K MEHTA & CO.,AHMEDABAD V. THE ACIT, CNTRAL CIRCLE-1(2), AHMEDABAD

ITSSA 74/AHD/2024

AI Insights

The case involves two separate but related appeals by K. Mehta & Co. and Relief Construction Co. against the orders of the Commissioner of Income Tax (Appeals)-11, Ahmedabad, which confirmed the additions made by the Assessing Officer under sections 69B and 69C read with section 115BBE of the Income Tax Act, 1961. The additions were based on the alleged 'on-money' payments and brokerage fees related to a land transaction. The Tribunal's decision was influenced by the lack of direct evidence linking the assessees to the cash transactions and the reliance on the statements of a third party, Shri Suresh R. Thakkar, who later retracted his statement.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41123 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Other Referred Cases: CBI vs. V.C. Shukla, Commissioner of Income Tax-II vs. Dhirajlal Durlabhbhai Patel HUF, ITO Ward vs. M/s. Akash Developers, Common Cause vs. UOI (Sahara Diaries), Shri Hitesh Patel vs. ACIT, M/s Riveria Properties Pvt Ltd vs. ITO, ACIT vs. Jas Infra Space Pvt. Ltd, CIT vs. Smt. Sakuntala Devi Khetan, T.S. Venkatesan vs. ACIT, M/s. K. Mehta & Co. vs. ACIT/DCIT, M/s. Relief Construction Co. vs. ACIT/DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. P. SINGH
• Assessee Lawyers: A.O. OF SEARCHED PERSON
• Keywords: Business income; Unexplained expenditure; Period of limitation; Retraction; Search and seizure; Loose papers; Time period of passing order
• Section: 143(3); 64; 208; 13; 153C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI T.R.SENTHIL KUMAR, JUDICIAL MEMBER IT(SS)A No.74/Ahd/2024 IT(SS)A No.102/Ahd/2024 (Assessment Year: 2020-21) K. Mehta & Co. 2nd Floor, P.K. House B/h. M.J. Library Ahmedabad The DCIT Central Circle-1(2), Ahmedabad Vs. The ACIT, Central Circle-1(2), Ahmedabad K. Mehta & Co. Ahmedabad PAN No. AACFK 4377 N (Appellants) (Respondents) IT(SS)A No.75/Ahd/2024 IT(SS)A No.103/Ahd/2024 (Assessment Year: 2020-21) Relief Construction Co. 2nd Floor, P.K. House B/h. M.J. Library, Ahmedabad The DCIT Central Circle-1(2) Ahmedabad Vs. The DCIT Central Circle-1(2) Ahmedabad Relief Construction Co. Ahmedabad PAN No. AAFFR 0770 B (Appellants) .. (Respondents) अपीलाथŎ ओर से/ Assessee(s) by : Shri Tej Shah, AR ŮȑथŎ की ओर से/Revenue by : Shri A.P. Singh, CIT-DR सुनवाई की तारीख/ Date of Hearing 23/01/2025 घोषणा की तारीख /Date of Pronouncement 03/03/2025 IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 2 : आदेश / O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: These cross-appeals are filed by two different assessees and by Revenue as against separate appellate orders both dated 31/07/2024 passed by the Commissioner of Income Tax [Appeals]-11, Ahmedabad [hereinafter referred to as “the CIT(A)] arising out of the separate assessment orders passed u/s.153C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) relating to the Assessment Year (AY) 2020-21. 2. Since the common issue of purchase of land by the above two assessees as co-owners in the ratio of 50% each and additions are made at 50% each on the above co-owners, therefore for the sake of convenience, the above appeals are disposed of by this consolidated order. IT(SS)A No.74/Ahd/2024 for AY 2020-21 in the case of M/s. K. Mehta & Co. is taken as the lead case. 3. The assessee is a partnership-firm engaged in the business of building contractor and developer. For the AY 2020-21, the assessee filed its return of income on 09-10-2020 declaring loss of Rs.46,537/-. The return was processed u/s.143(1) of the Act on 03-03-2022. Thereafter, the case of the assessee was reopened and re-assessment u/s.143(3) r.w.s.147 of the Act was passed on 06-06-2023 determining the total loss at Rs.46,540/-. IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 3 : 3.1. A search and seizure action u/s.132 of the Act was carried out on 15-10-2019 in the case of Suresh Ranchhodbhai Thakkar, who had been involved in land broking business. During the course of search, certain incriminating material/digital data were found and seized which were related to/pertained to the assessee- firm. Therefore, a notice u/s.153C of the Act was issued on 30- 06-2023. In response, the assessee filed a return of income for the AY 2020-21 on 04-07-2023 declaring total loss of Rs.46,533/. The Assessing Officer issued a show-cause notice enclosing images and documents found from the mobile phone of Shri Suresh R. Thakkar marked as page numbers 131, 140, 155 and 208 relating to the land admeasuring 5059 sq.mtrs at Laxmipura, Lambha, Ahmedabad, wherein part of the copy of Cancellation Agreement between Shri Umang Thakkar and Smt. Tarini Johri. As per page number 208, Sale was made between Shri Umangbhai Thakkar and Shri Mahesh Mehta purchased the above land at Rs.10,500/- per sq.yds. which resulted in total sale consideration as Rs.6,35,30,880/-. Whereas the registered document price of the land was Rs.96 Lakhs while sale-deed registered as per document No.7670 dated 19-06-2019. Hence, the balance amount of Rs.5,39,30,880/- was transacted in cash between parties. In the lower part of page No.208, there is working of payment of cash along with interest on delayed payment which is reproduced as follows: IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 4 : 3.2. The A.O. held that the above working clearly proves that on- money payment in cash was involved in the deal which was paid by the two assessees namely M/s. K. Mehta & Co. and M/s. Relief Construction Co. to the seller namely Shri Umang H. Thakkar. Further, the AO relied upon the statement recorded u/s.132(4) of the Act of Shri Suresh R. Thakkar and issued a show cause notice to make addition. In response, the assessee made a detailed reply as follows: “1. Notings in these images are notings & jottings for various transactions with third parties and not related to the assessee. 2. There is no signature of the assessee on these images. 3. No any agreement/ chitthi / evidences found in search, which shows that the property in question has been purchased by the assessee and co-owner at Rs..6,35,30,880/-. IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 5 : 4. Notings by third party cannot be considered as sole evidence to make addition without any logical and rational weighting, not acknowledged / signed by the assessee. 5. There is no any evidences of cash payments/on-money as between Shri Umang Thakkar and the assessee. Further, there is no mention of any date, sign and amount of alleged cash payment in the loose paper seized from the possession of Shri Suresh Tahkkar. 6. The assessee objects to the proposed addition based on digital images not related to it and states that it had not given any on-money or cash for purchase of the property situated at Laxmipura, Vatva, Ahmedabad. 7. The assessee has explained facts of case and furnished detailed explanations. However, if the AO has any other cogent evidences and statements, the same may be provided along with opportunity to cross- examine to Mr. Umang Thakkar and Suresh Thakkar. No adverse view may be taken against assessee, as these seized pages are merely notings & jotings found from the possession of mobile data of third parties and not written and signed by assessee. 8. It is submitted that purchase as per deed executed during the AY.2020- 21 the year under consideration was at prevailing jantri rate and no document/evidence seized as referred in the notice which in fact proves that the assessee has made on-money payment as alleged by the your honour A.O. and that in the absence of any corroborative evidence. 9. It is also submitted humbly that the assessee has sold the property in question for Rs.2,50,00,000/- On 07/06/2021 whereby the assessee has 50% share ie. Rs. 1,25,00,000/- and it declared the profit of Rs. 74,16,500/- on the said sale of the property of its 50% share of profit in profit & loss account and same contention has been accepted by the Ld. A.O. with regard to same land when department has accepted the sale price of the said land at Rs. 1,25,00,000/- The said sale deed is annexed herewith as per Annexure-2 10. It is also humbly requested to your honour to provide any comparable evidences and moreover matter may be referred to the DVO for ascertaining actual cost of the land to meet the end of the justice. 11. Further, except noting/jotting/ from the digital data in mobile phone of Shri Suresh Thakker, that no other cogent evidences ie, cash vouchers or cash trail, were referred by your honour to prove the allegation of the on money/cash transactions of the purchase of the Property. It is therefore IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 6 : contended that uncorroborated noting in loose papers should not be acted upon to derive any inference against the Assessee. 12. It is also respectfully submitted that the A.O. of the searched person as well as Jurisdictional A.O. of the assessee has recorded the satisfaction note without properly perusing the contents of the alleged loose papers/digital data obtained from the Phone of Shri Suresh Thakkar. It is also submitted that the satisfaction note in case of the appellant by A.O. of searched person and jurisdictional A.O. is recorded on 12/06/2023 ie. much after the date of completion of assessment of searched person. It is submitted that inordinate delay in recording of the satisfaction note by the AO of the searched person, in view of the circular of the Hon'ble CBDT, the proceedings are Non-Est hence bad in law and AO could not have assumed the jurisdiction thereto. Reliance also placed in the case of Anilkumar Gopikishan Agrawal of Jurisdictional Gujarat High Court. 13. It is also submitted that there is no date and signature of any of the party as mentioned in the alleged loose papers and it is only on the basis of the statement of Shri Suresh Thakkar the proceedings under section 153C has been initiated. Further, it is observed from the satisfaction note that the same completely fails to bring out on record as to in which years and in which manner and how muсh income in which assessment years, needs to be brought to tax. 14. The Assessee reley on the following judicial pronouncements: i. Hon'ble Supreme Court in CBI vs. V.C. Shukla (1998) (3) SCC 410 ii. Hon'ble Gujarat High Court in the case of Commissioner of Income Taxe-II V Dhirajlal Durlabhbhai Patel HUF iii Hon'ble ITAT Ahmedabad in the identical case of ITO Wardand M/s. Akash Developers ITA No.430/AHD/2019 iv. Common Cause Vs. UOI (Sahara Diaries) in writ petition (Civil) Nos. 505 of 2015. v. Income tax appellate tribunal \"a\" bench, ahmedabad in the case of shri hitesh Patel vs. Acit, anandita no.2778/ahd/2012 vi. ITAT, Delhi SMC Bench ITA No. 5936/Del/2016 in the case of SH. VIKAS KAPOOR, VS ACIT, CENTRAL CIRCLE-04, vii. ITAT, Mumbai 'C' Bench in the case of M/s Riveria Properties Pvt Ltd Vs. ITO, ITA No. 250/Mum/2013, where in it is held that, 15. It is also submitted that your honour have produced the extract of the statement of Shri Suresh Thakkar which was recorded under section 132(4) of the Act and merely on the basis of said statement you have proposed the above addition. The relevant extract of statement of Shri Suresh Thakkar is as under: IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 7 : Page No. 131, 140, 155 & & 208 are related to sale of land of Block No. 107 admeasuring 5059 Square meter TP No. 81 situated in Laxmipura, Lambha. e page No. 131 is copy of cancellation of Bankhat agreement carlier Ahmedabad. The page done by Umangbhai Thakkar with Smt. Tarini Johri (PAN: AWXPJ8719]]. The deal was cancelled and subsequently sold by Umangbhal Thakkar to Shri Mahesh K. Mehta. This deal has been facilitated through me. The land bearing Survey No. 187 admeasuring 5059 Square meteres ie. 6050 square yards K. Mehta at the rate of Rs. 10,500 per has been sold to Mahesh 500 per square yard, and the total sale consideration is Rs. 6,35,30,800/-. The documented price of the land is Rs. 96 lakhs and the balance amount of Rs. 5,39,30,880/-has been 208 there is working of payments delayed payment. paid in cash. On the lower part of page No. of cash alongwith the working of Interest I further want to submit that I have not yet received dalali which will be 1% on the quantum of the deal amount. On the quantum of the deal amount. In this regard, the assessee submits that mere admission in statement without any corroborative evidence or material cannot be relied. It is also worthwhile to mention here that the statement of Shri Suresh Thakkar is general in nature, further no date or year of the payment and amount has been mentioned by him in his statement. The assessee has explained facts of case and furnished detailed explanations. However, your honur is requested to provide opportunity to cross-examine Shri Suresh Thakkar. It is also humbly submitted to your honour that there is no sanctity of the statement of Shri Suresh Tahkkar, as it is gathered from the reliable sources that Shri Suresh Thakkar has already retracted his statement and therefore no addition can be proposed on the basis of the statement of Shri Suresh Thakkar. Further, the assessee relies on following case laws: i. ACIT vs. Jas Infra Space Put. Lid ITA No.2130/Ahd/2017 vide Order 28-01-2022 (A'bad-ITAT) ii. Hon'ble Madras High Court in the case of CIT us. Smt. Sakuntala Devi Khetan reported in 33 taxmann.com 98 iii. Hon'ble Supreme Court in CBI us. V.C. Shukla (1998) (3) SCC 410 iv. ITAT Kolkatta in the case of T.S. Venkatesan Vs. ACIT 69 TTJ (cal) 66 Further, it is also well settled that no addition