Additions based on “Dumb Documents” (Excel Sheets) & Retracted Statements Deleted
Issue
Whether additions for unexplained money and capital gains can be sustained based solely on seized Excel sheets (projections/estimates) and statements recorded under Section 132(4) that were subsequently retracted, without any independent corroboration or third-party verification.
Facts
The Evidence: During a search, Excel-based management information sheets and loose sheets were seized. These contained notings suggestive of cash investments in land and cash receipts for the sale of shares (VRECPL).
The Defense:
The Excel sheets were prepared by a third party (‘PDG’) and were merely estimates/projections, not records of actual transactions.
The key persons (‘TNS’ and ‘NKS’) retracted their initial statements, explaining they were unaware the statements would be used against the assessee.
‘NKS’ specifically contradicted ‘TNS’ regarding the nature of the sheets.
AO’s Failure: The Assessing Officer (AO) did not cross-verify the alleged cash payments with the counterparties (sellers/buyers) mentioned in the sheets. No corroborative evidence (like money trail or registered deeds matching the notes) was found.
Decision
Evidentiary Value: Seized material that is not self-explanatory (often called “dumb documents”) and is based on estimates cannot form the sole basis for tax addition.
Retraction: When a statement is retracted with valid reasons, the AO must bring on record independent evidence to sustain the addition. Relying on a retracted statement without cross-verification makes the assessment “built on conjecture.”
Ruling: Since the additions lacked factual and legal foundation, they were deleted.
III. Reassessment Quashed: JAO issued Notice violating Faceless Scheme
Issue
Whether a Reassessment Notice under Section 148 is valid if it is issued by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO), in violation of the Scheme notified under Section 151A.
Decision
Eclipsed Jurisdiction: The Tribunal held that once the Parliament and the Central Board of Direct Taxes (CBDT) assign jurisdiction to the Faceless Unit, the jurisdiction of the local JAO stands “eclipsed.”
Coram Non Judice: A notice issued by an authority (JAO) who has been divested of the power to issue it is coram non judice (acts done without jurisdiction) and is therefore void ab initio (invalid from the start).
Ruling: The reassessment proceedings were quashed due to lack of jurisdiction.
Key Takeaways
Faceless Assessment is Mandatory: For most taxpayers, the local Income Tax Officer (JAO) no longer has the power to issue reopening notices under Section 148. If you receive a notice signed by your local ITO instead of the “National Faceless Assessment Centre” (NaFAC), it is likely invalid and can be challenged in a Writ Petition or appeal.
“Dumb Documents” Defense: If a search unearths loose sheets or Excel files with rough calculations, they are not automatic proof of “black money.” If you can show they are merely projections, rough estimates, or dumb documents (without a narrator), and the Department fails to find the actual cash flow, the additions usually do not hold up in court.
IN THE ITAT MUMBAI BENCH ‘E’
Tarun Nandkumar Seksaria
v.
Deputy Commissioner of Income-tax*
Amit Shukla, Judicial Member
and ARUN KHODPIA, Accountant Member
and ARUN KHODPIA, Accountant Member
IT Appeal Nos. 3215, 3216 and 3239 (Mum.) of 2025
[Assessment years 2015-16 to 2017-2018]
[Assessment years 2015-16 to 2017-2018]
OCTOBER 28, 2025
Madhur Agrawal, Adv. and Pankaj Jain, CA for the Appellant. Ritesh Misra, CIT DR for the Respondent.
ORDER
1. The present batch of appeals emanates from a series of assessment and reassessment orders passed pursuant to search and survey operations conducted in the group cases of The Estate Investment Company Pvt. Ltd.[Estate] and its connected entities., [hereinafter referred to as the Sakseria Group of Companies] The appeals have been filed against separate order passed by ld. CIT(A)-50, Mumbai. Since the core issues, factual substratum, and legal contentions are substantially common across these years, therefore, are clubbed together and are being disposed of by this consolidated order. The appeals traverse multiple assessee’s appeals for assessment years 2015-16 to 2017-18 aggrieved by the orders of the learned Commissioner of Income Tax (Appeals)-50, Mumbai.
2. The details of the additions made can be classified into 2 parts- undisclosed income under section 69A/69B on account of unaccounted investment in land situated at Dhokawde & Dapoli and capital gains on sale of shares of Veda Real Estate Pvt Ltd.[Veda]
3. For the sake of convenience, the appeal for the A.Y. 201617 i.e. ITA No. 3215/Mum/2025 of Tarun Nandkumar Sekseria (TNS) are taken up first as lead matters and most of our finding given herein will apply mutatis mutandis in the appeals for other assessment year also. This appeal arises against order of ld. CIT(A) dated 15/04/2025.
Finding of the Assessing Officer
4. The controversy, in essence, centers upon additions made on the basis of certain excel sheets found during the course of search, the evidentiary worth of the statements recorded under section 132(4), and the consequential additions of unexplained investments under section 69A/69B of the Act.
5. Brief facts as culled out from the records are that the assessee is a part of the Sakseria Group of Companies. Assessee is a private limited company incorporated especially for acquisition of land in and around Dhokawade and Dapoli. The Assessee has been aggregating land parcels in and around Dhokawade and Dapoli for over a decade.
6. On 7th October, 2021, the Investigation Wing of the Department conducted a search and survey action under section 132 of the Act at the premises of the Sakseria Group of Companies which included the Assessees situated on the 4th Floor of Seksaria Chambers, Nagindas Master Road, Fort, Mumbai. The search extended over multiple days and encompassed various group entities and individuals associated with the Seksaria Group and their business concerns. During the course of the operation, certain Excel based management information sheets were found and seized. These documents, according to the Department, contained notings suggestive of cash investment for acquisition of land at Dhokawade and Dapoli. Statements of Mr. Nandkumar Kudilal Seksaria (NKS), and Mr. Tarun Sekseria (TNS) were recorded contemporaneously and in the days following the search, forming the bedrock of the Assessing Officer’s inference regarding unaccounted income in the case of Assessee,
7. In the case of Assessee, the Assessing Officer drawing primarily upon these excel statements which were found and seized on 07/10/2021 and based on the statements of TNS and NKS made additions under section 69A/69B.
8. The statements recorded during the course of the search are as under:
| Sr. No. | Deponent | Statement Recorded at | Statement dated | Q.Nos |
| 1 | Tarun Nandkumar Seksaria (TNS) | Sakseria building, Marine Drive, Mumbai-400020 | 09.10.2021 | Q1-Q 31 |
| 3. | Nandkumar Kudilal Seksaria (NKS) | Sakseria Building, nagindas master Road, Mumbai 400001. | 11.10.2021 | Q.1 to Q.30 |
| 4. | Nandkumar Kudilal Seksaria (NKS) | Air India Building, (Income Tax) | 04.04.2022 | Q.1 to Q.12 |
8.1. The statement relates to Excel sheets which were recovered from the laptop of Mr.Tarun Sakseria[TNS], which indicated notings pertaining to lands situated at Kolgaon, Dhokawade, Agarsure and Dapoli.
