SHRI SAURIN SHAH LEGAL HEIR OF LATE ASHOK DAMODAR SHAH,AHMEDABAD vs. THE ACIT, CIRCLE-4(1)(1), AHMEDABAD

2. The assessment order is passed in the name and on the PAN of a deceased assessee, and therefore, is bad in law.

4. The appellant craves leave to add, amend or alter the grounds of appeal

at the time of hearing, if need arise.

6. At the outset, Ld. Counsel for the assessee submitted that this issue of on-money paid to NODPL is considered by various decisions of this Tribunal as well as Hon’ble Gujarat High Court. Based on the same, the additions were deleted in the case of Ashokkumar Prahladbhai Patel vs. DCIT in dated 01-01- 2026. Following the same, the assessee appeal be allowed and the protective addition is liable to be deleted.

7. Per contra, Ld. Sr. D.R. appearing for the Revenue supported the order passed by the lower authorities and requested to confirm the same.

8. We have given our thoughtful consideration and perused the materials available on record. As rightly stated by the Ld. Counsel, Co-ordinate Bench of this Tribunal in the case of Munjal Mrugesh Jaykrishna in dated 19-03-2025 considered the issue of reopening of assessment and on-money payment to NODPL during post search proceedings and held that the reassessment itself is bad in law. This decision was considered by another Co-ordinate Bench of this Tribunal in Ashokkumar Prahladbhai Patel (cited supra) wherein considered Jurisdictional High Court Judgment in the case of Kaushik Nanubhai Majithia and thereby deleted the addition made by the Revenue by observing as follows: 7. We have considered the rival submissions. A copy of the reason recorded by the Assessing Officer has been brought on record in the paper-book filed by the assessee. It is found therefrom that the case of the assessee was reopened only on the basis of statement of one Shri Murlidhar Marutibhai Trivedi regarding receipt of on-money and the list of purchasers submitted by NODPL during the post search proceeding. In the reason, the Assessing Officer has not referred to any entry in the excel sheet wherein cash payment of Rs.78,75,000/- was mentioned for acquisition of the property by the assessee along with other three co owners. As rightly pointed out by the assessee, no evidence was found in the course of search regarding payment of any on-money by the assessee. Merely because NODPL had admitted in its settlement application that on-money was received by it, it does not establish that the assessee had paid on-money in respect of acquisition of property made by him.

8. The evidences found from NODPL on the basis of which the addition has been made, was examined by the Co-ordinate Bench of this Tribunal in the case of Munjal Mrugesh Jaykrishna in dated 19.03.2025. The finding given in the said order is found to be as under: “7. The most important facts observed by us pertains to para No.9.1 to 9.4 of the assessment order. For the sake of ready reference and completeness, the said paragraphs are reproduced hereunder: - 9.1 As per assessee, the decoded is done by the Department is its own and the search party has not given any authenticity for it. However the amount stated in the above discussion is tallied with the un-coded figures, which are tallied each other.

In the pink color, the figure of amount is quoted at 37500 on 20.04.2013, it has been seen from the submission of the assessee that the amount of Rs.37,50,000/- has been paid on 25.11.2011. Hence, the plea of the assessee is cleared herewith. The amount paid by the assessee 37,50,000/- is quoted in computer entry is 37500. Thus, it is clear that the decoding has been made perfectly. The date of payment and related entries again and again are reproduced above with the payment of the assessee. 9.2 The statement asked by Shri Murlidhar Marutbhai Trivedi, the accountant of the said NODPL could not be provided as the statement is based on not only the information regarding the assessee only but another person's only and it is confidential lies with Investigation wing hence, it has not been provided to the assessee. However, the information received and as available with the assessee is incorporated in the assessment order above. 9.3 NODPL before ITSC has confessed that they have taken on-money out of sale of land and building thereon. It is confessed relevant to all the purchasers of the scheme whatever developed by it. The name of the assessee also inclusive thereon. It is not proper query from the assessee, for his individual, he has confessed before ITSC. 9.4 As regard the payment made in various years hence, the amount involved for this year is only for under question. However, it is brought to kind notice of the assessee that the purchase deed is executed in the in the year under consideration hence, the all transaction are covered under this year only.”

