DINESHKUMAR CHHAGANLAL MANAVADARIA ,JUNAGADH vs. ITO WARD 1, JUNAGADH, JUNAGADH

ITA 837/RJT/2025Status: DisposedITAT Rajkot09 October 2026AY 2020-2110 pages
AI SummaryAllowed

What were the facts?

The assessee, Dineshkumar Chhaganlal Manavadaria, filed appeals before the ITAT, Rajkot, challenging orders for Assessment Years 2019-20 and 2020-21. These orders were passed by the National Faceless Appeal Centre (NFAC), Delhi, arising from assessment orders under Section 147 of the Income-tax Act, 1961, passed by the Assessing Officer (AO). The appeals were consolidated as the issues were common. The AO had reopened the assessment based on information from a search and seizure action ('operation blue diamond') on RK Group, which indicated the assessee paid on-money cash for property bookings. For AY 2020-21, an addition of Rs. 6,00,000/- was made on account of unexplained money under Section 69A read with Section 115BBE. For AY 2019-20, an addition of Rs. 3,51,000/- was made on similar grounds. The assessee's appeals before the CIT(A) were unsuccessful.

What did the Tribunal hold?

The Tribunal held that the additions made by the Assessing Officer were not sustainable. The primary basis for the additions was an excel sheet found during a search of the RK Group, which was considered 'dump documents' by the Tribunal. The Tribunal noted that this excel sheet was neither signed by the assessee nor by the seller, and there was no corroborative material to substantiate it. The Tribunal relied on the decision of the jurisdictional Gujarat High Court in PCIT vs. Kaushik Nanubhai Majithia (R/Tax Appeal No. 20 of 2024), which held that proceedings initiated based on an excel sheet found from a third party, without signature and corroborative material, are vitiated. The Tribunal also referred to a coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. which followed the Gujarat High Court's ruling. Since the issue was squarely covered in favour of the assessee, the additions were deleted. As the appeals were allowed on merits, the technical issues raised by the assessee regarding reassessment proceedings were rendered academic and infructuous. The Tribunal deleted the addition and allowed both appeals.

What were the issues?

1. Whether the addition of Rs. 3,51,000/- (AY 2019-20) and Rs. 6,00,000/- (AY 2020-21) on account of unexplained money under Section 69A of the Income-tax Act, 1961, is justified, based on an excel sheet found during a search of a third party (RK Group)? (Mixed law and fact) Assessee's contentions: The AO wrongly made additions based on an excel sheet found during a search of the RK Group, which was not signed by the assessee or the seller and lacked corroborative evidence. The seized data had no nexus with the assessee. Reliance was placed on the Bombay High Court's decision in Addl. CIT v. Miss Lata Mangeshkar and a coordinate bench decision in M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd. Revenue's contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147,Section 250,Section 132(4A),Section 153C,Section 143(3),Section 148,Section 142(1),Section 144B(8),Section 148B,Section 151,Section 271AAC,Section 272A(1)(d),Section 234B,Section 234D

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Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

Hearing: 27/07/2026Pronounced: 09/10/2026

Per, Dr. Arjun Lal Saini, AM: Captioned two appeals filed by the assessee, pertaining to assessment years (AY) 2019-20 & 2020-21, are directed against the separate orders passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 24.09.2025 by the National Faceless Appeal Centre (NFAC), Delhi/ Commissioner of Income Tax (Appeals) [in short ‘Ld.CIT(A)’] which in turn arise out of separate assessment orders passed by the Assessing Officer

The order continues below.

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