-mentioned parties filed before the Assessing Officer. From the balance sheets, it can be seen that the above lenders had surplus funds, while carrying out their trading business activity & these funds were loaned against interest and these loans were repaid in subsequent year(s). Therefore, the Assessee has discharged his onus as required u/s. 68 of the Act by filing the necessary documentary evidences. The Assessee further contends that on the contrary, that the AO has violated the principle of natural justice by not providing the copies of enquiry reports conducted at the back of the Assessee and the opportunity of cross examination of so-called accommodation entry operators was not provided by the AO. Further, no incriminating material, say in the form of any cash trail has been found during the search or even after the Search through any independent enquiries by the AO, to enable the AO to shift the onus back onto the Assessee.

12. The Ld. CIT(A) after relying on various case-laws described in para 10 to 27 of the appellate order and facts of the case, upheld the addition u/s. 68 of the Act, in respect of this loan. The disallowance of interest on unsecured loans was consequentially confirmed. The Ld. CIT(A) based his finding on the ground that the creditors were not found existing at the given addresses and the Assessee to failed to produce the directors of these companies as required by the Assessing Officer. The Assessee argued that the lenders are MCA active companies and are on compliance record of Income Tax Department through compliances before their respective jurisdictional PAN-AO. If these are not found on their addresses, years after the transactions with the Assessee, the onus of finding them can not be foisted onto the Assessee. Further, the insistence by both the Assessing Officer as well as the Ld. CIT(A) to produce the directors of a third-party legal entity is well beyond the control of anybody much less the Assessee. It is on the contrary, well within the powers of the revenue authorities to ensure their attendance, if they so required. Nevertheless, as contended by the Assessee, these aspects are not enough to shift the onus back on to the Assessee after the Assessee had submitted all possible details to discharge the onus and the Assessing Officer neither carried out any independent enquiry through banking channels or through the lender’s jurisdictional AOs or directly through lenders, to disprove any of the documents submitted by the Assessee in discharge of the onus.

13. The AR of the Assessee contented that in the other cases of the Dodhia Group, wherein, the Vinam Finance had provided unsecured loan to various companies and individuals, the Income Tax Appellate Tribunal, Mumbai Bench after going through various documents concluded that the Assessee Company Vinam Finance is not fictitious but is a genuine and legally existing company.

14. The AR argued that the issue on merits is covered by the following decisions of the Income Tax Appellate Tribunal, Mumbai Bench in cases, which are part of Dodhia Group and have taken loan from same Vinam Finance:

15. The Ld. DR on the other hand referring to the seized material, statement of various persons recorded during the search and the reports of the Investigation Wing, drew our attention to extensive discussion on various case laws cited by the Ld. CIT(A) and relying upon the orders of both the lower authorities, argued for dismissal of grounds raised by Assessee on merits against additions made u/s 68 on account of unsecured loans. However, the Ld. DR fell short on how the matter is not covered by the other judicial decisions in the matter of the assessee’s group companies and individuals as demonstrated by the Ld. AR.

16. We have heard counsel from both the parties and perused the material placed on record. We are inclined to follow the decisions of the judgments of this Tribunal on identical issue on the same material in group cases as tabulated above (including the judgments of Hon’ble Supreme Court, Jurisdictional High Court and Jurisdictional Tribunal referred therein) that create binding precedents as regards their ratio decidendi and accordingly delete the additions made u/s 68 in respect of unsecured loans/share application money on merits and the appeals are accordingly Allowed on relevant grounds.

17. Further, the interest on unsecured loan u/s 37(1) of the Act for AY 2015-16 to 2020-21 being consequential in nature is allowed accordingly.

Legal Contentions of the Assessee for A.Υ. 2015-16 to Α.Υ. 2019-20

18. The Assessee has challenged the jurisdiction of the Assessing Officer in making the additions u/s 153A of the Act, in the absence of any incriminating material whatsoever, found during the course of search and in a completed/unabated assessment relying upon the decision of the Hon’ble Supreme Court in Abhisar Buildwell Pvt. Ltd. v. PCIT (supra).

19. The Assessee contended that even the third-party statements recorded u/s 132(4) without any reference to seized and incriminating material cannot be held and used as evidence against the Assessee, more so if they are retracted. The reliance is placed on the decision of the Hon’ble High Court of Andhra Pradesh in CIT v. Shri Ramdas Motor Transport [1999] 238 ITR 177/102 Taxman 300 (AP), have dealt with the relevance of statement recorded u/s 132(4) of the Income Tax Act, 1961 in the absence of supporting material found during the search and reaffirmed in para 22 of Shri Ramdas Motor Transport Ltd. [2015] 55 taxmann.com 176 (AP) on reference u/s 256(1) made by Income Tax Appellate Tribunal, Hyderabad. Further, the Hon’ble Delhi High Court in the case of Harjeev Aggarwal [2016] 70 taxmann.com 95 (Delhi) delivered on 10.03.2016, interalia, relying on decision of Hon’ble AP High Court in Shri Ramdas Motor Transport (supra) have explained in detail that the statements recorded u/s 132(4) of the Act do not themselves, by constitute incriminating material unless, such statement relates to any incriminating evidence of undisclosed income unearthed during search and seizure. The above detailed judgment is also referred in another judgment of Hon’ble Delhi High Court in the case of Best Infrastructure (India) (P.) Ltd [2017] 84 taxmann.com

