MOHSIN BILAL GILITWALA,NA vs. ARIVS.ITO, WARD 3, NAVSARI, NAVSARI

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ITA 523/SRT/2026Status: DisposedITAT Surat29 June 2026AY 2018-195 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal remanded the issues of unexplained investment and the difference in property value to the AO for verification and recalculation, allowing the addition for cash deposits. The assessee's share in the property and the applicability of Section 56(2)(x) were to be re-examined.

What were the facts?

The assessee purchased an immovable property with co-owners. The Assessing Officer (AO) made additions for unexplained investment, difference in property value for stamp duty, and cash deposits. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether additions for unexplained investment, difference in property value, and cash deposits were justified, and if the AO properly considered the assessee's share and the valuation by DVO.

Which sections of the Income-tax Act were involved?

Section 56(2)(x),Section 69,Section 69A,Section 115BBE,Section 44AD,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Suresh K. Kabra, CA
For Respondent: Shri Ashish Kumar, Sr.DR
Hearing: 09.06.2026Pronounced: 29.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER ITA No.523/SRT/2026 (Assessment Year: 2018-19) Shri Mohsin Bilal Gilitwala, Income Tax Officer, 104, Shahi Nalanda Apartment, Room 108, Dudhia Talav, Income Tax Office, Vs. Beside ICE Factory, Charpul, NR. Lunsikui, Navsari, Navsari Gujarat Gujarat PAN:AMEPG8258L (Appellant) : (Respondent) Assessee by : Shri Suresh K. Kabra, CA Respondent by : Shri Ashish Kumar, Sr.DR Date of Hearing : 09.06.2026 Date of Pronouncement : 29.06.2026 O R D E R PER : SUCHITRA KAMBLE, J M: The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 23.02.2026 for the Assessment Year (in short “AY”) 2018-19. 2. The assessee has raised the following grounds of appeal: “1. The Ld CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming addition of Rs 2,74,532/- u/s 56(2)(x) without considering the valuation of DVO in case of CO-OWNER. 2. The Ld CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming of Rs.5,00,000/-the investment made by the assessee as unexplained u/s 69. 3. The Ld CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming the amount of Rs 3,25,000/- being CASH deposited in the Bank a/c.

ITA No.523/SRT/2026 Shri Mohsin Bilal Gilitwala 4. The valuation by DVO may be kindly considered for taxing the difference u/s 56(2)(x). 5. The addition of Rs.5 Lakh u/s 69 may be kindly deleted. 6. The addition of Rs 5 Lakh u/s 69 may be kindly deleted. 7. The addition of Rs 3.25 Lakh u/s 69A may be kindly deleted. 8. Personal hearing may be granted. 9. Any other relief that your honours may deem fit may be granted.” 3. The assessee is an individual doing some construction activity. During the course of scrutiny proceedings in the case of assessee the Assessing Officer (in short “AO”) observed that the assessee Shri Adil Nisharahmed Fruitwala (25%) along with other three persons namely Sn. Nisharahmed Fatubhai Fruitwala, Shri. Dastgeer Sarvarkhan Tanvar and Shri Mohsin Bilal Gilitwala (the assessee in the present case) have purchased an immovable property on 13.12.2017 for a consideration of Rs.29,50,000/- which was registered with SRO , Navsari. However, the value of property for the purpose of stamp duty was Rs.45,69,504/-. Thus, the provisions of section 56(2)(x) of the Act are attracted as contemplated by the AO. The assessment proceeding was initiated u/s 147/148 of the Act by way of issuance of notice u/s 148 of the Act dated 26.03.2022. In compliance, the assessee has furnished his response as well as filed the return of income u/s 148 of the Act showing the income of Rs.4,51,200/- u/s 44AD of the Act with regard to the construction activity on turnover of Rs.17,20,000/- on 12.04.2022. The assessee had invested a sum of Rs.5,00,000/- owning 16.95 percentage share in the property. For the purpose of stamp duty, the property was valued at Rs.45,69,504/-. After taking cognizance of the assessee’s reply, the AO made addition of Rs.5,00,000/- in respect of unexplained investment in the immovable property u/s 69 r.w.s. 115BBE of the Act. The AO further made addition of Rs.2,74,532/- which is a difference in value as per the Stamp Duty Authority and the consideration in which they have purchased the property and treated the same as income from other sources u/s 56(2)(x) of the Act. The AO further

ITA No.523/SRT/2026 Shri Mohsin Bilal Gilitwala made addition of Rs.3,25,000/- as unexplained money u/s 69A r.w.s. 115BBE of the Act related to cash deposits in Bank of India.

4.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the assessee is a co-owner and is having a 16.95% share in the property. The Ld. AR further submitted that the assessee has offered the income u/s 44AD of the Act thereby declaring the income at 6% of the turnover. Therefore, he has not maintained the books of accounts. The assessee opted presumptive taxation u/s 44AE of the Act. The assessee has given the details of purchase of immovable property and has categorically mentioned the assessee’s share. The assessee has given the details of the funds (source of the fund for purchase of the said property) out of his accumulated past savings and from the perusal of the bank statement, the assessee is having sufficient balance to produce the said property for the share of 16.95%. The Ld. AR further submitted that in the case of co-owner’s case the AO has made the addition to the extent of Rs.1,89,737/- who was having 25% of the share in the said property and in assessee’s case, the assessee is having only 16.95% share but the addition is made to that of Rs.5,00,000/-.

6.

The Ld. Departmental Representative (in short “Ld. DR”) submitted that the assessee did not inform or give any details about the purchase of the said property and thus without the documentary evidences the source of investment in the immovable property remained unexplained. Thus, the AO has rightly made addition of Rs.5,00,000/-.

7.

We have heard both the parties and perused all the relevant materials available on record. As regards ground No.2 related to addition of Rs.5,00,000/- as unexplained investment the assessee has given the bank details wherein the assessee has shown that the share of the assessee was to the extent of 16.95% and the AO has not taken cognizance of the same. The

ITA No.523/SRT/2026 Shri Mohsin Bilal Gilitwala CIT(A)’s order is also ex-parte, therefore it will be appropriate to remand back this issue to the file of the AO to verify the investment and the original source. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Thus, ground No.2 is partly allowed for statistical purpose.

8.

As regards ground No.1, the addition of Rs.2,74,532/-, the assessee is a co-owner and on what basis the 16.95% comes to Rs.2,74,505/- when in another co-owner’s case the AO has made the addition to the extent of Rs.1,89,737/- who was having 25% of the share in the said property whereas the assessee’s share is only 16.95%. Thus, the AO is directed to recalculate the said addition as per the valuation and the assessee’s share in the said property as well as whether the same will be treated as due income u/s 56(2)(x) of the Act also has to be looked upon. All these details about this addition needs verification, hence, remanded to the file of the AO for proper adjudication as per Income Tax Act. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Thus, ground No.1 is partly allowed for statistical purpose.

9.

As regards ground No.3 relating to cash deposits in bank account, the assessee contended that the source was explained and from the perusal of the records it can be seen that the assessee received contract receipts as per the details of return of income and was having the sufficient source as well as cash in hand at the relevant time. Thus, ground No.3 is allowed.

10.

In result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 29.06.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 29.06.2026 * Kishore, Sr. P.S. 4

ITA No.523/SRT/2026 Shri Mohsin Bilal Gilitwala

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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