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2025 Supreme(Online)(ITAT) 4215
INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
Siddhartha Nautiyal, J, Narendra Prasad Sinha, ACJ
Revenue – Appellant
Versus
Assessee – Respondent
IT(SS)A No.52/Ahd/2025
For the Appellants/Petitioners: Shri Alpesh Parmar
For the Respondents: Shri Vijay Mehta
Assessments based solely on presumptions without tangible evidence of additional cash transactions are unsustainable under tax law.
Headnote:This appeal is against the decision of the CIT(A) concerning the assessment under Sections 153A and 143(3) of the Income Tax Act, detailing a case involving alleged unaccounted cash transactions from the sale of land. The Court concluded that the Assessing Officer’s reliance on a WhatsApp chat regarding land valuation lacked corroborative evidence and was solely presumptive. Consequently, the addition of Rs. 19,61,99,000 as unaccounted cash was deemed unsustainable due to insufficient evidence of any cash transactions beyond the registered sale price. The appeal by the Revenue was dismissed, affirming the findings of the CIT(A).
| Table of Content |
|---|
| 1. appeal concerning assessment year under income tax act. (Para 1 , 2) |
| 2. details regarding the unaccounted cash transactions. (Para 3 , 4) |
| 3. arguments presented by revenue and assessee concerning the whatsapp chat evidence. (Para 5 , 6) |
| 4. court's evaluation of evidence and findings on additional cash. (Para 7 , 8 , 9) |
| 5. final ruling on the appeal, confirming dismissal. (Para 10) |
ORDER
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This appeal is filed by the Revenue against the order dated 06.03.2025 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad (in short “CIT(A)”) for the Assessment Year (AY) 2020-21 in the proceedings under Section 153A read with Section 143 (3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
2. The brief facts of the case are that a search action under Section 132 of the Act was conducted in the case of the assessee as part of “Land Broker and Financer Group of cases” on 15.10.2019. From the documents seized from the residence of the assessee, vide Annexure-A/1 (Page nos.1 to 17), it transpired that the assessee had sold a land bearing Survey No.361 (Khata No.1156) admeasuring 15479 square meters, TPS No.204, FP No.247 admeasuring 9287 square meters along with his two brothers to one Shri Sandeep Narshinbhai Patel vide sale deed dated 19.09.2019 for a total sale consideration of Rs.20 Crores. The search was also conducted at the office premises of M/s. Dharnidhar Developers, in which the assessee was a partner, wherein certain digital data was found and seized vide page nos.01 to 211. At page no.145 of Annexure Part A-10 was WhatsApp chat data retrieved from the mobile phone of Sri Alpesh Thakor, a key employee of the assessee. The WhatsApp chat was in respect of rate to be quoted for the land bearing Survey No.361 at Makarba, to one Shri Kaushalbhai. In reply to the query of Sri Alpesh Thakor, Sh. Deepak Rambhai Mevada (brother of the assessee) had stated the figure of “71000/-”. This WhatsApp communication was made on 03.05.2019. The plot of land at Survey No.361 belonged to the assessee and his two brothers Deepak Rambhai Mevada and Dhiren R. Bharwad which was sold to another person Sh. Sandeep Narshinbhai Paltel vide agreement dated 19.09.2019 for a consideration of Rs.20 Crores. The Assessing Officer, on the basis of the WhatsApp communication, applied sale consideration of the land at the rate of Rs.71,000/- per square yard which worked out to Rs.78,85,97,000/-. Since the documentation for sale of the land was done for Rs.20 Crores only, the Assessing Officer treated the difference of Rs.58,85,97,000/- as on-money received in cash. Since the assessee was one third owner of the property, a sum of Rs.19,61,99,000/- (one third of Rs.58,85,97,000/-) was added in the hands of the assessee as on-money received on sale of land. The assessment was completed under Section 153A read with Section 143 (3) of the Act on 26.07.2021 at total income of Rs.19,90,27,530/-.
3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was partly allowed.
4. The Revenue is now in appeal before us. The following grounds have been taken in this appeal: -
“1) In the facts and on the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.19,61,99,000/- being unaccounted cash received on sale of land at Survey No.361 without considering the fact of the case that the addition made by the AO was based on cogent-evidence, rational inference and established legal principles.
2) In the facts and on the circumstances of the case and in law the Ld. CIT(A) has erred by disregarding incriminating material seized during the course of search proceedings under section 132, which clearly indicated the assessee's involvement in unaccounted transactions.
3) In the facts and on the circumstances of the c
