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Facts
A search operation on H N Safal Group led to the seizure of a hard disc revealing an on-money cash payment of Rs. 13,50,700 made by the assessee for the purchase of a commercial unit. The Assessing Officer added this amount as undisclosed income under section 153C, which was subsequently confirmed by the CIT(A) after the assessee failed to respond to statutory notices.
Held
The Tribunal found that the CIT(A) had passed an ex-parte order without verifying if notices were received by the assessee and without providing a separate finding on the merits of the case. Consequently, the matter was remanded back to the file of the CIT(A) for proper adjudication and verification of issues.
Key Issues
The key legal issues concerned the confirmation of an addition for undisclosed on-money cash payment for property purchase and the procedural validity of the CIT(A)'s ex-parte order, which lacked verification of notice service and a decision on merits.
Sections Cited
132, 153C, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Dr. BRR Kumar & Ms. Suchitra Kamble
आदेश/ORDER
Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 25-07- 2025 passed by CIT(A), Ahmedabad-12 for assessment year 2011-12.
The grounds of appeal are as under:- “1. The Ld CIT Appeals has erred in law and facts by confirming addition of on money cash payment for purchase of property.
Ambika Laxminiwas Choudhary, A.Y. 2011-12 2. The Ld CIT Appeals has erred in law by confirming the addition as the order of AO does not contain any statutory provisions of law under which addition is made. 3. The Ld CIT Appeals has erred in law by confirming the demand u/s 68 as the assessed is not liable to maintain books of accounts. 4. The appellant craves liberty to add, amend or delete any other grounds of appeal.”
3. The assessee is an individual and has income from other sources as well as rent income. The assessee filed return of income on 14-11-2011 declaring total income of Rs. 2,00,400/- for the relevant assessment year. A search u/s. 132 of the Act was conducted on various premises of H N Safal Group of cases on 04-09-2013 and annexure A-8 i.e. hard disc was seized from residential and commercial premises. The data sheet-1 of soft excel referred to cash component of the consideration and total cheque component of the consideration receivable from the members respectively. As per the details appearing in the said excel sheet, it was noticed that total consideration of purchase of commercial unit at 10th Floor Unit A-110 Solitaire Scheme was decided at Rs. 54,02,800/- for which payment was to be made through cheque of Rs. 40,52,100/- and remaining payment of Rs. 13,50,7008/- was to be made in cash as on money. The said payment of Rs. 13,50,700/- was made by the assessee on 18-01- 2011 related to M/s. GSS Reality LLP for the purpose of purchase of commercial unit No. A-110 Solitaire Scheme. The assessee did not respond to the statutory notices and therefore the Assessing Officer after issuing the notice u/s. 153C and also the relevant statutory notices issued from time to time finally made the addition of Rs. 13,50,700/- as undisclosed income of the assessee.
5. At the time of hearing, none appeared on behalf of the assessee, hence we are proceeding on the basis of assessment order and the order of the CIT(A)
The ld. D.R. relied upon the assessment order and the order of the CIT(A).
We have heard the ld. D.R. and perused all the relevant material available on record. It is pertinent to note that the CIT(A) though issued the notices, has not given any details whether those notices were received by the assessee or not. The CIT(A) has passed ex-prate order without giving the separate finding on merits of the assessee. Therefore, it will be appropriate to remand back this matter to the file of the CIT(A) for proper adjudication and verification of the issues. The assessee is directed to fully co-operate with the appellate proceedings and will not take unnecessary adjournments otherwise the CIT(A) will proceed as per Income Tax Act and decide the matter on merit.
In the result, the appeal of the assessee is partly allowed for statistical purpose.