Income Tax Appellate Tribunal - Mumbai
Pradeep Phulchand Agarwal,Mumbai vs Dy. Commissioner Of Income Tax, Mumbai on 8 April, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI
BEFORE SHRI PAWAN SINGH, JM
AND
SHRI ARUN KHODPIA, AM
MA No. 267/Mum/2025
(Arising out of ITA No. 4136/Mum/2025)
(Assessment Year: 2019-20)
Pradeep Phulchand Agarwal Dy. Commissioner of Income Tax,
4B, Agarwal House, Pochkanwala Central Circle 3(3)
Road, Worli, Mumbai - 400030. Vs. 406, 4th Floor, Kautilya Bhavan,
BKC, Bandra (E), Mumbai -
400051.
PAN/GIR No. AAJPA0473C
(Assessee) : (Respondent)
Applicant by : Shri Shankarlal Jain, CA
Respondent by : Shri Surendra Mohan, SR. DR
Date of Hearing : 09.01.2026
Date of Pronouncement : 08.04.2026
ORDER
Per Arun Khodpia, AM:
This captioned Miscellaneous Application has preferred by the assessee towards order of Tribunal in ITA No. 4136/Mum/2025, dated 22.09.2025.
2. The contents of the miscellaneous application alleging a mistake apparent on record, sought to be rectified under the provisions of Section 254(2) of the Income Tax Act, 1961 ('the Act' for short) are extracted hereunder:
1. The Id. AO made an addition u/s 69C being interest paid to the following parties:
a. Rs.12,46,502/- Mr. Rajneesh Agarwal
b. Rs.2,24,411/- Mrs. Sita Devi jatia
c. Rs.60,00,000/- Mr. Arjun Bhatia
d. The Department raised following ground of Appeal:
"Department raised Ground of Appeal" On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 74,86,913/-made w/s 69C of the Income Tax Act on account of interest on loan paid in cash without considering the fact that the said entry is based on the evidences in form of whatsapp conversation of Ms. Jyoti Laxman Bambade, a key employee in M/s Phulchand Exports Private Limited found during the MA N o. 2 67/ M um / 202 5 ( A.Y .201 9- 20) P r ade e p P hu lc ha nd A ga rw al course of search proceeding in Phulchand Group and she has admitted in the statement recorded w/s 132(4) of the Act that assessee routinely engages in raising loans in cash and payment of interest in cash."
1.1 Hon Tribunal disposed the said ground as per para 5.9 of the order:
"We are unable to fathom with such findings of Ld. CIT(A), as in present matter, the Incriminating material in the form of whatsapp chat images was found from the mobile phone of a key employee of the assessee, which was further explained / clarified and proved Incriminating by her statement u/s 132(4) of the Act, which were not retracted ever thereafter. The assessee also endorsed such statements in post search proceedings. Denial of assessee at later stage and seeking linkage of information with transaction by corroborative evidence, which is accepted by the Ld. CIT(A) found to be mis-appreciation of facts, misplaced and illogical. We therefore, found substance in the plea of revenue that the addition made by Ld. AO was based on incriminating material and merits substance to be upheld. We thus direct to reverse the finding of Ld. CIT(A) on this issue and restore the addition of Rs. 74,86,913/- made u/s 68 of the Act on account of cash interest paid by the assessee, which is duly corroborated by whatsapp messages/images, which further explained and admitted by Smt. Bambade in her statements u/s 132(4), that could not be dislodged or contradicted by the assessee with any plausible explanation or evidence even during the post search assessment proceedings. Ground No 1 of the revenue appeal in ITA 4136/MUM/2025, therefore, having substance to be allowed."
1.2 Ld. AO made addition of Rs. 74,86,913/- u/s 69C. Department in Gr of Appeal also challenged deletion u/s 69C, however, Hon'ble Bench confirmed the addition u/s 68. Hence a mistake crept in the appellate order.
1.3 Ld. AO made 3 additions u/s 69C as discussed in para 5.5 of the order as below:
i. Rajnish Agrawal Rs.12,46,502/- it is based on image dated 23.08.23 as explained in statement recorded u/s 132(4) of Ms. Jyoti wherein she explained "chat are calculation of interest and loan to be paid in cash."
ii. Sitadevi Jatia Rs.2,40,411/- it is based on image dated 5.04.2018 as given on pg. 8 of the Order. 16% interest in cheque Rs.1,97,260/- and Rs.43,152/-in cash 3.5%.Ms. Jyoti in her statement, as quoted state that Mr. Pradeep Agrawal sent image dated 5.04.18 "calculation of interest on loan payable"
iii. Arjun Bhatia Rs.60,00,000/- Ld. AO referred to statement of Ms. Jyoti on pg. 11 "shri Arjun Bhatia lives at Ahmadabad. He is broker and through him we are getting loan from various persons. On 23.08.18 he sent one image which shows 'the calculation of interest to be paid by us to Denisha R Keshwani. As per calculation interest of Rs.2,76,000/- to be paid in cash."