8.2. The statement of TNS was recorded on each of these excel sheet pertaining to these various land parcels under section 132[4] on 9.10.2021. The land parcel concerning the assessment year under consideration is Dapoli land.
Relevant extract of statement of TNS in respect of Dapoli land recorded on 9/10/21.
9. In reply to Q.No.25 TNS stated that the sheet shows total working of Dapoli land acquired through Veda Trade Infra LLP. In reply to Q.No.26-27, TNS stated that the total application for acquisition of Dapoli land was Rs.2,07,54,500 and out of the said amount Rs.1,02,04,500 was the cash payment made out of the books for acquisition of Dapoli land. Further, TNS stated that the cash component was derived from release of rights and grant of NOC from The Estate Investment Company Pvt Ltd land parcels in Mira Bhayender.
Relevant extract of statement of NKS in respect of statement of TNS concerning excel sheet recorded on 4.1.2022.
10. In Q 11, NKS was asked to comment on the statement of TNS, on the excel statement seized, wherein TNS had stated that cash derived from rights/grants of NOC was deployed for purchase of various land parcels.
11. In response to the same, NKS stated that ‘since Tarun has been suffering from various illness from time to time, to keep him busy, I assigned him with the task of land acquisition in Alibaug. All our land dealings were coordinated by local aggregator Late Pratap Gambhir. To the best of my knowledge these excel statements are estimates of the cost and profits and projections as prepared by Late Pratap Gambhir. As mentioned to your good self above, occasionally some quantity of cash may have come from release of rights in eksali lands and may have been given to Pratap Gambhir’
12. Both TNS and NKS have retracted their statements vide letters dated 22nd December, 2022 and 07th February, 2023
Analysis of the statement
13. One crucial point to be noted from the perusal of the statement of TNS is that he has clearly mentioned that the amount invested in Dapoli land was sourced from Estate Investment and he is not aware of the quantum of such generated by Estate which will be explained by his father, NKS. NKS, on being confronted with the statement of TNS regarding cash investment in various land parcels, has categorically stated that TNS was unwell and further denied that these excel sheet records payment of cash and stated that these excel sheets are mere estimates of the costs and profits and projections prepared by Mr.Pratap Gambhir PDG.
14. Another loose paper titled ‘Veda Trade Infra LLP’ dated 16/12/2019 was found where in certain noting were made in the name of TNS and Rajuji under the columns ‘A & ‘B’. The AO has not recorded any statement in respect of the said loose paper to understand the nature of entries.
15. , based on the Dapoli excel sheet, statement of TNS in respect of Dapoli Land and on the prima facie reading of the loose paper titled ‘Veda Trade Infra LLP’, the AO concluded that the assessee had paid an amount of Rs.35,00,000 towards acquisition of land at Dapoli and accordingly made and addition of Rs.35,00,000 in AY 2016-2017.
16. Both TNS and NKS have retracted their statements vide letters dated 22nd December, 2022 and 07th February, 2023 during the course of assessment proceedings.
17. The retractions of NKS and TNS have been rejected by AO on the ground of delay. The ld. AO, in his elaborate order, narrated that during the course of the search proceedings, multiple diaries and loose sheets were found, each containing cryptic entries in the form of initials, figures, and occasional remarks. These entries, according to the Assessing Officer, chronicled cash investment made by the assessee for acquisition of lands at various places, including Dapoli. On this premise, the Assessing Officer held that the said payment represented unaccounted investment and, therefore, treated them as unexplained investment under section 69A/69B of the Act.
Loose sheet titled ‘Veda (B)’
18. During the course of survey conducted at the godown of Estate at Ground Floor, office no.3, Sekseria chambers, another loose sheet titled Veda(B)’ dated 18/05/2016 was impounded wherein various noting were made. The AO has not recorded the statement of any Director or concerned persons in respect of the said sheet. However, the AO based on the statements of TNS recorded in respect of various land parcels presumed that the amount mentioned in ‘B’ represents cash transaction and further presumed that the said loose sheet contains the details of unaccounted cash transactions by/of various shareholders of Veda Real Estate Corporation Pvt Ltd (VRECPL) was on account of sale of shares of VRECPL and accordingly concluded that an amount of Rs.2,14,50,000 was received in cash by the assesse towards transfer of shares of VRECPL and taxed the same as capital gains.
19. Based on this reasoning, the Assessing Officer made additions under section 69A/69B of Rs 35,00,00 and capital gains of Rs 2,14,50,000. These additions were founded almost exclusively on the noting in the excel sheets found in the laptop of TNS, the statement of TNS under section 1342[4] and some uncorroborated loose sheet papers found during the search / survey operations.
19.1. No independent verification was made from the counterparties purportedly reflected in the respective purchase agreement for purchase of Dapoli land, nor were any corroborative documents or contemporaneous records unearthed to substantiate the alleged cash outflows. The Assessing Officer, nevertheless, inferred a pattern of some stray noting s in the diaries which purported to be payments to PDG, who was the land aggregator for the Sakseria Group in Dapoli, entries in the excel sheet and the statement of TNS which was later retracted.
19.2. As regards the loose paper based on which the addition of capital gains has been made, no statement has been recorded and no corroborative evidence produced by the AO
Findings of CIT(A)
20. When the matter travelled in appeal before the learned Commissioner of Income Tax (Appeals) [—CIT(A)”], the assessee vehemently contested both the factual premise and the legal tenability of the additions under section 69A/69B. It was submitted that the entire edifice of the assessment rested upon the statement of TNS under section 132[4], which was retracted later. It was further urged that the statements recorded under section 132(4) lacked credibility, as they were subsequently retracted with cogent reasons, and that no corroborative evidence whatsoever was found during the search neither cash, nor unaccounted assets so as to lend authenticity to the inferences drawn by the Assessing Officer. The assessee also emphasized that in any case the statement of TNS was debunked by the statement of NKS who was in charge of the whole group where he has categorically mentioned that no cash were paid and the statement merely showed estimation of the increase in the market values of these land parcels which was prepared as a MIS statement for analyzing the potential of the investment made in the land.
