MAYUR HASMUKHBHAI SOJITRA ,RAJKOT vs. INCOME TAX OFFICER, WARD-1(2)(1), RAJKOT

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ITA 151/RJT/2026Status: DisposedITAT Raipur07 October 2026AY 2019-204 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, while acknowledging the assessee's grievance and the smallness of the amount, found that some documents submitted by the assessee were self-serving and could not be relied upon entirely. However, it also recognized that the assessee merited some relief, though not entirely. To protect the interest of the revenue and considering the inconsistencies in the evidence, the Tribunal directed an ad hoc estimated addition. It held that a net profit rate of 10% on the disputed amount of Rs. 30,100/-, amounting to Rs. 3,010/-, should be added to the assessee's income. This addition was to be made at the normal rate of income tax, not under section 115BBE. The Tribunal explicitly stated that this adjudication would not serve as a precedent for any other assessment year. The operative direction was for the AO to make an addition of Rs. 3,010/-.

What were the facts?

The assessee, Mayur Hasmukhbhai Sojitra, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Rajkot Bench, for Assessment Year (AY) 2019-20. The appeal challenges an order passed by the National Faceless Appeal Centre (NFAC)/CIT(A) dated 18.12.2025, which upheld an assessment order passed by the Assessing Officer (AO) under section 147 of the Income Tax Act, 1961, dated 19.03.2024. The dispute concerns an addition of Rs. 30,100/- made by the AO and confirmed by the CIT(A) on the grounds that the assessee paid 'on-money' in cash towards the purchase of a unit in the 'R K Empire' project, based on information unearthed during a search operation on the R K Group. The AO treated this amount as the assessee's income under section 69 read with section 115BBE of the Act.

What were the issues?

1. Whether the addition of Rs. 30,100/- made under section 69 read with section 115BBE of the Income Tax Act, 1961, on account of alleged 'on-money' payment for property purchase, is justified? (Question of law and fact) Assessee's contentions: - The Assessing Officer did not provide an opportunity for cross-examination during assessment proceedings. - The assessee submitted bank statements and property documents and denied paying 'on-money'. - The addition made by the AO should be deleted. Revenue's contentions: - The Revenue primarily reiterated the stand taken by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 69,Section 115BBE,Section 147,Section 250,Section 148,Section 142(1)

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 Gopi Nath Chaubey, Ld. Sr. DR
Hearing: 28/07/2026Pronounced: 07/10/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट । In The Income Tax Appellate Tribunal, “SMC” Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member आयकर अपील सं./ITA No. 151/Rjt/2026 [ �नधा�रण वष�/Assessment Year: 2019-20 ] Mayur Hasmukhbhai Sojitra, Income Tax Officer, C/O Murlidhar Dairy Farm, Ward-1(2)(1), Rajkot, Vs. Shivrajgadh Gate, At. Moviya, Aaykar Bhavan, Rajkot, Rajkot, Gujarat-360311 Gujarat-360001 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AONPR8703G (अपीलाथ�/Assessee) (��यथ�/Respondent) Assessee by : Shri Digant Kiyada, Ld. AR Respondent by : Shri Gopi Nath Chaubey, Ld. Sr. DR Date of Hearing : 28/07/2026 Date of Pronouncement : 07/10/2026 :: ORDER :: 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 18.12.2025, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 of the Act, dated 19.03.2024. 2. The solitary grievance of the assessee in this appeal is that ld.CIT(A) erred in confirming the addition of Rs. 30,100/- u/s. 69 r.w.s. 115BBE of the Act on the alleged ground that the assessee has paid “on-money” during the year under consideration towards purchase of unit to M/s. R.K Group. 3. Brief facts qua the issue are that in this case, the assessee filed income tax return ( ITR) for A.Y. 2019-20, declaring total income of Rs.2,43,640/-. As per information flagged in Insight portal under category High Risk CRU/VRU Information" that in Search and Seizure operation was carried out in various concerns of R K Group, it was unearthed that on-money in cash was received by developers/builders of various concerns of R K Group. In search operation from impounded incriminating digital data, documents, books of accounts, loose paper etc; was found. As per search data, the assessee gave “on-money” of Rs.30,100/- in cash towards purchase of unit(s) in project "R K Empire". Since, the materials so disseminated pertained to or related to the assessee, the case of the assessee was reopened u/s 147 of I.T. Act 1961. In response to notice u/s 148 of the Act, the assessee filed income tax return (ITR) declaring total income at Rs.2,43,640/-. During the course of reassessment proceedings, by issuing notices u/s 142(1) and show cause notice, the AO asked the assessee to explain the same. 4. In reply, the assessee submitted that he had not purchased any immovable property during the year relevant to Assessment year under consideration and no need to explain the source of cash payment of “on- money”. However, the Assessing Officer rejected the contention of the assessee and held that the assessee paid “on-money” of Rs.30,100/-, during previous year relevant to assessment year under consideration towards purchase/booking of unit in project, therefore AO treated sum of Rs.30,100/- as income of the assessee for the assessment year under consideration u/s 69 of the Income-Tax Act, 1961. 5. Being aggrieved by the said order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A), but remained unsuccessful. Therefore, assessee is left with no other alternative but to knock on the doors of the Tribunal with this appeal praying for justice.

6.

Learned Counsel for the assessee submitted that during the assessment proceedings, the assessing officer has not provided an opportunity for cross examination. The Ld. Counsel also submitted that during the assessment proceedings, the assessee submitted the bank statement and documents of the property and also stated that he did not pay the “on-money” therefore, addition made by the assessing officer may be deleted.

7.

On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which I have already noted in my earlier para and is not being repeated for the sake of brevity.

8.

I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the Ld. CIT(A) and other materials brought on record. I find that some of the documents and evidences, filed by the assessee, before the assessing officer, are self-servicing documents and evidences, on which reliance cannot be placed, therefore, to protect the interest of the revenue, and considering the smallness of the amount an ad hoc, estimated addition should be made in the hands of the assessee. Therefore, I find some merit in the contention of the Ld. Counsel for the assessee. Hence, I find that while the case of the assessee merits some relief, at the same time entire relief cannot be permitted to the assessee. In my view the ends of justice would be met, if a net profit rate of @10% of Rs.30,100/-, which comes to Rs.3,010/-, is adopted, since the same would take care of the inconsistencies, in the various documents and evidences submitted before the lower authorities. Therefore, in order to plug the leakage of revenue, I direct the assessing officer to make addition of Rs.3,010/-, by applying the normal rate of income tax (not under section 115BBE of the Act). It is also made clear that instant adjudication shall not be treated as a precedent in any preceding or succeeding assessment year.

9.

In the result, appeal of the assessee is partly allowed, in above terms. Order is pronounced in the open Court on 07/10/2026.

Sd/- [ Dr. Arjun Lal Saini ] S लेखा सद�य/Accountant Member //True Copy// राजकोट/Rajkot िदनांक/Date: 07/10/2026 Copy of the order forwarded to : 1. The assessee By order 2. The Respondent 3. CIT 4. The CIT(A) Private Secretary 5. DR, ITAT, Rajkot ITAT, Rajkot 6. Guard File

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