VISHAL RAMESHBHAI SORATHIYA,RAJKOT vs. THE ITO WD 1(1)(1), RAJKOT, RAJKOT

ITA 485/RJT/2026Status: DisposedITAT Rajkot07 October 2026AY 2020-214 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Vishal Rameshbhai Sorathiya, filed an appeal against the order of the National Faceless Appeal Centre (NFAC) for Assessment Year 2020-21. The NFAC's order upheld the Assessing Officer's (AO) addition of Rs. 3,98,000/- under Section 147 read with Section 144 of the Income-tax Act, 1961. The AO's action stemmed from information obtained during a search and seizure operation on the RK Group. Seized digital data, including accounting software files, revealed systematic recording of unaccounted cash transactions. Specifically, the assessee was found to have paid Rs. 3,98,000/- as on-money cash for an office unit, which was not recorded in regular books. Despite notices, the assessee failed to provide an explanation for this cash payment. The AO treated this amount as unexplained money and added it to the assessee's total income, which was assessed at Rs. 7,17,460/-.

What did the Tribunal hold?

The Tribunal noted that the issue was similar to a previous decision in Nitaben Kirtikumar Parekh v. ITO, ITA No. 506/Rjt/2026, where a similar addition was partly allowed by restricting it to 10% of the disclosed income. Following this precedent and considering the similarity of facts, the Tribunal decided to restrict the addition to 10% of Rs. 3,98,000/-, amounting to Rs. 39,800/-. The Tribunal further directed that this restricted addition should be taxed under the normal provisions of the Act, not under Section 115BBE. The grounds raised by the assessee were partly allowed.

What were the issues?

1. Whether the addition of Rs. 3,98,000/- as unexplained money under Section 69A read with Section 115BBE of the Income-tax Act, 1961, is justified on the facts and in law? Assessee's contention: The assessee argued that the impugned addition made by the AO and sustained by the CIT(A) is not justified either in law or on facts and is liable to be deleted. Revenue's contention: The Revenue supported the orders of the AO and CIT(A), submitting that no interference is called for.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 139(4),Section 148,Section 142(1),Section 69A,Section 115BBE,Section 250

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: Ms. Devina Patel, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 07/10/2026Pronounced: 07/10/2026

Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2020-21, 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 24.02.2026, which in turn arises out of an order passed by assessing officer u/s. 147 r.w.s. 144 of the Act, dated 15.03.2025. 02. Brief facts of the case that the assessee filed th

The order continues below.

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