RAVINDRA JAMNADAS MANWANI,AHMEDABAD vs. THE INCOME TAX OFFICER,WARD-7(2)(1), , AHMEDABAD

PER MAKARAND V.MAHADEOKAR, AM: This appeal by the assessee arises from the order of the Commissioner of Income-tax (Appeals)-11, Ahmedabad [hereinafter referred to as “CIT(A)”], dated 16.10.2023 upholding the assessment framed under section 144 read with sections 153C and 153A of the Income-tax Act, 1961[hereinafter referred to as “the Act”] for Assessment Year 2012-13. The assessment order was passed by the Income-tax Officer, Ward 7(1)(4), Ahmedabad [hereinafter referred to as “Assessing Officer or AO”], on 28.12.2018.

IT(SS)A No.60 /Ahd/2024 2 2.1 At the outset, it is noted that there is a delay of about 230 days in filing the present appeal before us. The assessee has filed an application accompanied by a duly sworn affidavit dated 01.08.2024, explaining the reasons for the delay. In the affidavit, the assessee has stated that the order of the learned CIT(A), Ahmedabad-11, dated 16.10.2023 was placed on the ITBA portal but no intimation or message was received either by the assessee or by his consultant. The assessee submits that the said appellate order came to his knowledge only in July 2024, when the consultant, while verifying the status of appeals on the portal, noticed the order. On being so informed, the assessee immediately arranged for the filing of the present appeal and deposited the appeal fee of Rs.10,000/- on 02.07.2024. It is further averred that the delay was not deliberate but was occasioned due to the peculiar circumstances narrated in the affidavit, which have been explained step by step.

2.2 The assessee has, thus, prayed that the delay in filing the appeal may be condoned in the interest of justice. During the course of hearing, the learned Departmental Representative, when queried, fairly submitted that he has no serious objection if the delay is condoned.

2.3 Having considered the submissions of the assessee, the contents of the affidavit, and taking note of the fact that the delay is neither deliberate nor contumacious but is occasioned due to bona fide reasons as explained, and further in view of the fact that the Revenue has not raised any objection, we are of the considered opinion that sufficient cause has been shown for the delay. In the larger interest of justice, we, therefore, condone the delay of 230 days in filing the appeal and admit the same for adjudication on merits.

IT(SS)A No.60 /Ahd/2024 3 3. Facts of the Case

3.1 A search under section 132 was conducted in the cases of the H. N. Safal Group on 04.09.2013. During the search a hard disk was seized from 7th Floor, Safal Profitaire, Corporate Road, Prahlad Nagar, Ahmedabad. On verification of the data, an Excel file titled “Name: 01.02.12-Sumel B Park-2-FINALSHEET-90%-xlsx” containing, inter alia, a sub-sheet “SBPL” was found. The sheet contained soft data of Sumel Business Park-II Scheme of M/s Safal Buildcon Pvt. Ltd., namely names of members or customers, unit or office numbers, payment details through cheque and cash, details of outstanding and related particulars.

3.2 The Assessing Officer recorded that the name of the assessee Shri Ravindra Jamandas Manwani figured in the seized sheet in relation to Shop/Office No. 3 on the Ground Floor of Sumel Business Park-II. As per the seized data the total consideration was Rs.16,73,100/-, out of which Rs. 8,36,550/- was recorded as paid by cheque and a further Rs.8,36,550/- was reflected as cash or on- money. The AO noted the columns “Rec. Q” and “Dis.” in the sheet, being the cheque component and the cash collection respectively, and that the figures for the assessee in both columns were Rs.8,36,550/- each. The AO further observed that the sheet showed last modification on 01.02.2012. Since the exact dates of individual cash payments were not available, the AO treated 01.02.2012 as the operative date flowing from the metadata of the seized file and held that the relevant assessment year was A.Y. 2012-13.

3.3 On the basis of a satisfaction note dated 15.05.2017 recorded by the Assessing Officer of the searched person and transmitted to the jurisdictional Assessing Officer of the assessee, proceedings under

IT(SS)A No.60 /Ahd/2024 4 section 153C read with section 153A were initiated. Notice under section 153C dated 03.08.2017 was issued. Consequent statutory notice under section 142(1) read with section 129 was issued on 02.11.2018 fixing the hearing on 12.11.2018. Thereafter, a show- cause notice dated 14.12.2018 was issued fixing hearing on 21.12.2018, specifically calling upon the assessee to explain why the cash component of Rs.8,36,550/- should not be treated as unexplained investment.

3.4 The AO also noted that the assessee had earlier filed the return of income for A.Y. 2012-13 under section 139 declaring income of Rs.1,71,979/- and that the alleged cash component of Rs.8,36,550/- was not recorded in the return or books.

3.5 As per the assessment order, there was no compliance to the notices. The AO, therefore, proceeded to complete the assessment ex parte under section 144 read with sections 153C and 153A. The AO made an addition of Rs. 8,36,550/- as unexplained investment under section 68, being the on-money allegedly paid in cash for the purchase of the said property.

3.6 The assessee preferred appeal before CIT(A). The assessee challenged, inter alia, the very assumption of jurisdiction under section 153C, service of notice, and the addition on merits on the footing that the Excel sheet was an unsigned and undated third-party document, that there was no corroboration of any cash payment, that the registered sale deed dated 03.10.2012 recorded only cheque payments aggregating Rs.11,11,110/-, and that there was a mismatch in the name of the selling entity.

IT(SS)A No.60 /Ahd/2024 5 3.7 On jurisdiction under section 153C, the learned CIT(A) recorded that incriminating documents relating to the transaction of purchase by the assessee were found and seized from the premises of the H. N. Safal Group, that the Assessing Officer of the searched person had recorded satisfaction and forwarded the material to the Assessing Officer of the assessee, and that the latter also recorded his satisfaction prior to issue of the notice. Relying on the decision of the Hon’ble Supreme Court in ITO v. Vikram Sujit Kumar Bhatia & others, Civil Appeal Nos. 911-1026 of 2022, order dated 06.04.2023, as reproduced in the appellate order, the learned CIT(A) held that the 2015 amendment to section 153C applies to searches conducted prior to 01.06.2015. On this reasoning the challenge to jurisdiction was rejected.

3.8 On facts, the learned CIT(A) has recorded that the seized Excel sheet contained the assessee’s name, the office number, and payment particulars through cheque and cash. It was noted that the area mentioned in the sheet tallied with the sale deed and that cheque payments recorded in the sheet tallied with the cheque payments recorded in the registered instrument. The assessee had not filed any submission before the AO to explain the cash entry. The learned CIT(A) further took note that the H. N. Safal Group had filed an application before the Hon’ble Settlement Commission, Mumbai, offering its on-money receipts as part of undisclosed turnover in respect of the very project and that the Settlement Commission had accepted the disclosure vide order under section 245D(4) dated 29.07.2016. Placing reliance inter alia on the principle culled out by the Hon’ble Delhi High Court in Gupta Perfumers Pvt. Ltd. v. ITSC, 348 ITR 86, as quoted in the appellate order, that “where in a settlement application certain seized papers were referred to which belong to third persons, such seized papers can be used and utilised

IT(SS)A No.60 /Ahd/2024 6 against such third persons,” the learned CIT(A) held that the seized sheet could be acted upon against the assessee.

3.9 The learned CIT(A) also dealt with the plea of denial of cross- examination and recorded that the addition was not based on any solitary statement but on seized documentary material corroborated by independent circumstances, including the disclosure before the Settlement Commission. After referring to several authorities discussed in the order, the learned CIT(A) concluded that the demand for cross-examination did not vitiate the assessment in the facts of the case.

3.10 The assessee’s contention that the Excel sheet was a “dumb document” was rejected on the reasoning that the very document recorded cheque entries which matched the registered deed, that the assessee cannot accept the cheque portion and deny the cash portion appearing on the same page, and that the recipient group had admitted on-money receipts before the Settlement Commission. The learned CIT(A) summarised the factual conclusions, inter alia, that the investment in the scheme was not disputed, that the cheque entries were accepted and verified, and that the cash entry of Rs.8,36,550/- therefore carried probative value.

3.11 As to the identity of the selling entity, the learned CIT(A) noted that the seized data was from the hard disk relating to M/s Safal Buildcon Pvt. Ltd., a group concern, and that the assessee’s purchase was of Shop/Office No. 3, Ground Floor, Sumel Business Park-II in the project developed by the said group. The assessee’s plea that the registered sale deed was executed with M/s Safal Buildcon (partnership firm) was noticed; however, on the totality of material, including the tally of area and cheques and the Settlement

IT(SS)A No.60 /Ahd/2024 7

Commission disclosure of the group, the learned CIT(A) confirmed the addition.

3.12 On overall consideration, the learned CIT(A) dismissed Grounds of Appeal on jurisdiction and merits, and in the result confirmed the addition of Rs.8,36,550/- as on-money investment, thereby dismissing the appeal.

