The two sides were locked at 1-1 after regulation time, forcing a tie breaker to decide the match -- the first in 28 years in the valley -- at Bakshi stadium here.
For the hosts, their custodian Vikramjeet Singh more than redeemed himself in less than 40 minutes as he made two crucial saves from the strikers of the Kolkata club during the shootout.
The Mohammadan strikers managed to score only once out of the four chances in the tiebreaker. The four striker shot wide of the post, sparking off rare celebration.
Singh's 60th minute blunder inside the box, during the regulation time, had allowed Mohammaden Sporting to equalise and get back into the game.
The goalkeeper pulled down Mohammaden strike David Sunday and midfielder Jayanta Sen slotted the ball past a diving Singh from the spot.
The game got off to a pacy start with J&K strikers making several attempts at the visitors' goal. Mohun Bagan skipper Ishfaq Ahmad wasted a couple of chances from close range before scoring a brilliant solo goal in the 34th minute.
Collecting the ball at halfline, Ahmed raced past two Mohammadan players before he wrong-footed their custodian Arnab Das Sharma to give his side the lead going into the halftime. More