could be made in the hands of the Assessee simply on the basis of a statement. Ref. S Khader Khan IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 8 : Sons - (2008) 300 ITR 157 (Mad) affirmed in 352 ITR 480 (SC), Satinder Kumar v/s. ACIT- (1977) 106 ITR 64 (HP). It is a settled proposition of law that no addition can be made on the basis of a statement made by third party against the assessee. First Global Stocking (P.) Ltd. US, ACIT (2008) 115 TTJ (Mum) 173, Dalpat Singh Choudhary vs. ACIT (2012) 143 TTJ 500 (Jodhpur), ACIT vs. Mrs. Uttara S. Shorewala (ITA No. 5506 & 5507/Mum/2009 and CO. [ΙΤΑ 5068/M/2009). No 107/Mum/2010), Jafferali K. Rattonsey vs. DCIT [ITA 5068/M/2009]. From the submission made above and facts of the case for your kind consideration, it is requested that no adverse view may be taken against assessee in respect of the alleged on money payment of Rs. 5,39,30,880/- towards purchase of the property.” 3.3. The above reply was taken on record however the same was not found acceptable by the AO since page No.208 clearly mentioned Shri Maheshbhai Mehta, (Partner of M/s. K. Mehta & Co.) and the extent of land 5059 sq.Yds. and Survey No.187 clearly matching with the transactions made by the assessee. Since the assessee purchased the above land as co-owner being its 50% share amounting to Rs.2,69,65,440/- was added as on- money paid in cash by the assessee u/s.69B r.w.s.115BBE of the Act. The AO also further added the commission payment to Shri Suresh R. Thakkar of Rs.3,17,654/- and belated payment of Rs.50,000/- amounting to Rs.3,67,654/- u/s.69C r.w.s.115BBE of the Act and demanded tax thereon. 4. Aggrieved with the assessment order, the assessee filed an appeal before the CIT(A). The Ld CIT(A) confirmed the addition being its 50% share amounting to Rs.2,69,65,440/- as on-money paid in cash by the assessee u/s.69B of the Act and dismissed the ground raised by the assessee. However Ld CIT[A] held that IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 9 : the on-money payment and brokerage payment are part of regular business income of the assessee’s partnership firm and to be taxed accordingly as business income and not invoking section 115BBE of the Act and thus partly allowed the appeal in favour of the assessee. 6. Aggrieved against the appellate order, both the Assessee and Revenue are in cross-appeals before us by raising following Grounds of Appeal(s): Assessee’s appeal in IT(SS)A No.74/Ahd/2024: “1. The Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in assuming jurisdiction and issuing notice u/s 153C of the act. 2. The Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in issuing notice u/s 153C of the act without any material pertaining/belonging to the appellant and only on the basis of statement of 3rd party. 3. The Ld. CIT(A) erred in law and in the facts of the case in directing the AO in making an addition of Rs. 2,69,65,440/-being undisclosed income in the form of on money and Rs. 3,67,654/- being brokerage payment for purchase of land. 4. The Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in not providing opportunity of cross examination of the person on whom the AO has relied upon to make addition. 5. The Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in not referring the matter to the DVO to determine the value of the land in question. 6. Your appellant craves for leave to add, amend or alter all or any of the grounds before or during hearing of these cross objections.” IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 10 : 7. We have heard rival submissions at length and perused the materials available on record including Paper Book and Case Laws filed by the assessee. The Ld. Assessing Officer based on the digital images found from the mobile phone of Shri Suresh R. Thakkar more particularly at Page No. 208, notings made in piece of paper held that the assessee firm has paid ‘on-money’ of Rs. 2,69,65,440/- being assessee’s 50% on purchase of the land in Survey No. 187. The Assessing Officer also reproduced the Cancellation of Agreement between the landlord Shri Umangbhai Thakkar and the purchaser Smt.Tarini Johri. The relevant digital photo marked as Page Nos. 131, 140 and 155 reproduced in the assessment order at Page No. 3 & 4 respectively. 7.1. However, the Assessing Officer is silent about the date of Cancellation deed, transaction amount between the parties. It is thereafter the A.O. referring to the digital image of the loose paper named as Shri Mahesh Mehta and Laxmipura-187 thereby came to the conclusion that the assessee paid ‘on-money’ of Rs. 2,69,65,440/- and also brokerage payment of Rs. 3,67,654/-. The so called statement of Shri Suresh R. Thakkar recorded u/s. 132(14) reads as follows: “Page No. 131, 140, 155 & 208 are related to sale of land of Block No. 187 admeasuring 5059 Square meter TP No. 81 situated in Laxmipura, Lambha, Ahmedabad. The page No. 131 is copy of cancellation of Bankhat agreement earlier done by Umangbhai Thakkar with Smt. Tarini Johri (PAN: AWXPJ8719)). The deal was cancelled and subsequently sold by Umangbhal Thakkar to Shri Mahesh K. Mehta. This deal has been facilitated through me. The land bearing Survey No. 187 admeasuring 5059 Square meteres i.e. 6050 square yards has been sold to Mahesh K. Mehta at the rate of Rs. 10,500 per square yard, and the total sale consideration is Rs. 6,35,30,880/-. The IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 11 : documented price of the land is Rs. 96 lakhs and the balance amount of Rs. 5,39,30,880/-has been paid in cash. On the lower part of page No. 208 there is working of payments of cash alongwith the working of interest on delayed payment. I further want to submit that I have not yet received dalali which will be @ 1% on the quantum of the deal amount.” 7.2. It is undisputed fact that Shri Suresh R. Thakkar is only a land–immediator and not owner of the land. Based on the statements recorded of Shri Suresh R. Thakkar, the above addition is made by the Assessing Officer. This digital images are not related to the assessee firm and there is no signature and there is no hand writing of the assessee in the above images. Correspondingly, the A.O. is not found any Agreement or Banakhat or any piece of evidences for payment of cash found during the course of search. 7.3. Further Shri Suresh R. Thakkar in his statement recorded clearly submitted that he has not received his commission (Dalali) which will be at 1% on the quantum of the deal amount. Thus the Assessing Officer without any seized material but only with this piece of digital image recovered from the search premises. Merely based on the ground that the survey no. and name of Shri Mahesh Mehta reflecting in that piece of loose paper the Ld. A.O. came to the conclusion that ‘on-money’ of Rs. 2.69 crores paid by the assessee. Further the assessee was not given any opportunity of cross-examining the so called Shri Suresh R. Thakkar based on which addition was made by the A.O. It is well settled principle of law mere admission in statement without any corroborative evidence or materials cannot be the basis for making additions in the hands of the assessee. Further the Assessing Officer is totally IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 12 : silent about the retraction (Notarized) statement dated 11-09- 2019 made by Shri Suresh R. Thakkar, which is placed at Page Nos. 196 to 211 of the Paper Book (with the duly English translation). The relevant portion of retraction statements are as follows: “5 During the proceedings of search, many here and there papers which cannot be said any proper record, such papers were seized by the Income Tax officers. 6. From my mobile and other digital data also, such here and there papers which mast probably were not in my handwriting, those were collected by the Income Tax officers. 7. During the proceedings of search, I have made aware with that talk to all the officers that I am doing the work of brokerage of land and in its connection, true false proposals related to so many lands are coming. 8. I also had informed that talk that in the era of present social media, small big brokers and other people are sending false and true proposals to me on whatsapp. Such many proposals are not transferring in the true transactions and if might have done, then also not doing according to the relevant rate or terms and conditions. 9. I also have informed that talk to the Income Officers that Kachi Bana Chitthi wherein so many times, any signature, rate are not being written, in such Kachi Bana Chitthi are exchanged by the brokers, there is no its any true meaning or trueness. So many times due to legal complications and family quarrels, such deal actually being not made final and if may be final, then also, it being done at very less rate. 10. So many times, where, signature of the relevant parties being made, in Banakhat or Bana chitthi also, the dealings are standing due to so many changes in the family and legal or government procedures or are being final in the insignificant value. …………………….. IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 