BALUBHAI NAGJIBHAI GAJERA,RAJKOT vs. ITO WD 1(1)(1) , RKT, RAJKOT

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ITA 32/RJT/2026Status: DisposedITAT Rajkot14 July 2026AY 2020-214 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal restricted the addition to 10% of the alleged undisclosed investment, following a coordinate bench's decision on similar facts. The addition was directed to be taxed under normal provisions, not under Section 115BBE.

What were the facts?

The assessee made a cash payment for property purchase, leading to reassessment proceedings. The Assessing Officer added the entire cash payment to the assessee's income.

What were the issues?

Validity of reassessment proceedings initiated on third-party information and the extent of addition for undisclosed investment.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 69A,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 Rajendra Singhal, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 14/07/2026Pronounced: 14/07/2026

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. 32 & 33/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2020-21 ] Balubhai Nagjibhai Gajera ITO Wd 1(1)(1), Shivsangam Society University Road, Aaykar Bhavan, Race Course Ring Vs. Rajkot-360005 Road, Rajkot-360005 Gujarat Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ABZPG7005P (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Rajendra Singhal, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR Date of Hearing : 14/07/2026 Date of Pronouncement : 14/07/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: These two appeals are directed against the separate orders of the Commissioner of Income-tax (Appeals), both dated 23.10.2025, arising out of assessment orders passed under section 147 read with section 143(3) of the Income-tax Act, 1961. Since common issues are involved, both the appeals were heard together and are being disposed of by this consolidated order. For the sake of convenience, ITA No. 32/Rjt/2026 for Assessment Year 2020-21 is taken as the lead case, and our findings therein shall apply mutatis mutandis to ITA No. 33/Rjt/2026.

ITA No. 32 & 33/RJT/2026 Balubhai N. Gajera

ITA No. 32/Rjt/2026 (A.Y. 2020-21)

2.

Brief facts of the case are that the assessee had made a cash payment of Rs.3,98,300 towards the purchase of a property in the “RK Prime” developed by RK Group. Based on information received during investigation, proceedings under section 147 of the Act were initiated by issuance of a notice under section 148. In response thereto, the assessee filed a return of income declaring a total income of Rs.4,74,580. The Assessing Officer completed the assessment under section 147 read with section 143(3) of the Act by determining the total income at Rs.8,72,880 as against the returned income of Rs.4,74,580 after making an addition of Rs.3,98,300 under section 69A of the Act.

3.

Aggrieved, the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals), who confirmed the addition. Hence, the present appeal before the Tribunal.

4.

At the time of hearing, the Ld. AR fairly submitted that there is a delay of 10 days in filing both the appeals, namely ITA Nos. 32/RJT/2026 and 33/RJT/2026. In support of the application for condonation of delay, the assessee has filed separate application along with duly sworn affidavits explaining the reasons for the delay. We have considered the submissions and perused the applications for condonation of delay along with the sufficient cause from filing the appeals within the prescribed period. Since the delay is only of 10 days and the explanation furnished appears to be bona fide, the delay is condoned. Accordingly, the appeals are admitted for adjudication on merits.

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ITA No. 32 & 33/RJT/2026 Balubhai N. Gajera 05. The Ld. AR submitted that the reassessment proceedings were initiated on the basis of third-party information and, therefore, were not legally sustainable. However, without prejudice to the said legal contention and with a view to buying peace and avoiding prolonged litigation, it was fairly submitted that the issue is covered by the order of this Tribunal in the case in ITA No. 506/Rjt/2026, wherein, on identical facts, the Tribunal restricted the addition to 10% of the alleged undisclosed investment. It was accordingly submitted that the assessee is willing to accept the addition to the extent of 10% of Rs.3,98,300, i.e., Rs.39,830, provided the same is taxed under the normal provisions of the Act and not under section 115BBE of the Act.

6.

On the other hand, the Ld. DR did not seriously object to the above submission.

7.

We have considered the rival submissions and perused the material available on record. Considering the peculiar facts of the case, the fair concession made by the assessee, and respectfully following the decision of the Coordinate Bench in ITA No. 506/Rjt/2026 on identical facts, we restrict the addition to Rs.39,830, being 10% of Rs.3,98,300. We further direct the Assessing Officer to tax the said addition under the normal provisions of the Act and not under section 115BBE.

8.

Accordingly, the appeal of the assessee in ITA No. 32/Rjt/2026 is partly allowed.

9.

In ITA No. 33/Rjt/2026 (A.Y. 2019-20), the facts and issues involved in this appeal are identical to those considered by us in ITA No.

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ITA No. 32 & 33/RJT/2026 Balubhai N. Gajera 32/Rjt/2026, except for the quantum of addition. In the present case, the Assessing Officer has made an addition of Rs.7,47,510 under section 69 A of the Act. Following our findings in the lead case, we restrict the addition to 10% of Rs.7,47,510, which works out to Rs.74,751. The Assessing Officer is directed to tax the said addition under the normal provisions of the Act and not under section 115BBE. Accordingly, the appeal of the assessee in ITA No. 33/Rjt/2026 is also partly allowed.

10.

In the result, both the appeals are partly allowed in the above terms. The Assessing Officer shall give effect to this order in accordance with law.

Order pronounced in the open court on this 14th day of July, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 14/07/2026 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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