20. It is submitted that in the case of the Assessee, the addition of Rs 50,00,000/- has been made u/s 68 of the Act in respect of unsecured loan received from M/s Vinam Finance P Limited. The Ld. CIT(A) and the Assessing Officer has heavily relied upon statements of certain persons namely Shri Minesh Dodhia, Shri Bhadresh Dodhia and Shri Bhavik Jhakharia recorded u/s 132(4) of the Act, which are not in the context of any incriminating corroborative material seized from the Assessee. In any case, the said statements stood retracted later. Nevertheless, the lower authorities have not brought on record any incriminating material either from the premise of the Assessee or any other person covered under the search in relation to the unsecured loan otherwise genuinely received by the Assessee from M/s Vinam Finance P Limited. Therefore, the said third party statements neither have evidentiary value nor have any relevance to be called incriminating to Assessee and therefore, no additions could have been made u/s 153A read with section 132(4) of the Act in an unabated assessment without incriminating material as held by the Hon’ble Supreme Court Abhisar Buildwell P Limited (supra).

21. It is further submitted by the Assessee that the impugned order passed by the Assessing Officer is in gross violation of the principles of natural justice as the Assessing Officer had failed to provide copies of the investigation reports; copies of reports of enquiries conducted through inspectors; copies of material and information received from investigation wing; and also failed to provide opportunity of cross examination of all the persons whose statements have been relied upon. It is a fact that none of the above were confronted to the Assessee in the course of assessment proceedings. Therefore, on this issue as well, the facts are identical.

22. Further, the Ld. AR submitted that an identical legal issue has also been dealt with by the coordinate Bench of this Tribunal in other Group cases, including the case of Chandrika Mansukhla Dodhia, [IT(SS)A no. 199/Mum/2025 decided on 15-04-2025] and while relying on the judgment in Abhisar Buildwell case (supra) has deleted the identical addition on legal grounds. The Ld. AR submitted that the case of the Assessee is covered by these decisions of the Income Tax Appellate Tribunal, Mumbai Bench in the matter of the assessee group companies and individuals, which are covered by the same search and additions have been made u/s 153A on identical additions. The list of these decisions, as submitted by the Ld. AR is as follows:

23. We have heard counsel from both the parties and perused the material placed on record. In view of the facts and circumstances and judicial precedents including those of jurisdictional tribunal in group cases on the same set of material, we are of the considered opinion that issue is squarely covered by the above decisions cited by the Ld. AR, wherein, it was held that in the absence of any incriminating material the judgement of the Hon’ble Supreme Court in the judgment of Abhisar Buildwell P Limited squarely applies. Furthermore, for a seized material to be considered for the purposes of section 153A, the material seized against the warrant of authorisation in respect of Assessee alone has to be considered and in case the material has been seized from the premises of some other person against a separate warrant of authorisation, not naming the Assessee, the recourse to section 153C has to be made on fulfillment of certain conditions including incriminating nature of the material. Therefore, the additions made u/s 153A in the case of Assessee are not sustainable on this ground and the additions stand deleted on this ground as well for the years, wherein, assessments were based on notices u/s 153A.

Additions made by AO on account unexplained expenditure based on seized material [Relevant for AY 2020-211]

24. For AY 2020-21, the Assessee has raised a ground with regard to the addition made by the AO on account of unexplained expenses as per seized pages no. 9 and 10 of bundle no. 1, party no. MN-4 papers. The relevant ground that is Ground Number 1 raised by the Assessee is re­produced below:

On the facts and in the circumstances of the Assessee’s case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition made by the Assessing Officer of Rs. 4,00,500/- u/s 69C of the Income Tax Act, 1961 even though the explanation of the rough notings on the seized material was duly submitted to the office of the Investigation Wing as well as the Assessing Officer vide letter dated 24.12.2019.”

25. The AO made alleged addition of Rs 4,00,500/- u/s 69C of the Act on the basis of seized pages no. 9 and 10 of bundle no. 1, party no. MN-4 which has been re-produced by the appellate authority at page no 46 and 47 of the appellate order.

26. Regarding page number 9, the CIT(A) alleged that seized page no. 9 clearly suggest that the name of the Assessee firm is mentioned at the top of the seized page along with date i.e. 01.06.2019. From the explanation, it can be seen that the Assessee has purportedly admitted about incurring of these expenses amounting to Rs. 1,22,500/- (out of Rs. 4,00,500/-). It is further seen from the assessment order that during the assessment proceedings, the assessee could not substantiate that any part of these expenses are in fact accounted in the books of accounts. Therefore the CIT(A) upheld the addition made by the AO.

27. Regarding the page no. 10, the Ld. CIT(A) held that it is seen that the name of the Assessee along with the date, i.e. 29.07.2019 is clearly mentioned on the seized document. The total amount of alleged expenses on this page comes to Rs. 2,78,000/- (out of Rs. 4,00,500/-). It is seen from the explanation of the Assessee that these notings are regarding estimated cost for repair and maintenance. According to Ld. CIT(A), the said claim of the Assessee cannot be accepted because the last item mentioned at this page is ‘extra work-4,000’ meaning thereby while carrying out repair and maintenance, some extra work was done which was valued at Rs. 4,000/-. Normally, no such item is mentioned in an estimate. Moreover, the date mentioned on the seized page also suggest that the work has been done because normally no date is mentioned on an estimate. Thus, the seized page suggest that the Assessee firm has incurred an expenditure of Rs. 2,78,000/-on this page which has not been accounted in the books of accounts and no explanation regarding the source of such expenditure is furnished. Considering the totality of facts of the case, the addition of Rs. 2,78,000/-made by the AO u/s. 69C of the Act on the basis of seized page no. 10, bundle no. 1, party no. MN-4, the CIT(A) upheld the additions made by the AO. In the result, the Ld. CIT(A) upheld total addition of Rs. 4,00,500/-.

28. The Ld. AR of the Assessee raised the following contentions:

i. It can be seen that the seized pages are mere jottings and estimates written down to conduct future work.

ii. Any work which was finally executed has been accounted for and claimed as expenses which has not been doubted.

iii. On perusal of page 9 it can be seen that the Amount of Rs 1,22,500/- has been struck off partly which further proves that these are mere jottings.

iv. Further it can be seen that Rs 25,000 has been deducted from Rs 1,22,500 and the total amount is Rs 97,500/-. However, the AO has still added Rs 1,22,500/-When a seized material is taken into consideration, it shall be seen as a whole and not how much that suits the AO.

v. The explanation for page 8 and 9 states that the notings of expenses are for Unit No 2. It is pertinent to note that there is no unit no 2 of the Assessee firm. In fact Unit No 2 related to another entity namely A One Sizing a company, and not the Assessee.

vi. The explanation for page number 10 itself states that the page contains estimated cost and the quantity of different material to be used in the repairs and maintenance.

vii. If the transaction indeed took place, it is nowhere mentioned that it was a ‘Cash’ transaction; even for the sake of academic discussion, if it is ‘Cash’, nowhere it is mentioned as to who is receiving or paying cash on behalf of the Assessee company or any other entity for that matter.

viii. The said noting does not contain any implicating or damning words like ‘cash paid’ or ‘cash received’ either.

ix. There is no independent inquiry conducted in this regard or any statement recorded of any person. In this regard the AR relied upon the decision of the Hon’ble Income Tax Apellate Tribunal in the matter of Deputy Commissioner of Income Tax vs Saarrthi Reality and Infra LLP, [2025] 176 com 859 (Mumbai-Trib.).

x. It is a well settled law that in order to prove that the assessee had undertaken unaccounted cash transactions or made any cash payments, a live link or a cash trail corroborating the alleged incriminating document as conclusive evidence should have been established. In absence of the same, noting /jottings cannot be considered as an incriminating material and no additions can be proposed in this regard on the basis of a mere ‘dumb document’.

29. The Ld. DR however relied upon the order of the lower authorities to urge for dismissal of the ground and contention raised by the Ld. AR.

30. We have meticulously gone through the facts, documents & legal proposition of the case, we noticed that the hand written noting in the seized material as bundle no. 9 and 10, which nowhere indicate that noting represent materialized transactions that too by the assessee under consideration. We also find that no attempts have been made by the department to identify and segregate the entries attributable to the assessee vis-à-vis other entities of the Group. Nevertheless, the presumption, if any is rebuttable and is, otherwise, to be duly supported by corroborative statements and independent enquiries, which have not been conducted with any of the transacting parties as being deciphered. The Ld. CIT(A), also has treated the dumb documents as materialized transactions without giving a clear finding as to the entity and persons with whom these transaction have taken place and whether they have materialized or not. Therefore, in view of the facts and circumstances, arguments of the Ld. AR and the judicial precedents referred to in the case of Dodhia Synthetics Ltd. (supra), we are inclined to allow the ground relating to additions u/s 69C in respect of unexplained expenditure based on this seized material.

31. In the net result appeals filed by the Assessee in IT(SS)A No. 1065, 1066, 1067, 1068, 1069 and 1070/Mum/2025 is allowed for statistical purpose.

Order pronounced in the open court on 20.04.2026