ITAT Mumbai Quashes Section 69 Addition Based on Unverified Excel Sheets and Pen-Drive Data

Background of the Dispute

The appeal in Suraj Kumar Vs DCIT (ITAT Mumbai) arose from a search and seizure operation under Section 132 on 17.03.2021 in the case of the Rubberwala Group and related entities. The assessee had filed his return of income for Assessment Year (AY) 2021-22 declaring total income of ₹7,28,410.

During the search, the Investigation Wing alleged that the assessee had purchased a commercial shop in Platinum Mall, Mumbai, and paid unaccounted “on-money” in cash over and above the registered agreement value. On the strength of electronic records and statements recorded from third parties connected with the developer, the Revenue claimed that the assessee had paid:

  • ₹5,00,000 in cash relating to AY 2020-21, and
  • ₹19,58,230 in cash relating to AY 2021-22,

aggregating to ₹24,58,230.

The Assessing Officer (AO), while completing the assessment under Section 143(3), made an addition of ₹5,00,000 under Section 69 treating it as unexplained investment. The Commissioner of Income Tax (Appeals) [CIT(A)] not only confirmed this addition but also:

  • Enhanced the income by a further ₹19,58,230 under Section 69, and
  • Directed initiation of penalty proceedings for alleged violation of Section 269SS.

The assessee carried the matter in appeal before the Income Tax Appellate Tribunal (ITAT), Mumbai, challenging both the original addition and the enhancement.

Core Facts and Evidence Relied Upon by the Revenue

Property Transaction in Question

The assessee had purchased Shop No. 86 on the 2nd Floor in Platinum Mall, Girgaon, Mumbai. As per the assessment order:

  • The registered agreement value was recorded at ₹18,29,050 (as appearing in the order).
  • The stamp duty authority reportedly determined the value at ₹13,20,680.

The dispute, however, did not turn on the valuation differential but on alleged cash paid over and above the agreement value.

Basis of Alleged Cash Component

The AO relied primarily on:

  1. Search findings in Rubberwala Group:

    • The project developer was M/s Rubberwala Housing and Infrastructure Ltd. (RHIL).
    • Its promoter/director, Shri Tabrez Shaikh, and key employee, Shri Imran Ansari, were subjected to search and recording of statements.

  2. Statement of Shri Imran Ansari:

    • On oath, he allegedly admitted that shops in Platinum Mall were sold with a combination of cheque/banking component and a separate cash component.
    • He claimed that the cash component for each deal was determined by Shri Tabrez Shaikh.
    • He also stated that he maintained an Excel sheet containing details of such transactions, including on-money.

  3. Excel Sheet / Pen-Drive Data:

    • Excel files were retrieved from a pen drive found at the premises of Shri Imran Ansari.
    • The Revenue contended that these files recorded agreement values and cash components for various shops in Platinum Mall.

  4. Statement of Shri Tabrez Shaikh:

    • In his post-search statement, he purportedly confirmed the correctness of the Excel data and the statements of Shri Imran Ansari.
    • The Rubberwala Group is stated to have offered 8% of the cash receipts reflected in such data as income and paid tax thereon.

Relying on the above, the AO concluded that the assessee had paid ₹5,00,000 in cash (relating to AY 2020-21), and the CIT(A) extended the same logic to treat an additional ₹19,58,230 as cash paid for AY 2021-22, cumulatively treating ₹24,58,230 as unexplained investment under Section 69.

Assessee’s Contentions Before the Tribunal

Denial of Any Cash Payment

The assessee consistently maintained that:

  • The entire consideration for Shop No. 86 was paid only through banking channels.
  • No portion of the purchase price was ever paid in cash to RHIL or its representatives.

No Incriminating Material Found from Assessee

The assessee emphasised that:

  • The search under Section 132 was conducted in the Rubberwala Group and other related premises—not in the assessee’s business or residential premises so as to unearth any incriminating evidence directly from his possession.
  • No document, diary, loose paper, digital record or any other material was found from the assessee himself indicating any undisclosed cash payment for the shop.