13 : 23. So many here and there papers in which there may not be any survey number or any proper description, then also, by joining with some survey number, my statement was taken. As per example, some here and there papers which were received from my office which was not the part of any diary or regular record, on which, there was no date, time, description of the land, name of the party or any signature, even though also, such papers were joined with Survey No. 194 situated at Okaf, Sarkhej, Ahmedabad. I have clearly stated such that any sale deed for Sarkhej Okaf 194 was not executed and even on this date also, it is not executed, I have told forcefully that the inquiry and the here and there proposals of the so many lands are being come to me from Ahmedabad and surrounding rural area through whatsapp and it is not proper to join Kachi entry or proposal of any such land with Sarkhej Okaf survey No. 194. 24. In such manner also, one paper of rough proposal of some lands situated at Kachariya village Survey Nos. 270, 270/1, 271, 285, 283, 289 was received, for which actually there was any concern with any sale deed. 25. The details of any cheque written therein is not tallied with my book also. Suspending all these talks and the facts, joining the paper with that survey number, statement is written, therefore, the statement taken in such manner is not binding to me or any other person. 26. As per the above situation, whatsoever some promissory notes and blank cheque related to any friend obtained from my house in the search proceedings, in its reply, I had stated that true fact that I, as a friend only, these cheque which are of very old dates, those are saved, which are not approved in the bank on this date because its limitation period is completed, but as per my knowledge, the Income Tax officer have noted whatsoever words of my statement against the fact, the any liability of Income Tax to be arisen due to it, is not binding to me or any other person.” 7.4. In his retraction statement Shri Suresh R. Thakkar made it very clear in the present social media era, small big brokers and other people are sending false and true proposals to him on whatsapp. Such proposals are not transformed in the true IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 14 : transactions and the prices are not certain. Further due to legal complications and family disputes many deals does not get through. Thus the Assessing Officer has not given any weightage to the retraction (Notarized) statement dated 11-09-2019 made by Shri Suresh R. Thakkar. Further the Assessing Officer do not even have in possession, the so called Cancellation Deed with Smt. Tarini Johri as well as the piece of paper jottings said to be seized from the premises of Shri Suresh R. Thakkar. However only the digital images are reproduced at Page Nos. 131, 140, 155 and 208 and came to the conclusion that the assessee has received ‘on- money’ payment of Rs.2,69,65,440/-, which are liable to be deleted. 7.5. Further the Assessing Officer though noted that the Sale Deed value as per Document No. 7670/2019 registered as Sale Deed on 19-06-2019 for a value of Rs. 96,00,000/- which is as per the Jantri Value approved by the State Government. In the above circumstances, the Assessing Officer has not verified the value land by referring to the DVO before making such addition of ‘on-money’ in the hands of the assessee. Further more when the assessee sold the above property on 07-06-2021 for a sale consideration of Rs. 2.5 crores and declared is 50% share of profit as Rs. 74,16,500/- which is in the profit and loss account, the same was accepted by the very same Assessing Officer while passing the assessment order u/s. 143(3) dated 15-12-2022. IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 15 : 8. The Co-ordinate Bench of this Tribunal in the case of ACIT vs. Shanker Nebhumal Uttamchandani reported in [2024] 161 taxmann.com 536 (Surat-Trib.) held as follows: “…..6 We find that the Assessing Officer made addition of Rs. 20,43,500/- as unexplained money and unexplained interest income of Rs. 4,27,237/- on the basis of image found in I-Phone of assessee by taking view that on such amount, the assessee earned interest. We find that before the Assessing Officer as well as Id. CIT(A), the assessee explained that there is no corroborative material to prove that the assessee made advance of such amount or earned interest. Neither it contained the name and signature of assessee nor it is mentioned whether this amount was received or paid. We find that the ld. CIT(A) on considering the submission of assessee held that the Assessing officer is silent as to whom these advances were made and from whom such interest was received. The Assessing Officer while making addition, simply relied on the image of lose paper (image in the mobile phone of assessee). The Assessing officer has not brought any direct evidence on record that assessee has lent this amount to any person. There is no incriminating paper found from the WhatsApp image to specify whether it is loan taken or given as no name of person is mentioned on the said paper. The paper/image is not signed by assessee nor in his handwriting, thus, in absence of incriminating evidence, it cannot be held that the assessee has given the said loan out of his unexplained source. The ld. CIT(A) noted that there is no likelihood that some estimate of interest has been worked out taking a particular amount and particular rate of interest, such working does not prove that transaction of advance has been materialized unless there is further evidence to prove that such amount of loan has been taken or given on a particular date. No such evidence was found in the search. The assessee is not engaged in the business of money lending, therefore, working found on paper cannot be treated as sacrosanct evidence. On the basis of such findings, the ld. CIT(A) deleted both the additions. 7. We have independently examined the facts of the case. We find that the Assessing Officer has not recorded in the assessment order whether such image/photo was received by assessee in WhatsApp image or it was sent. The source of image was not investigated by Assessing Officer. Assessing Officer nowhere mentioned whether such image was confronted to the assessee during the search action or his statement was recorded for such image. Thus, in absence of any corroborative IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 16 : evidence, we do not find any justification for making such addition. Hon'ble Supreme Court in Common Cause v. Union of India (2017) 394 ITR 220 SC also held that loose sheets of papers are wholly irrelevant as evidence being not admissible under section 34, so as to constitute evidence with respect to transaction mentioned therein being of no evidentiary value. Thus, we affirm the order of ld. CIT(A) on our aforesaid additional observation.” 8.1. Respectfully following the above judicial precedent, we do not find any merit in the additions made by the Assessing Officer which are liable to be deleted. Thus the Grounds raised by the assessee are hereby allowed. 9. In the result, the appeal filed by the Assessee in IT(SS)A No. 74/Ahd/2024 is hereby allowed. IT(SS)A No. 102/Ahd/2024 (Revenue’s appeal) 10. The Grounds of Appeal raised by the Revenue reads as under: “1) In the facts and on the circumstances of the case and in law, the ld.CIT(A) has erred in directing to consider the confirmed undisclosed income in the form of on money payment of Rs.2,69,65,440/ and confirmed brokerage payment of Rs.3,67,654/ as regular business income as against unexplained investment u/s.69B r.w.s. 115BBE of the Income Tax Act & unexplained expenditure u/s.69C r.w.s. 115BBE of the Income Tax Act without considering the fact that alleged land had not been recorded by the assessee in its books & assessee has not offered any explanation with respect to brokerage payment.\" 11. Since the entire additions are deleted vide this common order in IT(SS)A No. 74/Ahd/2024, the grounds raised by the Revenue has no legs to stand. Consequently, the Revenue Appeal is liable to be dismissed. IT(SS)A Nos.74 & 75/Ahd/2024 (By assessees) and IT(SS)A Nos.102 & 103/Ahd/2024 (By Revenue) K.Mehta & Co. and Relief Construction Co. vs. ACIT/DCIT respectively Asst.Years - 2020-21 : 17 : IT(SS)A No. 75/Ahd/2024 (Assessee’s appeal) and IT(SS)A No. 103/Ahd/2024 (Revenue’s appeal) 12.Appeal filed by the other co-owner namely Relief Construction Co. is also on identical set of facts, whereby the additions made by the Assessing Officer are liable to be deleted following the order passed in IT(SS)A No. 74/Ahd/2024. 13. In the result, the appeal filed by the Assessee in IT(SS)A No. 75/Ahd/2024 is allowed, consequently the appeal filed by the Revenue in IT(SS)A No. 103/Ahd/2024 is hereby dismissed. Order pronounced in Open Court on 03/03/2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 03/03/2025 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)-(NFAC) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "