RAJESHKUMAR RATANLAL TAK,AHMEDABAD, GUJARAT V. CIRCLE 3(1)(1), DEPUTY COMMISSIONER OF INCOME TAX, AHMEDABAD, GUJARAT

ITSSA 51/AHD/2025

AI Insights

The case involves an appeal by Rajeshkumar Ratanlal Tak against the order of the Commissioner of Income Tax (Appeals) which upheld the addition of Rs. 6,34,725/- to the assessee's income for the Assessment Year 2012-13. The addition was based on an Excel sheet found during a search at the premises of the H.N. Safal Group, which allegedly recorded details of a cash payment (on-money) for a property transaction. The assessee denied making any such payment, and the CIT(A) dismissed the appeal, relying on the document and the builder's admission of receiving on-money. The Tribunal, however, found the addition unsustainable as it was based on circumstantial evidence and lacked direct evidence linking the assessee to the alleged cash payment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774078 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 20-05-2025
• Other Referred Cases: Nirmalkumar Shantilal Jain vs. ITO, Kashish Gaurav Chandani vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P RASTOGI
• Assessee Lawyers: SUNIL TALATI
• Keywords: Condonation of delay; Document seized; Documents seized; Principle of natural justice
• Section: 271(1)(c); 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T(SS).A. No.51/Ahd/2025 (Assessment Year: 2012-13) Rajeshkumar Ratanlal Tak, B/102, Arti Soc. Ajay Tenaments, Nr. Mahadev Nagar, Vastral Road, Ahmedabad-382415 Vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad [PAN No.AAIPT4661J] (Appellant) .. (Respondent) Appellant by : Shri Sunil Talati, AR Respondent by: Shri R P Rastogi, CIT-DR Date of Hearing 13.08.2025 Date of Pronouncement 10.09.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-12, (in short “Ld. CIT(A)”), Ahmedabad vide order dated 05.09.2023 passed for A.Y. 2012-13. 2. The assessee has raised the following grounds of appeal: “1. The Ld. CIT(A) has erred in law and on facts in upholding the validity of the notices / order issued u/s. 153 of the Act, which is illegal, without jurisdiction, and bad in law. Consequently, the assessment order passed in pursuance thereof is null and void and deserves to be quashed. The same be held now. 2. The Ld. CIT(A) has erred in confirming the addition of Rs. 6,34,725/- on account of alleged on-money paid for purchase of immovable property, solely based on third-party material found during search at HN Safal Group, without any direct evidence or nexus against the assessee. The addition is presumptive, unjustified, and liable to be deleted. 3. The Ld. CIT(A) has erred in upholding the addition made without providing copies of the builder's statement or seized material or any documentary evidences and Printed from counselvise.com IT(SS)A No. 51/Ahd/2025 Rajeshkumar Ratanlal Tak vs. DCIT Asst.Year –2012-13 - 2– without allowing cross-examination, thereby violating principles of natural justice. Thus, the same is bad and contrary to law. 4. Without prejudice to the above, the Ld. CIT(A) has failed to consider the genuine evidences and bonafide explanations submitted by the assessee, including bank statements. Thus, it is submitted that the order so passed is totally incorrect and illegal and the entire addition made on account of on-money of Rs. 6,34,725/- deserves to be deleted. 5. The Order passed by the Ld. CIT(A) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be. held so now. 6. Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final of appeal.” 3. At the outset, we note that there is a delay of 562 days in filing the appeal. The assessee has filed an application for condonation of delay along with an Affidavit explaining the reasons for the belated filing. In his affidavit, the assessee has submitted that the delay was neither intentional nor due to negligence, but was caused solely due to lack of proper professional guidance and communication from his earlier consultant, CA Sushil Goenka, to whom the matter had been entrusted in good faith. The assessee was under the bona fide impression that all necessary steps, including the filing of the appeal, were being handled in a timely manner by the said consultant. However, the earlier consultant failed to inform the assessee about the time limits for filing the appeal and neither did he take any steps in this regard. The omission came to light only when the assessee approached a new professional advisor, M/s. Talati & Talati LLP, Chartered Accountants, Ahmedabad, who