MAHENDRA HARJIVAN MORABIA,AHMEDABAD V. THE DY.CIT., CENTRAL CIRCLE-2(3), AHMEDABAD

ITSSA 10/AHD/2024

AI Insights

The case involves an appeal by Mahendra Harjivan Morabia against the order of the Commissioner of Income Tax (Appeals)-12, Ahmedabad, which upheld the addition of Rs. 83,14,125/- to the assessee's income for the Assessment Year 2010-11. This addition was based on documents seized during a search operation at the residence of Shri Karsan Velji Patel, which allegedly contained entries of transactions involving the assessee. The primary legal contention was whether the additions made under Section 153A of the Income Tax Act, 1961, were valid in the absence of incriminating material directly linked to the assessee. The Tribunal examined the legal and factual basis of the additions and found that the documents did not provide sufficient evidence to establish the assessee's involvement in the transactions.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 829722 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Ahmedabad
• Assessment Year: misc
• Appeal Filed On: 23-01-2024
• Other Referred Cases: PCIT vs Abhisar Buildwell P Ltd (2023) 454 ITR 212 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR
• Assessee Lawyers: SAKAR SHARMA
• Keywords: Cost of acquisition; Document seized; Documents seized; Loose papers
• Section: 147; 271(1)(c); 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE: SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER आयकर अपील (एस.एस.) सं./I.T(SS).A. No.10/Ahd/2024 (िनधा[रण वष[ / Assessment Year : 2010-11) Mahendra Harjivan Morabia 12, Saryu Flats, Near Mithakhali Six Roads, Navrangpura, Ahmedabad, Gujarat – 380009 बनाम/ Vs. Deputy Commissioner of Income-tax Central Circle-2(3), Ahmedabad Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AEKPM6712P (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Sakar Sharma, AR Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Alpesh Parmar, CIT.DR Date of Hearing 12/01/2026 Date of Pronouncement 15/01/2026 (आदेश)/ORDER PER ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad, (hereinafter referred to as “CIT(A)”), dated 04.12.2023 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2010-11. Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 2 – 2. The grounds of appeal raised by the assessee are as under: “1. The Ld. CIT(A) erred on facts and in law in upholding assessment order passed u/s 153A of the Act making addition to the returned income without appreciating that assessment under reference was a completed assessment and there was no incriminating material found in the course of search in the case of appellant qua assessment year under reference. No addition ought to have made in absence of any incriminating material as held and affirmed by Hon'ble Supreme Court in PCIT vs Abhisar Buildwell P Ltd (2023) 454 ITR 212 (SC) 2. The Ld. CIT (A) erred on facts and in law in confirming addition made by Assessing Officer based on unsubstantiated documents seized in the course of search action on third party having no business transactions with the appellant in. assessment u/s 153A. Such additions are not permissible in assessment u/s 153A. Therefore, assessment made u/s 153A is without any valid jurisdiction. 3. The Ld. CIT (A) erred on facts and in law in not appreciating the contention of the appellant that unsubstantiated documents seized in the course of search action have no bearing on the assessment of income in the case of appellant read with provisions of section 132(4A) and section 292C of the Act. The entire addition is based on suspicion and suspicion alone. 4. The Ld. CIT(A) erred on facts and in law in not appreciating the contention of the appellant that addition based on documents seized in search action on third party is not permissible unless proceedings u/s 153C or u/s 147 are initiated on the appellant after recording of due satisfaction/reasons for alleged escapement of income. 5. The Ld. CIT(A) erred on facts and in law in not appreciating the contention of the appellant that the Assessing Officer did not grant cross examination of persons in whose case alleged documents qua appellant were seized. 6. The Ld. CIT(A) erred on facts and in law in not appreciating the contention of the appellant that properties referred to in the seized documents in relation to which addition is made by the Assessing Officer at no point of time were owned by the appellant. Therefore, question of receiving any amount against such properties by the appellant was not possible. Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 3 – 7. The Ld. CIT(A) erred on facts and in law in upholding action of Assessing Officer making addition u/s 69A amounting to Rs. 83,14,125/-without bringing any material on record that appellant was owner of the properties referred in third party seized documents.” 