21. The learned CIT(A), after a detailed consideration of the rival submissions and the seized material, partly accepted the assessee’s for the benefit of telescoping which was allowed. The CIT(A) however ignored the fact that the statements of TNS had been debunked by NKS and therefore were contradictory and further ignored the fact that the statement of TNS and NKS were retracted. The CIT[A] has also not pondered over the AOs action in not obtaining any third-party confirmations. The Ld. CIT(A) accordingly, confirmed the addition of that in principle the AO was right in making an addition under section 69A/69B but since the assessee had explained the source, he has allowed telescoping to the extent of the addition of Rs.35,00,000 for AY 2016-17.
22. As regards the addition of Rs.2,14,50,000 on account of capital gains, the CIT(A) confirmed the addition without appreciating the fact that the said addition was merely made on the basis of one loose sheet on which no statement in respect of the said sheet was recorded by the AO of any of concerned parties. The CIT[Appeals] has therefore confirmed the addition of capital gains of Rs 2,14,50,000 for AY 2016-17
23. The Assessee have contested the additions which were confirmed by the CIT(A) either substantively or in principle.
24. Similar addition has been made in in other assessment years and the summary of additions which have been confirmed by the ld. CIT(A) on the same reasoning which has been contested by the assessee before this Tribunal are as under:-
| Sr.No | Assessment Year | 69A/69B |
| 1 | 2015-16 | 63,12,686 |
| 2 | 2017-18 | 61,04,500 |
25. Apart from the aforesaid grounds on merits of the addition, the Assessee has also raised legal grounds regarding the validity of the Notice under section 148 & validity of DIN on the Assessment Order.
Submissions of the A.R:
26. The matter was argued at length before us. The Assessees have also filed detailed written synopsis covering the facts and various arguments made before us and a paper book containing a Excel sheets pertaining to purchase of land at Dapoli and the statement of TNS as also other relevant documents, which were relied upon during the hearing.
27. Before us, the learned Authorised Representative (AR) for the assessee opened his arguments with characteristic precision, asserting that the entire assessment proceedings were vitiated by a fundamental misconception of fact and law. He submitted that the Assessing Officer had elevated mere notings in a an excel sheet into conclusive proof of undisclosed income, without undertaking the most rudimentary verification or establishing any nexus between such notings and real-world transactions. The so-called incriminating excel sheet, he stressed, was merely a statement to analyze the increase in the market values in these land parcels prepared by PDG, who was the land aggregator and this fact was specifically mentioned by NKS and was not at all cash paid by the assesse for purchase of these lands as mentioned by TNS in his statement. The AR also mentioned that TNS ‘s in his statement has stated that he was not aware of the quantum of ‘cash’ generated and this would be explained by NKS and therefore the statement of NKS prevails over the statement of TNS. NKS in his statement has clearly stated that the statement was prepared by PDG stating the increase in market value of these lands. Consequently, the AR contended that in the absence of corroborative material or supporting evidence the reliance placed by the Assessing Officer upon these excel sheets and the contradictory statements of TNS and NKS, was wholly misplaced and is unsustainable in law.
28. The AR further pointed out that the only foundation on which the Assessing Officer sought to ascribe meaning to these noting in the excel sheet was the statement of TNS recorded on 09/10/2021. The learned counsel invited our attention to the transcript of TNS’s statement to demonstrate that it was riddled with conjecture and bereft of any factual basis. He emphasized that the Assessing Officer’s action in cherry picking a part of the statement of TNS was an exercise that was, in his words, “factually perverse and legally impermissible. “
29. The learned counsel also reiterated his submission that the statement of TNS was of no real consequence as it had been categorically denied by NKS the principal person in charge of the company, in his statement dated 4th October, 2022 in Q no 11 that TNS had been suffering from various ailments and he had assigned him the job of coordinating with PDG for land and most importantly the figures in the excel sheets which were stated to be ‘cash’ was in fact a comparison of the cost and projections of the profits[market values] in these lands prepared by PDG. The AR also contended that in any case NKS had stated that ‘occasionally some cash may have come and given to PDG’ which does not mean that all the figures under Col ‘B’ are cash as presumed by the AO.
30. The AR then highlighted that both TNS and NKS had formally retracted their statements during the course of assessment proceedings, through written communications dated 22nd December, 2022 and 7th February, 2023 respectively, giving cogent reasons for such retraction. Despite this, the Assessing Officer had summarily brushed aside these retractions, branding them as “afterthoughts,” without affording either individual an opportunity for cross examination or further clarification. This, he contended, amounted to a flagrant violation of the principles of natural justice. Once a statement is retracted, the law requires the Department to establish its truth through independent corroboration; absent such corroboration, the statement cannot be treated as binding evidence. The AR placed reliance on an array of judicial precedents to fortify his argument that a retracted statement, standing alone and unsupported by any tangible material, lacks evidentiary sanctity and cannot form the sole basis of addition.
31. The AR pointed out that the AO did not bother to analyze and evaluate other entries in the excel sheet and merely considered the amount mentioned in excel sheet as cash investment by relying on the uncorroborated statement of TNS which was later retracted.
32. The AR also made without prejudice submission that AO has cherry picked the statement of TNS to suit his narrative. Had the statement been fully considered, the AO would have been required to take cognizance of the fact that the cash investment was not made by the assesse and therefore no addition could have been made in his hands. The AR vehemently argued that the Assessee has no capacity to generate cash and that the cash was never invested by the Assessee. The AR also pointed out that this facts has been duly accepted by the AO and CIT(A).
33. As regard, the addition of Rs.2,14,50,000 as capital gains arising from transfer of shares of Veda Real Estate Corporation Private Limited (VRECPL) on the basis of one loose paper titled ‘Veda (B)’ seized during the search, the AR argued that the capital gains addition of Rs.2,14,50,000 on account of sale of shares of VRECPL have been made purely on the basis of surmises and conjectures.
34. The AR has pointed out the said loose sheet on the basis of which addition was made was prepared on 18/05/2016, which is beyond the assessment year 2016-2017. This statement has various notings on the right-hand column as also some of the left-hand column.
34.1. The AR has taken us through this statement and pointed out that under each of the heads of ‘Payable to SID’ and ‘Payable to Seksaria’ there are initials ‘A’ and ‘B’. The AO has made the addition based on the figures of Rs.4.29 appearing under the head ‘Payable to Seksaria’ and presumed that this amounts of Rs.4,29,00,000 is in the nature of unaccounted receipts for sale of 10% shares of Veda Real Estate Corporation Pvt Ltd (Veda) held by the Assessee (5%) and Harsh Sekseria (5%). Accordingly, Rs.2,14,50,000, being Assessee share in alleged sale of Veda shares sold during the year has been held to be taxable as ‘capital gain’ on transfer of shares on the ground that during the financial year 20152016 the assessee, Mr.Tarun K. Sekseria (TNS) and his brother Mr. Harsh Kumar Sakseria have each transferred 5% of their shares to M/s PLS Developers Private Limited and have been paid Rs.15,00,000 each, which is reflected in their books of accounts and offered for tax.
34.2. The AR has thereafter mentioned that the reasons mentioned by the AO for making this addition have been elaborated by him in para no 10, Page 52 to 64 of the assessment order.
34.3. The AR has drawn our attention to the basic presumption of the AO that the word ‘B’ represents ‘cash’ paid by the Assessee. This presumption, the AR has mentioned, is based on a statement of TNS on lands purchased in Alibaug and the AR has vehemently argued that this cannot be presumed to mean that wherever the word ‘B’ is mentioned in any other statement or loose paper it would indicate that it represents cash or unaccounted payment, especially in the case where no statement in respect of this loose paper was recorded by the AO.
34.4. The AR thereafter mentioned that if one goes through this statement, there are various figures and initials mentioned in the columns on right and left hand at the start of this statement, which have been completely ignored by the AO, who has concentrated only on the noting’s below these columns.
34.5. The AR also mentioned that the essence of the theory of the AO while coming to this conclusion and holding that this sheet is of any importance is that the figure after the word ‘A’ below ‘Payable to SID’ matches with the figure of repayment loans and payout to SID for the purchase of his shares and the figure against ‘A’ against ‘Payable to Seksaria’ matches with the consideration paid to TNS and HNS for the sale of Shares
34.6. The AR thereafter mentioned that even assuming that the figures mentioned against the word ‘B’ are correct, the figure mentioned against SID is 3.30 and that against sekseria’s is 4.29, which are not in the ratio of shares sold by each of them. While SID has sold 30% of his shares and the figure against ‘B’ is Rs.3.30, Sakseria have sold 10% and the figure against them is Rs.4.29. There is a complete mismatch of the % of Shares sold by each of them and therefore the AO’s presumption that these figures represent cash received on account of sale of shares is absurd and not based on the facts emanating from the statement
34.7. In support of the AO not having provided basic corroborative evidence the AR has reiterated that the least the AO ought to have done is to have recorded a statement of the Assessee or HNS on this loose paper. Also, even if he had done that the AO ought to have gathered information from the purchasers of the Shares to ascertain if any cash was paid and therefore under no circumstances can it be presumed, merely on the basis of presumptions and conjectures that ‘cash’ or unaccounted money was paid.
34.8. The AR has also mentioned that the total of alleged amount paid by the purchasers of these shares i.e. PLS Developers Pvt Ltd is Rs. 17.62 crores while the total amount paid to the sellers [col A + Col B] is Rs. 15.94 crores which in itself proves that this statement is not Pvt Ltd is Rs. 17.62 crores while the total amount paid to the sellers [col A + Col B] is Rs. 15.94 crores which in itself proves that this statement is not at all reliable and cannot be basis for making any addition.
34.9. Most importantly, the AR pointed out that despite so many inconsistencies in the loose paper, no statement of any of the Shareholders of Veda or of Assessee or of the purchaser (PLS Developers) has been recorded and therefore relying on the said loose sheet which in itself is contradictory and which is not self-explanatory of providing corroborative evidence is bad in law and addition made merely on the basis of such a sheet is not sustainable.
34.10. Further, the AO has argued that since TNS has retracted his statement on 22-12-2022, the statement recorded under section 132(4) is no longer relevant and has no evidentiary vale
34.11. The AR also mentioned that the retraction of the statement of TNS relates to all statements recorded under Section 132(4) and section 131.
34.12. The learned Authorised Representative thereafter continued his submissions with a meticulous reference to jurisprudence, weaving together a formidable chain of precedents that underscored the impermissibility of making additions solely on the strength of uncorroborated and subsequently retracted statements. He first drew our attention to the decision of the Hon’ble Bombay High Court in CIT v. Reliance Industries Ltd. ITR 686 (Bombay), where the Court had categorically held that a statement recorded during search cannot be relied upon as conclusive evidence unless supported by independent material. In that case, as in the present one, the Assessing Officer had based additions merely on the confession of a third party without any corroboration, which was later retracted. The High Court, affirming the Appellate Tribunal, ruled that when a statement is retracted and no other evidence is adduced, such a statement cannot, by itself, justify the addition. The learned counsel submitted that the ratio of this judgment was directly applicable to the present facts, where the Assessing Officer, resting solely on the statements of TNS, had proceeded to frame the assessment without any verification or corroboration from the alleged payers or any independent third-party evidence.
35. The learned AR next placed reliance on the judgment of the Hon’ble Jharkhand High Court in Shree Ganesh Trading Co. v. CIT (Jharkhand), wherein it was held that though a statement recorded under section 132(4) constitutes evidence, its reliability and probative worth depend on the surrounding circumstances and corroboration. The Court observed that a bald statement, made without contemporaneous recovery of cash or assets and later retracted, could not be used to fasten liability. Drawing a parallel, the learned counsel emphasised that in the assessee’s case, no incriminating cash or valuables had been discovered in the course of search; yet, the Assessing Officer had proceeded as though the excel sheet were self proving instruments of truth. Such an approach, he argued, stood condemned by judicial authority.
36. The learned counsel further fortified his argument by citing the judgment of the Hon’ble Gujarat High Court in Kailashben Manharlal Chokshi v. CIT ITR 411 (Gujarat), where it was held that an admission recorded under section 132(4), if retracted, cannot form the sole basis for addition unless supported by corroborative material. The High Court noted that statements extracted under stressful or coercive circumstances, particularly during search at odd hours, often lack voluntariness and hence must be treated with circumspection. The learned AR submitted that this principle had been reiterated in several later pronouncements, including by the coordinate benches of the Tribunal, and represents the settled position of law that mere confessional statements, in the absence of corroboration, are insufficient to sustain additions. He also drew our attention to the Mahadhan Agritech Ltd. v. ACIT [IT Appeal No. 2227/Mum/2024, dated 24-07-2025] decision, wherein this very Bench had, following the dictum of Harjeev Aggarwal (Delhi High Court) and Jagdish prasad Joshi (Supreme Court), held that retracted statements under section 132(4) lose all probative value unless independently substantiated by evidence.
37. The learned counsel, to reinforce the argument, also referred to the official guidelines issued by the Central Board of Direct Taxes (CBDT) itself specifically, Instruction No. 286/2/2003 dated 10th March 2003 and the subsequent Circular F. No. 286/98/2013 dated 18th December 2014 both of which explicitly caution the Department against obtaining confessions of undisclosed income during search or survey operations. These circulars direct that assessments must be founded upon material evidence rather than unverified admissions. The counsel submitted that these instructions, being binding on the revenue authorities under section 119 of the Act, constitute a clear administrative mandate that confessional statements, without corroboration, are not to be made the sole foundation of assessment. He therefore urged that the action of the Assessing Officer in the present case anchoring the entire addition upon the retracted statements of TNS was in flagrant violation not only of settled judicial doctrine but of the Board’s own directives.
