DIVYANG DIPAKKUMAR VYAS,AHMEDABAD V. THE DY.CIT, CENTRAL CIRCLE-1(4), AHMEDABAD

ITA 1178/AHD/2025

AI Insights

The case involves four appeals filed by the assessee, Divyang Dipakkumar Vyas, against the common order passed by the Learned Commissioner of Income Tax (Appeals)-11, Ahmedabad, for the Assessment Years 2019-20 to 2022-23. The appeals were consolidated due to common facts and identical issues. The primary contention was regarding the addition of Rs. 20,30,000 as unaccounted brokerage income based on rough jottings and loose papers seized during a search operation. The Tribunal found that the additions were made without any corroborative evidence linking the assessee to the alleged brokerage income, and thus, following the decision in a similar case, the additions were deleted.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793550 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Appeal Filed On: 23-05-2025
• Other Referred Cases: Shri Pravin Bavadiya in ITA No. 1896/Ahd/2024 for A.Y. 2021-22
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C. DHARANI NATH
• Assessee Lawyers: VARTIKCHOKSHI
• Keywords: Business income; Document seized; Documents seized; Principle of natural justice; Search and seizure; Loose papers
• Section: 148; 143(3); 142(1); 132

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA Nos. 1175 to 1178/Ahd/2025 (Assessment Year: 2019-20 to 2022-23) Divyang Dipakkumar Vyas, 74, Shivalik Bungalows, Anand Nagar Char Rasta, Satellite, Ahmedabad-380015 [PAN :AAJFN 6616 L] Vs. DCIT, Central Circle 1(4), Ahmedabad (Appellant) .. (Respondent) Appellant by : Shri Vartik Chokshi, AR Respondent by: Shri C. Dharani Nath, Sr Dr Date of Hearing 17.09.2025 Date of Pronouncement 23.09.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay condoned. The captioned four appeals have been filed by the Assessee against the common order dated 20.08.2024 passed by the Learned Commissioner of Income Tax (Appeals)-11, Ahmedabad, (‘Ld. CIT(A)’ in short), under Section 250 of the Income-Tax Act, 1961 (‘the Act’ in short), for the Assessment Years 2019-20 to 2022-23. 2. Since common facts and identical issues are involved in all these appeals, they were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity. 3. In all these appeals, the grounds raised by the assessee are identical and reproduced hereunder for reference:- “1. In the law and facts and circumstances of the case, the Ld. CIT(A) ought to have quashed the assessment order being void-ab-initio, illegal and without jurisdiction and not following the natural justice. Printed from counselvise.com ITA Nos. 1175 to 1178/Ahd/2025 Divyang Dipakkumar Vyas Vs. DCIT Asst. Year : 2019-20 to 2022-23 - 2– 2. In the law and facts and circumstances of the case, the Ld. CIT(A) has erred in holding that the appellant had received brokerage on estimate basis on the total value on the basis of survey/inquiry list particularly when no evidence relating to earning of alleged brokerage or any other incriminating evidence was found during the course of search and relied upon by the Assessing Officer in the assessment order. 3. In the law and facts and circumstances of the case, the Ld. CIT(A) has erred that the appellant has received brokerage on the basis of rough jottings when no evidence relating to earning of alleged brokerage or any other incriminating evidence was found during the course of search and relied upon by the Assessing Officer in the assessment order.” 4. The brief facts of the case are that the assessee filed its original return of income for the A.Y. 2019-20 u/s 139(1) on 22.08.2019 declaring total income of Rs. 6,65,550/-. A search and seizure operation u/s 132 of the Act was conducted on 28.09.2021 in the case of “B. Safal Group and City Estate Management Group”, wherein the assessee’s premises were also covered. Pursuant thereto, notice u/s 148 was issued on 10.06.2022. The assessee filed return of income in response on 09.07.2022 declaring total income of Rs. 6,65,730/-. Notices u/s 143(2) and 142(1) were subsequently issued. The assessment was completed u/s 143(3) r.w.s. 147 of the Act on 29.03.2024, whereby the Assessing Officer made an addition of Rs. 20,30,000/- on account of alleged unaccounted brokerage income for A.Y. 2019-20. 4.1 It was noted by the Assessing Officer that the assessee and Shri Pravin Bavadiya were partners in the City Estate Group, sharing profits in the ratio of 20:80. The Assessing Officer alleged that unaccounted brokerage income of Rs. 84,00,000/- had been earned during the relevant period, based on certain seized documents. Accordingly, Rs. 20,30,000/- was taxed in the hands of the assessee as his 20% share in the alleged brokerage. 5. We have heard the rival contentions and perused the material available on record. We find that the addition made in the hands of the assessee is based solely Printed from counselvise.com ITA Nos. 1175 to 1178/Ahd/2025 Divyang Dipakkumar Vyas Vs. DCIT Asst. Year : 2019-20 to 2022-23 - 3– on alleged rough jottings or loose papers seized during the course of search, which purportedly relate to brokerage income. However, we find that, on identical facts and issue, the Coordinate Bench of the Tribunal in the case of Shri Pravin Bavadiya in ITA No. 1896/Ahd/2024 for A.Y. 2021-22 vide order dated 09.05.2025, has deleted the addition made on account of similar unaccounted brokerage income. 