" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No. A.Y 3012/Mum/2025 2014-15 3013/Mum/2025 2016-17 3228/Mum/2025 2015-16 3227/Mum/2025 2017-18 3225/Mum/2025 2019-20 3224/Mum/2025 2020-21 3223/Mum/2025 2021-22 3222/Mum/2025 2022-23 The Estate Investment Company Pvt. Ltd. 4th Floor, 139, Seksaria Chambers, Nagindas Master Road, Fort Mumbai – 400 001 Vs. DCIT, CC-8(1), Mumbai PAN/GIR No.AAACE2566J (Appellant) .. (Respondent) ITA No. 3928/Mum/2025, 3087/Mum/2025, & 3936/Mum/2025 (Assessment Year :2015-16 to 2017-18) DCIT, CC-8(1), Mumbai Vs. The Estate Investment Company Pvt. Ltd. 4th Floor, 139, Seksaria Chambers, Nagindas Master Road, Fort Mumbai – 400 001 PAN/GIR No.AAACE2566J (Appellant) .. (Respondent) Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 2 Assessee by Shri Madhur Agrawal, Adv. & Shri Pankaj Jain, CA Revenue by Shri Ritesh Misra, CIT DR Date of Hearing 19/08/2025 Date of Pronouncement 17/10/2025 आदेश / O R D E R PER BENCH: 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. and its connected entities. 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 assessment years ranging from 2012–13 to 2022–23, and involve both the assessees as well as the Revenue, each aggrieved in part by the respective orders of the learned Commissioner of Income Tax (Appeals)– 50, Mumbai. For the sake of convenience, the appeal for the A.Y.2015-16 i.e. ITA No. No.3228/Mum/2025 is taken up first and most of our finding given herein will apply mutatis mutandis in the appeals for other assessment years also. This appeal arises against order of ld. CIT(A) dated 04/03/2025. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 3 Finding of the Assessing Officer 2. The controversy, in essence, centres upon additions made on the basis of certain diaries and loose papers found during the course of search, the evidentiary worth of the statements recorded under section 132(4), and the consequential additions under various heads, particularly capital gains on alleged NOC receipts and unexplained money under section 69A of the Act. 3. Brief facts as culled out from the records are that the assessee, The Estate Investment Company Pvt. Ltd., is a private limited company incorporated as early as 3rd February, 1945 under the Companies Act, 1913. Over the decades, the company‘s principal objects have been the acquisition of immovable properties, investment in shares and securities, and the advancement of loans. Its income streams have typically comprised dividend and interest income, as also compensation or consideration received upon release or transfer of its rights and interests in parcels of Eksali land located in the Mira–Bhayander region. These lands, governed by long-standing and complex tenurial rights, have been the fulcrum of several transactions undertaken by the company, the nature of which subsequently came under scrutiny during the course of search and post-search proceedings. 4. 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 assessee situated Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 4 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 family and their business concerns. During the course of the operation, certain diaries, loose papers, digital data and Excel-based management information sheets were found and seized. These documents, according to the Department, contained notings suggestive of cash receipts and payments allegedly pertaining to the release of rights in Eksali lands and ancillary dealings in real estate. Statements of key personnel including Mr. Pawan Kumar Sharma (PKS), Mr. Nandkumar Kudilal Seksaria (NKS), and Mr. Kamal Bubna (KB) were recorded contemporaneously and in the days following the search, forming the bedrock of the Assessing Officer‘s inference regarding unaccounted income. 5. The Assessing Officer drawing primarily upon these seized diaries and the statements recorded loose sheets and digital data in the form of MIS sheets and excel sheets which were found and seized on 07/10/2021 from the premises of the assessee and related concerns, concluded that the notings represented receipts from grant of NOCs and release of rights in land. The ld. AO particularly noted following documents and diaries. a. 8 Calendar diaries were found in the Godown which were been maintained by the cashier Mr. Pawan Sharma (PKS). b. Electronic Data from the computer of Mr. Tarun Seksaria, which was later printed and which mainly related to purchase of land parcels in Alibaug. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 5 c. Some chats on the WhatsApp from the phones of Directors 6. On the basis of these documents and the statements of Mr. Pawan Kumar Sharma (PKS) and Mr. Nandkumar Kudilal Seksaria (NKS) which was recorded during the search operation and post conclusion of search observed that assessee was engaged in the business of release of rights in Eksali land situated at Mira–Bhayandar and adjoining areas and from which confirmation was received from various parties. The diaries bore the initials ―KB‖ which, according to the Assessing Officer, denoted cash received by Mr. Kamal Bubna, the Estate Manager, on behalf of the assessee for facilitating such transactions. Other notings those not bearing the ―KB‖ marking were interpreted as representing unexplained cash receipts or unaccounted dealings unrelated to the NOC transactions. On this basis, the Assessing Officer bifurcated the entries into two broad categories those treated as capital receipts exigible to capital gains tax and others treated as unexplained money under section 69A. Accordingly, ld. AO made following additions:- i. Rs. 5,97,13,000 treated as unaccounted capital gains on account of NOC amount received for release of rights in Eksali land. ii. Rs. 23,000 added as unaccounted income on account of notional interest and unexplained receipts reflected in the MIS sheet. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 6 iii. Rs. 8,83,60,000treated as unexplained money under section 69A based on cash entries found in the diaries not linked to NOC transactions. 7. Ld. AO in his order has extracted various statements of the following persons on different dates which can be tabulated in the following manner:- Sr. No. Deponent Statement Recorded at Statement dated Q.Nos 1 Pawan Sharma (PKS) Seksaria Chamber 08.10.2021 to 11.10.2021 Q.1 to Q.44 2. Pawan Sharma (PKS) Air India (Income Tax) Various dates from 3.1.22 to 25.1.22 Q.1 to Q22 3. Nandkumar Seksaria (NKS) Office 11.10.2021 Q.1 to Q.30 4. Nandkumar Seksaria (NKS) Air India (Income Tax) 04.04.2022 Q.1 to Q.12 5. Kamal Bubna (KB) Seksaria Chambers 08.10.2021 Q.1 to Q.30 8. The gist and the analysis of these some of the statements are as under:- A. In the statement recorded, PKS on 08/10/2021, inter alia, stated as under:- Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 7 i. In response to Q.9, PKS clarified his role in the assessee company and stated that he manages bank accounts of the assessee company as well as several other group companies and individual bank accounts of all members of Seksaria Group. It was further clarified that he manages petty cash expenses of all the above entities ii. In response to Q.15, wherein PKS was shown a blue colour diary of January 2019, PKS confirmed that the same has been recovered from Office. iii. In Q.16, PKS was directed to explain the entries made in the diary on Wednesday 2nd. In response to Q.16, PKS stated that he has received cash of Rs.100.23 lakhs from Mr. Kamal Bubna (\"KB\"). iv. In response to Q.17, PKS stated that the diary is maintained to keep track of all cash received and disbursed v. In Q.18, PKS was directed to give names of people from whom he received cash. In response to the same, he stated that 99% of the time cash is handed over to him by KB. Further, he clarified that he also handles petty cash expense of the company vi. In response to Q.19, PKS stated that he does not share entries in the diary with anyone because details are maintained for his record keeping only. The cash is not entered into the books of accounts. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 8 vii. In Q.22, PKS was directed to give details of the source of cash In response to the same, he stated that KB should know the source of cash and he has never asked the source of cash. Statement of PKS was thereafter continued to be recorded directly on October 11, 2021 under Section 132(4) of the Act at 2.30 p.m. at office. i. In Q.35, PKS was directed to explain page no.89 of loose diary no.8, wherein on the left hand side of the diary \"10:KB\" was mentioned. In response to the same, PKS stated that it is Rs. 10 lakhs received by him from KB. ii. Similarly, PKS was directed to explain in Q.37 the entries mentioned on June 1, in the yellow colour diary of 2014. In response to the same, PKS stated that it is the account of Danded property in Murud village, Alibaug. The entries are cash entries made by him on the instructions of TNS iii. Most importantly, in response to Q.44, PKS clarified that he is making this statement to buy peace of mind and hoping that any discrepancies if found at a later date in writing the statements shall be addressed. He further stated that he is hoping that no penal action or prosecution shall be initiated against him and his family members and that he is just an employee and has not done anything in his capacity Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 9 iv. From the above, it is more than clear that the diaries were maintained by PKS for his records and at no point in time has he mentioned that these were maintained at the instance of the assessees or their group companies or