38. The learned Authorised Representative then turned to what he termed the —central infirmity” of the entire assessment the treatment of the seized excel sheet as conclusive documentary evidence. He contended that even if, arguendo, the statements under section 132(4) were to be disregarded or viewed with circumspection, the excel sheets themselves, in the absence of any corroboration, were nothing but —dumb documents” incapable of independent evidentiary value. They were not part of the books of account, bore no authentication, and were admittedly prepared by PDG and not by any of the Directors of the assessee. The presumption under section 132(4A), he submitted, applies only to documents found to —belong to” the assessee and does not extend to the private MIS statements of an outsider like PDG. It was emphasised that the Department itself had not demonstrated that the seized excel sheets were maintained under the assessee’s instruction or supervision and on the contrary a plain reading of the statements also indicate that these were not prepared by them as the words’ Total land acquisition Proposed’ would not have been mentioned had the statement been prepared by the assessee. The AR Pointed out that this fact corroborates with the statement of NKS that this statement was prepared by PDG.
39. As regards the capitals gains, the AR once again retracted the submissions made that an unverified and non self-explanatory loose paper without recording the statement of any of the identified concerned parties cannot form a basis for making any addition.
40. In support of this proposition, the learned AR drew strength from the celebrated decision of the Hon’ble Supreme Court in CBI v. V.C. Shukla (SC), wherein it was held that loose sheets or diaries, not being books of account regularly kept in the course of business, are not admissible evidence under section 34 of the Indian Evidence Act. The Court observed that entries made by one person in such documents, unless corroborated by independent evidence, cannot fasten liability on another. This, the AR submitted, was directly applicable to the present case, where the Assessing Officer sought to tax the assessee on the strength of the personal notings of PDG, without establishing authorship, authenticity, or relevance. He also placed reliance on the judgment of the Hon’ble Supreme Court in Common Cause (A Registered Society) v. UOI ITR 220 (SC) the celebrated —Birla-Sahara Diaries” case wherein the Court had categorically held that uncorroborated third-party records found in the course of search have no evidentiary value whatsoever.
41. The learned counsel further cited a line of decisions from the jurisdictional and coordinate benches to reinforce the —dumb document” principle. Reference was made to Pr. CIT, Central v. Umesh Ishrani (Bombay), where the Hon’ble Bombay High Court upheld the Tribunal’s finding that rough, unauthenticated notings in seized diaries, unaccompanied by corroborative evidence, could not justify addition under sections 68 or 69A. He also drew our attention to Harish Textile Engrs. Ltd. v. Dy. CIT ITR 160/[2016] (Bombay), and Padmashree Dr. D.Y. Patil University v. Dy. CIT (Mumbai – Trib.), both reiterating that such scribbled records, unless validated through substantive inquiry, are mere dumb documents. The AR thus submitted that the legal landscape on this issue is unequivocal: dumb documents, being self-serving, incomplete, or untested, cannot by themselves be a foundation for addition, particularly when the statements accompanying them have been retracted and no further corroboration is forthcoming.
42. Having thus traversed the legal authorities, the learned AR concluded that the entire assessment was built on conjecture and surmise. The Assessing Officer, he submitted, had not summoned or examined any of the alleged receivers of cash or payers of cash, though their details were available. No corroboration, direct or circumstantial evidence was adduced; and yet, the assessee was visited with enormous additions merely on the strength of what were, at best, an MIS statement or a loose sheet. To uphold such additions, he urged, would be to elevate suspicion to the level of proof, an approach that has been consistently disapproved by Courts. The learned AR therefore prayed that the additions sustained by the CIT(A) in principle under section 69A/69B and capital gains addition of Rs.2,14,50,000, be deleted in toto, and that the assessment itself, founded on invalid notice, be declared void ab initio.
43. On the legal grounds, the summary of the ld. Counsel submissions are as under:-
| A) | Notice issued by the jurisdictional Assessing officer instead of faceless Assessing officer |
| (i) | The AR also pointed out that the notice under section 148 was issued by jurisdictional Assessing officer in contravention of Section 151A of the Act & the scheme frame thereafter and therefore the reassessment proceedings are bad in law. |
| (ii) | The AR argued that as per the scheme formulated vide Notification S.O1466 (E)(18/2022) dated March 29, 2022 (—the Scheme”) issued under section 151A of the Act, the notice under section 148 of the Act could only have been issued in a faceless manner. |
| (iii) | The AR further argued that as per section 151A of the Act, read with the scheme, any notice under section 148 of the Act shall be issued only in terms of the said scheme and in a faceless manner. Therefore, the impugned notice issued by the AO is invalid and liable to be quashed and set aside. |
| (iv) | The AR relied on the following jurisdictional and non-jurisdictional high court / Tribunal decisions: |
a. Hexaware Technologies Ltd. v. ACIT ITR 430 (Bombay).
Notice under section 148 was issued by Jurisdictional Assessing Officer instead of Faceless Officer in contravention of scheme of Faceless assessment.
43.1. The Hon HC held that, there is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under section 148 or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act and accordingly and therefore issue of notice is bad in law.
43.2. The above decision of Hexaware was followed by the coordinate bench of Bombay High Court in the following cases:
| (i) | CapitalG LP v. Asstt. CIT, Int. Tax. ITR 325 (Bombay)/writ Petition (L) No. 15289 of 2024) (Bombay HC) |
| (ii) | Abhin Anilkumar Shah v. ITO ITR 350 (Bombay) |
| (iii) | Ganesh Nivrutti Jagtap v. Asstt. CIT (Bombay) |
b. The Supreme Court in the case of Deepanjan Roy v. ADIT [SLP (C) No. 18753/2025] (SC) has dismissed the SLP filed against the decision of Telangana High Court Deepanjan Roy v. ADIT, Int. Tax [WP No. 23573 of 2024, dated 29.08.2024] regarding the validity of notice issued under section 148 by the JAO.
44. The Assessee further submit that none of the above decisions have been stayed by Hon’ Supreme Court and therefore the same has the binding force on the lower appellate authorities. In this connection the Assessee relies on the decision of Jurisdictional Bombay High Court in the case of Bank of India v. Asstt. CIT ITR 208.
45. The learned Departmental Representative (DR), on his part, sought to defend the orders of the Assessing Officer and the learned CIT(A) with considerable fervor. He submitted that the seized excel sheets and loose papers though not part of the statutory books of account, constituted contemporaneous records maintained by the group, and therefore, merited serious evidentiary consideration. The very fact, that the excel sheet and loose paper were discovered from the office premises of the assessee gave rise to a presumption under section 132(4A) that the contents thereof belonged to the assessee. He further argued that the statement of TNS, recorded contemporaneously during the search, carried evidentiary weight. According to the DR, such testimonies could not be brushed aside as unreliable merely because of subsequent retractions.
46. The learned DR further contended that the retractions filed by TNS and NKS were afterthoughts, strategically made only after they had realised the adverse implications of their earlier admissions. Such belated retractions, he argued, should not dilute the evidentiary value of statements recorded under section 132(4), which, by legislative design, enjoy a special evidentiary status. In this connection, he drew reference to certain judicial pronouncements where Courts have held that retractions lacking immediate contemporaneity or supporting explanation cannot be accepted at face value. The DR also maintained that while the excel sheets / loose paper may not have been formal books of account, they nevertheless reflected a coherent pattern of transactions covering multiple years, with cross-references to names, amounts, and land parcels, thereby lending internal consistency and credibility to the entries. He urged that the Assessing Officer had correctly distinguished between the entries relatable to payment by cheque and entries relatable to payment by cash.
47. On the question of corroboration, the learned DR contended that complete mathematical or documentary correlation is not always possible in cases of search, and that circumstantial inference drawn from the seized material can, in appropriate cases, suffice for sustaining an addition. He emphasized that the Assessing Officer, by collating the excel sheet and loose sheet with the statements of key managerial person had constructed a cogent evidentiary mosaic pointing to unaccounted transactions. The DR urged that the Tribunal should not substitute its own appreciation of evidence in place of the Assessing Officer’s considered view, unless such view is perverse or devoid of rational basis. In his submission, the order of the CIT(A), which had already granted substantial relief, represented a fair equilibrium between departmental interest and taxpayer’s grievance, and no further deletion was warranted.
DECISION
48. We have heard rival contentions, perused the voluminous records and relevant finding given in the impugned orders. In so far as the issue relating to taxability of unaccounted investment in Dapoli land, it is seen that the entire premise of the ld. AO is based on the statements of TNS who has alleged to have explained entries in the excel sheet found during the search. From deep scrutiny of the statements it is discerned that the statement of TNS was contradicted by NKS who is the key person involved with land dealings. Further, NKS pointed out that the said sheet was prepared by PDG which is evident on a plain reading of this statement and the same were estimate of cost and profits and projections. NKS has further stated that TNS was not in good health and to keep him busy he was assigned with the task of land acquisition. No further statement of NKS was recorded on this issue. Further, in the statement of TNS was considered only in part. The AO ignored the statement where TNS has stated that the cash was derived from Estate. The AO has not recorded the statement of TNS in respect of various other entries found in the excel sheet. Thus, this statement per se cannot lead to conclusion that notings in the excel sheet prepared by PDG in his individual capacity can lead to adverse inference in so far as assessee company are concerned that they paid cash towards acquisition of land.
49. Another important fact is that both TNS and NKS have retracted their statements before the learned Assessing Officer. The reasons for such retraction were that they were not even aware that their statements would be used against the assessee, particularly when the seized excel sheet were not prepared by any the assesse. When statements have been retracted with cogent and plausible reasons, the law casts a corresponding duty on the Assessing Officer to summon those persons, confront them with their earlier statements, and subject them to cross-examination. Such procedural safeguard, as repeatedly emphasized by the Hon’ble Supreme Court in several decisions cited before us by learned counsel, is not a matter of indulgence but a sine qua non of natural and fair adjudication.
50. As regards the addition of capital gains, the addition was based on a loose sheet which was uncorroborated Further, no statement in respect of the loose sheet which the AO has alleged mentioned year wise details was recorded.
50.1. The common thread in all these additions relating to lands at Dapoli,is that these have been made on the basis excel sheets or losse papers which are not self-explanatory purely based on the statements recorded under section 132[4] by TNS and contradicted by NKS
50.2. Even after the statements have been retracted no further action has been taken by the AO either on the retraction or any effort has been made to provide any other corroborative evidence by making third party verifications or by rerecording the statements of the concerned persons.
50.3. Further in respect of the addition of capital gains, the AO relied merely on loose sheet titled Veda(B) without recording statements of any of the concerned parties i.e. the sellers and buyers of the shares of Veda despite there being contradictory facts evident in the noting in the said loose sheet and that too, despite being pointed out by the assessee during the assessment proceedings, which have been reiterated by the AR during the course of the hearing before us. The CIT[Appeals] has confirmed the addition of capital gains by merely relying on the order of the AO and without rebutting the submissions filed by the assesse.
50.4. The mere discovery of excel sheet and loose sheets which are not even prepared by the assessee and remain uncorroborated by any external evidence, cannot, by itself, form the sole basis for an addition. Particularly so when the authorship and authenticity of such documents are in dispute. The Investigation Wing, which carries out the search, may record statements or seized documents; however, the same are merely inputs for further enquiry. Once the material is transmitted to the jurisdictional Assessing Officer, it becomes incumbent upon him to apply his own independent mind and conduct proper enquiry to determine whether such statements or seized documents can lawfully lead to any addition.
50.5. The Assessing Officer cannot act as a mere forwarding agent of the report or view expressed by the Investigation Wing and mechanically incorporate the same in his assessment order without exercising his own judgment as to whether such information or view can legitimately form the foundation of an addition within the four corners of law. At best, the information and material emanating from the Investigation Wing may serve as a trigger or starting point to issue a show cause notice and seek an explanation from the assessee. But once the assessee has rebutted those materials including any recorded statement with cogent reasons, the Assessing Officer must judiciously evaluate such explanation and undertake at least a prima facie enquiry to test the correctness of the rebuttal and strengthen the evidentiary base of the material relied upon.
50.6. If he fails to do so, sustaining any addition solely on the basis of such material gathered from the search cannot be justified. In the present case, the statements and documents relied upon by the Department have been effectively rebutted and controverted with cogent reasoning, as elaborated in detail above. The Assessing Officer, functioning as a quasi judicial authority, is bound to apply his mind independently and adjudicate the issue in a fair and reasoned manner.
50.7. The presumption under section 132(4A) is, at best, a limited and rebuttable presumption applicable only in the context of seizure and custody, and cannot, by itself, elevate a private employee’s scribblings into proof of income chargeable to tax. The Assessing Officer’s reliance on extrapolation— extending the inference drawn from a uncorroborated excel sheet and the loose sheet amounts more to conjecture than to judicial reasoning.