IT(SS)A No.60 /Ahd/2024 8 6. On the above facts, no such addition ought to have been made and no proceedings u/s. 153C ought to have been initiated. against the assessee. 7. The appellant craves, leave to add, to alter and or modify any ground of appeal. 5. During the course of hearing before us, the learned Authorised Representative submitted that he basis of addition was an excel sheet found from the premises of H.N. Safal Group, which allegedly contained details of certain transactions. The AR stated that the assessee had purchased Shop No. A-3 at Sumel Business Park–II for which payments aggregating Rs.11,11,110/- were made through banking channel as per following details:

Sr. Amount Cheque No. & Date Bank & Branch No. (Rs.) 1 8,36,550 Cheque No. 683784 dt. Syndicate Bank, 03.09.2011 Maninagar Branch

2 1,67,310 Cheque No. 033571 dt. Syndicate Bank, 31.08.2012 Maninagar Branch

3 1,07,250 Cheque No. 033572 dt. Syndicate Bank, 04.09.2012 Maninagar Branch

5.1 The registered sale deed was executed on 03.10.2012, relevant to A.Y. 2013-14, and therefore even otherwise, the alleged transaction could not be taxed in A.Y. 2012-13.

5.2 The AR placed reliance on the Judgement of Hon’ble Gujarat High Court in case of Kaushik N. Majithia vs. DCIT (Tax Appeal No. 20 of 2024, dated 06.03.2024) and Decisions of Co-ordinate Bench as enlisted below:

IT(SS)A No.60 /Ahd/2024 9 i. Kashish Gaurav Chandani - IT(SS)A No. 147/Ahd/2023 ii. Nilamkumar Shantilal Jain – IT(SS)A No. 144/Ahd/2023 iii. Poonam Brijlal Lalchandani – IT(SS)A No.140/Ahd/2023

In reply, the learned Departmental Representative strongly supported the orders of the Assessing Officer as well as the Commissioner of Income-tax (Appeals).

6.1 We find that an identical issue came up for consideration before the co-ordinate Bench of this Tribunal in the case of Kashish Gaurav Chandani vs. ITO in IT(SS)A No.147/Ahd/2023 for A.Y. 2011-12, order dated 10.06.2024, arising out of the very same search action in the case of H.N. Safal Group. In that case also, the addition was made on the basis of seized Excel sheets showing cheque and cash components. The co-ordinate Bench, after detailed examination of facts and law, held that there was no corroborative evidence to establish that the assessee had actually paid any cash; that the seized Excel sheets were unsigned, undated and found from a third party; and that merely because the builder had offered certain income before the Settlement Commission, the same could not be used to sustain

IT(SS)A No.60 /Ahd/2024 10 an addition in the hands of the assessee without independent evidence. The Co-ordinate Bench, relying on the judgment of the Hon’ble Gujarat High Court in Kaushik Nanubhai Majithia vs. DCIT (supra), deleted the entire addition of alleged on-money.

6.2 The Hon’ble jurisdictional High Court in Kaushik Nanubhai Majithia (supra) has categorically held that an Excel sheet found from the premises of a third party, unsigned and unsupported by corroborative material, cannot form the basis of addition in the hands of the assessee. The Hon’ble Court observed that there was no adjudication to establish that the amounts mentioned in such sheet were actually paid by the assessee, and in absence of any supporting material, proceedings under section 153C stood vitiated. We also noted that similar views have been taken by the Co-ordinate Bench in case of Nilamkumar Shantilal Jain (supra) and Poonam Brijlal Lalchandani (supra) that unsigned Excel sheets recovered from third- party premises, in the absence of corroborative evidence and opportunity of cross-examination, could not justify additions in the hands of the assessee.

6.3 In the present case, the addition has been made solely on the basis of the seized Excel sheet found from the premises of H.N. Safal Group, which admittedly does not bear any signature, date of payment, or acknowledgment of the assessee. No corroborative evidence has been brought on record by the Revenue to substantiate the allegation of cash payment. The assessee has consistently denied having made any such payment. Following the binding ratio of the Hon’ble Gujarat High Court in Kaushik Nanubhai Majithia (supra) and respectfully applying the decision of the co-ordinate Bench in Kashish Gaurav Chandani (supra), we are of the considered view that the impugned addition is not sustainable.

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6.4 We may also observe that the learned CIT(A) has dealt at length with the legal grounds regarding assumption of jurisdiction under section 153C. Since the issue is squarely covered in favour of the assessee, on merits, by the judgment of the Hon’ble jurisdictional High Court referred above, and further, the learned AR has preferred not to argue those legal grounds before us, we refrain from adjudicating them independently.

Order pronounced in the Court on 29th September, 2025 at Ahmedabad.

Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (MAKARAND V. MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Ahmedabad, dated 29/09/2025