VENISH VINODRAY LALANI,RAJKOT vs. INCOME TAX OFFICER, MORBI

ITA 197/RJT/2026Status: DisposedITAT Rajkot19 October 2026AY 2019-2010 pages
AI SummaryAllowed

What were the facts?

The assessee, Venish Vinodray Lalani, filed an appeal against the order of the National Faceless Appeal Centre (NFAC) Delhi for Assessment Year (AY) 2019-20. The NFAC's order upheld an assessment order passed by the Assessing Officer (AO) under section 147 read with section 144B of the Income-tax Act, 1961. The AO's assessment order was based on a search and seizure action ('operation blue diamond') conducted on August 24, 2021, targeting real estate builders in Rajkot, including the RK Group. During the search, incriminating documents suggesting on-money payments in real estate transactions were found. The assessee was identified as a purchaser who allegedly paid Rs. 6,25,000/- as on-money for a unit in the 'R K Prime' project. This led to the reopening of the assessment under section 147.

What did the Tribunal hold?

The Tribunal held that the addition made by the Assessing Officer was not sustainable. The Tribunal noted that the addition was based on an unsigned excel sheet and a ledger account found during the search, which did not belong to the assessee and lacked corroborative evidence. The Tribunal relied on the decision of a Coordinate Bench of the ITAT Rajkot in the case of M/s. RC Buildcon/M/s. RC Heights Pvt. Ltd., which held that additions should not be made based on an excel sheet that was neither signed by the purchaser nor the seller. Furthermore, the Tribunal referred to the judgment of the Gujarat High Court in PCIT vs. Kaushik Nanubhai Majithia, which observed that proceedings initiated based on an excel sheet found from a third party, without corroborative material and without adjudication of the payment, are vitiated. The Tribunal found that the seized data had no nexus with the assessee and lacked the assessee's signature. Therefore, the addition exclusively based on such documents was deleted, and the appeal was allowed.

What were the issues?

1. Whether the initiation of proceedings under section 147 of the Income-tax Act, 1961, was valid? 2. Whether the principles of natural justice were violated by not affording the assessee an opportunity for cross-examination? 3. Whether the addition of Rs. 6,25,000/- as alleged on-money payment is sustainable when based on an unsigned excel sheet and an uncorroborated statement of an accountant, which allegedly possess no evidential value? Assessee's Contentions: - The AO did not provide an opportunity for cross-examination during assessment proceedings. - The assessee submitted bank statements and property documents, denying any on-money payment. - The addition was based on an unsigned excel sheet and a ledger account found during the search, which does not belong to the assessee and lacks evidential value. - The NFAC was silent on the lapse of affording cross-examination of the accountant and key persons who did not name the appellant for on-money transactions. Revenue's Contentions: - The Revenue primarily reiterated the stand taken by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 132,Section 133A,Section 148,Section 143(1),Section 143(2),Section 142(1),Section 69A,Section 115BBE,Section 153C,Section 132(4A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Appellant: Shri Hiren Shah, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 30/09/2026Pronounced: 19/10/2026

Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2019-20, is directed against the order 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 30.12.2025, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 read with sect

The order continues below.

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