JASHVANTIBEN MANOJBHAI MAKWANA,RAJKOT V. INCOME TAX OFFICER, WARD 1(1)(1), RAJKOT, RAJKOT

ITA 813/RJT/2025

AI Insights

The case involves Jashvantiben Manojbhai Makwana, the assessee, who appealed against the order of the Commissioner of Income-tax (Appeals) confirming the addition of Rs. 80,000 as unexplained money under section 69A of the Income Tax Act, 1961. This amount was allegedly paid as on-money for a property transaction, which the assessee failed to explain the source of. The Tribunal noted procedural lapses such as the failure to provide a copy of the statement for cross-examination and the reliance on a digital, editable document without signatures. Considering these factors and the smallness of the amount, the Tribunal reduced the addition to 30% of the unexplained amount.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830120 (ITAT-RAJKOT)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Rajkot
• Assessment Year: misc
• Appeal Filed On: 25-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: SUNNY MEHTA; LD
• Keywords: Unexplained investment; Principle of natural justice; Search and seizure; Procedural lapse
• Section: 147; 148; 142(1); 132

Judgement Text

" आयकरअपीलीयअिधकरण,राजकोटɊायपीठ,राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, “SMC” RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER आयकरअपील सं. /ITA No.813/RJT/2025 िनधाŊरण वषŊ/Assessment Year : 2021-22 Jashvantiben Manojbhai Makwana, 120 Gujarat Housing Board BAPA Sitaram Chowk Kothariya Rajkot, Rajkot 360022. बनाम/ Vs The ITO, Ward-1(1)(1), Rajkot ˕ायीलेखासं./जीआइआरसं./PAN/GIR No.: FCZPM0142M (अपीलाथŎ/Assessee) (ŮȑथŎ/Respondent) िनधाŊįरती की ओर से/Assessee by : Shri Sunny Mehta, Ld. AR राजˢकी ओर से / Revenue by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR सुनवाई की तारीख/Date of Hearing : 05/12/2025 घोषणा की तारीख/Date of Pronouncement : 12/01/2026 आदेश/ORDER Per, Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to Assessment Year 2021- 22, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals) (‘CIT(A)’), dated 17.09.2025, which in turn arises out of an assessment order passed by Assessing Officer u/s. 147 of the Act, on 16.03.2025. Printed from counselvise.com ITA No. 813/Rjt/2025 Jasvantiben Manojbhai Makwana Page 2 of 5 2. Grounds of the appeal raised by the assessee are as under: 1. The Ld. CIT(A) erred in not adjudicating the addition of 280,000 made under section 69A, based on a third-party ledger lacking any reference to the assessee, without independent corroboration, ignoring the possibility of fabrication, and contrary to valuation accepted by the Stamp Valuation Authority. 2.The Ld. CIT(A) erred in not adjudicating the addition made without any evidence of additional source of income to justify the alleged unexplained investment. 3. The Ld. CIT(A) erred in confirming the addition based merely on assumptions and suspicion, without any conclusive evidence to establish the genuineness of the document relied upon. 4. The Ld. CIT(A) erred in not appreciating that the addition was made without affording the assessee sufficient opportunity of hearing and without allowing cross- examination of the person whose statement was relied upon. 5. The Ld. CIT(A) erred in dismissing the appeal without considering that the assessment order is arbitrary, illegal, and in violation of principles of natural justice. 6. Without prejudice, the assessee reserves the right to add, amend, or withdraw any ground of appeal before or at the time of hearing. 3. Briefly stated, the relevant material facts are as follows. As per information, a search and seizure operation was conducted u/s 132 of the I.T. Act, on Suchariya Group (residence of Shri Hari Singh Sucharia). During the search and seizure operation, certain incriminating documents containing details of cash transactions of the project \"Pragati Shopping Centre\" were found and seized. These ledgers contained individual ledgers showing unaccounted cash receipt by the builder. Ledger in name of assessee has been found showing that the assessee has made cash payments to the tune of Rs. 80,000/- in order to acquire FF (First floor) Unit/shop No. 135 of Pragati Shopping Centre. Further, assessee failed to explain the sources of the above on-money payment, therefore, unaccounted on-money payment of Rs.80,000 was treated as unexplained money u/s 69A rws 115BBE of the Act. Printed from counselvise.com ITA No. 813/Rjt/2025 Jasvantiben Manojbhai Makwana Page 3 of 5 Therefore, assessment is completed u/s 147 r.w.s. 144B of the I.T. Act, 1961 at assessed income of Rs. 3,25,930/- (Rs. 2,45,930/- as per ITR u/s 148 + Rs. 80,000/- u/s 69A). 4. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the CIT(A), who has confirmed the action of the Assessing Officer, therefore, assessee is in appeal before this Tribunal. 5. Learned Counsel for the assessee, at the outset submitted that required documents and evidences were submitted by the assessee before the assessing officer to prove his claim. However, only addition made by the A.O. is to the tune of Rs. 80,000/- therefore, considering the smallness of the amount an estimated addition @ 10% should be made in the hands of the assessee. 6. On the other hand, Ld. D.R. for the Revenue, argued that in order to protect the interest of the revenue, an estimated addition @ 30%, may be made in the hands of the assessee, on Rs.80,000/-. 7. I have heard both the parties. I note that assessee is engaged in providing tuitions to students. The original return of income has not been filed, by the assessee, as her total income was below basic exemption limit. It is a fact that the assessee is not well aware of the process and intricacies involved in the assessment proceedings. However, the return in response to notice under section 148 has been filed vide acknowledgment number 178591550170424 declaring total income of Rs. 2,45,930/-. Further, response to notices under section 143(2) and 142(1) as well Printed from counselvise.com ITA No. 813/Rjt/2025 Jasvantiben Manojbhai Makwana Page 4 of 5 as response against show cause notice under section 147 have been submitted by the assessee. I also, note that the entire assessment has been initiated and completed solely on the basis of a single document, an alleged dump ledger, which is digital and editable, and which contains incomplete particulars and does not bear signature or handwriting of either of the parties. Additionally, the assessment is solely based on a statement recorded under section 132 of the Act from a third party, the builder, during a search operation. However, the Assessing Officer failed to provide a copy of the said statement to the assessee and did not grant any opportunity for cross examination, despite such a request having been made. This amounts to a serious procedural lapse and violation of the assessee's fundamental right to a fair hearing. 8. Therefore, learned Counsel submitted that assessee`s case has sufficient merit, however, due to smallness of the amount, an estimated addition may be made at the rate of 10% which would be sufficient and would be agreeable to the assessee. 9. I find that statement recorded during search corroborates the evidence found in search, therefore I find that there is only a little merit in the case of the assessee. Therefore, considering the above facts and circumstances of the case and the fact that both parties have agreed for adhoc addition/estimated addition, and entire on money cannot be treated profit of the assessee and only profit element of the “on- money”, may be taxed, in the hands of the assessee, therefore, to meet the end of justice, I direct the A.O. to make disallowance @ 30% of Rs. 80,000/-, which comes to Rs. 24,000/-, by applying normal rate of income. It is also made clear that instant adjudication have been done, considering the special facts and Printed from counselvise.com ITA No. 813/Rjt/2025 Jasvantiben Manojbhai Makwana Page 5 of 5 circumstances of the assessee`s case, therefore, it shall not be treated as a precedent in any preceding or succeeding assessment year. 10. In the result, appeal filed by the assessee is partly allowed in above terms. Order pronounced in the open court on 12/01/2026. Sd/- (Dr. Arjun Lal Saini) लेखा सद˟/Accountant Member राजकोट /Rajkot िदनांक/ Date: 12/01/2026 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File (True Copy) By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot Printed from counselvise.com "