VIRAJ DEVABHAI PATA,AT PARADAVA, TALUKA-JAMJODHPUR, DIST. JAMNAGAR vs. THE ITO WD 2 (6), JAMNAGAR, JAMNAGAR

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ITA 1/RJT/2026Status: DisposedITAT Rajkot17 August 2026AY 2019-203 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, following a previous decision on similar facts, agreed to restrict the addition to 10% of the alleged undisclosed amount. The addition was directed to be taxed under normal provisions, not under Section 115BBE.

What were the facts?

The Assessing Officer reopened the assessment based on information from a search that indicated the assessee made an additional cash payment of Rs. 51,58,500/- for a property purchase, treating it as unexplained investment. The CIT(A) sustained the addition.

What were the issues?

Whether the entire alleged cash payment for property purchase constitutes unexplained investment, and if so, how it should be taxed.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 148,Section 143(3),Section 69,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Dipen K. Sukhadia, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 12/08/2026Pronounced: 17/08/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member आयकर अपील सं./ITA No. 01/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2019-20 ] Viraj Devabhai Pata Income tax Officer Ward 2(6) At Paradava Jamnagar Jamnagar Income tax Office, Shiv smruti, Vs. 360490, Jamjodhpur Jamnagar-361008, Gujarat Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ESZPP4865F (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Dipen K. Sukhadia, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR Date of Hearing : 12/08/2026 Date of Pronouncement : 17/08/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2019-20, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the National Faceless Appeal Centre [hereinafter referred to as ‘NFAC’], dated 15.12.2025, which in turn arises out of an order passed by assessing officer u/s. 147 of the Act, dated 18.03.2024.

2.

Brief facts of the case are that the assessee filed its return of income for A.Y. 2019-20 on 29.07.2020 declaring total income of Rs.3,49,940/-. Subsequently, the Assessing Officer received information from the Investigation Unit, Rajkot, arising from a search conducted under section 132 of the Income-tax Act in the case of RK

ITA No. 01/RJT/2026 Viraj Devabhai Pata Group, Rajkot, on 24.08.2021. During the course of search, incriminating digital data was found and seized from the office premises of Shri Girish Vanjani, accountant of the group. The said digital data contained a file named “MIRACLE”, recording details of sales relating to the project RK Industrial Zone-9, including payments received through cheque as well as cash from various purchasers of immovable properties. As per the information contained in the said file, the assessee had purchased Plot No. 3 of R.K. Industrial Zone-9 for a recorded consideration of Rs.5,45,000/- and had allegedly made an additional cash payment of Rs.51,58,500/- On the basis of the said information, the assessment was reopened under section 147 of the Act after following the procedure prescribed under section 148A of the Act. Consequently, notice under section 148 of the Act was issued on 31.03.2023. The assessment was thereafter completed under section 147 read with section 143(3) of the Act on 18.03.2024, determining the total income at Rs.55,08,440/-. The Assessing Officer made an addition of Rs.51,58,500/- under section 69 of the Act, treating the alleged cash payment towards purchase of the immovable property as unexplained investment.

3.

Aggrieved by the aforesaid assessment order, the appellant preferred an appeal before the Ld. CIT(A). The appeal was considered by the CIT(A), and the appellant’s contentions were not accepted. Consequently, the addition made by the Assessing Officer was sustained.

4.

Aggrieved by the order of the Ld.CIT(A), the appellant is now in appeal before the Tribunal.

5.

During the course of hearing before us, the Ld. AR submitted that the issue involved in the present appeal is covered by the decision of the ITAT, Rajkot Bench in ITA No.506/Rajkot/2026, wherein, on identical facts and circumstances, the

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ITA No. 01/RJT/2026 Viraj Devabhai Pata Tribunal had partly allowed the appeal by restricting the addition to 10% of the alleged undisclosed income. In the present case, the assessee, in order to buy peace of mind and avoid prolonged litigation, fairly submitted that he was willing to accept the addition to the extent of 10% of the alleged undisclosed amount of Rs.51,58,500/-. Accordingly, the assessee agreed that an addition of Rs.5,15,850/- being 10% of Rs.51,58,500/-, may be sustained and brought to tax at the normal rates applicable under the Act, instead of invoking the provisions of section 115BBE of the Act. In view of the above submission and considering the facts and circumstances of the case, we direct the Assessing Officer to restrict the addition to Rs.5,15,850/- being 10% of the alleged undisclosed amount of Rs.51,58,500/. We further direct that the said addition shall be taxed under the normal provisions of the Act and the provisions of section 115BBE shall not be invoked. Accordingly, the grounds raised by the assessee are partly allowed for statistical purposes.

6.

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

Order pronounced in the open court on this 17th day of August, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 17/08/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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