7.1 A detailed analysis of the relevant paragraphs from the assessment order reveals multiple inconsistencies and procedural lapses that render the addition unjustified.

7.2 Firstly, the decoding of figures has been done solely by the department without any independent verification, and the search party has not provided any authenticity for the same. This statement recorded on decoding has not been part of the assessment proceedings. The Revenue has relied on unverified and coded figures, which have been tallied against the un-coded figures without proper corroboration. Any statement recorded of the Directors or the employees relating to the material found in codes has not been brought on record. This raises serious doubts about the reliability of the figures used to make the addition. Since the authenticity of the decoded amounts is questionable, any conclusions drawn from them cannot be sustained. 7.3 Secondly, the records indicate that the payment details align with the submissions made by the assessee. It has been established that the amount of ₹37,50,000 was paid on 25.11.2011, as per the assessee's records, which match the decoded figures quoted in the assessment order. The repeated mention of these figures in the department's findings confirms that there is no discrepancy in the assessee's declaration of the payments. Hence, the plea of the assessee stands corroborated, and there is no ground for any addition on this account.. 7.4 Thirdly, the statement made by Shri Murlidhar Maruthbhai Trivedi, the accountant of NODPL, has not been made available to the assessee. The assessment order itself acknowledges that this statement is based not only on information regarding the assessee but also on another person's details, which are confidential and lie within the Investigation Wing. Since this statement has not been shared with the assessee, reliance on it violates the principles of natural justice. Without providing the assessee an opportunity to cross-examine the statement or verify its contents, the department cannot use it as the basis for making an addition. 7.5 Furthermore, NODPL has confessed before ITSC that it collected on money from the sale of land and buildings. However, the admission was made in a general context regarding all purchasers of the scheme developed by NODPL. There is no specific mention or direct evidence linking the assessee to this alleged on-money transaction. In the absence of any concrete evidence that the assessee was involved in undisclosed transactions, making an addition solely on presumptions is unsustainable. Any such addition must be backed by clear, conclusive proof rather than general confessions made by third parties.”

9. On the basis of the above findings, the Co-ordinate Bench had held that no addition was called for on the basis of the evidences provided by NODPL. The Hon’ble Gujarat High Court in the case of Kaushik Nanubhai Majithia (supra) had observed on the evidences found from NODPL as under: - “3. We find inherent fallacy in this submission, inasmuch as, there is no basis for conducting proceedings against the assessee merely for the fact that the developer had paid tax on the amount shown in the excel-sheet. There is no adjudication with regard to the payment, which was shown in the excel-sheet to the effect that the same was actually paid by the assessee to the developer. Even otherwise, the concurrent findings returned by the CITA and ITAT are that the document found from the premises of the third party namely excel- sheet, which is the basis of the proceedings was without any signature and there is no corroborative material to substantiate the said document. The nature of the document has not been explained by the Assessing Officer while proceeding against the assessee. The statements of the persons recorded during search with reference to the alleged, seized material, was not provided to the assessee and hence, the entire proceedings under Section 153C of the IT Act of 1961 stood vitiated.”

8.1. Here in this case also, the additions made by the Revenue on account of payment of on-money, however restricted as a protective addition in the hands of the deceased assessee, since substantive addition was made in the hands of other co-owner. However there is no specific mention or direct evidence linking the assessee to the alleged on-money transaction made to NODPL. In the absence of any concrete evidence that the assessee was involved in undisclosed transactions, making addition solely on presumption is unsustainable in law as held by the Jurisdictional High Court. Therefore, we have no hesitation in deleting the protective addition made in the hands of the deceased assessee.