ACIT CENTRAL CIRCLE 2(3), AHMEDABAD, AHMEDABAD V. ANIL RAMBHAI MEVADA, AHMEDABAD

ITSSA 52/AHD/2025

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) which had partly allowed the appeal of the assessee, Anil Rambhai Mevada, regarding the assessment year 2020-21. The Revenue challenged the deletion of an addition of Rs.19,61,99,000, which was treated as unaccounted cash received from the sale of land. The original assessment was based on a WhatsApp chat indicating a higher sale price per square yard than recorded in the sale deed. The Tribunal examined the evidence and found that the addition was not supported by any concrete evidence of actual cash transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712860 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2020-2021
• Other Referred Cases: CIT vs. Jeet Construction Company, M/s. Trident Creation Pvt. Ltd. vs DCIT, CC-1(1)(Ahmedabad), ITO vs. Bharat A. Mehta
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR
• Assessee Lawyers: VIJAY MEHTA; DISREGARDING THIS INCRIMINATING MATERIAL SEIZED
• Keywords: Set aside; Question of law; Sale consideration of property below Jantri Value; Fair market value; Income from undisclosed sources; Documents seized; Search and seizure; Loose papers
• Section: 143(3); 132; 153A; 50C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 A.C.I.T., Central Circle – 2(3), Room No.305, 3rd Floor, Aaykar Bhavan, Ashram Road, Ahmedabad – 380 009. Vs. Anil Rambhai Mevada, Parishram Makarba Gam, Bharwadvas, Ahmedabad – 380 051. [PAN – ABWPB 4548 B] (Appellant) (Respondent) Assessee by Shri Vijay Mehta, AR Revenue by Shri Alpesh Parmar, CIT(DR) Date of Hearing 04.07.2025 Date of Pronouncement 29.07.2025 O R D E R 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 Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 2 of 11 (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 Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 3 of 11 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 case and in law the Ld. CIT(A) has erred in deleting the addition by holding that the deal was executed with a person other than that of found recorded in the WhatsApp Chat not appreciating that once a particular rate is fixed for the sale/purchases of land, the same does not gets deflated in absence of any changed circumstances or factors causing negative fluctuation. 4) In the facts and on the circumstances of the case and in law the Ld. CIT(A) has erred in ignoring the fact that in cases involving unaccounted income or cash transactions, direct evidence may not be available and courts have consistently held that such additions can be sustained on the basis of surrounding circumstances, corroborative material, and the principle of preponderance of probabilities and also that the law does not demand mathematical precision or conclusive proof in cases where the very nature of the transaction involves concealment. 5) The Revenue craves leave to add/alter/armed and/or substitute any or all of the grounds of appeal.\" Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 4 of 11 5. All the grounds taken by the Revenue pertain to addition of Rs.19,61,99,000/- in respect of unaccounted cash received on sale of land. Shri Alpesh Parmar, the Ld. CIT(DR) appearing for the Revenue submitted that the Assessing Officer had worked out the sale consideration of the land on the basis of the digital evidence in respect of rate of the same piece of land as found in the course of search in the form of WhatsApp chat data. He explained that the WhatsApp communication was between Alpesh Thakor, the key employee, and Deepak Rambhai Mevada, brother of the assessee and the co-owner of the land. The Ld. CIT-DR submitted that the contentions of the WhatsApp communication was not denied. Therefore, the Assessing Officer had rightly worked out the sale consideration of the land on the basis of the rate as quoted in the WhatsApp communication. He submitted that the Ld. CIT(A) has allowed relief to the assessee by dis-regarding this incriminating material seized in the course of search. He further submitted that merely because the land deal was finalised by another person, this does not deflate the rate of the property as quoted in the WhatsApp communication. The Ld. CIT- DR submitted that the addition was made on the basis of surrounding circumstances, corroborating material found in the course of search and principle of preponderance of probabilities. According to the Ld. CIT-DR, the law does not require mathematical precision or conclusive proof in the cases where the very nature of the transaction involves concealment. 6. Per contra, Shri Vijay Mehta, Ld. AR of the assessee submitted that the WhatsApp communication between Alpesh Thakor and Deepak Rambhai Mevada was only a quotation which cannot be considered as final sale consideration rate. He explained that the WhatsApp communication was for quoting the rate to one Kaushalbhai with whom transaction never materialised. Therefore, the rate as quoted in the Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 5 of 11 WhatsApp communication could not have been utilised for working out the sale consideration in the deal undertaken by the assessee with a different party. He submitted that in the course of search, no evidence was found that the assessee had entered into sale transaction with Sh. Sandeep Narshinbhai Patel at a rate other than that as quoted in the sale deed. Further that, no evidence was found that the assessee had received any extra consideration than the amount of Rs.20 Crores as mentioned in the sale deed. The Ld. AR submitted that there was no corroborating evidence to support the presumptions of receipt of cash of Rs.58.86 Crores in the sale consideration and neither such cash was found in the course of search. He, therefore, strongly supported the order of the Ld. CIT(A). 