directors. As stated above, statements of PKS was subsequently recorded under Section 131 of the Act at Room No.2007A, 20th Floor, Air India Building, Nariman Point, Mumbai-21 on January 3-4, 2022, January 17-21, 2022 and on January 24-25, 2022. B. In the statement recorded on January 34, 2022, PKS, inter alia, stated as under: i. In response to Q.8, PKS reiterated that he manages the bank accounts of the assessee company as well as other group concerns. It was also stated that he manages petty cash expenses of all members of Seksaria Group ii. In Q.10, PKS was directed to explain the contents of sky blue colour small diary of 2019 January recovered from office. In response to the same, PKS clarified that it contains details of payments received and disbursed by him on the direction of NKS. The payments are both in cash and through banking channels. It also contains amounts only for noting purposes on directions of NKS and he has not received the same. iii. In response to Q.11, he clarified that he is providing the page wise explanation of the content of the diary to the best Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 10 of his recollection and the entries are rough entries. Some transactions may not have happened or gotten cancelled and there are duplication of entries. The details of which are available with NKS. It is pertinent to note that with relation to substantial amount of entries, PKS has stated that NKS will be able to explain the data. iv In response to Q.12, PKS has once again reiterated that entries in blue colour small diary of January 2018 are rough entries and some transactions may not have happened or gotten cancelled NKS would be able to explain the same. C. Similar statements were recorded on 8 different dates and PKS has reiterated that NKS shall be in a better position to explain the data. Most importantly, in the statement recorded on January 25, 2022 in response to Q.22, PKS has once again clarified that he is making the statement to buy peace of mind and reserving the right that the entries in the diaries are rough notings, many of which pertains to old period and thus, if any discrepancy is found as per the books of accounts at a later stage, then he shall intimate and correct his statement. Analysis of the above statements One crucial point to be noted from the perusal of the statement is that in case he has not made any statement claiming the entries in the seized diaries to be completely accurate and has clarified that his statements are subject to alterations on the basis of actual position as per the books of Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 11 accounts. Further, nowhere, in his statement or at any point of time he has stated that these diaries are maintained at the instance of the assessee or any group companies or any of the directors. Another important fact which is also borne out from the assessment order PKS has retracted all of his statements by filing letter dated 22/12/2022 before the ld. AO, the copy of which has also been placed at the paper book at pages 29-33. The said retraction has been rejected by the ld. AO and also confirmed by the ld. CIT(A) on the ground of delay. It was stated that the retraction was filed only when PKS came to know that the department is intending to use his statement against assessee company. D. Relevant extract of Statement of NKS recorded on October 11,2021 at Office (i) In Q.20, NKS was directed to explain the quantum of cash generation derived from release of rights and grants of NOCs by the assessee in Mira-Bhayander In response to the same, NKS stated that \"Some cash is also generated from release of right and grant of NOCs from the Estate Investment Co. Pvt. Ltd. land parcels in Mira Bhayander. The facts provided by Tarun N Sakseria need to be verified by me The same will be provided in a week's time.\" This statement of NKS U/s 132(4) also confirms that he was not aware that such diaries were maintained by PKS Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 12 (ii) In Q. 29, NKS was shown statement of KB recorded on oath on October 8, 2021 and PKS recorded on October 11, 2021 under section 132 (4) of the Act. Further, the responses given by KB and PKS in response to question 14 and question 24 of the statements, their statements respectively, NKS was also directed to offer his comments on details of cash generated tabulated in question No. 29. In response to the same, NKS stated that \"I also confirm that sheet also contains the accounting of unaccounted cash transactions. Sir, I don't exactly know the amount of undisclosed cash receipts and undisclosed unaccounted income, but all these will be determined and will be offered for taxation.\" (iii) In response to Q. 31, NKS stated that the disclosures have been made to avoid prolonged litigation in case of determination of undisclosed income. If undisclosed income is reconciled, the same shall be offered for taxation. Further, he stated that none of the employees, directors, partners and family members will be subjected to prosecution for concealment of undisclosed income. E. Statements of NKS was subsequently recorded under Section 131 of the Act at Room No. 2007A, 20th Floor, Air India Building, Nariman Point, Mumbai-21 on January 4, 2022. In the statement recorded on January 4, 2022, NKS, inter alia, stated as under: (i) In Q6, NKS was asked to comments on the seized diaries. IN response to same, NKS stated that \"I would like to state Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 13 that the notings in the diaries do not seems to be legible at many places. The notings are not in an organised manner. I am therefore not able to comment upon the nature of the transactions as the amounts mentioned therein as these diaries pertain to very old period from FY 2014-2015 onwards. I shall verify our records in our office and give explanation on the same wherever applicable\" (ii) In Q.7, NKS was asked to offer his comments on the statement recorded by PKS wherein he has stated that the contents of the diary are the details of payments received and payments disbursed in cash and banking channel by him on the direction of NKS, In response to the same, NKS stated that \"it must be noted that PKS has been handling the petty cash and bank accounts of all entities. Further, PKS used to take my directions for office related work. However, 1 feel that there is a lot of duplication of these entries as cash return from the bank, petty cash and the receipts used to be deposited in our personal safe or sent home for safekeeping and returned later when required. Prima facie it seems that the payments and receipts have been recorded multiple times under different initials every time the amounts were sent for safe keeping by PKS and were subsequently brought back to the office and handed over to PKS. As these diaries pertain to very old period from 2014 -2015 onwards, therefore, I shall verify our records and give explanation wherever possible\" (iii) In Q6, NKS was asked to comments on the statement of TNS, on the excel statement seized, wherein he stated that Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 14 cash derived from rights/grants of NOC was deployed for purchase of various land parcels in Alibaug 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\". 9. Here also NKS has retracted all of his statements by filing the letter dated 7th February 2023, copy of which has been enclosed in the paper book. However, the said retraction has been rejected by AO on the same 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. Amongst these, particular significance was attached to the diaries marked as ―KB,‖ which were stated to have been maintained by the Estate Manager, Mr. Kamal Bubna, allegedly under the instructions of the promoter–director, Mr. Nandkumar Kudilal Seksaria. These entries, according to the Assessing Officer, chronicled cash receipts received by the assessee from various parties in respect of granting No-Objection Certificates (NOCs) for release of rights in Eksali lands situated in Mira–Bhayandar Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 15 and adjoining areas. On this premise, the Assessing Officer held that the said receipts represented unaccounted consideration received for extinguishment of rights, which was assessable as capital gains in the hands of the assessee. As regards the other entries not bearing the marking ―KB,‖ the Assessing Officer assumed them to denote unexplained cash transactions unrelated to any specific land or NOC deal and, therefore, treated them as unexplained money under section 69A of the Act. 10. Based on this reasoning, the Assessing Officer made substantial additions running into several crores, dividing them into three distinct heads first, those considered as capital receipts subject to tax under the head ―Capital Gains‖; second, notional interest allegedly earned on such receipts; and third, cash transactions categorised as unexplained under section 69A. These additions were founded almost exclusively on the notings in the seized diaries and the accompanying statements of the employees. No independent verification was made from the counterparties purportedly reflected in the diaries, nor were any corroborative documents or contemporaneous records unearthed to substantiate the alleged cash inflows. The Assessing Officer, nevertheless, inferred a pattern of systematic receipt of cash for release of Eksali land rights and proceeded to tax the same accordingly. Findings of CIT(A) 11. When the matter travelled in appeal before the learned Commissioner of Income Tax (Appeals) [―CIT(A)‖], the assessee Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 16 vehemently contested both the factual premise and the legal tenability of the additions. It was submitted that the entire edifice of the assessment rested upon a diary maintained by an employee for his personal reference, without any direction or authorization from the management. 