URMILABEN BHARATBHUSHAN AGARWAL,AHMEDABAD vs. THE ITO, WARD-5(3)(5), AHMEDABAD
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the Assessing Officer was not right in making the addition solely based on the admission of a third party without allowing the assessee to cross-examine them. The assessee had provided documentary evidence for the payment.
What were the facts?
The Assessing Officer reopened the assessment and added Rs. 8,65,237/- as unexplained investment under Section 69, treating it as 'on money' paid for a shop. The addition was based on information from a search in Dharmadev Group and a statement from Shri Umang Hiralal Thakkar.
What were the issues?
Whether the addition made on account of 'on money' was justified without providing the assessee an opportunity to cross-examine the deponent and without proper disposal of objections against reassessment.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: Ms. SUCHITRA KAMBLE
This appeal is filed by the Assessee against the order dated 13.12.2019 passed by the CIT(A)-5, Ahmedabad for the Assessment Year 2011-12.
The assessee has raised the following grounds of appeal :-
“1. That the learned Commissioner of Income Tax Appeal has grossly erred in not discussing the issue of re-opening of the assessment u/s.148.
2. The learned Commissioner of Income Tax (Appeals) has erred on facts as well as in law in confirming the additions of Rs.8,65,237/- made by the learned ITO, Ward 5(3)(5) u/s.69 of the I.T. Act.
That the appellant contends that all the documentary evidences in support of purchase of shop. The entire payment was made through cheques and there was no on money has been paid by the appellant.
That the CIT(A) as well as AO has placed reliance on information received from ACIT Central Circle 2(4), Ahmedabad which has no nexus to the appellant’s case.”
3. The case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 and notice under Section 148 of the Act was issued on 26.03.2018. In response to the notice issued under Section 148 of the Act, the assessee filed details such as purchase deed of property, bank statement, ledger account etc. The Assessing Officer observed that the assessee paid cash of Rs.8,65,237/- towards the booking of Shop No.301, Swaminarayan Park, Narol-1, Ahmedabad. The Assessing Officer further observed that Swaminarayan Park-1 is a residential cum commercial township project of Dharmadev Infrastructure Limited consisting of 205 housing units and 93 Shops. During the course of search in Dharmadev Group on 15.10.2013, an excel file “”PARK.1.xlsx”” was recovered from forensic image and found that difference of receipts which were reflected in the books of accounts. The Assessing Officer made addition of Rs.8,65,237/- on account of on money paid and treated the same as unexplained investment under Section 69 of the Act.
4. Being aggrieve by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that the Assessing Officer did not supply the reasons recorded for issuing reassessment notice. Therefore, the assessee was deprived of filing of objection and objections were not disposed. The Assessing Officer passed reassessment order without hearing the assessee and, therefore, it would be a breach of principles of natural justice. The Ld. AR further submitted that non-granting of opportunity of cross examination of the persons who made statement against the assessee is breach of principles of natural justice. Ld. AR further submitted that Assessing Officer has not provided the seized material to the assessee. The Ld. AR further submitted that the assessment order was passed based on statement of Shri Umang Hiralal Thakkar and the said statement was never provided to the assessee. Despite requesting for 16 occasions, the Assessing Officer has not allowed the assessee to cross-examine Shri Umang Hiralal Thakkar. The admission on the part of Shri Umang Hiralal Thakkar before the Settlement Commission cannot be accepted in toto without confirming the same to the assessee. The assessee’s case is independent case and the assessee cannot be punished for higher tax liability
Page 3 of 4 because some third person has made admission. The assessee denied vehemently that any on money was paid to Shri Umang Hiralal Thakkar for purchase of shop. In fact, the evidences related to registered sale deed on which stamp duty paid was before the Assessing Officer and there is no other evidence on record to prove on money was paid to Shri Umang Hiralal Thakkar or the concerned group. Thus, the Ld. AR submitted that the addition made by the Assessing Officer was not just and proper.
The Ld. DR submitted that the CIT(A) has categorically observed that the assessee had invested huge amount in the property but which does not commensurate with the income declared with the return of income. From the material seized from Dharmadev Infrastructure Limited during the course of search, it was established that the assessee has given on money to Dharmadev Infrastructure Limited in cash for purchase of property. Ld. DR relied upon the Assessment Order and the order of CIT(A).
I have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has given all the details related to purchase of property in the project of Swaminarayan Park and paid Rs.8,65,237/- in cash towards booking amount. This fact was never disputed, but the Assessing Officer analysed the same as assessee’s investment in the property in respect of on money to Dharmadev Infrastructure Limited. In fact, the details of cash payment were established by the assessee as the said amount was not paid in cash but through proper channel. Mere admission on the part of Shri Umang Hiralal Thakkar before the Settlement Commission, the assessee cannot be denied the cross examination of the said party. Thus, the Assessing Officer was not right in making addition on that basis. Therefore, appeal of the assessee is allowed.
In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on this 23rd day of September, 2022.
More judgments on Section 147
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Vinod Agrawal, Kawardha vs Assisstant Commissioner of Income Tax…ITA 666/RPR/2026[2019-20]Status: Heard21 Oct 2026AY 2019-20
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Tarunaben Maganlal Bhut, Navagam vs ITO Ward 2(2)(1), RajkotITA 673/RJT/2026[2024-25]Status: Disposed21 Oct 2026AY 2024-25
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
Recent GST High Court judgments
Search GST case law →- Shri Yaras Suresh Babu Prabhu Kumar vs. The Union Of INDIATelangana · 27 Oct 2026
- Santa Singh vs. SuperintendentUttarakhand · 27 Oct 2026
- Azaad Builders vs. Assistant Commissioner SGSTUttarakhand · 27 Oct 2026
- Ganesh Trimbak Saraf And Another vs. The State Of Maharashtra And AnotherBombay · 26 Oct 2026
- M/S Monolith Resorts Private Limited vs. The CommissionerUttarakhand · 26 Oct 2026