7. We have carefully considered the rival submissions. There is no dispute to the fact that the impugned property being land at Survey No.361 owned by the assessee and his two brothers was sold vide sale deed dated 19.09.2019 for a total sale consideration of Rs.20 Crores to one Shri Sandeep Narshinbhai Patel. In the course of search, no evidence was found that any additional amount was received from Shri Sandeep Narshinbhai Patel towards the sale consideration of this land. The only basis of the addition of Rs.19,61,99,000/- in respect of on-money received by the assessee in the sale consideration, is the WhatsApp chat communication between Alpesh Thakor and Deepak Rambhai Mevada. As is evident from the WhatsApp chat, this communication was made for quoting the rate to one Kaushalbhai, with whom the deal never materialised as the land was sold not to Kaushalbhai but to Sandeep Narshinbhai Patel. No evidence was found in the course of search either from the assessee or from the other two co-owners that they had received extra consideration other than the amount as mentioned in the sale deed. In the absence of any evidence, whatsoever, regarding receipt of on- Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 6 of 11 money in this sale transaction, the addition of Rs.19,61,99,000/- in respect of unaccounted cash received on sale of land could not have been sustained. 8. It is found that the ld. CIT(A) has carefully examined the facts of the case and given very cogent finding in this regard, which is reproduced for the sake of clarity: - “7.2 During the course of appellate proceedings, the appellant has explained that in the WhatsApp chat on 03.05.2019, Sh. Alpesh Thakore was asking the rate of the property to be quoted to one Shri Kaushalbhai for land bearing survey no.361, Makarba to which Shri Deepak Mevada replied a rate of Rs.71,000/-. The appellant has vehemently contended that no such transaction took place with Shri Kaushalbhai. It has been further submitted that a Banakhat (agreement to sell) for the said land had already been executed with Shri Sandeep Narshinbhai Patel on 15.02.2019, prior to the WhatsApp conversation between Shri Deepak Mevada and Shri Alpesh Thakore. The appellant emphasized that in the real estate business, it is a common practice to provide quotations for properties, and such quotations are often based on business convenience and do not necessarily reflect the final transaction price. The appellant has also argued that the addition made by the AO is purely presumptive and lacks any corroborative evidence, and therefore, such addition ought to be deleted. 7.3 On perusal of the assessment and submission furnished by the appellant, it is observed that during the course of search, digital data comprising pages 01 to 211 was found and seized from the office premises of M/s. Dharnidhar Developer, in which the appellant is a partner. During the post-search proceedings, a WhatsApp chat was retrieved from the mobile phone of Shri Alpesh Thakore, a key employee of the appellant. This chat involved a conversation between Shri Alpesh Thakore and Shri Deepak Rambhai Mevada, the appellants brother in the said chat, Shri Alpesh Thakore asked about the rate to be quoted to Shri Kaushalbhai for the land bearing Survey No.361, Makaba, to which Shri Deepak Mevada provided a quoted rate of Rs.71,000/- . The AO relying solely on the WhatsApp chat concluded that the appellant along with his two brothers sold the land bearing Survey No.361 admeasuring 9287 square meters (11107 square yards) to Shri Sandeep Narshinbhai Patel at a rate of Rs.71,000/- per square yard amounting to Rs.78,85,97,000/- as against registered sale value of Rs.20,00,00,000/- on 15.02.2019. It is an undisputed fact that the said land was never sold to Shri Kaushalbhai, and in fact, during the course of search the appellant has clearly stated that the land was sold to one Shri Sandeep Narshinbhai Patel. The important fact which is pertinent to mention here that the WhatsApp Chat between Shri Alpesh Thakor & Shri Deepak Mevada, relied by the AO was dated 03.05.2019 whereas Banakhat (agreement to sale) was executed between Shri Sandeep Narshinbhai Patel Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 7 of 11 and three brothers on 15.02.2019 for sale consideration of Rs.20 Crores which itself prove that the rate of given by Shri Deepak Mevada was nothing but a rough quotation. This fact was intimated to the AO during the assessment proceedings and said Banakhat has been reproduced (on page No.22 to 25 of assessment order) by the appellant in his written submission made before the AO. Moreover, during the course of post search proceedings, statement of Shri Dhiren Rambhai Bharvad was recorded on 10.02.2020 wherein he has explained that the rate quoted was Rs.71,000/- however, no such transaction took place with Shri Kaushalbhai for selling the land bearing survey no.361 situated at Makarba Village. In fact, the land was sold to Shri Sandeep Patel. The appellant has further mentioned that there is no relation between Shri Kaushalbhai and Shri Sandeepbhai Narshinbhai Patel. The A.O. has not adduced any evidence to show that the appellant has received any cash consideration over and above the registered sale agreement. There is no evidence found during the course of the search which would establish that the appellant has received any cash. It appears that addition made by the A.O. is based only on assumption and not on any material found during search and seizure. Any such addition made on assumption cannot be sustained. This principle well settled in law has been recognised by the Apex Court. The judgment of the Supreme Court in the case of CIT vs. Jeet Construction Company [278 Taxman 273/124 taxmann.com 527] wherein Supreme Court had dismissed the SLP filed by the Department against the judgment of the High Court wherein it had upheld the order passed by the Tribunal holding that addition cannot be sustained which is based merely on presumption that assessee had earned undisclosed income and had incurred expenses outside the books of account. i. On the similar issue, reliance is placed on the decision of Hon'ble ITAT Ahmedabad in the case of M/s. Trident Creation Pvt. Ltd. vs DCIT, CC-1(1). Ahmedabad, ITAT Ahmedabad \"A\" Bench [ITA No.1078/AHD/2009] wherein it was held as under: “The findings of the A O would show that A O has assumed certain facts which are not on record of the A O or that the same are not supported by any material on record. A O has not brought sufficient and cogent material/evidence against the assessee to prove that assessee made payment of “on money\" in cash over and above the consideration shown in the MOU and sale deeds. No statement of any person has been recorded in whose case loose papers were recovered to explain the entries contained therein. Learned DR admitted that AO has not relied upon any statement of the builder against the assessee and that no such copy has been received by him. Similarly, no statement in the comparable cases has been produced before us. It would prove that even in the comparable cases no statement is recorded against the interest of the assessee. The surrender made in 4 comparable cases has not been confronted to the assessee. The above facts prove that there is no evidence on record that the seized paper is connected with the assessee or that assessee has in fact made the cash payment Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 8 of 11 to the builders over and above the amount mentioned in the documents. No evidence of actual payment of cash was found. No evidence of excess amount paid was found. No handwriting of the assessee's director or connected person was found on the seized papers. The director of the assessee company never admitted payment of on money in cash in his statement. Since, assessee is a purchaser, therefore, section 50C of the IT Act would also not apply in its case as is held in the case of ITO vs. Venu Proteins Industries reported in 4 ITR (Tribunal) 602 (Ahmedabad). It may also be noted here that in the seized papers the names of “Shri Jatin Parikh/ Trident (india)\" is mentioned but the name of the assessee is M/s.Trident Creations Pvt. Ltd., which is not mentioned in the seized papers would prove that the seized papers do not belong to the assessee. There is also no mention in the loose papers if any cash payment is made by the assessee company to the builders. The builders/sellers from whose possession seized papers have been recovered have not made any statement against the assessee, therefore, the entries or notings contained in the loose papers found from the possession of the builders are not sufficient to make the addition against the assessee. There is no other corroborative material or independent evidence available on record against the assessee. The submissions of the learned DR are based upon assumption only that since 4 parties made payment of “on money” to the builder, therefore, there is a presumption against the assessee that assessee also paid “on money” in cash. Since, the AO wanted to tax the alleged payment of \"on money\" in the case of the assessee; therefore, burden was upon the AO to prove that assessee made payment of \"on money\" from undisclosed sources, which has not been discharged in this case. Considering the facts and circumstances of the case, we are of the view that the AO has not brought sufficient material against the assessee to make the above addition. The AO made addition merely on suspicion and assumption of facts, which cannot take place of legal proof. It is thus a case of no evidence for making the addition. We are, therefore, of the view that the authorities below were not justified in making the addition against the assessee. We accordingly, set aside the orders of the authorities below and delete the entire addition ii. It is also relevant to refer to decision of Hon'ble High Court of Gujarat in case of ITO vs. Bharat A. Mehta [[2015] 60 ITR 31 (Gujarat)) wherein it was id as under: “On further appeal, the Tribunal, on facts, held that as per the allotment letter and other documentary evidence, the assessee had shown to have paid only Rs.6 Lakhs and Rs.12,000/- for acquiring the bungalow. Secondly, inspite of the search, the revenue authorities could not lay hand on any document which could show that the assessee had paid 'on-money. Thirdly, the AO could not extract Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 9 of 11 from the witness that the assessee had paid on money inspite of concealed threat in cross-examination. The Tribunal, therefore, deleted the addition made u/s.69. Under the circumstances, the finding recorded by the Tribunal to the effect that the revenue failed to provide that the assessee made undisclosed investment in the bunglows of ‘Tulip’ Scheme does not give rise to any substantial question of law. The finding regarding non-payment of on money by assessee is a question of fact and no substantial question of law arises and, consequently, the Tribunal's order deleting the addition to the income u/s.69 does not raise any question of low where, the Tribunal did not find any material evidence to establish that the assessee made investment over and above what was recorded in the ROI filed by the assessee. In view of the above, no interference is called for in the present appeals and the same are to be dismissed.