3. The brief facts of the case are that a search action was conducted on the assessee u/s.132 of the Act on 30.07.2013 along with other entities of the Dharti-II Group. Thereafter, notice was issued to frame assessment u/s.153A of the Act. During the course of assessment, the assessee was confronted with some incriminating documents found during the course of search conducted at the residence of Shri Karasan Velji Patel, Madhapur, Bhuj, revealing the assessee to have received amounts for sale of certain property. The assessee denied having anything to do with the impugned properties/transaction. However, the explanation of the assessee was rejected and the amount mentioned in the seized documents as allegedly received by the assessee for sale of certain plots was treated as income of the assessee. Accordingly, an addition of Rs.83,14,125/- was made to the income of the assessee. The assessee carried the matter in appeal before the Ld.CIT(A) raising both legal grounds as well as on the merits of the addition made, all of which were dismissed by the Ld.CIT(A) and the addition made confirmed. Against this order of the Ld.CIT(A), the assessee has come up in appeal before us raising both legal grounds as well as grounds on merits of the case as reproduced above in our order. Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 4 – 4. We have heard contentions of both the parties. The facts leading to the addition in the present case are that during the course of search at the residence of Shri Karsan Velji Patel, a diary was found wherein transactions in respect of sale/purchase of property allegedly relating to the assessee were found. The details of the seized material are reproduced at page 4 para 4.1 of the assessment order as under: Sr. No. Annexure/Page no. Details of Transaction 1 A-1/Page no.9 Rs. 5,00,000/- City square property 8311 Sq.yd. @ 950 paid as suthi to MHM for the purchase of property. 2 A-1/Page no.12 Rs. 73,95,000/- payable for Citi Square plots having area 8311 sq. yards for purchased at the rate of 950/- per square yards from Mahendra H. Morabia. 3 A-1/Page no.14 Rs. 67,36,000/- paid to Mahendra H. Morabia for plots whose area is 7616.69 sq. yards @ Rs. 950/- per sq. yards. Total Rs. 72,36,000/-, Rs. 5,00,000/- already paid as Suthi remaining amount is paid. 4 A-3/Page no.125 Rs. 21,36,404/- Citi Sq. Plot No. AB-3 & 4, B- 208 201 purchase from Mahendrabhai Morabia total sq. yards 2248.85 @ 950 total amount Rs.21,36,404/-being 50% 1,50,000/- 08.02.2010/ 7,50,000/- 18.02.2010 2,50,000/- 08.03.2010 2,18,000/- 12.01.2010 5 A-3/Page no.133 Rs. 9925/- Document exp. of plot purchased from Mahendra Morabia, AB-3-4, В-208-209 dtd. 05.03.2011 Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 5 – 5. The details of the said transactions as interpreted by the AO are reproduced at page nos. 2 & also page no.13 & 14 of the assessment order as under: City Sq. 4 Plots purchased from Mahendra Morabia: Area of Plot: 2248.85 sq.yeards @ Rs.950/- = Rs.21,36,407/-, Plot No. AB-3, AB-4, B- 208 & B-201 Particulars Amt. Date Anx. Pg. Citi Sq. Plot No. AB-3 & 4, B-208 & 201 2136400 01-02-2010 to 09-06-2010 3 125 Document exp. of plot purchased from Mahendra Morabia, AB-3-4, B-208-209 9925 05-03-2011 3 133 Details of purchase of Citi Square Plots. Total area of land is 8311 sq. yards. Sold by Mahendra Morabia @ Rs. 950/-. (MHM refers to Shri Mahendra H. Morabia) Particulars Amt. Date Anx. Pg. Suthi of Rs. 5 lacs paid to Mahendra Morabia for purchase of plots at Citi Square Township. Total area of plots is 8311 sq. yards. Rate of sale is Rs. 950/- per sq. yards. 500000 09-01-2009 to 01-03-2010 1 9 Rs. 73,95,000/- payable for Citi Square plots having area 8311 sq. yards and purchased at the rate of 950/- per square yards from Mahendra H. Morabia (purchased for 78.95 The amount was less Suthi 5.00/-). subsequently paid to Shri Mahendra Morabia. 7395000 Summary of due as on 01-03-2010 1 12 Rs. 67,36,000/- paid to Mahendra Morabia for plots whose area is 7616.69 sq. yards. Total Rs. 72,36,000/-, Rs. 5,00,000/- already paid as Suthi. This bund is separate from land mentioned above. 7236000 02-03-2010 to 20-03-2012 1 14 1463100 0 Grand Total 1677732 5 Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 6 – 6. With respect to the incriminating material listed at S.No.4 of the detail of seized material, being Annexure A-3 Page No.125 containing the details of transactions relating to Citi Sq. Plot No. AB-3 & 4, B-208 & 201 purchase from Mahendrabhai Morabia, the AO noted that the transaction pertained to total sq.yards 2248.85 @ 950 total amount Rs.21,36,404/- being 50%. Noting that the seized diary noted payment made for 50% of the volume, the AO made addition of 50% of the amount noted to have been paid i.e. 50% of Rs.21,36,400/- amounting to Rs. 10,68,200/-. 