NAMAN VIDYAPATI PATEL,AHMEDABAD V. THE PR.CIT, CENTRAL, AHMEDABAD

ITA 1008/AHD/2025

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The case involves Naman Vidyapati Patel, the appellant, who contested the revision order by the Principal Commissioner of Income-Tax (Central), Ahmedabad, concerning the assessment year 2021-22. The revision was based on a search conducted on the Nila Sambhav Group, which revealed an MOU and related documents indicating unaccounted cash transactions for a land sale. The Assessing Officer initially accepted the assessee's explanation and did not make any additions to the income. However, the Principal Commissioner later revised this decision, leading to the current appeal. The Tribunal's decision emphasized that the assessee had taken timely steps to cancel the deal and return the received amounts, thus not escaping any income tax liability.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773078 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Appeal Filed On: 06-05-2025
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR
• Assessee Lawyers: S.N. DIVATIA; SAMIR VORA; WAY OF CHEQUE WAS
• Keywords: Set aside; Income from undisclosed sources; TDS; Revision of order
• Section: 263

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0012ायपीठ “ए“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ A” BENCH, AHMEDABAD \u0016ी संजय गग\u001b, \u0012ाियक सद एवं अ पूण\u001b गु!ा, लेखा सद क े सम%। ] ] Before Shri Sanjay Garg, Judicial Member And Annapurna Gupta, Accountant Member आयकर अपील सं /ITA No.1008/Ahd/2025 िनधा \u000fरण वष\u000f /Assessment Year : 2021-22 Naman Vidyapati Patel M/s.Markettic Mahalaxmi Compound Opp. Rustom Mills Dudheshwar Road Ahmedabad – 380 004 बनाम/ v/s. The Pr.CIT (Central) Ahmedabad – 380 009 \u0013थायी लेखा सं./PAN: ACOPP 9233 C (अपीलाथ(/ Appellant) ()* यथ(/ Respondent) Assessee by : Shri S.N.Divatia, AR & Shri Samir Vora, AR Revenue by : Shri Alpesh Parmar, CIT-DR सुनवाई की तारीख/Date of Hearing : 30/07/2025 घोषणा की तारीख /Date of Pronouncement: 25/09/2025 आदेश/O R D E R Per Sanjay Garg, Judicial Member: The present appeal preferred by the assessee is against the order of learned Principal Commissioner of Income-Tax (Central), Ahmedabad [hereinafter referred to as “Ld. PCIT” for short] dated 27/03/2025 passed in exercise of his revision jurisdiction under Section 263 of the Income-Tax Act, 1961 [hereinafter referred to as \"the Act\" for short] for Assessment Year (AY) 2021-22. Printed from counselvise.com ITA No.1008/Ahd/2025 Naman Vidyapati Patel vs. The Pr.CIT Central Asst. Year : 2021-22 2 2. The assessee, in this appeal, has contested the very validity of the impugned revision order of the Ld. PCIT u/s 263 of the Act. 3. The brief facts of the case are that the assessee is an individual and had filed his return of income declaring total income of Rs.48,10,920/-. His source of income was from salary, house property and other sources. The assessee’s return of income was selected for compulsory scrutiny u/s.143(3) of the Act. 3.1. During the course of assessment proceedings, the Assessing Officer (AO) noted that a search action was conducted on the Nila Sambhav Group (real estate developer) on 08/09/2021. During the course of search, an MOU dated 02/04/2019 executed between the assessee (potential seller) and Shri Manoj B. Vadodaria, Director of one of the companies of the Nila Sambhav Group, which contained the transaction details of land situated at Village Vasna, Ahmedabad was found. As per the said MOU, the assessee agreed to sell his land at Vasna for a a total consideration of Rs.3,21,00,000/-. Further, during the course of search proceedings, certain handwritten loose-papers were also found which showed cash transactions related to the said land. The copy of the MOU as well as the loose-paper notings have been reproduced by the Ld. PCIT in the impugned order. The Ld. AO from the said papers observed that the total sale consideration for the land in question was settled at Rs.3,21,00,000/- out of which an amount of Rs.1,29,00,000/- was paid as advance by cheque and the remaining amount of Rs.1,92,00,000/- was paid in cash. Further, certain vouchers were also recovered which showed that the assessee had taken cash in relation to the transfer of his land. During the course of assessment proceedings, the AO show-caused the assessee as to why the said amount of Rs.1,92,00,000/- received in cash from the purchasers Printed from counselvise.com ITA No.1008/Ahd/2025 Naman Vidyapati Patel vs. The Pr.CIT Central Asst. Year : 2021-22 3 Shri Manoj B. Vadodaria should not be treated as his unaccounted income and, accordingly, be added into the income of the assessee. In reply to the show-cause notice, the assessee admitted that, in fact, an MOU to sell his land was agreed between him and Shri Manoj B. Vadodaria and further that the sale consideration was agreed at Rs.3,21,00,000/-. He, however, submitted that only an amount of Rs.1,56,00,000/- was paid by Shri Manoj Vadodaria to him which was paid through banking channel and TDS was duly deducted thereupon. That the balance amount was pending and, hence, not received by the assessee. That there was mutual agreement to the effect that the assessee would get Non-Agriculture (NA) permission for the said land. But due to delay in getting NA permission and because of some legal issues, the deal was cancelled on 03/01/2022 and the total amount paid by Shri Manjo Vadodaria was returned to him. The assessee also furnished the ledger account of Shri Manoj Vadodaria in his accounts, along with the copy of cancellation letter. The assessee denied having received any amount in cash and submitted that the said loose-papers/documents found from the premises of the Nila Sambhav Group did not establish that the assessee had received any cash consideration. The Ld. AO considering the above submissions of the assessee, did not make any addition and accepted the returned income. 4. Thereafter, the Ld. PCIT exercising his revision jurisdiction observed that there was enough and reliable evidences found during the search action conducted at the Nila Sambhav Group which showed that assessee had received an amount of Rs.1,92,00,000/- in cash, which was not accounted for by the assessee. He show-caused the assessee as to why not the order of the AO be revised and the addition of the said amount be made to the income of Printed from counselvise.com ITA No.1008/Ahd/2025 Naman Vidyapati Patel vs. The Pr.CIT Central Asst. Year : 2021-22 4 the assessee. The assessee reiterated his submissions before the Ld. PCIT as were made before the Ld.AO. The Ld. PCIT, considering the submissions of the assessee, observed that, in this case, the assessee had received the cash consideration of Rs.1,92,00,000/-. That the search was conducted at Nila Sambhav Grou on 08/09/2021 during which, apart from the cheque component, the evidence of receipt of cash component was also found. The amount received by way of cheque by the assessee was allegedly refunded on 27/12/2021, i.e. three months after the date of search. That the said cancellation of the deal was an after-thought as the assessee was found to have received the cash consideration of Rs.1.92 crores as per MOU dated 02/04/2019. He observed that the said amount was not likely to be declared in regular accounts by the assessee. He observed that in view of the facts and circumstances of the case, the assessment order passed by the AO dated 15/12/2022 was without making the necessary examination/ verifications/enquiries on the abovementioned issue and, accordingly, he held that the said assessment order as erroneous and prejudicial to be interests of the revenue. He set aside the impugned assessment order dated 15/12/2022 and the matter was restored to the file of the AO for examining the above issue in detail. 5. Being aggrieved by the order of the Ld. PCIT, the assessee has come in appeal before us. 6. We have heard the rival contentions of the Ld. Representatives of the parties and gone through the record. A perusal of the impugned order of the Ld.PCIT woud reveal that the Ld.PCIT has mainly stressed that from the seized material, it was found that the assessee had received cash component Printed from counselvise.com ITA No.1008/Ahd/2025 Naman Vidyapati Patel vs. The Pr.CIT Central Asst. Year : 2021-22 5 of Rs.1.92 crores, as per the MOU dated 02/04/2019. Further that, the assessee was not likely to enter the said amount in his regular accounts. Further, that the alleged cancellation of the MOU was an after-thought of the assessee after the search action to avoid the tax liability. 6.1. May it be so, the cancellation of deed has not been rebutted or denied by the Ld .PCIT. Though it appears that the MOU was cancelled after the search action to avoid the tax liability on the receipt of alleged cash component of Rs.1.92 crores, however, the fact on the file is that the deal was cancelled and the amount received by the assessee by way of cheque was also refunded. Therefore, it is most likely that when the deal was cancelled, if the assessee would have received any cash component that would also have been returned by the assessee. Under the circumstances, though the step of the assessee to cancel the deed/MOU may be an after-thought pursuant to the search action, but the fact on the file is that the deal between the parties has been cancelled and the amount received by the assessee has been returned. Therefore, it cannot be said that the assessee has earned any unaccounted income which is required to be taxed at this stage. Though, the intention of the assessee might have been to avoid his tax liability on the cash component received through MOU, however, the assessee has taken the timely step to cancel the deed. Therefore, under the circumstances, at this stage, it is not a case of any escapement of income. At the most, it can be summed up that the assessee was clever enough to take the timely step of cancellation of deed to avoid his apprehended tax liability. The AO duly considering the aforesaid facts and circumstances has not made any addition. The view of the AO is a plausible view, hence, the assessment order passed by the AO cannot be said to be erroneous. Therefore, we do not find Printed from counselvise.com ITA No.1008/Ahd/2025 Naman Vidyapati Patel vs. The Pr.CIT Central Asst. Year : 2021-22 6 justification on the part of the Ld.PCIT in setting aside the said assessment order. Thus, the revision order passed by the Ld. PCIT u/s.263 of the Act, is not sustainable and the same is hereby quashed. 7. In the result, the appeal of the assessee stands allowed. Order pronounced in the Open Court on 25 /09/2025. Sd/- Sd/- (Annapurna Gupta ) Accountant Member ( Sanjay Garg) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 25 /09/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की \"ितिलिप अ#ेिषत/Copy of the Order forwarded to : 1. अपीलाथ$ / The Appellant 2. \"%थ$ / The Respondent. 3. संबंिधत आयकर आयु& / Concerned CIT 4. आयकर आयु& ) अपील ( / The CIT(A)/ Pr.CIT, Central, Ahmedabad 5. िवभागीय \"ितिनिध , अिधकरण अपीलीय आयकर , अहमदाबाद/DR,ITAT, Ahmedabad. 6. गाड\u000f फाईल / Guard file. आदेशानुसार/ BY ORDER, स%ािपत \"ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (dictation pad is attached with file) : 18.1.2025 2. Date on which the typed draft is placed before the Dictating Member. : 19.1.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 25.9.25 7. Date on which the file goes to the Bench Clerk. : 25.9.25 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 Despatch of the Order : Printed from counselvise.com "