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 many entries were illegible, repetitive, or incomplete, and could not, in isolation, indicate any taxable transaction. 12. The learned CIT(A), after a detailed consideration of the rival submissions and the seized material, partly accepted the assessee‘s contentions. He held that the entries bearing the initials ―KB‖ could, at best, be treated as reflecting the assessee‘s transactions in respect of NOC receipts, subject to verification and correction of factual inaccuracies. He, therefore, granted partial relief in respect of certain computational errors identified in the ―KB‖ notings. However, with regard to other entries that were not specifically attributed to the assessee, the CIT(A) concluded that these could not be taxed in its hands in the absence of any corroborative evidence linking them directly to the assessee. The CIT(A) also accepted the contention that the MIS sheets relied upon by the Assessing Officer were entirely subsumed Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 17 within the diary notings, and therefore, any addition based on them would result in duplication and double taxation. 13. Ld. CIT(A) accordingly, allowed following reliefs:- (i) Relief of Rs.1,00,18,000 on account of errors in the entries of ‗KB‘ as capital gains (ii) Relief of Rs 23,000 on account of notional interest taxed as capital gains and (iii) Relief of Rs 8,81,10,000 on account of uncorroborated entries under section 69A, 14. The Assessees have contested the following additions which were confirmed by the CIT(A): 1) Addition of Rs. 4,96,95,000 was made on account of Capital Gains - NOC amount received from Eksali land 2) Addition of Rs. 2,50,000 U/s 69A–entries in diaries not pertaining to NOC were taxed under section 69A 15. Similar additions have been made 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:- AY Capital Gains KB 69A Total AY 2014-2015 1,15,96,000 - 1,15,96,000 AY 2015-2016 4,96,95,000 2,50,000 4,99,45,000 AY 2016-2017 2,98,20,000 - 2,98,20,000 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 18 AY 2017-2018 1,79,63,000 - 1,79,63,000 AY 2018-2019 59,05,000 - 59,05,000 AY 2019-2020 2,27,40,000 - 2,27,40,000 AY 2020-2021 4,86,51,000 - 4,86,51,000 AY 2021-2022 1,25,00,000 - 1,25,00,000 AY 2022-2023 1,89,50,000 4,20,000 1,93,70,000 16. 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: 17. 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 copy of pages of the diary and the statement of PKS, NKS and KB , MIS Sheet as also other relevant documents, which were relied upon during the hearing. 18. 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 personal diary into conclusive proof of taxable Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 19 receipts, without undertaking the most rudimentary verification or establishing any nexus between such notings and real-world transactions. The so-called incriminating diaries, he stressed, were maintained by one Mr. Pawan Kumar Sharma (PKS), an employee of the group, purely for his personal reference. The said diaries contained a miscellany of jottings names, figures, abbreviations, and half-legible annotations many of which were repetitive, incomplete, or plainly unintelligible. They were neither part of the statutory books of account nor contemporaneous records of any actual dealings of the assessee. Consequently, the AR contended, the reliance placed by the Assessing Officer upon these diaries, in the absence of corroborative material or supporting evidence, was wholly misplaced and unsustainable in law. 19. The AR further pointed out that the only foundation on which the Assessing Officer sought to ascribe meaning to these notings was the statement of PKS recorded during search, spanning various dates between 3rd and 25th January, 2022. Yet, even in that statement, PKS had nowhere described the nature of the entries; he had merely identified the names and figures appearing therein, and repeatedly stated that the true explanation would have to be furnished by Mr. Nandkumar Kudilal Seksaria (NKS), the Director of the company. The learned counsel invited our attention to the transcript of PKS‘s statement to demonstrate that it was riddled with conjecture and bereft of any factual basis. He emphasised that the Assessing Officer had drawn sweeping conclusions by extrapolating a stray remark pertaining to one Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 20 page of the diary across hundreds of entries spanning multiple years an exercise that was, in his words, ―factually perverse and legally impermissible.‖ 20. The learned counsel also drew our attention to the statement of Mr. Kamal Bubna (KB), recorded on 8th October, 2021. He pointed out that the said statement was based on a solitary diary page shown to him during the search, on which KB had offered an ad hoc explanation. That isolated statement, the AR lamented, was then magnified and mechanically applied to every other entry in the diaries containing the initials ―KB,‖ without KB being confronted with those entries or his statement being extended to cover them. This, according to the AR, was a blatant misapplication of evidence. The AR added that even NKS, the principal person in charge of the company, in his statement dated 11th October, 2021 and again on 4th April, 2022, had stated unequivocally that the diaries were not coherent; that they contained rough notings, duplications, and personal annotations of PKS; and that he was not in a position to explain their contents. Importantly, NKS had not confirmed or adopted the statements of PKS or KB in any manner whatsoever. 21. The AR then highlighted that both PKS 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 21 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. 22. The learned Authorised Representative 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. [(2020) 261 Taxman 358 (Bom)], 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 22 that the ratio of this judgment was directly applicable to the present facts, where the Assessing Officer, resting solely on the statements of PKS and KB, had proceeded to frame the assessment without any verification or corroboration from the alleged payers or any independent third-party evidence. 23. The learned AR next placed reliance on the judgment of the Hon’ble Jharkhand High Court in Shree Ganesh Trading Co. v. CIT [(2012) 214 Taxman 262 (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 diary entries were self- proving instruments of truth. Such an approach, he argued, stood condemned by judicial authority. 24. The learned counsel further fortified his argument by citing the judgment of the Hon’ble Gujarat High Court in Kailashben Chokshi v. CIT [(2010) 328 ITR 411 (Guj.)], 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 23 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 (ITA No. 2227/Mum/2024) decision, wherein this very Bench had, following the dictum of Harjeev Aggarwal (Delhi High Court) and Jagdishprasad Joshi (Supreme Court), held that retracted statements under section 132(4) lose all probative value unless independently substantiated by evidence. 25. 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 24 present case anchoring the entire addition upon the retracted statements of PKS and KB was in flagrant violation not only of settled judicial doctrine but of the Board‘s own directives. 26. The learned Authorised Representative then turned to what he termed the ―central infirmity‖ of the entire assessment the treatment of the seized diaries 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 diaries 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 maintained by a non-director employee for his own personal convenience. The notings, often incomplete or repeated, were neither dated nor supported by vouchers or receipts. Such raw scribblings, he urged, could not constitute material evidence of income in law. 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 jottings of an employee. It was emphasised that the Department itself had not demonstrated that the seized diaries were maintained under the assessee‘s instruction or supervision. 27. In support of this proposition, the learned AR drew strength from the celebrated decision of the Hon’ble Supreme Court in Central Bureau of Investigation v. V.C. Shukla & Ors. [Criminal Appeal Nos. 247–256 of 1998], wherein it was held that loose sheets or diaries, not being books of Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 25 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 company on the strength of the personal notings of PKS, 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. Union of India [(2017) 394 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. 28. 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 Principal CIT v. Umesh Ishrani [(2019) 108 taxmann.com 437 (Bom)], 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 Engineers Ltd. v. DCIT [(2015) 63 taxmann.com 66 (Bom)], and DCIT v. Padmashree Dr. D.Y. Patil University [(2024) 159 taxmann.com 353 (Mum Trib)], both reiterating that such scribbled records, unless validated through substantive Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 26 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. 29. 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 payers of cash, though their details were available. No corroboration, direct or circumstantial, was adduced; no incriminating cash, bullion, or asset was unearthed during the search; and yet, the assessee was visited with enormous additions merely on the strength of what were, at best, unverified personal jottings. 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), to the extent of Rs. 4.96 crore as capital gains and Rs. 2.50 lakh under section 69A, be deleted in toto, and that the assessment itself, founded on invalid notice and manual DIN, be declared void ab initio. 30. In so far as additions made u/s.69A, without prejudice, arguments were made by the ld. AR can be summarized in the following manner:- Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 27 (i) Without prejudice to above, the AR has argued that the AO made a total addition of Rs.7,00,000 in respect of entries found in the name of one Mr.Ramesh Babu. (ii) The AR pointed out that the CIT(A) allowed the relief in respect of Rs.4,50,000 on the ground that Ramesh Babu has no business connection with the Assessees etc. However, the CIT(A) noted that the entry of Rs.2,50,000 was not in the name of Ramesh Babu but was in the name of NKS. Based on said observation, the CIT(A) confirmed the addition of Rs.2,50,000 in the hands of the Assessees under section 69A. (iii) The AR pointed out that as per the noting in the diaries the aggregate of entries in the name of Ramesh Babu was to Rs.7,00,000/- (Rs. 2,50,000/- + Rs. 4,50,000/-). (iv) The AR further pointed out that in one entry of Rs.4,50,000/- in the name of Ramesh Babu, a sum of Rs.2,00,000/- was allegedly allocated to RKS and balance Rs.2,50,000/- was allocated to NKS. The learned CIT(A), however, erred in fact in presuming that since Rs. 2,50,000/- was mentioned against the name of NKS and, the said amount was received by the Assessees from NKS. This presumption is factually incorrect and is contrary to the entries recorded in the diaries. The AR has taken us through the diaries to buttress his argument. (v) The AR made a without prejudice submission, that in case the diary entry of Rs.4,50,000/- is interpreted in its true and natural sense, it clearly indicates that out of Rs.4,50,000/- received from Ramesh Babu, Rs.2,00,000/- Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 28 was attributed to RKS and Rs.2,50,000/- was attributed to NKS and therefore no addition whatsoever could be made in the hands of the Assessees. Thus, the interpretation adopted by the learned CIT(A) is wholly misconceived. Since it stands established beyond doubt that the transaction in question was between Ramesh Babu and RKS/NKS, no addition can be sustained in the hands of the Assessees. Moreover , for the reasons that the diaries were maintained at a group level and not restricted to the Assessees case . This position is consistent with the finding of the learned CIT(A) in respect of another entry of Rs. 2,50,000/- found in the name of Ramesh Babu, wherein similar reasoning was accepted. (vi) The AR made a further without prejudice submission that even assuming but not admitting, that the entry of Rs.2,50,000/- pertains to NKS, the Assessees respectfully submit that the same can, at best, be regarded as circulation of money and not as a transaction between NKS and the Assessees. The AR pointed out that, the Assessing Officer, in the assessment order for A.Y. 2021-22 (entry no.5 in the table at page 52 of the assessment order), has categorically held that entries in the name of NKS represent mere circulation of money and are not in nature of any actual transactions. The AR argued that since the facts remain identical, the said finding of the Assessing Officer in A.Y. 2021-22 is equally applicable to the year under consideration. The AR further argued that in any case, the fact remains that there has been no transaction between NKS and the Assessees Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 29 and therefore no addition could be made in the hands of Assessees. 31. On the legal grounds, the summary of the ld. Counsel submissions are as under:- A) Manual DIN (i) The AR pointed out that the DIN mentioned on the assessment order dated 27-03-2023 was not in accordance with the CBDT Circular No. 19/2019 dated August 14, 2019 and therefore the Order passed is bad in law and is liable to be quashed. (ii) The AR pointed out that on bare perusal of the assessment order it can be noted that the DIN has been mentioned manually. The AR further pointed out that the DIN intimation letter is dated 18-04-2023, which is after the date of assessment order i.e. 27-03-2023. (iii) The AR accordingly argued that the manual DIN in the impugned reassessment orders is not in accordance with CBDT Circular No. 19/2019 dated August 14, 2019. (iv) The AR pointed out that the CBDT Circular has mandated that all communications shall be issued through ITBA portal for maintaining proper audit trail and the communication shall be treated as Non est unless a computer-generated DIN has been allotted and duly quoted in the body of such communication. The Circular further mandates that only in exceptional circumstances, as provided in the Circular, such communication may be manually issued. It further provides specific procedure to be followed for issuing Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 30 such manual communication. The Circular also states that any communication issued in contravention of the above stated procedure, shall be treated as invalid and shall be deemed to never have been issued. (v) The AR pointed out that The AO has not made out any exceptional circumstances, which enables him to bye- pass this notification, which is binding on him. (vi) The AR further argued that the DIN has been generated on date subsequent to date of assessment order and intimated vide separate intimation, which is after the date of the impugned reassessment Order. From the intimation dated 18- 04-2023, it is clear that the DIN has been generated on 18-04- 2023 and therefore there was no DIN available on the date of the assessment order i.e. 27-03-2025. The AR accordingly argued that the impugned reassessment Orders have been passed before the generation of DIN, which is not in accordance with the Circular. (vii) The AR relied on the following jurisdictional and non- jurisdictional High Court and others decisions in support of his contention: a. Ashok Commercial Enterprises vs. ACIT [2023] 154 taxmann.com 144 (Bombay) The DR produced the intimation letter dated 13-10-2021 stating that the order dated 28-9-2021 under section 153C has a DIN, which is set out therein. The Hon High Court held that even if this is in compliance with para 3 of Circular no.19 of 2019, the same is not in compliance with para 3 of the Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 31 circular as no exceptional circumstances were claimed and accordingly it was held that such an order is to be treated as invalid. b. Commissioner of Income Tax v Laserwords US Inc (2025 175 taxmann.com 920) (Madras) The Assessing Officer passed assessment order under section 143(3) read with section 144C(13) read with section 254 pursuant to the directions of DRP. The direction issued by the DRP under section 144C(5) and the assessment order did not contain a Document Identification Number (DIN) as mandated by the CBDT by its Circular No. 19/2019, dated 14-8- 2019.The Revenue contended that the DIN was generated and it was written in hand in the proceedings of DRP and subsequently, communicated to assessee on the same day, i.e., on 12-2-2021. Following the decision of Bombay High Court in Ashok Commercial Enterprises v. Assistant Commissioner of Income tax [2023] 154 taxmann.com 144 (Bombay) it was held that in absence of valid DIN, DRP proceedings and the assessment order are invalid. c) Commissioner of Income Tax, International Taxation vs Sutherland Global Services Inc (2025 175 taxmann.com 897) (Madras) The Madras High court stated that Firstly, on facts, it is the case of revenue that there was a DIN generated and it was written in hand in the proceedings of DRP and subsequently, communicated to assessee two days later. Thus, according to revenue, a DIN in fact was generated for DRP proceedings, Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 32 written by hand and subsequently communicated on 21-12- 2022 and therefore, the conditions prescribed in paragraph No.3 of the circular have been complied with. Admittedly, the reason for writing the DIN number by hand and the reason for not generating the DIN electronically have not been specified in the format prescribed in paragraph No.3 of the circular. Even prior written approval of the Chief Commissioner/Director General of Income-Tax, as prescribed in Clause (3) of the Circular, was not brought to notice. If such prior permission has not been taken, that will also be another ground to make the communication to be treated as invalid and having never been issued. Therefore, the communication or the proceedings of the DRP, is not in conformity with paragraph Nos.2 and 3 of the circular and are invalid and deemed to have never been issued. Consequently, the assessment orders under section 144C(13), which are passed on those directions of DRP, cannot be sustainable. d) DCIT, Central Circle – 7(2) vs Shubhkanchi Trading Pvt Ltd (1600/Mum/2022) (Mumbai Trib) Relying on the binding decision of Bombay High Court in the case of Ashok Commercial Enterprises Vs ACIT (154 taxmann.com 144), it was held that order issued in violation of Circular 19 of 2019 is bad in law and is liable to be quashed. B) Notice issued by the jurisdictional Assessing officer instead of faceless Assessing officer Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 33 (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 Limited v. ACIT reported in [2024] 464 ITR 430 (Bombay HC) Notice under section 148 was issued by Jurisdictional Assessing Officer instead of Faceless Officer in contravention of scheme of Faceless assessment. 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 hasbeen assigned to either the JAO or the FAO in the Scheme dated Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 34 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. The above decision of Hexaware was followed by the coordinate bench of Bombay High Court in the following cases: i) Capital G LP V. ACIT (writ Petition (L) No. 15289 of 2024) (Bombay HC) ii) Abhin Anil Kumar Shah v. ITO reported in [2024] 468 ITR 350 (Bombay HC) iii) Ganesh Nivrutti Jagtap vs ACIT [2024] 166 taxmann.com 168 (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 (Writ Petition No. 23573 of 2024) regarding the validity of notice issued under section 148 by the JAO. 32. 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 35 the decision of Jurisdictional Bombay High Court in the case of Bank of India vs ACIT [2025] 170 taxmann.com 422 (Bombay). 33. The learned Departmental Representative (DR), on his part, sought to defend the orders of the Assessing Officer and the learned CIT(A) with considerable fervour. He submitted that the seized diaries, though not part of the statutory books of account, constituted contemporaneous records maintained by a responsible employee of the group, and therefore, merited serious evidentiary consideration. The DR argued that PKS was not a casual or peripheral employee, but a key managerial person who, by virtue of his long-standing involvement in the affairs of the group, had intimate knowledge of the cash transactions and dealings in Eksali land. The very fact, he contended, that the diaries 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 PKS, recorded contemporaneously during the search, carried evidentiary weight and was duly corroborated by the statement of KB, the Estate Manager, who had confirmed that entries marked in his name corresponded to cash received for release of NOCs. According to the DR, such concurrent testimonies could not be brushed aside as unreliable merely because of subsequent retractions. 34. The learned DR further contended that the retractions filed by PKS and NKS were afterthoughts, strategically made Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 36 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 diaries 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 NOC receipts and those representing unexplained cash flows, and that the additions were made only after granting due relief for evident duplications and computational inaccuracies. 35. 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 emphasised that the Assessing Officer, by collating the diaries, the MIS sheet, and the statements of key employees, 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 37 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 36. 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 capital gains, it is seen that the entire premise of the ld. AO is based on the statements of PKS and NKS who have alleged to have explained entries in the diary found during the search. From deep scrutiny of the statements it is discerned that PKS in his statement has not identified the nature of entries noted in the diaries and left it for NKS to provide the clarification. NKS on the other hand in his statement has clearly stated that the diaries are not coherent, there are various duplications and most of them are rough notings etc., due to which he is not in the position to provide any clarification nor has offered any explanation or confirmed the statement of PKS. No further statement of NKS was recorded on this issue. Further, in the statement of KB which was recorded in respect of the noting in his name by showing him only one isolated single entry and then the said statement was extrapolated to all the diary entry in the name of KB, without recording his statement on to all the notings in his name in the diaries. Thus, this statement per se cannot lead to conclusion that notings in the diary Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 38 maintained by PKS in his individual capacity can lead to adverse inference in so far as assessee company are concerned or the assessee company or related concerns that they have been taking cash on the deal of the land. 37. One very important fact to be noted here is that the seized diaries were maintained by the employee of P.K.S., who has himself categorically admitted that these notings were made for his personal purposes only and were not coherent, nor have they been fully explained or corroborated. This fact has been admitted by P.K.S. in his statement recorded in Question No. 19. We have also perused certain pages referred to at the time of hearing and found it difficult to believe that any normal person could decipher such entries after a lapse of six to seven years from the date of the statement. The Director N.K.S., in his own statement, has clearly stated that these diaries were maintained by P.K.S. purely for his personal use and reference. Now, when the diary itself has been found in the possession of the employee who wrote and maintained it for his private reference, there can be no presumption under section 132(4A) operating against the assessee. Once the Assessing Officer himself has found that the entries in the diaries were merely personal notings of the employee, he ought to have verified and corroborated this statement by recording the evidence of any director or by summoning the parties from whom the alleged cash was purportedly received. No such effort was made, even though the entire details such as names, addresses, and the parties to whom NOCs were given were already available on record. The entries in the Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 39 diaries are nothing but rough and unverified notings, incapable of explaining the underlying transactions without resort to the statements of P.K.S. 38. Another important fact is that both P.K.S. and N.K.S. 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 company, particularly when the seized diaries were not found from the premises of any director or of the assessee company itself. 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 emphasised 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. 39. The mere discovery of loose papers or personal diaries, which are not even maintained by the directors of the assessee company 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 seize 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 40 his own independent mind and conduct proper enquiry to determine whether such statements or seized documents can lawfully lead to any addition. 39.1. 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. 39.2. 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. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 41 39.3. 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 solitary entry or isolated explanation to hundreds of unverified notings amounts more to conjecture than to judicial reasoning. 40. This concern is further magnified when the authors of those diaries have retracted their statements 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. 40.1. 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 alleged NOC transactions, nor did he summon the supposed payers of cash whose names appeared in the diaries. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 42 40.2. 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. 41. We therefore hold that the Assessing Officer, in relying solely upon unverified diary entries and uncorroborated statements, has traversed beyond the permissible confines of evidentiary inference. The seized diaries, 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 ―Capital Gains‖ amounting to ₹4,96,95,000, and under section 69A amounting to ₹2,50,000, cannot be upheld and are hereby deleted. 42. Having disposed of the additions of merits, we now turn to legal ground concerning the validity of the assessment Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 43 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 two principal planks first, 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; and second, that the assessment order bears a manually inscribed Document Identification Number (DIN), contrary to CBDT Circular No. 19 of 2019 dated 14th August 2019. On the first issue, the legal position is no longer res integra. The Hon‘ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT [(2024) 464 ITR 430 (Bom)] 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. v. ACIT has since been consistently followed by the same Court in Capital G LP v. ACIT, Abhin Anil Kumar Shah v. ITO [(2024) 468 ITR 350 (Bom)], and Ganesh Nivrutti Jagtap v. ACIT [(2024) 166 Taxmann.com 168 (Bom)], thereby fortifying the principle that the faceless assessment regime under section 151A is not a matter of administrative Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 44 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. 42.1. 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. 42.2. 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. 43. The second legal infirmity relates to the manner in which the impugned assessment orders were issued bearing a manually written Document Identification Number (DIN) and followed by a separate communication of the DIN several Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 45 weeks later. The undisputed factual matrix reveals that the assessment order was dated 27th March 2025, whereas the intimation letter bearing the DIN was generated and communicated on 18th April 2025. Thus, on the date when the assessment order was passed, no DIN existed in the system. The purported handwritten DIN subsequently inserted in the body of the order is a post facto attempt at regularisation. This practice, we regret to note, stands in direct contravention of the binding mandate of CBDT Circular No. 19 of 2019 dated 14th August 2019, which prescribes that ―no communication shall be issued by any income-tax authority without a computer-generated DIN, and any communication issued in contravention thereof shall be treated as invalid and shall be deemed to have never been issued.‖ The Circular, being issued in exercise of powers under section 119 of the Act, has statutory force and is binding upon all officers of the Department. 44. The Circular admits of only limited exceptions in cases involving system outages, emergencies, or other exceptional circumstances and even then, mandates the recording of reasons in writing, prior approval of the Chief Commissioner or Director General, and contemporaneous documentation of such approval in the assessment record. The Revenue has neither pleaded nor produced any evidence that such conditions were satisfied in the present case. On the contrary, the generation of DIN after nearly three weeks from the date of assessment belies any claim of technical exigency. The omission, therefore, is not a mere procedural irregularity but a Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 46 substantive breach that goes to the root of jurisdiction. The Hon’ble Bombay High Court in Ashok Commercial Enterprises v. ACIT [(2023) 154 Taxmann.com 144 (Bom)] has authoritatively held that failure to issue an order through the designated ITBA portal, or issuance of an order without a valid pre-existing DIN, renders such order invalid and non est in the eyes of law. The Court rejected the argument that subsequent intimation of DIN could cure the defect, holding that such post-dated compliance defeats the purpose of the Circular, which is to ensure transparency, traceability, and audit trail of every communication issued by the Department. 45. The same principle was reaffirmed by the Hon’ble Madras High Court in CIT v. Laserwords US Inc. [(2025) 175 Taxmann.com 920 (Mad)], where it was held that an assessment order and DRP proceedings issued without a valid DIN were void ab initio. The Court observed that the procedural mandate under Circular No. 19 of 2019 is not directory but mandatory, and that even if a DIN was generated later and handwritten in the order, such post facto insertion could not cure the inherent defect of invalidity. The reasoning was reiterated in CIT (International Taxation) v. Sutherland Global Services Inc. [(2025) 175 Taxmann.com 897 (Mad)], where the Hon‘ble Court observed that the absence of a pre- generated DIN, or the failure to record reasons and obtain prior approval for manual issuance, is fatal to the validity of the order. These rulings, when read conjointly, leave no room for doubt that compliance with the DIN protocol is a jurisdictional prerequisite and not a curable irregularity. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 47 46. The coordinate benches of this Tribunal have consistently followed this judicial position. In DCIT (Central Circle–7(2)) v. Shubhkanchi Trading Pvt. Ltd. (ITA No. 1600/Mum/2022), the Tribunal, applying the ratio of Ashok Commercial Enterprises (supra), quashed the assessment order for violation of the DIN requirement, observing that the issuance of a manual order without a computer-generated DIN was antithetical to the CBDT‘s stated policy of transparency and accountability. Likewise, in CIT v. Laserwords US Inc. and Sutherland Global Services (supra), both the High Courts categorically declared that communications issued without valid DINs are ―invalid and deemed to have never been issued.‖ Following these precedents, we hold that the assessment orders impugned before us having been manually issued and followed by post-dated DIN intimations are void in the eyes of law and cannot be sustained. The sanctity of the CBDT‘s procedural safeguards cannot be reduced to a mere formality; they are, in essence, the bedrock of institutional integrity in the era of faceless administration. 47. 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 and compounded by the failure to generate and quote a valid DIN, stand vitiated in law. The dual breaches one jurisdictional, the other procedural strike at the root of the assessment‘s validity. The notice under section 148, having been issued by an officer not authorised under the notified scheme, is coram non judice, and the subsequent Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 48 order passed without a valid DIN is a nullity. This conclusion is fortified by the decision of the Hon‘ble Bombay High Court in Hexaware Technologies Ltd. v. ACIT (supra), which has been consistently followed in Capital G LP v. ACIT (Writ Petition No. 15289 of 2024), Abhin Anil Kumar Shah v. ITO [(2024) 468 ITR 350 (Bom)], and Ganesh Nivrutti Jagtap v. ACIT [(2024) 166 Taxmann.com 168 (Bom)]. 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. 48. 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 assessment order, bereft of a valid, pre-generated DIN, stands condemned by the express stipulations of CBDT Circular No. 19 of 2019, as interpreted by the binding judgments of the jurisdictional and other High Courts. 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. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 49 49. In the result, and in consonance with our detailed findings hereinbefore, we hold that (i) the additions made under the head ―Capital Gains‖ on account of alleged NOC receipts and under section 69A on account of alleged unexplained money 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; and (iii) the assessment orders are further invalidated for non-compliance with CBDT Circular No. 19 of 2019 owing to the absence of a valid pre-generated DIN. The remaining grounds pertaining to interest under sections 234A, 234B, and 234C 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. 50. We now turn to the connected appeals for the subsequent assessment years, 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 each of these years, the additions have emanated from the same set of diaries and the same statements recorded during the search, 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 50 mutandis to these years as well. We therefore adopt our findings and conclusions in the lead appeal as applicable in toto to the remaining years under consideration. 51. For the sake of ready reference the grounds raised by the assessee in other years and the Revenue grounds are incorporated as under:- (A) ITA No. 3012/MUM/2025 - AY 2014-15 – Assessee Appeal Grounds raised by the Assessees: 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. 2. Without prejudice to the above, the CIT erred in holding that AO was right in making an addition of Rs. 1,15,96,000 as capital gains purely on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 3. The Ld. AO erred in levying interest under section 234B and 234C of the Act. The Appellant prays that the interest under section 234B and 234C of the Act be deleted or consequentially reduced 4. The Appellants craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (B) AY 2016-17 (ITA 3013/MUM/2025) – Assessee’s Appeal Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 51 Grounds raised by the Assessees: 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. 2. Without prejudice to the above, Appellants submit that the assessment Order passed by the AO under section 143(3) /148 has been issued without DIN and therefore this Order passed by the AO is a nullity in Law and the Appellants pray that the same be quashed. 3. Without prejudice to the above, the CIT erred in holding that AO was right in making addition of Rs. 2,98,20,000 as capital gains purely on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence .The Appellants pray that the same be deleted. 4. The Ld. AO erred in levying interest under section 234B and 234C of the Act. The Appellant prays that the interest under section 234B and 234C of the Act be deleted or consequentially reduced. 5. The Appellant craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (C) AY 2016-17 (ITA 3087/MUM/2025) – Department’s Appeal Grounds raised by the Department: 1. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee without giving opportunity to the Assessing Officer to verify the Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 52 documents filed before him during the appellate proceedings by calling for a remand report under rule 46A of the Income-tax Rules, 1962; 2. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 46, 13,000/- when the assessee had accepted the receipts to belong to the assessee and no valid documents and reconciliation for claiming the relief citing the same to be double taxation had been filed; 3. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs.29,17,000/- when the assessee had accepted during the assessment proceedings that the receipts pertained to cash received on release of lands at Eksali and no valid documents and reconciliation for claiming the relief had been filed; 4. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 10,00,000/- holding the same to be belonging to Veda Real Estate Corporation when the assessee has not filed any valid document or reconciliation to prove the same; 5. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs.22,50,000/- while relying on the statement filed by the assessee to state that the said sum of Rs. 22,50,000/- was the excess amount of cash paid to late Shri Pratap Gambir without any supporting evidences to substantiate the statement; 6. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs.47,50,000/- while relying on the statement filed by the assessee to state that the said sum of Rs.47,50,000/- belonged to Rajkumar Seksaria (RKS) on the basis of a noting on the Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 53 seized paper which was actually 'RIG' and not 'RKS' as claimed by the assessee; 7. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs.66,66,669/- u/s 69A of the Act merely relying on the cash flow statement filed by the assessee without any supporting evidences; 8. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition aggregating to Rs. 11,00,000/- merely on the submissions filed by the assessee that the said amount pertained to circulation of money(V Kulkarni and Vishal) and development agreement (Kumar Pune) though no documentary evidences to support the same had been filed by the assessee; 9. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 40,00,000/- even though the Assessing Officer had taken a judicious view in allowing telescoping to the assessee and adding the impugned sum of Rs. 40,00,000/- in respect of which no documents were filed by the assessee to grant telescoping; 10. The appellant craves leave to add to, alter, amend, modify and / or delete any or all of the above said grounds of appeal. the appellant reserves its right to file further submissions in the appeal.\" (D) AY 2017-18 (ITA 3227/MUM/2025) – Assessee’s Appeal Grounds raised by the Assessees: 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 54 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. 2. Without prejudice to the above, Appellants submit that the assessment Order passed by the AO under section 143(3) /148 has been issued without DIN and therefore this Order passed by the AO is a nullity in law and the Appellants pray that the same be quashed. 3. Without prejudice to the above, The CIT erred in holding that AO was right in making an addition of Rs. 1,79,63,000 as capital gains purely on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 4. The Ld. AO erred in levying interest under sections 234B of the Act. The Appellants prays that the interest under sections 234B of the Act be deleted or consequentially reduced. 5. The Appellants craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (E) AY 2017-18 (ITA 3936/MUM/2025) – Department’s Appeal Grounds raised by the Department: 1. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in allowing relief to the assessee without giving opportunity to the Assessing Officer to verify the documents filed before him during the appellate proceedings by calling for a remand report under rule 46A of the Income-tax Rules, 1962; Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 55 2. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 26,03,000/- when the assessee had accepted the receipts to belong to the assessee and no valid documents and reconciliation for claiming the relief citing the same to be double taxation had been filed; 3. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 13,60,000/- when the assessee had accepted during the assessment proceedings that the receipts pertained to cash received on release of lands at Eksali and no valid documents and reconciliation for claiming the relief had been filed: 4. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition is 69A to the extent of Rs.1,95,50,000/- holding the same were not assessable to tax in the hands of the assessee since the same did not belong to the assessee: 5. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition u/s 69A to the extent of Rs.1,95,50,000/- not appreciating that the Assessing Officer had taken a judicious call in adding the amounts involved in the entries in the hands of the entities in respect of which the assessee was able to provide complete documentary evidences and only added the amounts of cash involved in the entries in respect of which the assessee had failed to submit complete documentary evidences since the assessee was the main group entity for generation of cash; 6. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 90,00,000/- even though the Assessing Officer had taken a judicious view in allowing telescoping to the assessee and adding the impugned sum of Rs. 90,00,000/- in respect of Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 56 which there was discrepancy in matching the entries appearing in the MIS Sheet and the entries in the diaries; 7. The appellant craves leave to add to, alter, amend, modify and / or delete any or all of the above said grounds of appeal, the appellant reserves its right to file further submissions in the appeal.\" (F) ITA No.3225/Mum/2025 - AY 2019-20 (Assessee’s Appeal) Grounds raised by the Assessees: 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. 2. Without prejudice to the above, the Appellants submit that the Assessment Order passed by the AO under section 143(3) /148 has been issued without DIN and therefore this Order passed by the AO is a nullity in law and the Appellants pray that the same be quashed. 3. Without prejudice to the above, the CIT erred in holding that AO was right in making addition of Rs. 2,27,40,000 as capital gains purely on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 4. The appellant craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 57 (G) ITA No.3224/Mum/2025 - AY 2020-21 (Assessee’s Appeal) Grounds raised by the Assessees: 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. 2. Without prejudice to the above, the Appellants submit that the Assessment Order passed by the AO under section 143(3) /148 has been issued without DIN and therefore this Order passed by the AO is a nullity in law and the Appellants pray that the same be quashed. 3. Without prejudice to the above, the CIT erred in holding that AO was right in making addition of Rs. 4,86,51,000 as capital gains purely on the basis of entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 4. The Ld. AO erred in levying interest under sections 234B of the Act. The Appellant prays that the interest under section 234B of the Act be deleted or consequentially reduced. 5. The appellant craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (H) AY 2021-22 (ITA No. 3223/Mum/2025) (Assesse’s Appeal) Grounds raised by the Assessees: 1. The CIT erred in holding that AO was right in making addition of Rs. 1,25,00,000 as capital gains purely on the basis of Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 58 entries in the diaries illegally seized from the Appellants premises and uncorroborated evidence. The Appellants pray that the same be deleted. 2. The Ld. AO erred in levying interest under sections 234A and 234B of the Act. The Appellant prays that the interest under sections 234A and 234B of the Act be deleted or consequentially reduced. 3. The appellant craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. (I) ITA No.3222/Mum/2025) - AY 2022-23 (Assessee’s Appeal) Grounds raised by the Assessees: 1. The CIT erred in holding that AO was right in making an addition of Rs. 1,89,50,000 as capital gains on the basis of entries in the diaries illegally seized from the Appellants premises .The Appellants submit that there is no reason for making this addition which is based purely on uncorroborated evidence which has not been legally procured under the provisions of the Act and purely based on surmises and conjectures and pray that the same be deleted. 2. Without prejudice to the above, the Appellants submit that the Assessment Order passed by the AO under section 143(3) /148 has been issued without DIN and therefore this Order passed by the AO is a nullity in law and the Appellants pray that the same be quashed. 3. Without prejudice to the above, the CIT erred in holding that AO was right in making addition of Rs. 4,20,000 relating to other receipts in diaries found during the course of search proceedings under section 69A/69B of the Act. The Appellants submit that the said addition pertaining to an entry is un corroborated and as such the conditions precedent for making an addition under section 69A/69B do not exist. The Appellants Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 59 therefore pray that the addition of Rs. 4,20,000 made by the AO under section 69A be quashed. 4. The Ld.AO erred in levying interest under sections 234B and 234C of the Act. The Appellants pray that the interest under sections 234B and 234C of the Act be deleted or consequently reduced. 5. The appellant craves leave to add, amend, omit or alter the above grounds of appeal before or during the hearing of the appeal. J. Department Appeal: ITA No. 3928/MUM/2025 AY 2015-16 The department has raised the following grounds of appeal 1.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing relief to the assessee without giving opportunity to the Assessing Officer to verify the documents filed before him during the appellate proceedings by calling for a remand report under rule 46A of the Income-tax Rules, 1962: 2. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 23,51,000/- when the assessee had accepted the receipts to belong to the assessee and no valid documents and reconciliation for claiming the relief citing the same to be double taxation had been filed; 3. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 76,67,000/- when the assessee had accepted during the assessment proceedings that the receipts pertained to cash received on release of lands at Eksali and no valid documents and reconciliation for claiming the relief had been filed: Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 60 4. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition u/s 69A to the extent of Rs.8,81,10,000/- holding the same were not assessable to tax in the hands of the assessee since the same did not belong to the assessee: 5. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition u/s 69A to the extent of Rs.8,81,10,000/- not appreciating that the Assessing Officer had taken a judicious call in adding the amounts involved in the entries in the hands of the entities in respect of which the assessee was able to provide complete documentary evidences and only added the amounts of cash involved in the entries in respect of which the assessee had failed to submit complete documentary evidences since the assessee was the main group entity for generation of cash; 6. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs.23,000/- even though the Assessing Officer had taken a judicious view in allowing telescoping to the assessee and adding the impugned sum of Rs.23.000/- in respect of which there was discrepancy in matching the entries appearing in the MIS Sheet and the entries in the diaries: The appellant craves leave to add to, alter, amend, modify and / or delete any or all of the above said grounds of appeal, the appellant reserves its right to file further submissions in the appeal.\" 52. From a careful perusal of the grounds raised by the assessee in the connected assessment years, it emerges that the challenge revolves primarily around two distinct yet interrelated facets, first, the very validity of the reassessment proceedings initiated under section 148 of the Act; and Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 61 second, the substantive additions made on account of alleged capital gains, based on the same set of seized diaries 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. The assessee has further assailed the consequential assessment orders on the ground that they were passed without a valid Document Identification Number (DIN), in breach of the mandatory directions contained in CBDT Circular No. 19 of 2019 dated 14 August 2019. 53. On merits, the assessee has contested the additions made on account of alleged capital gains said to have arisen from the so-called NOC transactions, contending that the same are purely notional and unsupported by any cogent material. It has been argued that such additions rest entirely on loose sheets and diary notings maintained by an employee for his personal 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 Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 62 adjudicated in consonance with the principles and findings already recorded hereinabove. 54. In certain years, the Assessing Officer has resorted to making additions on a protective basis in one entity of the Seksaria group and on a substantive basis in another, both founded on the same seized material. Since we have held that the seized diaries 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. 55. We also note that in certain assessment years, the Assessing Officer has purported to reopen completed assessments merely on the basis of the seized diaries, 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. [(1992) 198 ITR 297 (SC)] held that reopening under section 147 cannot be used as a ploy for roving verification or fishing enquiry into completed matters. Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 63 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. 56. For completeness, we also record that certain minor computational adjustments made by the CIT(A) in respect of arithmetic reconciliations, while not impugned on merits, stand rendered academic in view of our decision to annul the substantive assessments themselves. 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. 57. Coming now to the appeals preferred by the Revenue, we find that the Department has assailed the relief granted by the learned CIT(A) in respect of certain portions of the seized material which, according to the Department, ought to have been sustained as unaccounted income. The grounds raised are, in substance, that the CIT(A) erred in deleting additions relating to diary entries not marked ―KB,‖ and in holding that the same could not be attributed to the assessee without corroborative proof. Upon careful consideration, we find no merit in the Revenue‘s grievance. The learned CIT(A), in his considered wisdom, had analysed the seized material threadbare and correctly held that only entries specifically identified, explained, and linked to the assessee could even be considered for assessment. The other entries, being stray and Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 64 uncorrelated, were rightly held to be outside the purview of the assessee‘s accountability. Far from committing any error, the CIT(A) exhibited judicial restraint and factual circumspection. His partial relief was grounded in logic, consistency, and fairness. The Revenue‘s attempt to resuscitate these very entries, after their evidentiary infirmity has already been judicially exposed, is a futile exercise. 58. The Revenue has also sought enhancement of income on the footing that certain unaccounted receipts were wrongly omitted or under-assessed. However, we find that the CIT(A) had no occasion to direct any such enhancement, nor has any cogent material been brought before us to justify it. The powers of enhancement under section 251 of the Act are indeed wide, but they are not unbounded. They must operate within the framework of issues arising out of the assessment before the CIT(A) and cannot extend to introducing new sources of income that were never the subject of consideration before the Assessing Officer. The Hon’ble Supreme Court in CIT v. Shapoorji Pallonji Mistry [(1962) 44 ITR 891 (SC)] and subsequently in Nirbheram Daluram v. CIT [(1997) 224 ITR 610 (SC)] has held that while the appellate authority has plenary powers to confirm, reduce, enhance or annul an assessment, such power of enhancement must be exercised judiciously and only within the confines of the material before it. The Revenue‘s present plea, seeking enhancement at this stage, is therefore not maintainable. 59. Additionally, the Revenue has taken ground No.1 in most of the years relating to violation of Rule 46A. We have perused Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 65 the papers filed by the assessee, assessment order and order of the ld. CIT(A), we are in agreement with the contention of the ld. AR that no evidence was produced before the ld.CIT(A) in violation of Rule 46A. Even at the time of hearing, ld. DR has not indicated what were the additional evidences which have been entertained by the ld. CIT(A). Thus, these grounds raised by the department in various years are dismissed. 60. In view of the foregoing discussion, all the appeals preferred by the Revenue are dismissed. The orders of the learned CIT(A) granting partial relief to the assessees are upheld to the extent they survive our annulment of the assessments themselves. The assessees‘ appeals, being meritorious both on factual and legal grounds, stand allowed as indicated in our operative findings. The Revenue‘s grounds, being devoid of substance, are dismissed. We accordingly confirm that the deletions and relief granted by the CIT(A) were wholly justified and call for no interference. 61. Accordingly, for the assessment years from 2012–13 to 2022–23, wherever reassessment orders were framed pursuant to notices under section 148 or 153A of the Act based on the same set of seized diaries, statements, and MIS sheets, such assessments stand annulled for want of jurisdiction, procedural legitimacy, and evidentiary support. All consequential additions made therein are correspondingly set aside. 62. For the sake of clarity and completeness, it is hereby recorded that: (i) in all years where additions were made Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 66 towards alleged NOC receipts treated as capital gains, the same are deleted in full; (ii) additions made under section 69A or 69C towards unexplained money or expenditure stand deleted; (iii) 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; and (iv) the assessment orders themselves are invalidated for non- compliance with CBDT Circular No. 19 of 2019 due to the absence of a valid pre-generated DIN. 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. 63. The cumulative outcome of these appeals is thus be summarised, for administrative convenience, as follows:- ITA No. A.Y Result 3012/Mum/2025 2014-15 Allowed 3013/Mum/2025 2016-17 Allowed 3228/Mum/2025 2015-16 Allowed 3227/Mum/2025 2017-18 Allowed 3225/Mum/2025 2019-20 Allowed 3224/Mum/2025 2020-21 Allowed 3223/Mum/2025 2021-22 Allowed 3222/Mum/2025 2022-23 Allowed 3928/Mum/2025 2015-16 Dismissed 3087/Mum/2025 2016-17 Dismissed 3936/Mum/2025 2017-18 Dismissed Printed from counselvise.com ITA No.3012/Mum/2025 and others The Estate Investment Company Pvt. Ltd. and others 67 59. All the appeals filed by the assessees are allowed in full, whereas the cross-appeals preferred by the Revenue are dismissed. No order as to costs. Order pronounced on 17th October, 2025. Sd/- (ARUN KHODPIA) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 17/10/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "