GEETABEN KETANKUMAR NAYAK,PALANPUR V. THE ACIT, CENT CIR 2(1) AHMEDABAD, AHMEDABAD

ITSSA 2/AHD/2025

AI Insights

The case involves two appeals by Ketankumar Chandrakant Nayak and Geetaben Ketankumar Nayak against the orders of the Commissioner of Income Tax (Appeals) for the assessment year 2013-14. Both appeals were related to the same issue of an addition of Rs. 36,11,000 made by the Assessing Officer as unexplained investment in a property, which was based on the same piece of evidence. The Tribunal noted that the addition was made in the hands of both spouses for the same amount, which constituted a duplicate addition. Furthermore, the Tribunal found that the cash payments for the property were made in the preceding years, not in the assessment year in question. Therefore, the Tribunal concluded that the additions were unjustified and directed their deletion.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360985 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: CHETAN AGARWAL
• Keywords: Set aside; Unexplained investment; Principle of natural justice; Search and seizure
• Section: 144; 142(1); 271(1)(c); 132; 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE: SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER आयकर अपील (एस.एस.) सं./I.T(SS).A. No. 1/Ahd/2025 (Ǔनधा[रण वष[ / Assessment Year : 2013-14) Ketankumar Chandrakant Nayak 32, Anjali Bunglows, Behind Mini Ambica Nagar, Near Railway Crossing, Palanpur, Gujarat - 385001 बनाम Vs. The ACIT Cent. Cir. 2(1), Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : ADQPN1331A (Appellant) .. (Respondent) & आयकर अपील (एस.एस.) सं./I.T(SS).A. No. 2/Ahd/2025 (Ǔनधा[रण वष[ / Assessment Year : 2013-14) Geetaben Ketankumar Nayak 32, Anjali Bunglows, Behind Mini Ambica Nagar, Near Railway Crossing, Palanpur, Gujarat - 385001 बनाम Vs. The ACIT Cent. Cir. 2(1), Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AFCPN8501Q (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Chetan Agarwal, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Rignesh Das, CIT. DR Date of Hearing 13/05/2025 Date of Pronouncement 20/05/2025 IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 2 – (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM: Both the appeals relate to different assesses and arise from separate orders passed by the Ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad, (hereinafter referred to as “CIT(A)”) both dated 08.01.2025 and both for A.Y. 2013-14 under Section 144 r.w.s. 153C r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). 2. It was common ground that both the assesses before us are spouses in whose hands the same addition had been made on account of unexplained investment in a property. It was contended that addition was made in both the cases was on the basis of same piece of evidence and the arguments against the order of the Ld.CIT(A) was the same in both the cases. 3. Therefore both the appeals were taken up together for hearing and are being disposed of by this common consolidated order. 4. The ground raised in both the appeals are as under: IT(SS)A No.1/Ahd/2025 “1. The Ld.CIT(A) erred in law as well as on facts in setting aside issue to the file of Ld.AO for denovo assessment, he ought to have decided the Issue considering the facts and circumstances of the case. IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 3 – 2. The Ld.CIT(A) erred in law as well as on facts in upholding an addition of Rs.36,11,000 being made by Ld.AO on account of alleged on money payment on purchase of property. 3. The Ld.CIT(A) erred in law as well as on facts in not considering the fact emanating from assessment order that alleged on money payment was made in earlier assessment year.” IT(SS)A No.1/Ahd/2025 “1. The Ld.CIT(A) erred in law as well as on facts in setting aside issue to the file of Ld. AO for denovo assessment, he ought to have decided the issue considering the facts and circumstances of the case 2. The Ld.CIT(A) erred in law as well as on facts in upholding an addition of Rs 36,11,000 being made by Ld. AO on account of alleged on money payment on purchase of property. 3. The Ld.CIT(A) erred in law as well as on facts in not considering the fact emanating from assessment order that alleged on money payment was made in earlier assessment year.” 5. The solitary plea of the Ld.Counsel for the assessee before us was that the addition made in the hands of both the assessees was grossly unjustified on facts itself , and the Ld.CIT(A) had erred in setting aside the issues back to the AO for fresh assessment, when he ought to have deleted the additions itself. 6. Our attention was drawn to the background of the case as noted in the assessment order that pursuant to search and seizure action conducted in the case of SSS (Satyam, Sangani, Shaligram) Group u/s.132 of the Act on 06.03.2018, certain documents containing information relating/pertaining to the assessees, were IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 4 – seized. The information, revealed from digital data found and seized during search, allegedly revealed the assesses to have invested in cash for purchase of a unit in a residential project of the group during the impugned year. The data referred to in both the cases, it was contended was the same. In the absence of any explanation of the source of investment made in cash, the amount revealed in the information to have been invested in cash by the assessee, was added to the income of both the assesses. 7. The contention of the Ld. Counsel for the assessee before us was that based on the same information in the possession of the AO which allegedly revealed investment made in cash to the tune of Rs.36,11,000/- in a project SDL-Satyam Skyline, addition of the said amount was made in the hands of both the assesses. Ld. Counsel for the assessee pointed out that the information extracted from the digital data revealed a ledger account in the name of one of the assessee Geetaben Ketankumar Nayak maintained by such entity which ledger account allegedly revealed investment in cash to have been made to the tune of Rs.36,11,000/-. The Ld. Counsel for the assessee contended that based on this information, addition was made in the hands of both the assesses. 8. Secondly, he contended, that the information itself clearly revealed that the investment in cash was not made in the impugned year, but, was made in the preceding year. IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 5 – 9. Therefore, he contended that firstly the same addition could not have been made in the hands of both the assessees and even otherwise, since as per the information available with the AO, the investment in cash was not made in the impugned year, no addition on account of unexplained investment could have been made in the hands of either of the assessees. 10. Our attention was drawn to the assessment orders passed in the case of both the assessees which it was pointed out was identically worded. Our attention was drawn more particularly to Para 5.1 of the order passed in the case of Geetaben Ketankumar Nayak, one of the assessee before us, recording the above facts as under: “5.1 Addition of Rs.36,11,000/- for unexplained investment: A search & seizure action u/s 132 of the Income tax Act, 1961 was carried out on 06/03/2018 in the case of \"SSS(Satyam, Sangani, Shaligram) Group of companies. During the search and seizure action, the residential premise of Shri Viral K Patel at 8/104 Shaligram Flora, Near Sangini Bungalows, Opp. Shaligram-III, Thaltej Ahmedabad was also covered u/s 132 of the Act as he is the key person handling cash transactions related to the M/s Satyam Developers Limited and its directors During the course of search action, various incriminating documents and digital data is found and seized which were inventorized. (ii) Verification of tally data at location Viral Kirankumar Patel_Party A8/Viral Kumar Patel_HD5 EXTRACTION/viral lenovo laptop/TALLY DATA/viral Lenovo laptop/it/F/Desktop file/CD RERA/02112017/data/10008 reveals that you have purchased unit no. A803 in project \"SDL-Satyam Skyline\", Naranpura Rd, Naranpura, Ahmedabad, Gujarat 380013, property registered on 12/14/2012 for a total cost of Rs. 7111000/- out of which Rs. 3611000/-has been paid in cash. Copy of the ledger is reproduced hereunder: IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 6 – (iii) As per the details, the assessee has paid Rs.36,11,000/- in cash for purchase of unit no. A803 in project \"SDL-Satyam Skyline\", which has been registered in FY 2012-13 relevant to AY 2013-14. 5.2 Therefore, vide this office notice dated 22.11.2021, the assessee was show caused as to why the investment made in cash amounting to Rs.36,11,000/- by him for purchase of Unit No. A803 in project \"SDL- Satyam Skyline\" should not be treated as unexplained investment uls, 69 of the Act during the year and added to total income. 5.3 However, the assessee did not submit any reply to the show cause notice. Therefore, it is deemed that the assessee has nothing to explain on the issue and accepted the proposed additions. Further the issue of unexplained investment is also proved from the following discussion: (i) There are complete details of cash payment and cheque payment noted in the ledger. (ii) Date is also noted against each transactions specifying the period in which the transactions had happened. IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 7 – (iii) Unit no. and name of assessee/related person has also been noted on top of the ledger. (iv) All these details prove the veracity of the content of the impugned ledger proving it a strong piece of primary evidence having all the details in a self-speaking manner and leaving any scope for other passible interpretation. 5.4 In view of the above facts, it is established that the assessee has paid on-money in cash for purchase of Unit no. A803, in project \"SDL-Satyam Skyline\". As the assessee has failed to explain the nature and source of the investments made for purchase of property in cash, the same is liable to be treated as unexplained investment of the assessee not reflected in the books of account Hence, the amount of Rs.36,11,000/- is added to the total income of the assessee as UNEXPLAINED INVESTMENT u/s. 69 r.w.s 115BBE of the Act. Penalty proceedings u/s. 271(1)(c) of the Act for concealing the particular of income is hereby initiated on this issue. 6. After discussion and from the data available on record, the income of the assessee is computed as under: Income as per Original Retum u/s 139 Rs. 5,10,450 Income as per ITR filed u/s. 153C of the Act Rs. Not filed Add: Unexplained investment as para 5 [To be considered u/s. 115BBE of the Act] Rs. 36,11,000 Assessed Income Rs. 41,21,450 11. It was contended that the assessment order in the case of other assessee i.e. Ketankumar C. Nayak was identically worded at para 5.1 to 5.4 to para 6. 12. Ld. DR, however, countered by stating that the assessee was non-complaint in the assessment proceedings in the case of both the assessees and the Ld. CIT(A) had considered this plea of the assessee and noting that all facts needed to be verified had IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 8 – accordingly rightly restored the issue back to the AO for re- adjudication in both the cases. He drew our attention to Para 5 to 5.2 of the order of the Ld. CIT(A) in the case of the assessee Geetaben Ketankumar Nayak reproduced as under: “5. I have carefully considered the impugned order and its effect and written submission made by the appellant as well as along with other material available on record with respect to the grounds of appeal. 5.1 On perusal of the assessment order, it is observed that a search and seizure operation u/s 132 of the Act, was conducted on 06/03/2018, in the case of the 'SSS (Satyam Sangani, Shaligram) Group of companies. During the course of the search document containing information related and/or pertained to the appellant was seized Consequently, proceedings u/s. 153C of the Act were initiated against the appellant based on the incriminating material unearthed during the search. The appellant did not file return of income in response to notice u/s 153C of the Act However, it is seen that the appellant filed return of income u/s 139(4) of the Act for on 31/03/2015 declaring total income of Rs 5,10,450/- During the assessment proceedings, various statutory notices u/s 142(1) of the Act, including a show-cause notice dated 22/11/2021, were issued, requesting the appellant to furnish a response/written submission on the merits of the case. However, the appellant failed to comply with any of the notices issued u/s 142(1)/153C of the Act and remained non-compliant throughout the assessment proceedings. As a result, the assessment was completed ex-parte under the provisions of Section 144 of the Act (best judgment assessment) based on the available records by making addition of Rs 36,11,000/- u/s 69 of the Act as unexplained investment towards the purchase of Unit No. A803, in project \"SDL-Satyam Skyline”. 5.2 Aggrieved by the addition of Rs 36,11,000/-, the appellant preferred an appeal on 10/09/2022 against the assessment order of the AO dated 14/12/2021 raising various grounds of appeal During the course of appellate proceedings, the appellant has provided submissions with regards to grounds of appeal However the submissions filed by the appellant at the appellate stage were not provided to the AD during the assessment proceedings. Accordingly, in absence of any compliance from the part of the appellant, the AO proceeded to finalize the assessment proceedings ex-parte as per the provision of section 144 of the Act based on the material available on records Moreover, the appellant in her submission has contended that IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 9 – the property in question was purchased jointly in the names of herself and her husband, the AO has made same addition of Rs. 36,11,000/- in the hands of both co-owners for the same assessment year, resulting in double addition, and has further asserted that the assessment order has been passed in violation of the principles of natural justice. Therefore, I am of the considered opinion that the submissions made by the appellant during the appellate stage in conjunction with the grounds of appeal raised, require enquiries and verification. It would therefore be in the best interest of justice if the appellant is provided another opportunity to present her case before the Assessing Officer so that the Assessing Officer can verify the submission made by the appellant, conduct necessary enquiries for the estimation of true and correct income of the appellant and then pass a fresh assessment order.” 13. Ld. DR contended that in both the cases the Ld. CIT(A) had rightly restored the issue back to the AO. He heavily supported the order of the Ld. CIT(A), vehemently arguing that since the assessee had not participated in the assessment proceedings, the facts as pleaded by the assessee needed verification and, therefore, re-consideration by the AO. 14. We have heard both the parties. We have also gone through the orders of the authorities below. The issue in dispute before us is the addition made to the income of both the assessees u/s.69A of the Act on account of unexplained source of investment in a property in cash to the tune of Rs.36,11,000/- in both the cases. Undeniably, the assessee did not appear before the AO and the Ld. CIT(A) restored the issue back to the AO for re-adjudication. The grievance of the Ld. Counsel for the assessee before us is that considering the facts on record before the Ld. CIT(A), the addition made in the case of both the assessees ought to have been deleted in entirety and his arguments rest on the fact that: IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 10 – i. The same addition on account of same investment, emanating from the same information, has been made duplicate/double in the hands of both the assessees. ii. That in any case, as per the information in the possession of the AO itself, investments were not made in the impugned year in cash and, therefore, there was no case for making any addition u/s.69A of the Act on account of the same in the impugned year. That accordingly, there arose no case for any verification at all and no need for setting aside the issue back to the AO, as done by the Ld.CIT(A). 15. On the first aspect of the addition being a duplicate addition in the hands of both the assessees, the facts on record clearly reveal so and even the Ld. DR was unable to controvert the same. The assessment orders passed in the case of both the assessees have been perused by us and we find that the basis of addition is the same, i.e the ledger account in the name of A803 Geetaben Ketankumar Nayak (one of the assessee before us) revealing cash paid to the tune of Rs.36,11,000/-. We find merit in the contention of the Ld. Counsel for the assessee therefore that this is clearly a case of duplicate addition. 16. Having said so, however the fact remains that it needs to be verified as to who exactly made the investment, whether Geetaben Ketankumar Nayak or her spouse Ketankumar Chandrakant Nayak. Therefore, to this extent, the reference of the matter by the Ld. CIT(A) back to the AO for adjudication afresh is correct in the IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 11 – light of the fact that the assessee has not cooperated in the assessment proceedings in both the cases. 17. However, we find that on the next aspect of the addition made, raised by the Ld. Counsel for the assessee that the investments were not made in the impugned year as per the information in the possession of the AO itself, we find the same to be correct. Ledger account of one of the assessees, which forms the basis of the addition, reveals the cash to have been paid in the preceding two years A.Y 2011-12 & A.Y 2012-13 (Rs.20 Lakhs cash paid in F.Y. 2010-11 relevant to A.Y. 2011-12 and Rs.16,11,000/- cash paid in F.Y. 2011-12 pertaining to A.Y. 2012- 13). The impugned year before us is A.Y 2013-14. The ledger account does not reveal a single cash paid in the impugned assessment year i.e. A.Y.2013-14. Even the assessment order notes the fact that the information reveals the date against each transaction, specifying the period in which the transaction happened, the unit number and name of the assessee or related person noted on top of the ledger, and based on this the AO states that the veracity of the contents of the ledger is demonstrated, proving it to be a strong piece of primary evidence having all details in a self-speaking manner and no scope for any other position, interpretation. As per the AO himself, therefore, he has relied on the contents of the ledger before him for holding the investments made in cash by the assessee to be from unexplained sources and this very information reveals the cash to have not been paid in the assessment year at all. Therefore, we are in IT(SS)A Nos. 1 & 2/Ahd/2025 [Ketankumar Chandrakant Nayak & Anr.] A.Y. 2013-14 - 12 – complete agreement with the Ld. Counsel for the assessee that there was no case at all with the AO for making any addition in the hands of the either of the assessees on account of investment in cash made allegedly from unexplained source u/s.69A of the Act amounting to Rs.36,11,000/-. We, therefore, agree that the Ld. CIT(A) was wrong in restoring the matter back to the AO for re-adjudication afresh when he should have deleted the addition itself. The order of Ld. CIT(A) is set aside and the AO is directed to delete the addition in both the cases. Ground raised by the assessee in both the appeals is accordingly allowed. 18. In the combined result, both appeals filed by the assessee are allowed. This Order pronounced on 20/05/2025 Sd/- Sd/- (SUCHITRA KAMBLE) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 20/05/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "