SHIV KUMAR DESHRAJ AGARWAL,UNJHA vs. DCIT CIRCLE, GANDHINAGAR

ITA 700/AHD/2026Status: DisposedITAT Ahmedabad22 September 2026AY 2019-208 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Revenue had miserably failed to prove any payment made by the assessee, either in cash or by cheque, to the Sankalp Group for booking a flat. The Tribunal noted that the alleged incriminating document (G-2) mentioned the assessee's name and a broker, Shri Nitinbhai, but no statement was recorded from Shri Nitinbhai, nor was any enquiry made from him. Furthermore, the alleged cheque payment of Rs. 19,60,000/- could have been easily verified by the AO from the assessee's bank accounts. Despite the assessee furnishing details of all bank accounts and audited accounts, the AO could not trace any entry relating to the alleged cheque payment. The customer inquiry form, relied upon by the AO, lacked the assessee's signature and bore the broker's signature. The Tribunal also observed the absence of any booking agreement, allotment letter, or sale agreement. The statement of Shri Mandaviya did not confront him with specific transactions with the assessee, and the assessee's request for cross-examination was denied. The Tribunal found no reliable evidence to prove any cash or cheque payment, and the reliance on the alleged slip from Shri Mandaviya without independent corroboration was insufficient, especially when the cheque payment could not be established. The Tribunal also referred to a co-ordinate bench's decision in ACIT vs. Pawan Satyanarain Jalan, which arose from the same search and involved similar issues, where additions were deleted due to lack of cross-examination and the presumption under section 292C operating against the person from whose premises the document was found. Consequently, the Tribunal ordered the deletion of the impugned addition. The legal grounds regarding the reopening of assessment were rendered academic and were kept open.

What were the facts?

The assessee, Shiv Kumar Deshraj Agarwal, is appealing against an order of the CIT(A) dated 13/01/2026, which upheld an assessment order passed by the AO under section 143(3) read with section 147 for Assessment Year 2019-20. The assessment was reopened following a search and seizure action on the 'Sankalp Group' on 30.10.2018. Incriminating documents found from an employee, Shri Jigar Kantilal Mandaviya, indicated the assessee allegedly paid Rs. 1,15,00,000/- in cash and Rs. 19,60,000/- by cheque as advance for a flat. The assessee denied any such transaction. The AO added the cash amount as unexplained investment under section 69A. The CIT(A) confirmed this addition. The dispute involves the validity of the reassessment and the addition made.

What were the issues?

1. Whether the initiation of proceedings under section 147 and issuance of notice under section 148 are bad in law, rendering the reassessment order void ab initio and without jurisdiction, as argued by the assessee. 2. Whether the Assessing Officer (AO) erred in upholding the addition of Rs. 1,15,00,000/- as unexplained investment, considering the assessee's contention that no property was purchased in the Sankalp Square III scheme and no payment was made, as argued by the assessee. 3. Whether the order passed by the AO is arbitrary and devoid of natural justice, as it relied on the statement of Shri Jigar Kantilal Mandaviya and directors of the Sankalp Group without providing an opportunity for cross-examination, as argued by the assessee, citing M/s Andaman Timber Industries v. Commissioner of Central Excise, Kolkata. 4. Whether the AO erred in not confronting the assessee with the fact of the alleged payment of Rs. 19,60,000/- before passing the assessment order, rendering it invalid, as argued by the assessee. 5. Whether the CIT(A) erred in upholding the addition when there was no evidence of payment of Rs. 19,60,000/- through any bank account, and consequently, no cash payment could have been made, as argued by the assessee. 6. Whether the CIT(A) erred in upholding the invocation of section 115BBE when no evidence of property purchase or cash payment of Rs. 1,15,00,000/- was established, as argued by the assessee. 7. Whether the CIT(A) erred in upholding the AO's order based solely on unverified information from the Insight Portal, as argued by the assessee. 8. Whether the AO's belief that income escaped assessment was based on borrowed satisfaction, as the Revenue allegedly had no evidence of property purchase, as argued by the assessee. 9. Whether the CIT(A) failed to consider the assessee's submissions in response to the show cause notice, despite having co-extensive powers with the AO, as argued by the assessee. 10. Whether the assessment order was based on surmises and presumptions, contrary to judicial pronouncements, as argued by the assessee. The Revenue did not record any specific arguments in the judgment.

Which sections of the Income-tax Act were involved?

Section 143,Section 147,Section 148,Section 69A,Section 115BBE,Section 132,Section 250,Section 292C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Dhrunal Bhatt, A.R, Shri Abhijit, Sr. DR
For Respondent: Shri Abhijit, Sr. DR
Hearing: 25/06/2026Pronounced: 22/09/2026

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “the CIT(A)”] dated 13/01/2026 passed under section 250 of the Income Tax Act, 1961 (in short “the Act”), arising out of the assessment order

ITA No.700/Ahd/2026[Shiv Kumar Deshraj Agarwal vs. ITO] A.Y. 2019-20 - 2 –

passed under section 143(3) read with section 147 of the Act for the Assessmen

The order continues below.

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