Seized Excel Sheet Not Prepared by Taxpayer, Not Credible: ITAT Deletes ₹35 Lakh Unexplained Investment Addition [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) deleted ₹35 Lakh addition under section 69A/69B for alleged unaccounted land investment for the assessment year (A.Y) 2016-17, holding that excel sheets seized during search were prepared by a Third-Party Land aggregator, not by the assessee being not credible in nature.

The Tribunal heard a series of assessment and reassessment orders passed against the assessee, whereby the appeal for the A.Y 2016-17 ITA No. 3215/Mum/2025 of the assessee was taken up first as lead matters. This appeal arose against the order of CIT(A) dated 15/04/2025.

The Assessee, Tarun Nandkumar Seksaria, a part of the Sakseria Group of Companies, private limited company incorporated especially for acquisition of land in and around Dhokawade and Dapoli.

The dispute involved additions made on the basis of certain excel sheets found during the course of search, the evidentiary worth of the statements recorded under section 132(4), and the consequential additions of unexplained Land investments under section 69A/69B of the Income Tax Act, 1961.

The Section 69A of the Income Tax Act, 1961 explained that: Unexplained money, etc

“Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the ] [ Substituted by Act 18 of 1992, Section 35, for Explanation 3 (w.e.f. 1.4.1993).][Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).][, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.] [Inserted by Act 5 of 1964, Section 16 (w.e.f. 1.4.1964).]”

On the other hand, the Section 69B of the Income Tax Act, 1961 explained that: Amount of investments, etc., not fully disclosed in books of account.

“Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the ] [Section 64 renumbered as sub-Section (1) thereof by Act 42 of 1970, Section 16 (w.e.f. 1.4.1971).][Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).] [finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the ] [Inserted by Act 10 of 1965, Section 19 (w.e.f. 1.4.1965).][Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).][, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year. ] [Inserted by Act 10 of 1965, Section 19 (w.e.f. 1.4.1965).]”

The Assessing Officer made search and survey operations conducted on 7th October, 2021, under section 132 of the Income Tax Act, 1961. During the Search, certain Excel sheets and loose paper were found and seized, which the Assessing Officer interpreted as Cash investments and Unexplained investment under section 69A/69B of Income Tax Act, 1961.

The statement of Tarun Nandkumar Seksaria (TNS) was recorded on each of the excel sheets pertaining to the various land parcels under section 132[4] on 9.10.2021. Statements of the Assessee, Tarun Nandkumar Seksaria (TNS) and Nandkumar Kudilal Seksaria (NKS) were recorded.

The Section 132(4) of the Income Tax Act, 1961 explained that : Search and seizure

“The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.”

The Assessee initially stated that Rs.1,02,04,500 cash payment was made for land acquisition, derived from the The Estate Investment Company Pvt Ltd land parcels. However, Nandkumar Kudilal Seksaria (NKS), contradicted TNS statement on 4.01.2022 asserting that to the best of my knowledge these excel statements are estimates of the cost and profits and projections as prepared by a, local Land Aggregator, Late Pratap Gambhir since, assessee had been suffering from various illness from time to time.

Subsequently, both TNS and NKS retracted their statements on 22nd December, 2022 and 07th February, 2023. The Assessing Officer rejected these retractions and made addition of Rs.35,00,000 for unexplained investments and Rs.2,14,50,000 for Capital Gains in the A.Y 2016-17, with similar additions for AY 2015-16 and 2017-

The Assessee, represented by Madhur Agrawal and Pankaj Jain, argued that the entire assessment was based on uncorroborated excel sheets and retracted statements, which lacked evidentiary value. They stated that excel sheets were nothing but “dumb documents” that were not books of accounts and bore no authentication.

The Assessing officer failed to conduct independent verification or cross-examination after the retractions. They also argued on legal grounds that notice under Section 148 of the Income Tax Act, 1961 was issued by a jurisdictional Assessing officer instead of the Faceless Assessing Officer, in contravention of the scheme notified under Section 151A of the Act.

The Section 148 of the Income Tax Act, 1961 explained that: Issue of notice where income has escaped assessment.

“Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished”

The Section 151A of the Income Tax Act, 1961 explained that: Faceless assessment of income escaping assessment.

“The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148 10[or conducting of enquiries or issuance of show-cause notice or passing of order under section 148A] or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability”

The Revenue, on the other hand, represented by Ritesh Misra, maintained that seized documents carried a presumption under Section 132(4A) of Income Tax Act, 1961 and that retractions were afterthoughts.

The Section 132(4A) of the Income Tax Act, 1961 explained that: Search and Seizure

“Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed-

(i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;

(ii) that the contents of such books of account and other documents are true; and

(iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.”

The Two-Member Bench comprising Amit Shukla, Judicial Member and Arun Khodpia, Accountant Member heard and reviewed the matter.

After hearing and considering submissions from both the parties, the Tribunal held that mere discovery of excel sheet and loose sheets which were not even prepared by the assessee and remain uncorroborated by any external evidence, could not, by itself, form the sole basis for an addition. Particularly so when the authorship and authenticity of such documents are in dispute. Thus, all additions made under Section 69A/69B and for capital gains were deleted for all assessment years.

The Tribunal, in conclusion, held that the additions made under section 69A/69B on account of alleged cash investment in Dapoli and Dhokawade land stand deleted for want of evidence; the reassessment proceedings initiated under section 148 are quashed for lack of jurisdiction in terms of the Faceless Assessment Scheme.

The Tribunal also held that reassessment proceedings initiated under section 148 by the jurisdictional Assessing Officer, in violation of the Faceless Scheme under section 151A stand vitiated in law. The notice under section 148, having been issued by an officer not authorised under the notified scheme, is coram non judice.

Thus, the Tribunal allowed all the appeals filed by the assessee. The Order was pronounced on 28th October, 2025.

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