1.3.1 Ld. CIT(A) deleted the addition per para 5.4.5 as there being no proof of actual payment addition was deleted.
2. Appellant filled a synopsis before Hon Bench dated in relation to this addition: "LD AO made addition Rs. 74,86,913/- as detailed on pg. 13 of Assessment Order(AO). a. Rajneesh Agrawal Rs.12,46,502/-. Statement of Smt. Jyoti L Bambade as quoted on pg. 7 provides Advocate address and stated that it is an image communicate in chart 'are calculation of interest and loan to be paid in cash'. Assessee explained no loan borrowed from said party pg. 7 AO.
b. Smt. Sitadevi Jatia Rs.2,40,411/-(197,260+43151) Smt. Jyoti L. Bambade stated calculation of interest payable to Sitadevi Jatia in cheque Rs.197,260/- and Part interest 2 MA N o. 2 67/ M um / 202 5 ( A.Y .201 9- 20) P r ade e p P hu lc ha nd A ga rw al @3.5% Rs.43,151/- In cash pg.8 AO. Ld. AO concluded on pg. 9 that loan taken in cash. No Interest paid in cheque by Assessee.
c. Arjun Bhatia Rs.60,00,000/-. She stated that He is a broker at Ahmadabad through him getting loans from various parties. On 23.08.18 image show calculation of interest to be paid to Danisha R Keshwani Rs.2,76,000/- PB-11 AO. Assessee stated no loan from Arjun Bhatia. Loan confirmation of Mrs Danisha R Keshwani submitted. Appellant relied on following decisions of Jurisdictional High Court for the preposition that no addition u/s 69C can be made without evidence of cash payment by the Appellant, merely based on some noting, whatsapp image or statement.
1) Lavanya land P. Ltd 249 taxman 275(Bom), 297 ITR 204(Bom) addition was made for cash payment based on statement recorded. Jurisdictional High Court deleted addition in lack of necessary proof of actual cash payment and corroboration. Decision in case of Arpit land P. Ltd 78 taxman.com 300(Bom), 297 CTR 200(Bom) was referred.
2) TIMBLO (P) LTD. 300 TAXMAN 343 (BOM) in search a diary was seized showing legal expenses payment of Rs. 2 cr the jurisdictional High Court deleted addition u/s69C in lack of any evidence of actual payment and corroboration of the fact of cash payment.
3) Appellant also relied on Umesh Ishrani 108 taxman.com 437 Bom for the preposition that no addition to be made for cash payment for shop purchased based on seized papers without corroboration with the seller.
3. It is submitted that non consideration of Jurisdictional High Court decisions lead to a rectifiable mistake in Hon Tribunal order.
4. In view of the above the Appellant pray that Hon Tribunal Order under reference be suitably rectified u/s 254(2) of the Act.
5. For the above act of kindness, the Appellant always pray."
3. Learned AR placed his reliance on various decisions of Jurisdictional High Court regarding proof of cash payment to corroborate the addition made by the AO. It is submitted, such decisions of Hon'ble Jurisdictional High Court were there before the Tribunal placed during the hearing of the impugned appeals. Therefore, the decision of Tribunal is not in accordance with the principle laid down by the Hon'ble High Court which constitutes a mistake apparent from record and needs rectification.
4. Per contra, learned DR contradicted the submissions of the ld. AR and submitted that where the Tribunal had passed a detailed order during the appellate proceedings holding the addition made by AO and confirmed by ld. CIT(A) was in accordance with the mandate of law, the same cannot be treated as mistake apparent on record to rectify the 3 MA N o. 2 67/ M um / 202 5 ( A.Y .201 9- 20) P r ade e p P hu lc ha nd A ga rw al same under the provisions of Section 254(2) of the Act. The ld. DR reiterated observations from the order of Tribunal, referred to the findings qua the addition u/s. 69C on account of interest on loan paid in cash. It was the submission that Tribunal had discussed the issue at length, mentioned the observations of AO, CIT(A), submissions of the assessee as well as revenue and had categorically mentioned that the addition u/s. 69 is subject to upheld. There was a mention of Section 68 in the Tribunal's order which may be treated as mistake apparent on record as the same has been mentioned instead of Section 69C of the Act. Therefore, at the most, the Section mentioned by the Tribunal can be considered on mistake apparent from record. Apart from said mistake, entire contentions raised by the AR are nothing but seeking revenue under the shadow of rectification u/s 254(2), which is not permissible.
5. We have considered the rival submissions, perused the material available on record and the judicial pronouncements referred to by the assessee. We find that in present case, the case laws which were relied upon by the assessee are duly considered in the original proceedings. However, the facts of present case are found to be distinguishable from the facts of judicial precedents relied upon. In present case, the incriminating material found was further endorsed by way of statements u/s. 132(4), which were never retracted. Denial to such statement by the assessee cannot rescue the contentions of the assessee. Therefore, the case laws relied upon by the assessee are of no help in the present matter. Accordingly, even after considering the judicial pronouncements, the issue in present case cannot be decided in favour of the assessee, being on different facts and circumstances then that of the facts of present case.
6. In view of such facts and circumstances, apart from mentioning of such Section 68 instead of Section 69C, there is no mistake apparent from record and therefore, the 4 MA N o. 2 67/ M um / 202 5 ( A.Y .201 9- 20) P r ade e p P hu lc ha nd A ga rw al Tribunal is constrained to dismiss the miscellaneous application of the assessee being there is no mistake apparent from record.
7. Further, with the discussion of the issue which is already decided by the Tribunal, the assessee is nothing but seeking review of the order of Tribunal by tribunal itself, which is not permissible within the provisions of Section 254(2) of the Act as per settled principle of law. The miscellaneous application of the assessee, therefore, partly allowed to the extent correcting Section 68 to Section 69C in para 5.9 at page no. 29 of the Tribunal's order, which be read accordingly.
8. In the result, the Miscellaneous Application filed by the assessee is partly allowed.
Order pronounced on 08.04.2026
Sd/-d Sd/-Sd/-
(PAWAN SINGH) (ARUN KHODPIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai; Dated: 08.04.2026
Karishma J. Pawar, SR. PS
Copy of the Order forwarded to:
1. The Appellant
2. The Respondent
3. CIT- concerned
4. DR, ITAT, Mumbai
5. Guard File
//True Copy//
BY ORDER,
(Dy./Asstt.Registrar)
ITAT, Mumbai
5