Sonopix Productions Private Limited Vs ACIT (ITAT Hyderabad)
Hyderabad ITAT Remands ₹2.15 Crore Alleged On-Money Addition: Findings in Developer’s Own Appeal Crucial Where Addition Is Based Solely on Documents Seized From Developer
The Hyderabad ITAT in Sonopix Productions Pvt. Ltd. v. ACIT, Central Circle 3(2), ITA No.1138/Hyd/2025, AY 2023-24 considered an addition of ₹2.15 crore towards alleged cash/on-money received by the assessee from the developer, Suchir India Constructions Pvt. Ltd., in connection with the “Giza Polis” project at Kothur. The addition arose entirely from loose sheets found during a survey at the developer’s premises. The assessee’s Managing Director had categorically denied receiving any cash or on-money.
Interestingly, the developer’s Managing Director, Shri Yadugiri Kiran Kumar, also categorically denied having made any cash/on-money payment to the assessee. The Tribunal therefore rejected the assessee’s plea that failure to permit his cross-examination violated natural justice, observing that Revenue had not relied upon his statement for making the addition; rather, the addition was based solely upon the seized documents. Consequently, no prejudice arose from denial of cross-examination.
On merits, however, the Tribunal noted an important circumstance. The very documents forming the sole basis of the ₹2.15 crore addition were seized from the developer, and the developer’s own appeal concerning those documents was still pending before the CIT(A), who had already called for a remand report from the AO.
The ITAT held that the findings ultimately recorded in the developer’s appellate proceedings regarding the “genuineness, nature and evidentiary value” of the seized documents would have a direct bearing on the assessee’s case. To avoid conflicting findings on the very same seized material, the Tribunal restored the issue to the CIT(A) for fresh adjudication after considering the outcome of the developer’s appeal.
Importantly, the ITAT did not delete or uphold the ₹2.15 crore addition on merits. It expressly kept all contentions of both sides open and directed the CIT(A) to decide the matter afresh after giving the assessee adequate opportunity of hearing. The appeal was accordingly allowed for statistical purposes.
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