7. With respect to the amount of Rs.73,95,000/- and Rs.72,36,000/- noted in the seized material and listed at S. No.2 & 3 above, the AO accepted the contention of the assessee that the said amounts related to the same plot of land measuring 8311 sq.yards and, therefore, he treated the actual transaction to be of Rs.72,36,000/- and considered the same for addition. 8. The remaining amounts of Rs.5 Lakhs and Rs.9,925/- noted in the seized material/diary were also considered for making addition in the hands of the assessee, resulting in a total addition of Rs.83,14,125/- being made to the income of the assessee as amounts received in transaction of plots of City Square property treating the same as undisclosed income of the assessee. The relevant finding of the AO in this regard are contained at page nos. 14 & 15 of the order as under: Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 7 – “So far as the transactions regarding Citi Square Plot No. AB- 354, B 208 & 201 of Rs. 21,36,400/- is concerned, it is written in the seined diary that payment is made for 50% of the value of the property. The said facts have been confirmed from the seized dairy. Therefore the addition of Rs. 10,68,200/- being % of share is to be made. Therefore the addition of Rs. 10,68,200/- is made in respect of Citi Square Plot No. AB-384, 13 208 & 201. Further, it is also opposed by the assessee if any addition is proposed in respect of Citi Square Plots of Rs. 73,95,000/- and Rs. 72,36,000/-. In fact, both amount pertains to same plots. Hence the addition of Rs. 67,36,000/- is required to be made. Though there were difference in area i.e.8311 sq yards and 7616.69 sq, yards but the transactions pertains to only one plot. There might be negotiation for different area on different occasion. However the transaction is only in respect of one plot. The actual transaction is of Rs 72,36,000/- and the same is required to be considered for addition. On perusal of seized diary, above view is found to be correct. In view of the above, the unexplained income as per seized dairy found from the residence of Shri Karasan Velji Patel is worked out as under: Particulars Amt. Citi Sq. Plot No. AB-3 & 4, B-208 & 201 1068200 Document exp. of plot purchased from Mahendra Morabia, AB-3-4, B-208-209 9925 Suthi of Rs. 5 lacs paid to Mahendra Morabia for purchase of plots at Citi Square Township. Total area of plots is 8311 sq. yards. Rate of sale in Rs. 950/- per sq. yards. 500000 Rs. 67,36,000/- paid to Mahendra Morabia for plots whose aren is 7616.69 nq. yards. Total Rs. 72,36,000/-, Rs. 5,00,000/- already paid as Suthi. This is the balance amount. 6736000 Total addition 8314125 Considering the above facts it is established beyond any doubt that amount of Rs. 83,14,125/ has been received by the assessee in respect of transaction of plots of city square property and the same is nothing but undisclosed income of the asscasce. Accordingly the amount of Rs. 83,14,125/ is added to the total income of the assessee. Penalty proceedings are initiated for furnishing inaccurate particulars of income and concealment of income within the meaning Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 8 – of explanation 5 to section 271(1)(c) rws 274 of the Income-tax Act, 1961. 9. The argument of the Ld. Counsel for the assessee before us was that other than this seized material found during search conducted on Shri Karsan Velji Patel, there was no other material with the Department. He contended that the seized material was found from a third party and not the assessee. He contended that the person from whom it was found was never questioned about this material. He pointed out that Shri Rajendra V. Shah who allegedly had purchased this property was also subjected to search action, and though his statement was recorded during search, no questions were asked about the impugned transaction allegedly undertaken with the assessee. He further contended that even the assessee’s statement was recorded u/s.131(1A) of the Act and the assessee all along denied having anything to do with these transactions. That the assessee repeatedly stated that he was not the owner of any of the property mentioned in the seized documents and no question, therefore, arose of the assessee having received any amount for the sale of the said properties. That with nothing else been on record with the Department corroborating the inference drawn from the seized material found during search on a third party there was no case at all for making addition based on such uncorroborated material in the hands of the assessee. Our attention was drawn to the submissions made by the assessee at para 10.2 of the CIT(A)’s order as under: Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 9 – ‘10.2 The appellant has raised various objection regarding the above additions. He continues to deny any transaction with either Shri Karsan Velji Patel or Shri Rajendra V Shah. Further he has denied any investment in City Square and thus selling of any plot therein does not arise. He said that no addition was made wrt undisclosed investment in such plots in previous AYs which were assessed u/s 153A as well. He says no evidence of any acquisition of such plots was found during the search at all his premises. Further, the AO has not produced any registered deed from sub-registrar of properties to demonstrate that the appellant indeed sold the plots to Shri Rajendra V Shah or his Associates or was owner of the plots referred to in the seized loose papers at any given point of time. He has not obtained any affirmation of purchase of land from him by the buyers. He reiterated that the AO failed to establish any link between the purported land plots and him. Even Shri RV Shah has not made any assertion that the said plots were sold by the appellant. The appellant has further asserted that no evidence was found in the course of search action on the appellant that appellant has indulged in land trading or acting as real estate broker and to sell the plot, one has to either own the plot or ought to have acquired the plot prior to the date of sale. However, in the case of the appellant both the events are absent. Thus with respect to the City Square property where addition of Rs.72,36,000/- the appellant states that the noting in page no.9, 12, 14 (of Annexure A-1) only gives the area of land which also varies in the pages from 8311 sq.yds to 7616.69 sq.yds. However, it does not give any further detail of the property like actual plot number etc. The AO has concluded that the said entry relates to the appellant only because of reference of MHM in the noting but this MHM can be anyone. Without clear proof of ownership of the aforesaid land how the same can be concluded to belong to him. He completely denies ownership of any land in City Square area. Further with respect to Annexure A-3 page no.125 and 133 the appellant mentions that although the said document clearly mentions plot no.AB-3 and 4 and B-208-209 which is purchased from Mahendrabhai Morabia and totals 2248.85 sq.yds, however, no documents is on record to prove that these plot of lands were owned by him and the noting speaks of him or any other Mahendrabhai Morabia. He submitted that there are atleast 8 Mahendrabhai Morabia, he himself knows who live in the Bhuj area. Further, in this case he also states that the entire receipts cannot be taxed in his hands and only profits arising out of the same can be taxed. However, the AO has not bothered to ascertain the cost of acquisition of the said property to calculate the profits correctly. Even if he acted as broker of the said properties, he would have earned only 1 to 2% out of the overall sale. Thus his income from the transaction could be Rs. Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 10 – 83,141/-@ 1% and Rs. 1,66,283/- @ 2%. But in such circumstances, cogent reasons to hold the appellant to be a real estate agent need to be established and brought on record. Finally he submitted that the presumption under the Act, Sec.292C works in the case of the person from whose possession the incriminating material is seized. In this case the said documents were seized from the residence of Karsan Velji Patel and pertain to R V Shah purportedly a land broker. He has no connection with Shri R V Shah as has been held by the ITAT with respect to the case his wife Induben Morabia. Therefore, the said documents pertain to his transactions cannot be presumed. He added that despite the fact that the search in the case of Shri Karsan Patel and Shri R V Shah was held on the same day, no question regarding the transactions indicated in the seized documents and presumed to have been made by him were asked while recording the statement u/s 132(4) of the Act. 1 A-1/Page no.9 Rs. 5,00,000/- City square property 8311 Sq.yd. @ 950 paid as suthi to MHM for the purchase of property. 2 A-1/Page no.12 Rs. 73,95,000/- payable for Citi Square plots having area 8311 sq. yards for purchased at the rate of 950/- per square yards from Mahendra H. Morabia. 3 A-1/Page no.14 Rs. 67,36,000/- paid to Mahendra H. Morabia for plots whose area is 7616.69 sq. yards @ Rs. 950/- per sq, yards. Total Rs. 72,36,000/- Rs. 5,00,000/-already paid as Suthi remaining amount is paid. 4 A-1/Page no.125 Citi sq. Plot NO. AB-3 & 4, B-208 & 201 purchased from Mahendrabhai Morabia total sq, yards 2248.85 @ 950 total amount Rs. 21,36,404/- being 50% 1,50,000/- 08.02.2010 7,50,000/- 18.02.2010 2,50,000/- 08.03.2010 2,18,000/- 12.01.2010 5 A-1/Page no.133 Rs. 9925/-Document exp. of plot purchased from Mahendra Morabia, AB-34, B-208-209 dtd. 05.03.2011 Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 11 – 10. Per contra, Ld. DR relied on the finding of the authorities below contending that the inference drawn by the Department that the transactions noted in the seized material pertained to the assessee was not baseless, since, another transaction noted in the diary in the Code MHM was revealed to be in relation to a plot sold by the assessee’s wife. That notings also clearly mentioned the name of Mahendrabhai Morabia with regard to purchase of plot no. AB-3 & 4, B-208 & 201. That another annexure in the seized diary referred to sale of property by Mahendra H. Morabia through power of attorney of Shri Pranav C Upadhyay and these plots were noted to be sold Mahendra H Morabia HUF in his capacity of Karta HUF, wherein he has given power of attorney to Pranav C. Upadhyay, which was proven from the copy of sale deeds. He also pointed out that the fact noted by the authorities below that the assessee had admitted to be a Director of Citi Square Properties Ltd. Therefore, this relation to Citi Square was also a fact proven from the records. He drew our attention to the findings of the Ld. CIT(A) at para 10.3.1 to 10.4.1 as under: “10.3.1 On the issue whether 'MHM' recorded in Page 11, 13, 14 of Annexure A-1 and Mahendrabhai Morabia' recorded in Page-125, 133 of Annexure A-3 refers to him or some other person, the AO has stated that in the seized documents there are other incriminating material where the land referred to belonged to the wife of the appellant and his HUF and similar reference to 'MHM' was made. Thus it proves the connection of 'MHM to name Mahendra Harjivanbhai Morabia, the appellant. These references are detailed as under: i) In page no.8 of Annexure-Al, reference of payment to MHM for Plot No.7 Vardhman Nagar, Sukhpur of Rs 8,50,000/- is seen. The said property belonged to Smt. Induben Morabia. Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 12 – ii) Similarly, in page-23 of Annexure-A3 reference to sale of property by Mahendra H Morabia (HUF) through PoA Pranav C Upadhyay of vide plot No. 48, 75, 5, 26 and 6 to 9 is also seen. These plots were sold by Shri Mahendrabhai H Morabia in his capacity as Karta of the HUF had given the POA to Pranav C Upadhyay. This is proven by the copy of sale deeds with respect to these plots was adduced. 10.3.1.1 It is added that the AO of Smt Induben Morabia had made the addition of the said payment of Rs 8,50,000/- in her hands. However, the Hon'ble ITAT Ahmedabad (ITA (SS) 420/Ahd/2017 dated 16.03.2022) has treated this transaction as not pertaining to her and deleted the entire addition stating that the seized document does not mention her name and she has placed documents before AO & CIT(A) that the plot was sold to Smt Nanbhai Manji Khetani on 31.01.2011. Further, there is reference to Plot No.70 also in the assessment order as belonging to Mahendrabhai Morabia. However, from the copy of page-23 supplied by the AO it can be seen that with respect to this plot, the seller is Mitesh Purushottam Thakkar and not the HUF. The appellant has submitted that no action was taken against Mahendrabhai H Morabia HUF. 10.3.2 In the statements recorded u/s 131(1A) of the Act on 06/08/2013, the appellant has admitted that he was a director of Citi Square Properties Ltd and resigned only around October 2011. He mentioned that the fact of this resignation is not reflected in the documents of the RoC. He also has admitted transactions with Citi Square by he and members of family. 10.3.3 Thus denial that reference of \"MHM' in seized documents page-11, 13, 14 of Annexure A-1 and \"Mahendrabhai Morabia\" in seized documents page-125/133 of Annexure A-3 pertains to him is not acceptable and argument is rejected. There is sufficient evidence that MHM recorded in the seized documents relate to him only. 10.4 The appellant has also objected that the payments to him recorded in seized documents page-11, 13, 14 of Annexure A-1 and page-125/133 of Annexure A-3 do not belong to him as no reference to any property sold was mentioned there in and he has not sold any property to citi square as mentioned. 10.4.1 Analysis of seized documents page-11, 13, 14 of Annexure A-1 shows that there is Peference of payments to \"MHM\" with respect to City Square property of 8311 sq. yds or 32416.69 sq. yds. The AO has accepted the figures related to the size of plot 7616.69 sq.yds. and made addition of Rs 72,36,000/- in the hands of the appellant based Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 13 – on the notings. Regarding seized documents page-125/133 of Annexure A-3 it clearly mentions purchase of plot no. AB-3 & 4, B- 208 & 209 from \"Mahendrabhai Morabia\". The plot size was sq. yards 2248.85 @ 950. Thus total amount comes to Rs. 21,36,404/-. The AO has held 50% as part of the appellant and added back Rs 10,68,200/- in the hands of appellant. A further Rs 9925/- was added as document expenses by the appellant recorded in Page 133. The appellant has been evasive in his reply when queries regarding these properties were made while recording his statement. He has simply denied selling any property to Citi Square. But he has also not mentioned why these amounts were paid to him. He is also a director of Citi Square Properties Ltd during the period of time. His relation to Citi Square transactions is a fact proven from the records. Further Rajendra Virchand Shah also shows himself as owner of the company. He received the sums at various times but has not explained the nature and source of the same. Other entries in seized documents related to him and his family members are found to be true. The entries referred to here are also true. The appellant is held to have received the amounts of Rs. 72,36,000/- + Rs 10,68,200/- + Rs 9,925/-, Hence, I confirm the addition of Rs 83,14,125/-made by the Assessing officer as undisclosed income of the appellant.” 11. Having considered the submissions of both the parties, We are in agreement with the Ld. Counsel for the assessee that other than the notings in the diary seized during search on Shri Karasan Velji Patel, there is no other material with the Department to corroborate their inference drawn from the seized material that the assessee had received amounts from transactions conducted in plots of land to Citi Square Ltd. Admittedly no material /document relating to the said transactions was found during search conducted on the assessee. The assessees statement was recorded u/s 131(1A) of the Act and we have noted that the assessee was confronted with the seized material and he repeatedly denied having anything to do with the transaction noted therein. This fact finds mention in both the assessment order and the Ld. Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 14 – CIT(A)’s order. The department has not produced a shred of evidence linking the assessee to the said plots of land in any manner. 12. It is also not the case of the department that Sh. Karsan Velji had submitted to the contents of the diary as relating to the assessee in any statement recorded on oath during search. Even the Ld.DR has been unable to demonstrate the said fact before us. 13. Further, the Department had alleged the transaction to have been undertaken with one Shri Rajendra V. Shah who was also searched. His statement was recorded during search conducted on him. The Ld. DR was unable to draw our attention to any admission or for that matter any comment made by Shri Rajendra V. Shah on the transaction relating to the assessee found in the diary with Shri Karasan Velji Patel. Also as noted in the case of Shri Karasan Velji Patel, it is not the case of the Revenue that Shri Rajendra V. Shah admitted to the transactions noted in the diary to be relating to the assessee before us i.e. Mahendra Harjivan Morabia. 14. Therefore, it remains as a matter of fact, that other than the seized diary found during search conducted on the third person there is no material corroborating the inference drawn by the Department from the said seized material that the transactions were relating to the assessee. We agree with the Ld. Counsel for Printed from counselvise.com IT(SS)A No. 10/Ahd/2025 [Mahendra Harjivan Morabia vs. DCIT] A.Y. 2010-11 - 15 – the assessee that the addition is based merely on presumptions. The addition made in the hands of the assessee of Rs.83,14,125/- therefore is held to be not sustainable and the AO is directed to delete the same. 15. The grounds of appeal no. 6& 7 raised on merits of the case, therefore, are allowed. 16. Since, we have allowed assessee’s appeal on merits, the grounds raising legal challenge to the order passed by the AO are not being adjudicated by us. 17. In the result, appeal filed by the assessee is allowed in above terms. This Order pronounced on 15/01/2026 Sd/- Sd/- (SUCHITRA KAMBLE) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 15/01/2026 S. K. SINHA True Copy आदेश कȧ Ĥितिलǒप अĒेǒषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंिधत आयकर आयुƠ / Concerned CIT 4. आयकर आयुƠ(अपील) / The CIT(A)- 5. ǒवभागीय Ĥितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "