RAJSHEEL JITENDRA PATEL,AHMEDABAD V. THE ITO, WARD-2, INTL. TAX, AHMEDABAD

ITA 388/AHD/2025

AI Insights

The case involves Rajsheel Jitendra Patel, who appealed against the order of the Income Tax Officer, Ward-2 (International Taxation), Ahmedabad, which was based on directions from the Dispute Resolution Panel (DRP). The appeal contested the additions made for alleged unexplained investments and unverified receipts related to real estate transactions. The Tribunal examined the evidence, including seized documents and the assessee's responses, and found discrepancies in the reliance on third-party materials without proper corroboration or opportunity for cross-examination. The Tribunal also noted that the assessee had substantiated his ownership and the transactions through various documents, which were not adequately considered by the lower authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789112 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 19-02-2025
• Other Referred Cases: Kaushik Nanubhai Majithia v. ITO, Kiritkumar Champaklal Shah v. DCIT, CIT vs. Balbir Singh Maini
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DA RSI SUMAN RATNAM
• Assessee Lawyers: M K PATEL
• Keywords: Capital asset; Unexplained investment; Cost of acquisition; Documents seized; Capital Gains; TDS; Valuation report; Source of fund; Loose papers; Share purchase agreement
• Section: 147; 148; 143(3); 142(1); 54; 56; 132; 69

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद Ɋायपीठ “D”, अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD ŵी िसȠाथŊ नौिटयाल, Ɋाियक सद˟ एवं ŵीमकरंद वसंत महादेवकर, लेखा सद˟ क े समƗ। BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER I.T.A. No.388/Ahd/2025 (Assessment Year: 2019-20) Rajsheel Jitendra Patel, C/o. Jaimin Deliwala & Co. CA, 406, Time Square, Nr. Pariseems Complex, C. G. Road, Ahmedabad-38006 Vs. Income Tax Officer, Ward-2 (International Taxation), Ahmedabad [PAN No.AATPP0107E] (Appellant) .. (Respondent) Appellant by : Shri M K Patel, Advocate Respondent by: Dr. Darsi Suman Ratnam, CIT DR Date of Hearing 17.11.2025 Date of Pronouncement 25.11.2025 O R D E R PER MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER: This appeal by the assessee is directed against the order dated 09.01.2025 passed under section 147 read with section 144C(13) of the Income Tax Act, 1961 [hereinafter referred to as “the Act”]by the Assessing Officer, Ward 2, International Taxation, Ahmedabad [hereinafter referred to as “Assessing Officer or AO”], pursuant to the directions issued by the Dispute Resolution Panel - 2, Mumbai [hereinafter referred to as “DRP”], under section 144C(5). The assessee has raised various grounds of appeal challenging the additions Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 2– sustained in respect of (i) alleged unexplained investment of Rs. 48,89,877/-, and (ii) alleged unverified and unexplained receipts of Rs. 1,56,00,000/-, as well as the validity of the assessment framed under section 147. Facts of the Case 2. The brief facts leading to the assessment are that no return of income was filed by the assessee for the assessment year 2019–20. Subsequently, the case of the assessee was flagged under the Risk Management Strategy on the Insight Portal of the Department on the basis of information indicating that the assessee had entered into significant financial transactions exceeding taxable limits during the relevant previous year. The information flagged related to alleged unaccounted investment in immovable property amounting to Rs. 48,89,877. The Assessing Officer has recorded that the material forming the basis of this information had been found in the course of a search under section 132 carried out in the cases of Shivalik, Shilp and Sharda Group on 10.02.2022, and that such seized material contained information pertaining to several other persons including the assessee. 3. The Assessing Officer stated that since the information was gathered from documents seized in a search conducted after 01.04.2021, the proviso to section 148A was attracted, and therefore Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 3– the procedure prescribed under section 148A was not required to be followed. Based on this premise, the Assessing Officer issued notice under section 148 on 31.03.2023, in response to which the assessee filed return of income on 05.04.2023 declaring total income of Rs. 3,84,030/-. The Assessing Officer thereafter issued a notice under section 143(2) on 15.06.2023 and further notices under section 142(1) dated 08.01.2024 and 29.02.2024 calling for several details. The assessee submitted a written response on 11.01.2024, but according to the Assessing Officer certain critical details relating to the flagged transactions were not furnished. 4. The Assessing Officer thereafter issued a detailed show-cause notice dated 12.03.2024 proposing two additions, namely (i) Rs. 48,89,877/- as alleged unexplained investment in cash component relating to purchase of a residential unit in the project “Sky City Floris” developed by M/s Safal Goyal Realty LLP, and (ii) Rs. 1,56,00,000/- as alleged unverified and unexplained receipts arising from sale of an immovable property and denial of exemption under sections 54 and 54EC. The assessee submitted a written reply dated 18.03.2024 objecting to the additions proposed. 5. As regards the addition of Rs. 48,89,877/-, the Assessing Officer stated that during the course of the search proceedings in the case of Shivalik, Shilp and Sharda Group, a search was simultaneously carried out at the residence of one Shri Manish Brahmbhatt, who was Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 4– allegedly a real-estate broker associated with sale transactions of several projects. From the premises and electronic devices of the said broker, the Department allegedly recovered diaries, loose papers and voluminous digital data such as Excel sheets, Word files, PDF files, WhatsApp chats, and images. The Assessing Officer has recorded that the seized material contained details of sale transactions of various real-estate projects and the alleged on-money cash components received in respect of such transactions. According to the Assessing Officer, the seized diaries contained entries of deal serial numbers, dates, total considerations (actual or coded), amounts recorded as “Exp. Amount”, and balance cash components. The Assessing Officer has observed that the “Exp. Amount” column represented coded figures of cash components, being either one-thousandth or one- hundredth of the alleged actual cash. 6. The Assessing Officer has further noted that among the various projects reflected in the seized diaries and digital files, the project “Sky City Floris” of M/s Safal Goyal Realty LLP was one of them, and that the entries in a particular diary identified at page T-14, A-16 belonging to Book 3 contained a reference to a transaction concerning “Unit No. 84” of Sky City Floris. The Assessing Officer recorded that this entry showed the date of finalization of the deal as 14.12.2018, total consideration of Rs. 1,75,00,000/-, the buyer being “C.O. Parthivbhai”, and the Registered Document value being Rs. 1,26,10,123/-. The Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 5– Assessing Officer specifically noted that the names recorded in the Sub-Registrar Office documents were “Neepa Rajsheel Patel and Rajsheel Jitendra Patel” with respective PANs, and that the cash component reflected in the diary entry amounted to Rs. 48,89,877. On the basis of this diary entry, the Assessing Officer concluded that the assessee had paid an unaccounted cash component of Rs. 48,89,877/- towards purchase of Unit No. 84 in the project Sky City Floris. 7. The Assessing Officer held that this alleged cash investment was unexplained within the meaning of section 69 and accordingly added the amount to the total income of the assessee, subjecting it to tax under section 115BBE. Penalty proceedings under section 271AAC were also initiated. 8. As regards the issue relating to Rs. 1,56,00,000/-, the Assessing Officer has stated that the assessee claimed exemption under sections 54 and 54EC in respect of a property said to have been sold for Rs. 3,12,00,000/-, of which the assessee’s share was stated as Rs. 1,56,00,000/-. The Assessing Officer records that the sale deed dated 22.11.2018 indicated the purchaser as Smt. Neepa Rajsheel Patel, wife of the assessee, and not the assessee himself. The Assessing Officer further records that the original purchase deed of the property dated 14.12.1994 did not contain the name of the assessee. The assessee, according to the Assessing Officer, failed to demonstrate how he acquired ownership in the property, how cost of acquisition was Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 6– determined, or why the original purchase deed was not furnished. A valuation report produced by the assessee indicating a cost of Rs. 38,40,000/- was rejected by the Assessing Officer as unreliable. The Assessing Officer therefore held the assessee’s claim of exemption under sections 54 and 54EC to be unverified and unsubstantiated, and treated the entire amount of Rs. 1,56,00,000 as unexplained receipts taxable under section 56. Penalty proceedings under section 270A were also initiated. 9. A draft assessment order was passed under section 144C(1) on 27.03.2024, against which the assessee filed objections before the DRP. The DRP, by its directions dated 24.12.2024, rejected the objections raised by the assessee. The DRP observed that the assessee did not furnish documentary evidence to show that he had requested copies of seized material or opportunity of cross-examination. The DRP held that the seized material constituted credible information and that the Assessing Officer was justified in relying upon the same. The DRP reiterated the discussion recorded by the Assessing Officer regarding the nature of the seized material, the coded entries allegedly implicating the assessee, and the manner in which the cash component was worked out. The DRP accordingly confirmed the additions proposed in the draft assessment order. 10. Based on the directions of the DRP, the Assessing Officer passed the final order dated 09.01.2025 repeating the additions of Rs. Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 7– 48,89,877/- under section 69 read with section 115BBE and Rs. 1,56,00,000/- under section 56, giving rise to the present appeal. 11. Aggrieved by the order of the Assessing Officer, the assessee is in appeal before us raising following grounds: 1. That on facts, and in law, the learned AO has grievously erred in making addition of Rs. 48,89,877/- u/s 69 of the Act in respect of alleged payment of On Money on the basis of directions given by Hon’ble Dispute Resolution Panel (DRP). 2. That on facts, and on evidence on record, the Hon’ble DRP has made factually incorrect observations on page 24, para 6.2.1 and on page 28, para 6.2.4 and para 6.2.5 of its order, as the appellant has specifically demanded cross examination of concerned person which is not given till date. 3. That on facts and in law, the learned AO has grievously erred in making addition of Rs. 1,56,00,000/- as alleged unexplained receipts which is admittedly received for sale of joint property. 4. That on facts, in law, and on evidence on record, the Hon’ble DRP has made incorrect and irrelevant observations on pages 32 and 33 of its order while giving directions for making this addition. 5. That on facts, and in law, and on evidence on record, the learned AO and Hon’ble DRP have grievously erred in observing that the claim made u/s 54 and u/s 54EC remain unverified, as the appellant has filed all the evidence in the form of Purchase Deed and copy of Specified Bonds to substantiate the claim. 6. The appellant craves leave to add, alter, amend any ground of appeal. 12. During the course of hearing before us, the learned Authorized Representative (AR) reiterated the factual matrix and submitted that the assessee had not appointed any broker in connection with the purchase of the residential unit in the project “Sky City Floris”, nor was any brokerage paid by the assessee to any person. It was Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 8– contended that the name of the alleged broker, namely Shri Manish Brahmbhatt, appearing in the seized material, pertains to an individual who might have been engaged by the seller or some other concerned party, but the assessee had no dealings with him. The learned AR specifically emphasised that no statement recorded of the said individual or any other person was ever furnished to the assessee, and no opportunity of cross-examination was granted, despite specific request. The learned AR further pointed out that even the basic factual foundation relied upon by the Assessing Officer was inconsistent inasmuch as the excel sheet relied upon by the Assessing Officer mentions the seller as “Desai Kaka”, whereas the registered sale deed executed for purchase of Unit No. 84 clearly shows the seller as Safal Goyal Realty LLP. This, according to the Authorised Representative, demonstrates that the seized material is not reliable and has no nexus with the assessee’s transaction. 13. In support of these submissions, the learned AR placed reliance on the judgment of the Hon’ble Gujarat High Court in Kaushik Nanubhai Majithia v. ITO (Tax Appeal No. 20 of 2024), wherein the Hon’ble Court held that additions cannot be made merely on the basis of Excel sheet without supporting corroboration and without affording cross-examination. The learned Authorised Representative also relied upon the order of the co-ordinate bench in the case of Kiritkumar Champaklal Shah v. DCIT (ITA No. 1014/Ahd/2023), Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 9– wherein reliance was placed on the aforesaid judgment of the Hon’ble Gujarat High Court and similar additions based solely on alleged on- money entries in third-party material were deleted. 14. Regarding the addition of Rs.1,56,00,000/-, the AR submitted that the assessee and his wife, Smt. Neepa Rajsheel Patel, were joint holders of Row House No. 17 situated in the scheme known as Shyamal Row House. The property was originally purchased by Smt. Neepa R. Patel vide purchase deed dated 14.12.1994, and her name was duly entered in the society share certificate on 27.11.1994 through Resolution No. 8. The transfer was formally noted on 22.01.1995. The AR explained that clause 11 of the sale deed has been misunderstood by the AO. He submitted that the full sale deed, when read holistically, clearly establishes the joint ownership of the assessee and his wife. He specifically referred to page 3 of the sale deed where the names of both Neepaben Rajsheel Patel and Rajsheel J. Patel appear as “Second Part”. The AR pointed out that clause 12 of the sale deed records that Smt. Neepa Patel had requested the Society to enter the name of her husband, Shri Rajsheel J. Patel, as joint holder of the property, and that the Managing Committee passed Resolution No. 4, dated 07.12.1995, unanimously approving his joint ownership. Consequent entries were also made in the society’s share certificate. The AR also pointed out the copy of share certificate where the name of the assessee is present (paper book page no. 157-158). Thereafter, Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 10– referring to clause 13, the AR submitted that both Neepaben and Rajsheel Patel became independent yet joint members, shareholders and allottees/transferees, having independent but joint co-ownership, occupancy, and possession rights in the property, with full entitlement to common facilities. The AR further referred to clause 19, which specifies that the property was sold for Rs. 3,12,00,000/-, and submitted that both joint holders received equal consideration of Rs. 1,56,00,000/- each as reflected in the payment details and TDS deduction. The assessee received cheque No. 173623 of Rs. 1,54,44,000/- from Safalya Infra Link LLP on 21.11.2018, and TDS of Rs. 1,56,000/- was deposited. The AR relied on clause 22 of the sale deed to demonstrate that both joint holders were independently paid by the buyer, which confirms that the assessee’s share was rightly treated as 50 percent. The AR emphasised that in the case of the assessee’s wife, on identical facts and documentation, the learned Assessing Officer accepted that she held only 50 percent share in the property and assessed long-term capital gain on Rs. 1,56,00,000/-. The AR further submitted that the assessee’s joint ownership stands acknowledged by multiple authorities, namely the society’s committee, the Sub-Registrar (Index No. 2 entry dated 26.11.2018), and by the sale deed itself. He argued that all these documents conclusively prove that the assessee held and transferred 50 percent ownership rights in the property. Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 11– 15. Addressing the AO’s question as to how the assessee became a joint owner, the AR argued that Smt. Neepa Patel had transferred 50 percent rights in the property to her husband in December 1995, and such transfer falls within the scope of Section 2(47)(vi). He relied on the judgment of the Hon’ble Supreme Court in CIT vs. Balbir Singh Maini, drawing attention to the principle that any transaction enabling enjoyment of immovable property constitutes “transfer” for purposes of capital gains. The AR submitted that the transfer of interest in favour of the assessee was duly ratified by the society and acknowledged by the registering authorities, thereby satisfying the requirements of Section 2(47)(vi). Consequently, the assessee’s receipt of Rs. 1,56,00,000/- represented sale consideration of his share in the property, taxable as long-term capital gain, as correctly offered. The AR further submitted that the assessee has already filed purchase documents for claiming deduction under Section 54, and the investment in specified bonds qualifies for deduction under Section 54EC, both being within the stipulated time limits. 16. The Departmental Representative (DR) relied on the order of lower authorities. 17. We have carefully perused the assessment order passed under section 143(3) r.w.s. 144C, the directions of the Hon’ble DRP, submissions made before us, and the material placed in the paper book. The addition of Rs. 48,89,877/- has been made exclusively on Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 12– the basis of an excel sheet recovered from the electronic device of one Shri Manish Brahmbhatt, who is alleged to be a broker of the seller. The assessee repeatedly stated that Shri Manish Brahmbhatt was never appointed as a broker by the assessee, and no brokerage was paid. The Department asserts that the assessee’s name appears in the excel sheet. However, it is equally an admitted fact that the seller’s name appearing in the excel sheet is “Desai Kaka”, whereas the actual seller under the registered sale deed is Safal Goyal Realty LLP. This fundamental mismatch between the seized sheet and the registered deed demonstrates that the excel sheet is not an authentic record of the assessee’s transaction. The assessee repeatedly sought a copy of the statement of Shri Manish Brahmbhatt and an opportunity of cross- examination. Neither was granted. No corroborative evidence in the form of cash withdrawals, seller’s confirmation, movement of funds, forensic linkage, or any other primary material was brought by the Revenue. Thus, even though the assessee’s name appears in the excel sheet, the presence of a wrong seller’s name, lack of signature, lack of authenticity, incorrect facts, and total absence of corroboration render the document unreliable. 18. The Hon’ble jurisdictional High Court in case of in case of Pr. CIT v. Kaushik Nanubhai Majithia (Tax Appeal No. 20 of 2024) held that an unsigned excel sheet recovered from a third party, without any independent corroboration, has no evidentiary value. When Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 13– statements referred to in assessment are not furnished to the assessee and no cross-examination is granted, the addition cannot survive. In the said case the Department also argued that the assessee’s name appeared in the third-party excel sheet. The High Court still held that mere appearance of a name in a third-party excel sheet cannot lead to addition unless backed by cogent evidence. The present facts are on a stronger footing because the seller’s name in the sheet is itself wrong, which destroys its reliability. The Co-ordinate Bench in case of Kiritkumar Champaklal Shah v. DCIT (ITA No. 1014/Ahd/2023) relied on the decision of the Hon’ble High Court in case of Kaushik Nanubhai Majithia (supra) to give relief to the assessee. 19. The factual observations made by the DRP are found to be incorrect. The objections raised regarding the absence of corroboration and the denial of cross-examination were also not dealt with in the manner required. The DRP accepted the document at face value, despite the absence of primary evidence supporting the allegation of on-money. 20. In view of the foregoing discussion and applying the binding ratio of the Hon’ble Gujarat High Court in Kaushik Nanubhai Majithia (supra) as well as the co-ordinate bench decision in Kiritkumar Champaklal Shah (supra), along with other judicial principles governing the evidentiary value of third-party loose sheets, we hold that the excel sheet found from the premises of Shri Manish Brahmbhatt is a Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 14– third-party uncorroborated material. The mere appearance of the assessee’s name in such a document does not establish payment of any on-money. The presence of an incorrect seller’s name further destroys the reliability of the document. The Department has failed to produce any corroborative evidence to substantiate the alleged cash payment, and the denial of cross-examination of the alleged broker vitiates the entire assessment proceedings. Accordingly, Ground Nos. 1 and 2 are allowed. 21. Ground Nos. 3, 4 and 5 relate to the addition of Rs. 1,56,00,000/- treated as alleged unverified and unexplained receipts arising from the sale of an immovable property jointly held by the assessee and his wife, and the consequential denial of the assessee’s claim for exemption under sections 54 and 54EC. The DRP, while affirming the addition, recorded observations to the effect that the assessee’s claim under sections 54 and 54EC remained unverified. The assessee has categorically contended that he had produced the registered sale deed, share certificate, society resolutions, bank statements, details of investment in new residential house, and copies of specified bonds, and therefore the denial of exemption was wholly unjustified. 22. On careful examination of the assessment order and the directions of the Hon’ble DRP, it emerges that the addition of Rs. 1,56,00,000/- has been made by the Assessing Officer on the footing that the assessee had allegedly failed to substantiate his ownership in Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 15– the immovable property sold and had not furnished the original purchase deed for determining the cost of acquisition. The Assessing Officer proceeded on the premise that since the original purchase deed of 1994 was in the name of Smt. Neepa Rajsheel Patel and the assessee’s name did not appear in that deed, the assessee could not demonstrate how he became joint owner of the property. The Assessing Officer therefore treated the assessee’s share of Rs. 1,56,00,000/- received through banking channels as “unverified and unexplained receipts,” and on that basis denied the assessee’s claim of exemption under sections 54 and 54EC, holding that the claim remained unverified. 23. When the material placed by the assessee is examined in entirety, this conclusion of the Assessing Officer cannot be sustained. The assessee produced (i) the English translation of the registered sale deed dated 22.11.2018, (ii) extracts of Clause 12 and Clause 13 of the share certificate and society resolutions, (iii) certified copy of Index-2 issued by the Sub-Registrar Office, (iv) the society’s Resolution No. 4 dated 07.12.1995 adding the assessee as joint holder, and (v) documentary evidence showing that the assessee and his wife were jointly treated as independent joint members, shareholders and co- owners of the said property. These documents conclusively establish that the assessee’s wife had transferred 50 percent share in the immovable property to the assessee in 1995 by entering his name as Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 16– joint holder in the share certificate and by referring the society- approved resolution. The Sub-Registrar also recognised both individuals as joint sellers in Index-2 at the time of sale. The registered sale deed itself records both Smt. Neepa Rajsheel Patel and Shri Rajsheel J. Patel as “Second Part” sellers who transferred the property and received Rs. 1,56,00,000/- each. The buyer deducted TDS under section 194IA on the entire sale consideration and issued separate cheques as recorded in Clause 22 of the sale deed. These evidences directly contradict the Assessing Officer’s finding that ownership and receipt were unverified. 24. The assessee also placed on record the purchase deed of the new residential property and proof of investment in specified bonds of NHAI within the statutory time limit for the purposes of sections 54 and 54EC. The DRP’s observation that the claim remained unverified is contrary to record, as the assessee had furnished all requisite primary documents which were neither rejected nor disproved. Once the ownership, receipt of consideration, and investment of capital gains stand duly proved by registered documents and statutory certificates, the inference of “unverified and unexplained receipts” cannot survive. 25. We also note that the Assessing Officer has not invoked any particular sub-clause or charging limb of section 56, nor has he demonstrated how a receipt arising from a registered transfer of a Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 17– capital asset, already subjected to capital gains computation, could fall within the ambit of section 56. In absence of a statutory charging provision being clearly invoked, such an addition cannot be sustained. The taxability of a receipt cannot rest on assumption or ambiguity. When the nature of receipt is established as arising from transfer of a capital asset, it falls to be examined only under the head “Capital gains” and not under section 56. There is also no finding by the Assessing Officer that the assessee lacked funds to make the investment in the new residential property or specified bonds claimed under sections 54 and 54EC. When the source of funds is traceable to disclosed and documented sale consideration, the allegation of “unverified and unexplained receipt” becomes self-contradictory. The denial of exemption under sections 54 and 54EC is also founded purely on the erroneous assumption that the receipt itself was unexplained. The assessee has furnished the purchase deed of the new residential house and copies of specified bonds issued by NHAI. The Revenue has not disputed the genuineness, eligibility or timing of such investments. Therefore, once the receipt is held to be explained and eligible for capital gains computation, the corresponding exemption cannot be denied. In these circumstances, we hold that the addition of Rs. 1,56,00,000/- made under section 56 is not supported by the facts on record or by law. The consideration received by the assessee is duly explained, duly recorded, duly taxed under the correct head, and duly supported by primary documents. No adverse Printed from counselvise.com ITA No. 388/Ahd/2025 Rajsheel Jitendra Patel vs. ITO Asst.Year –2019-20 - 18– material has been brought to justify taxing it as unexplained income. Consequently, the basis for denial of exemption under sections 54 and 54EC also ceases to exist. 26. Ground Nos. 3, 4 and 5 are accordingly allowed. 27. In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 25/11/2025 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad; Dated 25/11/2025 Tanmay, Sr. PS TRUE COPY 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)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 25.11.2025(Dictated on dragon software by Hon’ble Member) 2. Date on which the typed draft is placed before the Dictating Member 25.11.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S .11.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement .11.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 25.11.2025 7. Date on which the file goes to the Bench Clerk 25.11.2025 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 "