51. This concern is further magnified when the foundation on which the said addition was made i.e. Statement of TNS has been retracted and no further examination or cross verification has been undertaken. In light of these circumstances, the very evidentiary substratum of the additions evaporates, leaving behind nothing but suspicion. The Assessing Officer’s approach of brushing aside the retractions as afterthoughts, without testing their veracity through examination or cross-questioning, constitutes a serious procedural infirmity.
51.1. This infirmity is all the more pronounced in the present case because the seized material is neither self-explanatory nor independently corroborated. The Assessing Officer’s duty extends beyond mere reproduction of search findings; he must verify the surrounding facts and determine whether any such statements or diary notings are supported by independent evidence. Yet, in this case, he did not examine any of the persons purportedly involved in the statements, who were identified by TNS and were the supposed recipients of cash.
51.2. At the very least, there should have been some independent corroborative material such as bank statements, agreements, receipts, or documents evidencing any actual cash transaction or confirmation brought on record. The entire addition has been founded upon untested statements and cryptic notings. Such a method of assessment, built on conjecture and devoid of corroboration, cannot withstand judicial scrutiny. An addition resting purely on suspicion and unsupported inference is antithetical to the settled principles of evidentiary assessment and the doctrine of fair adjudication.
52. We therefore hold that the Assessing Officer, in relying solely upon unverified excel sheet, loose sheet and uncorroborated statements, has traversed beyond the permissible confines of evidentiary inference. The seized excel sheet and loose sheet, as earlier discussed, are incapable of interpretation without contextual evidence, and the statements upon which reliance was placed stand nullified by valid retraction. The confluence of these infirmities absence of corroboration, failure to summon and cross-examine, and the intrinsic vagueness of the documents compels us to conclude that the additions made towards alleged capital gains and unexplained money are devoid of factual and legal foundation. In the result, the additions sustained under the head —Unexplained Investment U/s 69A/69B ” and capital gains addition of Rs.2,14,50,000 cannot be upheld and are hereby deleted.
53. Having disposed of the additions of merits, we now turn to legal ground concerning the validity of the assessment itself. Upon the submissions and the judicial precedents, especially of Hon’ble Jurisdictional High Court which is a binding precedent on us, we are persuaded that the reassessment edifice is untenable on two independent yet converging grounds. The assessee has assailed the reassessment orders on principal plank, that the notice under section 148 was issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer, in contravention of the scheme notified under section 151A vide Notification S.O. 1466(E) dated 29th March 2022; On the issue of issue of notice by Jurisdiction Assessing Officer, the legal position is no longer res integra. The Hon’ble Bombay High Court in Hexaware Technologies Ltd. (supra) has decisively explained that where Parliament and the delegated notification have assigned jurisdiction to the faceless unit, the jurisdiction of the local officer stands eclipsed. The scheme does not contemplate a concurrent or overlapping authority. Any notice issued dehors the faceless framework is coram non judice and the proceeding is void at inception. The exposition laid down by the Hon’ble Bombay High Court in Hexaware Technologies Ltd. (supra) has since been consistently followed by the same Court in Capital GLP (supra), Abhin Anil Kumar Shah (supra), and Ganesh Nivrutti Jagtap (supra), thereby fortifying the principle that the faceless assessment regime under section 151A is not a matter of administrative convenience but a jurisdictional imperative. The High Court in these decisions has unambiguously held that once jurisdiction is statutorily vested in the Faceless Assessing Officer, any notice issued by the Jurisdictional Assessing Officer is coram non judice and consequently void ab initio.
53.1. This view now stands further affirmed by the Hon’ble Supreme Court in Deepanjan Roy v. ADIT [SLP (C) No. 18753 of 2025], wherein the Special Leave Petition filed by the Revenue against the decision of the Hon’ble Telangana High Court in Writ Petition No. 23573 of 2024 upholding the invalidity of notices issued by the Jurisdictional Assessing Officer under section 148 was dismissed. The dismissal of the SLP lends the imprimatur of the Apex Court to the settled proposition that reassessment notices issued outside the framework of the faceless scheme are jurisdictionally incompetent.
53.2. In the absence of any contrary authority or distinguishing factual matrix, we are bound to follow the consistent line of judicial precedent emanating from the Hon’ble Jurisdictional High Court. None of these decisions have been stayed, modified, or reversed by the Hon’ble Supreme Court. Accordingly, these binding pronouncements of the Hon’ble Bombay High Court command full precedential authority over this Tribunal.
54. Having held so, it necessarily follows that the reassessment proceedings initiated under section 148 by the jurisdictional Assessing Officer, in violation of the Faceless Scheme under section 151A stand vitiated in law. The notice under section 148, having been issued by an officer not authorised under the notified scheme, is coram non judice. This conclusion is fortified by the decision of the Hon’ble Bombay High Court in Hexaware Technologies Ltd. (supra), which has been consistently followed in Capital G LP (supra), Abhin Anil Kumar Shah (supra), and Ganesh Nivrutti Jagtap (supra). The dismissal of the Special Leave Petition by the Hon’ble Supreme Court in Deepanjan Roy v. ADIT [SLP (C) No. 18753/2025] lends further imprimatur to this legal position. Thus, we have no hesitation in holding that the reassessment orders impugned before us are void ab initio, both for want of jurisdiction and for breach of mandatory procedural require.
54.1. The cumulative effect of our findings leads inexorably to the conclusion that both the reassessment proceedings and the resultant assessment orders are unsustainable. The notice under section 148, issued by an authority bereft of jurisdiction under the Faceless Assessment Scheme, is void ab initio. The Revenue, though afforded ample opportunity, has not demonstrated compliance with any of the statutory or procedural conditions that could lend legitimacy to its actions. In this view of the matter, the entire reassessment exercise is vitiated at inception, and all consequential proceedings are rendered nullities in the eye of law.
55. In the result, and in consonance with our detailed findings hereinbefore, we hold that (i) the additions made under section 69A/69B on account of alleged cash investment in Dapoli and Dhokawade land stand deleted for want of evidence; (ii) the reassessment proceedings initiated under section 148 are quashed for lack of jurisdiction in terms of the Faceless Assessment Scheme. The remaining grounds pertaining to interest under sections 234B are purely consequential and call for no separate adjudication. The appeals filed by the assessees are thus allowed in part, whereas those preferred by the Revenue stand dismissed.
56. We now turn to the connected appeals filed by the assessee for AY 2015-2016 and 2017-2018, wherein the facts, issues, and the reasoning adopted by the Assessing Officer are pari materia to those already adjudicated upon in the lead year in respect of unaccounted investment in Dapoli land,. In each of these years, the additions have emanated from the similar excel sheets and the similar statements recorded during the search, and thereafter retracted with only the quantum of alleged receipts differing in arithmetical magnitude. The learned representatives on both sides fairly conceded that the evidentiary foundation, the nature of seized material, and the pattern of assessment are identical. Having already held that the very basis of these additions is legally infirm and evidentially hollow, it necessarily follows that the same reasoning applies mutatis mutandis to these years as well. We therefore adopt our findings and conclusions in the lead appeal as applicable in toto to the AY 2015-2016 and 2017-18 under consideration and the same are allowed.
57. For the sake of ready reference the grounds raised by the assessee in other years are incorporated as under:-
(A) ITA No.3216/Mum/2025) – AY 2015-16 (Assessee’s Appeal)
Grounds raised by the Assessees:
Ground no. 1
The Commissioner of Income tax (Appeals) – 50, Mumbai (herein referred to as CIT (A)) erred in holding that the DCIT, Central Circle 8(1) (herein referred to as AO) was right in reopening the assessment under section 148 of the Act. The Appellants submit that the conditions precedent to reopening of the assessment are not compiled with and the Order passed by the AO is without jurisdiction and therefore the reopening of assessment is bad in law and void ab-initio and the Appellants pray that order be quashed.
Ground no.2
Without prejudice to the above, the CIT(A) erred in holding that the AO was right in making an addition of Rs. 63,12,686 under section 69A/69B as being cash applied towards purchase of land at Dhokawade, Alibaug. The Appellants submit that the addition are made purely of surmises and conjectures and in any event, provisions of section 69A/69B are not applicable to the facts and circumstances of their case. The Appellants therefore pray that the addition made under section 69A/69B should be deleted.
Ground no. 3
The Ld. AO erred in levying interest under section 234B of the Act. The Appellant prays that the interest under section 234B of the Act be deleted or consequentially reduced.
The Appellants craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal.
(B) ITA No.3239/Mum/2025) – AY 2017-18 (Assessee’s Appeal)
Grounds raised by the Assessees:
Ground no. 1
The Commissioner of Income tax (Appeals) – 50, Mumbai (herein referred to as CIT (A) erred in holding that the DCIT, Central Circle 8(1) (herein referred to as AO) was right in reopening the assessment under section 148 of the Act. The Appellants submit that the conditions precedent to reopening of the assessment are not compiled with and the Order passed by the AO is without jurisdiction and therefore the reopening of assessment is bad in law and void ab-initio and the Appellants pray that the Order be quashed
Ground no. 2
Without prejudice to the above, the CIT(A) erred in holding that the AO was right in making an addition of Rs. 61,04,500 under section 69A/69B as being cash applied towards purchase of land at Dapoli. The Appellant submit that the additions are made purely on surmises and conjectures and in any event, the provisions of section 69A/69B are not applicable to the facts and circumstances of their case. The Appellant therefore pray that the addition made under section 69A/69B should be deleted.
Ground no. 3
The Ld AO erred in levying interest under section 234B of the Act. The Appellant prays that the interest under section 234B of the Act be deleted or consequentially reduced.
The Appellants craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal.
58. From a careful perusal of the grounds raised by the assessee in both the assessment years, it emerges that the challenge revolves primarily around interrelated facets, first, the very validity of the reassessment proceedings initiated under section 148 of the Act; and second, the substantive additions made on account of alleged unaccounted investment in Dhokawde land, based on the same excel sheet and materials. The legal challenge to the reopening rests on the contention that the notice under section 148 was issued by the Jurisdictional Assessing Officer in contravention of the Faceless Assessment Scheme framed under section 151A of the Act, and is therefore void ab initio.
59. On merits, the assessee has contested the additions made on account of alleged unaccounted investment in land is said to have arisen from the statements recoded under section 132[4]/131 which have been retracted, contending that the same are purely notional and unsupported by any cogent material. It has been argued that such additions rest entirely on excel sheets which were not prepared by the assessee and are purely for MIS purposes, which neither constitute books of account nor possess any evidentiary sanctity in the eyes of law. These contentions, as raised across the various assessment years, have already been examined in detail in the earlier part of this order, where we have found that the reassessment proceedings themselves suffer from fundamental jurisdictional defects, and that the very foundation of the additions lacks probative value. The present grounds, therefore, stand on identical footing, both in law and in fact, and are to be adjudicated in consonance with the principles and findings already recorded hereinabove.
60. Since we have held that the seized excel sheet themselves lack probative value and the statements supporting them stand retracted, both the substantive and protective additions crumble together. The concept of protective assessment, as judicially expounded, presupposes that there exists a sustainable substantive addition somewhere within the group. Where the substratum of that substantive addition is itself found non-existent, the protective one cannot survive in limbo. The deletion of the substantive addition in the hands of the assessee thus automatically extinguishes any protective addition made elsewhere.
61. We also note that in, the Assessing Officer has purported to reopen completed assessments merely on the basis of the seized excel sheet, even though such material pertained entirely to earlier or later years. This mechanical transposition of entries across assessment years, without verifying the temporal correlation of the alleged transactions, amounts to impermissible telescoping of facts. The Hon’ble Supreme Court in CIT v. Sun Engineering Works (P.) Ltd. ITR 297 held that reopening under section 147 cannot be used as a ploy for roving verification or fishing enquiry into completed matters. The Assessing Officer’s act of extrapolating entries found in one year to reopen other years is precisely the mischief which the Court sought to prevent. On this count too, the reassessments lack legal sanctity.
62. Once the foundational assessment is quashed, all ancillary determinations such as depreciation recomputation, interest levies, or carry-forward adjustments lose their footing. In consequence, these incidental matters need no separate adjudication and are rendered infructuous.
63. For the sake of clarity and completeness, it is hereby recorded that: (i) additions were made towards alleged unaccounted investment in land at Dhokawade and Dapoli, are deleted in full; (ii) assessments reopened under section 147 are quashed as void ab initio for having been initiated by an officer lacking jurisdiction in contravention of the Faceless Assessment Scheme under section 151A; It is further clarified that all consequential adjustments such as disallowances, carry-forward of losses, and levy of interest under sections 234A, 234B and 234C are rendered academic in view of the annulment of the primary assessment orders.
64. The cumulative outcome of these appeals is thus be summarised, for administrative convenience, as follows:-
| ITA No. | A.Y | Result |
| 3216/Mum/2025 | 2015-16 | Allowed |
| 3015/Mum/2025 | 2016-17 | Allowed |
| 3239/Mum/2025 | 2017-18 | Allowed |
65. All the appeals filed by the assessees are allowed in full. No order as to costs.