upon reviewing the case, immediately brought the delay to the assessee’s notice and advised him to initiate remedial action. Upon learning of the lapse, the assessee acted without further delay and instructed the new consultants to file the appeal before the Hon’ble Tribunal. Accordingly, the assessee submitted that the delay occurred due to reasons beyond the control of the assessee and Printed from counselvise.com IT(SS)A No. 51/Ahd/2025 Rajeshkumar Ratanlal Tak vs. DCIT Asst.Year –2012-13 - 3– not due to any mala fide intent or disregard of the law. We have carefully considered the application filed by the assessee seeking condonation of delay of 562 days in filing the present appeal, along with the affidavit dated 20.05.2025. The explanation offered by the assessee in our view establishes that the delay was neither deliberate nor due to any negligence or disregard of legal process, but rather arose from the bona fide reliance placed on the earlier consultant, who failed to communicate the urgency and requirement of filing the appeal within the prescribed time. The assessee has acted in good faith and initiated immediate corrective steps upon discovering the lapse by engaging a new professional advisor. Considering the explanation furnished, the supporting affidavit, and in the larger interest of justice, we are of the view that the delay deserves to be condoned. We also find support from judicial precedents that a litigant should not be made to suffer for the inadvertent lapse of an advisor, especially when the assessee has demonstrated promptness and diligence upon learning of the default. Accordingly, the delay of 562 days in filing the appeal is hereby condoned. The appeal is admitted for adjudication on merits. On Merits: 4. The brief facts of the case are that a search was conducted under section 132A of the Income Tax Act (Act) on the premises of the HN Safal Group on 4th September 2013. During the search, a hard disk was seized from their corporate office in Ahmedabad, which contained data relating to various real estate projects, including Sumel Business Park-II. In one of the Excel sheets found on the disk, specific details were obtained regarding the sale of a commercial unit (Shop No. 15A) to Mr. Rajeshkumar Ratilal Tak (the Printed from counselvise.com IT(SS)A No. 51/Ahd/2025 Rajeshkumar Ratanlal Tak vs. DCIT Asst.Year –2012-13 - 4– assessee). The details which were found included the carpet area, amount received via cheque, and the additional cash component (on-money). The Assessing Officer observed that these details matched exactly with the contents of the registered sale deed, including the name of the buyer, the size of the property, and the cheque payment made up to 01.02.2012. Based on this, the Assessing Officer was of the view that the assessee had also paid an additional cash amount of ₹6,34,725/-, which was not disclosed in the return of income filed by the assessee. The assessee, however, denied making any such cash payment, and submitted that there was no direct evidence and no prudent person would pay such a large sum in cash. However, the Assessing Officer rejected this claim, referring to the data found in the seized documents, the matching sale deed, and the fact that the developer (Safal Buildcon) had already admitted before the Settlement Commission that it had received on-money in various projects, including the present one, and paid tax on such income. Accordingly, the Assessing Officer held that the cash payment constituted undisclosed income of the assessee. Therefore, the amount of ₹6,34,725/- was added to the assessee’s total income for the year, and penalty proceedings under section 271(1)(c) were also initiated for furnishing inaccurate particulars. 5. In appeal, the CIT(A) dismissed the appeal filed by the assessee against the addition of ₹6,34,725/- as undisclosed income. The assessee submitted that no evidence of cash payment was found, the documents did not belong to him, and no opportunity was provided to cross-examine the builder. However, the CIT(A) held that the addition was based on concrete material, specifically the excel sheet seized during a search at H.N. Safal’s Printed from counselvise.com IT(SS)A No. 51/Ahd/2025 Rajeshkumar Ratanlal Tak vs. DCIT Asst.Year –2012-13 - 5– premises, which clearly contained record of the transaction details including both the cheque and cash components. The CIT(Appeals) noted that the cheque payment matched with the sale deed entered between the assessee and Safal Group though the cash payment was denied by the assessee. However, since the same sheet had been accepted as being correct by H.N. Safal Group before the Settlement Commission (where they admitted to receiving ON MONEY from various buyers, including the assessee), the CIT(A) held that the document was reliable. The CIT(Appeals) further held that absence of cross-examination was not considered vital in the instant case as the addition was not based on statements but on documentary evidence corroborated by the builder’s own admission. Therefore, the CIT(A) confirmed the addition, and dismissed the appeal of the assessee. 6. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. We have heard the rival contentions and perused the material on record. In the present case, the addition of ₹6,34,725/- made by the Assessing Officer under Section 69 of the Act is based solely on an Excel sheet found during a search at the premises of the H.N. Safal Group, and the corresponding disclosure made by the said builder group before the Settlement Commission. Admittedly, the H.N. Safal Group has already paid tax on the income arising from the said transaction. Furthermore, it is an undisputed fact that no direct evidence of any cash payment was found during the course of the search. The seized hard disk containing the alleged transaction details did not belong to the assessee, and the Excel sheet relied upon by the department neither bore the signature of the assessee nor contained any verifiable link establishing a nexus with the Printed from counselvise.com IT(SS)A No. 51/Ahd/2025 Rajeshkumar Ratanlal Tak vs. DCIT Asst.Year –2012-13 - 6– alleged cash payment made by the assessee. We observe that the present addition has been made purely on the basis of circumstantial evidence and the admission of the builder, without any corroboration and without affording the assessee the opportunity to cross-examine the concerned parties, thereby violating the principles of natural justice. The Hon’ble ITAT, Ahmedabad Bench, in the case of Nirmalkumar Shantilal Jain vs. ITO, IT(SS)A No.144/Ahd/2023, order dated 28.08.2024, in identical facts and circumstances deleted the addition made on account of alleged on-money payments, holding that no direct nexus was established between the assessee and the seized material, and third-party disclosure without corroborating evidence is insufficient for making an addition. Similarly, in Kashish Gaurav Chandani vs. ITO, IT(ss)A No.147/Ahd/2023, order dated 10.06.2024, the coordinate bench of Ahmedabad ITAT held that reliance on unsigned third-party Excel sheets without opportunity of cross- examination and without independent verification cannot justify additions under Section 69 of the Act. Respectfully following the coordinate bench decisions by Ahmedabad ITAT and considering that the builder has already paid taxes on the disclosed amount, that there is no evidence of cash payment made by the assessee, and the fact that the assessee was denied an opportunity of cross-examination, we hold that the addition of ₹6,34,725/- made by the AO and confirmed by the CIT(A) is unsustainable in law and on facts. 7. We also observe that at Page 9 of the assessment order, the Assessing Officer has reproduced data in the form of a table containing details relating to the transaction such as area sold, value of the transaction and consideration Printed from counselvise.com IT(SS)A No. 51/Ahd/2025 Rajeshkumar Ratanlal Tak vs. DCIT Asst.Year –2012-13 - 7– received through cheque and consideration received through cash. A perusal of the table reproduced at Page 9 of the assessment order shows, that in the excel sheet there is a mention of an amount of Rs. 7,61,670/- (Value Q) and a sum of Rs. 5,07,780/- (Value D). However, while passing the assessment order the Assessing Officer has made an addition for an altogether different amount of Rs. 6,34,725/- which does not find mention in the table / excel sheet reproduced at Page 9 of the assessment order. Thus, the addition made by the Assessing Officer is not found to be based on the entries in the excel sheet. Therefore, even for the above reason, we are of the considered view that the order passed by the Assessing Officer is not sustainable on facts. Accordingly, the addition of Rs. 6,34,725/- is hereby deleted. 8. In the result, the appeal filed by the assessee is allowed. This Order pronounced in Open Court on 10/09/2025 Sd/- Sd/- (NARENDRA P. SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 10/09/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "