SUNIL BIPATPRASAD SHANI,RAJKOT vs. INCOME TAX OFFICER, WARD1(1)(1), RAJKOT

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ITA 854/RJT/2025Status: DisposedITAT Rajkot07 September 2026AY 2018-197 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee filed written submissions but did not furnish the supporting documents. Therefore, the matter was restored to the Assessing Officer for fresh adjudication with a direction to the assessee to file the required documents.

What were the facts?

The assessee purchased a flat and allegedly paid 'on money' in cash. During a survey at the developer's premises, an excel sheet and statements suggested the assessee paid Rs. 6,09,000 as on-money. The Assessing Officer added this amount as unexplained investment.

What were the issues?

Whether the addition of 'on money' as unexplained investment is justified based on an excel sheet and statements, and whether the assessment proceedings were validly initiated.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69,Section 151A,Section 133A,Section 148A,Section 148,Section 133(6),Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

Hearing: 16/06/2026Pronounced: 07/09/2026

आयकरअपीलीयअिधकरण,राजकोट�ायपीठ,राजकोट। In The Income Tax Appellate Tribunal, “SMC” Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member आयकरअपीलसं/.ITA No.854/RJT/2025 �नधा�रणवष�/ Assessment Year: 2018-19 Sunil Bipatprasad Shani The Income Tax Officer, Block No. 106, Gujrat Slam Vs. ITO WD 1(1)(1), RKT Quarter Board, Raiya Gam, New Aayakar Bhawan, Rajkot, Gujarat-360007 Near Race Course Ring Road, Rajkot, Gujarat 360001 PAN No. BUHPS2797E (अपीलाथ�/Assessee) : (��यथ�/Respondent) �नधा�रतीक�ओरसे/Assessee by : Written Submission राज�वक�ओरसे/Revenue by : Shri Anadi Dixit, Ld. Sr. DR सुनवाईक�तार�ख/Date of Hearing : 16/06/2026 घोषणाक�तार�ख/Date of Pronouncement : 07/09/2026 ORDER Per, Dr. Arjun Lal Saini, AM: The present appeal has been filed by the assessee, against the order passed by the Learned Commissioner of Income Tax (Appeal), National Faceless Appeal, Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 07.10.2025, arising in the matter of assessment order passed u/s.147 read with section 144B of the Income Tax Act, 1961 dated 28.03.2023, relevant to the Assessment Year 2018-19. 2. Grounds of the appeal raised by the assessee, are as follows: 1. The Id. Commissioner of Income tax (Appeals), National Faceless Appeal Centre has erred in law and facts in dismissing the grounds raised in appeal in violation of principles of natural justice; 1.1 The Id. Commissioner of Income-tax (Appeal) earned in law and on facts in rejecting the ground of lacking the valid jurisdiction for initiating proceedings u/s 147 of the Act, which may kindly quashed and justice be done;

1.2 The Id. Commissioner of Income-tax (Appeal) earned in law and on facts in rejecting the ground of lacking jurisdiction by jurisdictional assessing officer in view of section 151A of the Act read with Notification dated 29.03.2022; 1.3 The Id. Commissioner of Income-tax (Appeal) earned in law and on facts in holding the view that the information in excel sheet is material evidence for all purposes and the person from whom evidences impounded cannot be regarded as third party; 2. The Id. Commissioner earned in law and on facts confirming the addition u/s 69 of the Act of Rs. 6,09,000/-, as alleged unexplained investment, which may kindly be deleted and justice be done; Your appellant craves leave to add, alter, withdraw any one or more grounds of appeal

3.

Brief facts qua the issue are that the assessee had purchased flat No. 202- D2 in Dream City Project of M/s Six Twenty Realty Private Limited, Rajkot during the financial year 2017-18 relevant to the assessment year 2018-19. During the survey action carried out on 02.04.2019 at the premises of M/s Six Twenty Realty Private Limited, Rajkot Shri Ashutosh Ganatra (nephew of Shri Atul Ganatara, the Director of the company) admitted to have received "On money" (the amount received in cash on and above the sale consideration of each flat) from the various buyers in lieu of the sale of flats carried out in Dream City project. It was observed from the list of buyers that the assessee, Sunil Sahni has bought a flat no. 202-D2 for a consideration of Rs 26,00,000/- and out of it, Rs. 6,09,000/- were paid in cash as on money'. In light of the above mentioned discussion the on money paid by the assessee in lieu of purchase of said property was added to his income u/s 69 of the Act as unexplained investment of Rs. 6,09,000/-.

4.

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld.CIT(A), who has confirmed, the action of the assessing officer, observing as follows:

“The grounds 1.0, 1.1 & 1.12. were raised against the action of the AO in re-opening the assessment. On perusal of the assessment order, it was noticed that the AO followed the procedure laid down as per the Act by re-opening the case u/s. 147 and completed the assessment. The AO passed a speaking order u/s. 148A(d) before issuing notice u/s. 148 of the Act. The appellant relied numerous case laws, facts of which are distinguishable to the facts of the present case. Ground no.1.3 raised against the action of the AO in making addition of Rs.6,09,000/- I have carefully considered the grounds of appeal raised by the assessee and written submission/documentary evidences made in support of its claim. It would appear that the issue involved is on-money paid amounting to Rs.6.09,000/- towards purchase of flat to the company M/s Six Twenty Reality Pvt. Ltd., A survey was conducted in the case of M/s Six Twenty Reality Pvt. Ltd., and the incriminating material in the form Excel Sheet from accountant by name Yagnesh Jogi was found and impounded. The Excel sheet contained the details of on-money received in cash which is over and above the registered value of the flat. Shri Ashitosh Ganatra nephew of Shri Atul Ganatra Director of M/s Six Twenty Reality Pvt. Ltd., confirmed the findings of the Survey in his statement recorded. The AO based on the findings of the survey, made addition of Rs.6,09,000/- u/s. 69 of the Act to the returned income. On the other hand, the appellant denied to have paid cash to the seller M/s Six Twenty Reality Pvt. Ltd., The appellant stated that the Director of the company had also denied to have received any on-money on account of sale of flats. Further, the impounded material was found and impounded from a third party. In view of the facts and circumstances of the case, I am of the considered opinion that the AO has rightly made addition of Rs.6,09,000/- u/s. 69 on account of on-money paid to the seller. The information found in the Excel sheet has to be considered as material evidence for all practical purposes. The person from whom the evidences were impounded was accountant of the company M/s Six Twenty Reality Pvt. Ltd., and the transactions cannot be ruled out as third party. Therefore, the action of the AO is upheld. Accordingly, the ground raised on this issue is dismissed.

5.

Aggrieved by the order of the Ld.CIT(A), the assessee is in further appeal before this Tribunal.

6.

I have heard, Ld. DR for the revenue and noted that the assessee has filed written submission and stated that based on the written submission, the adjudication may be done by the Tribunal. The said written submission filed by the assessee, are reproduced below:

“The appellant, not so educated, deriving job-work receipts on contractual interior building colour assignments; The appellant purchased flat 202D-2 in Dreamcity, developed by Six Twenty Reality Pvt. Ltd (in short, “developer”), vide purchase deed dated 30.03.2018;

The flat was purchased for apparent consideration disclosed in the purchase deed and source thereof was banking loan; The survey proceedings u/s. 133A of the Act were carried out at the business premises of developer on 02.04.2019; The survey proceedings retrieved excel sheets from the email of Shri Yagnesh Jogi, accountant (in short "accountant"); The finance aspects of Dream city project were managed by Shri Ashutosh Ganatra, nephew of developer; During survey proceedings, statements of accountant: cashier: sales manager and accountant were recorded on oath; The entries depicted in excel sheets: statements of accountant and related key persons concluded on-money transaction of Rs. 6,09,000/- by appellant; The jurisdictional assessing officer followed the mandatory provisions of section 148A of the Act and issued notice u/s 148 of the Act, as evident from: Description Date Page Show cause notice u/s 148A(b) of the Act 21.03.2022 15 to 17 order u/s 148A(d) of the Act 23.03.2022 18 to 20 Notice u/s 148 of the Act 23.03.2022 21

Prima facie, the process for compliance of provisions of section 148A of the Act were under taken only on dormant Income-tax portal; The proceedings came to notice to appellant on much later date through SMS on mobile, which were respected in subsequent proceedings; The denial of on-money payment by appellant discredited by the assessing officer holding the view that: (a) name of appellant in excel sheet cannot be arbitrary or co-incidental; (b) and no convincing explanation furnished; (c) the accountant: key persons admitted on-money transaction statements; The Id. Commissioner of Income-tax (Appeals) endorsed the validity of proceedings and confirmed the addition holding the view that: (a) the data in the Excel sheet must be considered as material evidence; (a) the evidence from accountant cannot be ruled out as third party;

B: Validity of proceedings: The appellant was unaware of issue of show cause notice u/s 148A(b): order u/s 148A(d) or notice u/s 148 of the Act, being Income-tax Portal was dormant;

The proceedings came to notice on much latter through SMS on mobile and subsequent proceedings were attended; The issue of subsequent notices had no sanction of law, unless there is valid service of notice u/s 148 of the Act for assuming jurisdiction; The excel sheet impounded from the accountant is third party evidence and his cross examination is statutory requirement; The sworn-in-affidavit possesses evidential value unless discredited in cross examination, as per settled law; The assumption of jurisdiction u/s 148 of the Act is contrary to section 151A of the Act: Notification dated 29.03.2022, as applicable at relevant point of time; In short, the foundation for proceedings u/s 147 of the Act is void-ab-initio, just grounded on reliance of unsigned: uncorroborated material and statements;

C: Addition u/s 69 of the Act of Rs. 6,09,000/-: The statement of one of the relatives of developer: excel sheet retrieved from e- mail of accountant is fulcrum of holding the view of on-money transactions; The statements recorded during survey proceedings u/s 133A of the Act, has no evidential value, as per the settled proposition of law: The unsigned: uncorroborated excel sheet impounded from the third party has no evidential value, unless tangible material exists; Hon'ble High Court of Delhi has, in the case of CIT vs. RMG Polyvinyl (I) Ltd. 2017 Tax Pub (DT) 2034 (Del-HC), held that: “In the present case the information received from the Investigation Wing could not be said to be tangible material per se without further inquiry being undertaken by the AO." Ironically, the assessing officer conveniently ignored compliance u/s 133(6) of the Act by developer, as depicted in para-5.2 of the assessment order, that: (i) the value is determined as per stamp duty valuation authority; (ii) the allegation of cash transaction as on-money is misplaced; (iii) the excel sheet is not found from director: promoter of company; (iv) the excel sheet is recovered from personal e-mail of third party; (v) unaware of author or excel sheet or instructed to prepare excel sheet; (vi) the statement of Ashutosh Ganatra is not binding; (vii) the promoter: director in notarized sworn-in-affidavit deposed: (a) denial of averment of statement of Ashutosh Ganatra; (b) denial of acceptance of unaccounted receipts: on money;

The prime reliance on unsigned excel sheet is not exhibiting tangible material to trigger on- money transactions; Hon'ble jurisdictional I.T.A.T., D-Bench, Ahmedabad has, vide decision in ITA No. 388/Ahd/2025 dated 25.11.2025 in the case of Rajsheel Jitendra Patel vs. ITO (copy attached at Page-43 to 60.), held that: “The excel sheet found from the premises of Shri Manish Brahmbhatt is a third- party uncorroborated material. The mere appearance of the assessee's name in such a document does not establish payment of any on-money." Hon'ble jurisdictional I.T.A.T., D-Bench, Ahmedabad has, vide decision in the case of Rajsheel Jitendra Patel vs. ITO (supra), held that: "The Department has failed to produce any corroborative evidence to substantiate the alleged cash payment, and the denial of cross-examination of the alleged broker vitiates the entire assessment proceedings." Hon'ble jurisdictional High Court of Gujarat has in Pr. CIT v. Kaushik Nanubhai Majithia 2024 Tax Pub (DT) 2388 (Guj-HC) [copy attached at Page- 61 & 62], held: "Where document found from premises of third party was without any signature and there was no corroborative material to substantiate the said document, and also statements of persons recorded during the search with reference to alleged seized material, were not provided to assessee, entire proceedings under section 153C was vitiated" In the premises, there being no spectre of evidence of unrecorded on-money transaction, the addition u/s 69 of the Act of Rs. 6,09,000/- is unwarranted;”

7.

Learned DR for the revenue submitted that assessee had submitted only written submission, however, the document involved in these above written submissions, were not submitted, by the assessee before the Bench, therefore, matter may be restored back to the file of the assessing officer for fresh adjudication, with the direction to the assessee to file the documents and evidences mentioned in the written submissions, before the assessing officer.

8.

I find merit in the submission of Ld. DR for the revenue and noted that the assessee has submitted only written submission, however, the documents mentioned in the written submissions are not furnished by the assessee, therefore, I am of the view that matter should be restored back to the file of the assessing officer for fresh adjudication. I also direct the assessee to file the required documents and evidences which are mentioned in the written submissions, before the assessing officer. It is needless to say that the assessee will be at liberty to adduce any evidences as deemed relevant before the assessing officer at the time of assessment, proceedings in consequence to this order and the Assessing Officer shall, allow the assessee adequate opportunity of being, heard and to make relevant submissions, and then pass a speaking order which is fair and judicious.

9.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order was pronounced in the open Court on 07/09/2026.

Sd/- [ Dr. Arjun Lal Saini ] लेखा सद�य/Accountant Member राजकोट /Rajkot िदनांक/ Date: 07/09/2026 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order //True Copy// Private Secretary ITAT, Rajkot

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