5.1 The Tribunal, after analyzing the seized materials and noting the absence of corroborative evidence such as names of buyers/sellers or properties, held that the additions made on the basis of loose papers were unsustainable. The relevant portion of the Tribunal’s decision in Shri Pravin Bavadiya’s case reads as under: “8. Coming to ground no.4, raised by the Revenue, namely deleting the addition of Rs.43,50,000 u/s.69A r.w.s. 115BBE of the Act on account of unexplained and unaccounted brokerage income ignoring the seized material & statement recorded during/post search proceedings. 8.1. It is noted that the Department has challenged the deletion of addition of Rs.43.50 lacs u/s.69A r.w.s. 115BBE of the Act on account of unexplained and unaccounted brokerage income. It has already been discussed at length in the foregoing paragraphs that the assessee is a broker and any income determined on the basis of seized material unearthed during the course of search proceedings should be added as unaccounted business receipts earned from the activity of rendering brokerage services to its clients/customers. Therefore, this ground raised by the revenue fails. Any income earned by a real estate broker can be taxed only as unaccounted business receipts of the assessee and not section 69A of the Act. Coming to the merits of the case, the learned A.R. has pointed out during the course of hearing invited our attention to the facts as reproduced by the learned CIT(A) in para 27 onwards on page 74 of the appellate order. It is noted that the addition was made based on a loose paper found from the premises of Mr. Divyang Vyas which has been reproduced at para 27.1 of the order of the CIT(A). It is noted that the addition of Rs.43.50 lacs has been made on the basis of instances mentioned at page No.55 of the seized material, Annexure A-3, sr. No. 1 to 9. The items which have been mentioned in the above list do not indicate the name of the property, the details of purchaser - seller and, therefore the question of making any addition based on such loose paper is uncalled for. At most, the notings which have been made on pages 54, 55, 56 & 57 of Annexure A-3, are merely instances reproduced in the loose paper and do not indicate or lead to a conclusion that Printed from counselvise.com ITA Nos. 1175 to 1178/Ahd/2025 Divyang Dipakkumar Vyas Vs. DCIT Asst. Year : 2019-20 to 2022-23 - 4– the assessee could have earned unaccounted brokerage income from any of the deals. Accordingly, the Ld CIT(A) has rightly deleted the addition of Rs.43.50 lacs made by the Assessing Officer. Therefore, we are inclined to agree with the findings given by the CIT(A) and we hereby uphold deletion and the Ground no.4 raised by the Revenue is devoid of merits and dismissed.” 5.2 In the instant case also, the addition is made based on estimated brokerage income drawn from the same seized material and without any independent corroborative evidence. No specific transactions, parties, or confirmations have been brought on record to establish that the assessee actually received any such brokerage income. Therefore, respectfully following the above order of the Coordinate Bench, the addition made in the case of the present assessee is liable to be deleted. 6. Since the facts and issues involved in all the captioned Assessment Years, i.e. 2019-20 to 2022-23, are identical and the additions have been made on the same basis and under similar circumstances, the reasoning and conclusion drawn above shall apply mutatis mutandis to all the four appeals. 7. In the result, all the appeals of the assessee are allowed. The order is pronounced in the open Court on 23.09.2025. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 23.09.2025 **btk Printed from counselvise.com ITA Nos. 1175 to 1178/Ahd/2025 Divyang Dipakkumar Vyas Vs. DCIT Asst. Year : 2019-20 to 2022-23 - 5– आदेश आदेश आदेश आदेश क\u0007 क\u0007 क\u0007 क\u0007 \b त ल प \b त ल प \b त ल प \b त ल प अ\u0010े षत अ\u0010े षत अ\u0010े षत अ\u0010े षत/Copy of the Order forwarded to : 1. अपीलाथ\u0015 / The Appellant 2. \b\u0016यथ\u0015 / The Respondent. 3. संबं\u001bधत आयकर आयु त / Concerned CIT 4. आयकर आयु त(अपील) / The CIT(A)- 5. वभागीय \b त न\u001bध, आयकर अपील$य अ\u001bधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड) फाईल / Guard file. आदेशानुसार आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, True Copy सहायक सहायक सहायक सहायक पंजीकार पंजीकार पंजीकार पंजीकार (Dy./Asstt. Registrar) आयकर आयकर आयकर आयकर अपील$य अपील$य अपील$य अपील$य अ\u001bधकरण अ\u001bधकरण अ\u001bधकरण अ\u001bधकरण, अहमदाबाद अहमदाबाद अहमदाबाद अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation ….words processed by Hon’ble VP on his PC on 19.09.2025 2. Date on which the typed draft is placed before the Dictating Member ….22.09.2025 3. Other Member …..22..09.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S …….22.09.2025 5. Date on which the fair order is ed before the Dictating Member for pronouncement …...23.09.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S ……….23.09.2025 7. Date on which the file goes to the Bench Clerk …......23.09.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "