CHANDRESH VISHANJI PANDIT,RAJKOT vs. DCIT / ACIT-2(1), RAJKOT

ITA 759/RJT/2026Status: DisposedITAT Rajkot07 October 2026AY 2019-208 pages
AI SummaryAllowed

What were the facts?

The assessee, Chandresh Vishanji Pandit, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2019-20. The NFAC had upheld an assessment order passed by the Assessing Officer (AO) under section 147 of the Income-tax Act, 1961. The AO had reopened the assessee's case based on information that the assessee made cash transactions for property in the 'RK Empire' project. An amount of Rs. 7,00,000/- was added to the assessee's total income as unexplained investment under section 69 of the Act, to be taxed under section 115BBE. The assessee contended that the digital data and ledger entries did not belong to him, no cross-examination was provided, and the excel sheet was unsigned and pertained to earlier years. The AO rejected these pleas, concluding that an excel sheet found during a search indicated 'ON MONEY' payment by the assessee.

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal and deleted the addition of Rs. 7,00,000/-. The Tribunal noted that the issue was squarely covered by the decision of a Coordinate Bench in the case of M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. (supra), which was also supported by the jurisdictional High Court of Gujarat in PCIT vs. Kaushik Nanubhai Majithia. The reasoning was that additions should not be made based solely on an excel sheet found from a third party's premises, especially when it is unsigned by the assessee or the seller, and when no opportunity for cross-examination of the third party was provided. The Tribunal emphasized that such additions, made without providing an opportunity for cross-examination, violate the principles of natural justice. The seized documents lacked a nexus with the assessee, and there was no corroborative evidence to substantiate the AO's findings. The Tribunal respectfully followed the binding decision of the Coordinate Bench and the High Court, finding no reason to interfere. The issue regarding the initiation of action under section 148 was implicitly decided in favour of the assessee by allowing the appeal on the substantive addition.

What were the issues?

1. Whether the initiation of action under section 148 of the Income-tax Act, 1961, was valid. (Question of law and fact) 2. Whether the addition of Rs. 7,00,000/- as unexplained investment under section 69 of the Income-tax Act, 1961, on account of alleged cash payment for property purchase, is sustainable. (Question of law and fact) Assessee's contentions: - The seized digital data and ledger EMP 0425 had no nexus with the assessee. - The addition was based on third-party statements and digital data without providing an opportunity for cross-examination. - The excel sheet was unsigned by the assessee or the seller and pertained to earlier years. - The modus operandi was inconclusive, and there was a lack of corroborative evidence. Revenue's contentions: - The Ld. DR primarily reiterated the stand taken by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69,Section 115BBE,Section 143(2),Section 142(1),Section 145(3),Section 132(4A),Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Appellant: Shri Digant Kiyada. Ld. AR
For Respondent: Shri Shishir Kumar, Ld. SR DR
Hearing: 29/07/2026

Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2019-20, is directed against the order passed under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 08.05.2026 by the National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals) [in short ‘Ld.CIT(A)’] which in turn arises out of an assessment order passed by the Assessing Officer (in short ‘AO’) u/s 147 of the Act dated 29.03.2024. 2. Grounds of appeal raised by the assessee are as foll

The order continues below.

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