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

ITA 925/RJT/2026Status: DisposedITAT Rajkot07 October 2026AY 2021-225 pages
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What did the Tribunal hold?

The Tribunal acknowledged that some documents and evidence presented by the assessee were self-serving and not entirely reliable. However, considering the smallness of the disputed amount and to protect the revenue's interest, the Tribunal found merit in the assessee's contention for some relief. The Tribunal decided that an ad hoc, estimated addition was appropriate. It held that a net profit rate of 10% on Rs. 1,00,000/-, amounting to Rs. 10,000/-, would adequately address the inconsistencies in the documents. The AO was directed to make an addition of Rs. 10,000/- at the normal rate of income tax, not under Section 115BBE. The Tribunal explicitly stated that this adjudication, made considering the small amount, should not be treated as a precedent for any other assessment year. The issue regarding the initiation of action under Section 148 was not expressly decided but implicitly accepted by proceeding with the appeal on merits.

What were the facts?

The assessee, Chandresh Vishanji Pandit, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Rajkot Bench, for Assessment Year (AY) 2021-22. The appeal challenged the order of the National Faceless Appeal Centre (NFAC), Delhi, which upheld an assessment order passed by the Assessing Officer (AO) under Section 147 of the Income Tax Act, 1961. The AO had made an addition of Rs. 1,00,000/- to the assessee's income, alleging it was 'on money' paid in cash for the purchase of property in the RK Empire project. This reopening was based on information seized during a search operation ('Operation Blue Diamond') on real estate builders in Rajkot, where documents pertaining to the RK Group, including those of the assessee's transactions, were found.

What were the issues?

1. Whether the initiation of action under Section 148 of the Act was valid. (Assessee's contention: Ld. CIT(A) erred in dismissing the ground of appeal relating to the initiation of action under Section 148. Revenue's contention: Not recorded. 2. Whether the addition of Rs. 1,00,000/- made by the AO, alleging it was 'on money' paid in cash for the purchase of property, is sustainable and should be deleted. (Assessee's contention: Ld. CIT(A) erred in confirming the addition of Rs. 1,00,000/-. The addition under Section 69A should be deleted. During assessment, the assessee submitted bank statements and property documents, denying any 'on-money' payment. The AO did not provide an opportunity for cross-examination. Revenue's contention: Primarily reiterated the AO's stand. The AO made the addition under Section 69A read with Section 115BBE of the Act due to the assessee's failure to produce supporting documents for cash transactions totaling Rs. 1,00,000/- for purchasing a unit in the RK Empire project.)

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69A,Section 115BBE,Section 139,Section 132,Section 143(2),Section 142(1),Section 250

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: 30/07/2026Pronounced: 07/10/2026

Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2021-22, 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 (NAC) Delhi/Commissioner of Income-Tax (Appeals) [in short ‘NFAC/Ld.CIT(A)’], dated 19.06.2026, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 of the Act, dated 11.03.2026. 2. The grounds of appeal raised by the a

The order continues below.

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