\" It is evident that the AO has failed to produce any corroborative evidence on record to demonstrate that the land was sold at Rs.71,000/- per square yard or that any cash component was received over and above the registered sale value of Rs. 20 Crores or that any transaction materialized at the quoted rate with Shri Sandeep Narshinbhai Patel. Moreover, Banakhat (agreement to sale) dated 15.02.2019 with Shri Sandeep Narshinbhai Patel and appellant and appellant's brothers were much before three months from the whatsapp chat dated 03.05.2019 relied by the AO in making addition in the hands of the appellant. Therefore, addition of Rs.19.61,99,000/- was made solely on the presumption that the land was sold at the rate of Rs.71,000/- per square yard, a rate that was merely quoted in a WhatsApp chat to a third party, Shri Kaushalbhai, with whom the appellant had no transaction. It is a settled legal principle that an addition under the Act must be supported by tangible and conclusive evidence. In the absence of any such evidence, the AO's reliance on an isolated WhatsApp chat, without any further corroboration, is wholly unjustified and unsustainable in law. It is a settled principle of law, that a doubt however, be strong cannot take the place of evidence. There should be some clinching material on record to prove the allegation beyond any reasonable doubt. However, the same is absent in the present case under consideration. In view of the above discussion, the facts and circumstances of the case, and the relevant judicial precedents supra, the addition of Rs.19,61,99,000/- cannot be sustained and deserves to be deleted. Accordingly, the AO is directed to delete addition of Rs.19,61,99,000/-. Grounds of appeal No.2 and 3 are allowed.” 9. It is found that the Ld. CIT(A) has meticulously examined each and every aspect of the transaction and given a categorical finding as to why the addition of Rs.19,61,99,000/- in respect of unaccounted cash received could not have been made. The Revenue has been unable to controvert Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 10 of 11 the findings of the Ld. CIT(A). One of the contentions of the Revenue is that when the rate for the land was quoted at Rs.71,000/- in the WhatsApp chat, the property could not have been sold at a much lower rate. However, the Revenue has been unable to bring on record any evidence to substantiate the rate of Rs.71,000/- for this sale transaction. The WhatsApp chat was not with the buyer of the land but with a third person and the rate quoted therein can’t be considered as conclusive evidence for the rate. Merely because certain rate was quoted to a prospective buyer, the said rate can’t be considered as final rate for the sale transaction with another person. The Revenue has also not brought on record any evidence that any other property in the same locality was sold at the rate of Rs.71,000/- or at a comparable rate. The principle of surrounding circumstances and preponderance of probabilities required any other instance of actual sale transaction at a comparable rate. In the absence of any such evidence, the rate of Rs.71,000/- as appearing in WhatsApp chat can’t be considered as sacrosanct. Neither the matter was referred by the AO to the DVO to find out the fair market value of the property. Further, if the property was sold at a rate higher than as appearing in the sale deed, then certain evidence for receipt of extra consideration should have been found in the course of search. As already mentioned earlier, no evidence of receipt of any on-money in respect of the sale consideration of the land, was found from the assessee or from the other co-owners, in the course of search. If the Revenue wanted to tax the on-money consideration of the sale transaction, the burden was squarely on the Assessing Officer to establish that the assessee had received on-money in this transaction. The buyer of the property had also not admitted having made any on-money payment in this transaction. In the absence of any such evidence, the addition as made by the Assessing Printed from counselvise.com IT(SS)A No.52/Ahd/2025 Assessment Year: 2020-21 ACIT vs. Anil Rambhai Mevada Page 11 of 11 Officer is based purely on suspicion and assumption of facts, which could not have been sustained. We, therefore, do not find anything wrong with the order of the ld. CIT(A) on the issue. Accordingly, the order of the Ld. CIT(A), deleting the addition of Rs.19,61,99,000/- in respect of unaccounted cash received on sale of land, is upheld and the grounds taken by the Revenue are rejected. 10. In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on this 29th July, 2025. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 29thJuly, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE C Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "