ITAT Ahmedabad Remands ‘On-Money’ Addition in Property Purchase Case

The “SMC” Bench, Ahmedabad of the Income Tax Appellate Tribunal partly allowed the appeal of Ambika Laxminiwas Choudhary (AY 2011–12) and remanded the matter to the CIT(A) for fresh adjudication.

Background: Alleged Cash Component in Commercial Property Purchase

A search under Section 132 was conducted in the H N Safal Group on 04.09.2013, during which a hard disk (Annexure A-8) containing excel data was seized. The data allegedly reflected cheque and cash components in respect of various property transactions. As per the excel sheet, the assessee had agreed to purchase a commercial unit (Unit A-110, Solitaire Scheme) for ₹54,02,800, of which ₹40,52,100 was to be paid by cheque and ₹13,50,700 in cash as “on-money.” Based on this material, the Assessing Officer initiated proceedings under Section 153C and added ₹13,50,700 as undisclosed income, alleging cash payment to M/s GSS Reality LLP. The assessee did not respond to statutory notices during assessment. The CIT(A) dismissed the appeal.

Tribunal: Ex Parte Order Requires Fresh Examination

Before the ITAT, none appeared for the assessee. The Tribunal noted that although notices were issued by the CIT(A), the appellate order did not clarify whether they were properly served. Further, no independent findings on merits were recorded. Observing that the CIT(A) had passed an ex parte order without proper adjudication, the Tribunal held that the matter required reconsideration. Accordingly, the case was restored to the file of the CIT(A) for fresh adjudication after granting adequate opportunity of hearing. The assessee was directed to cooperate and avoid unnecessary adjournments. The appeal was partly allowed for statistical purposes.