SHRI KANUBHAI DHULABHAI PATEL,AHMEDABAD V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), AHMEDABAD

ITA 1125/AHD/2017

AI Insights

The case involves Kanubhai Dhulabhai Patel, the appellant, contesting additions made by the Assessing Officer regarding unexplained investments in land purchases for the Assessment Year 2010-11. The primary issues were the additions related to land purchases at Hathijan and Ropda. The Tribunal examined the evidence, including documents and statements, and compared the case with a similar case involving another joint purchaser, Rameshbhai N. Savaliya, where the additions were deleted. The Tribunal found that the additions were unjustified based on the evidence presented, particularly noting the lack of concrete proof linking the assessee to the alleged cash transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705780 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2010-2011
• Other Referred Cases: ITA No.1124/Ahd.2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B.P SRIVASTAVA
• Assessee Lawyers: SANJAY R SHAH
• Keywords: Corroborative evidences; Unexplained investment; Loose papers

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.1125/Ahd/2017 (Assessment Year: 2010-11) Kanubhai Dhulabhai Patel, 17, Chandranagar Society, Nr. Navrang School, Odhav, Ahmedabad-382415. [PAN :ARAPP7916 R] Vs. The Deputy Commissioner of Income Tax, Central Circle-1(1), Ahmedabad. (Appellant) .. (Respondent) Appellant by : Shri Sanjay R Shah, AR Respondent by: Shri B.P Srivastava, Sr. DR Date of Hearing 18.06.2025 Date of Pronouncement 03.07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal is filed by the Assessee against the appellate order dated 19.01.2017 passed by the Commissioner of Income Tax (Appeals)-11, Ahmedabad, relating to the Assessment Year 2010-11. 2. The assessee has raised the following grounds of appeals: 1. The Learned Commissioner of Income Tax, (Appeals)-11, Ahmedabad has erred in law and on facts of the case in confirming the addition made by the Assessing Officer in respect of unexplained investment in purchase of land at Hathijan amounting to Rs.52,91,053/- 2. The Learned Commissioner of Income Tax, (Appeals)-11, Ahmedabad has erred in law and on facts of the case in confirming the addition made by the Assessing Officer in respect of unexplained investment of land at Ropda amounting to Rs.5,52,428/- 3. Your Appellant prays to reserve the right to add, alter, amend and/or withdraw any of the above grounds of appeal. ITA No. 1125/Ahd/2017 Kanubhai Dhulabhai Patel Vs. DCIT Asst. Year : 2010-11 - 2– 3. The first ground of appeal is relating to the addition of Rs. 52,91,053/- as unexplained investment in purchase of land at Hathijan. In this case, there was an allegation that both the purchasers of the property viz. Shri Rameshbhai N. Savaliya and Shri Kanubhai Dhulabhai Patel who had purchased the property at Hathijan village having share of 60% and 40% respectively in the said property had allegedly paid consideration in cash over and above the total sale consideration of Rs.1,01,48,900/- recorded in the sale deed. The said allegation was made by the Assessing Officer on the basis of loose papers found during survey from the office of one Advocate, Shri Paresh Hiralal Modi with whom both the joint purchasers had no connection and also the documents on the basis of which such allegation was made were found to be rough documents having many corrections and without signature of the parties. 4. The Ld. AR for the assessee in his written submission draw our attention to the decision of the Hon’ble ITAT, Ahmedabad Bench, in the case of joint purchaser Shri Rameshbhai N. Savaliya, (through legal heir) in ITA No.1124/Ahd.2017 for AY 2010-11 dated 17.04.2024, wherein the ITAT has deleted the addition made by the Ld. CIT(A). The Ld.AR for the assessee, therefore, submitted that when the addition has been deleted in respect of 60% owner of the property, the same should also be deleted in the case of joint purchaser having 40% right in the property i.e the assessee (Shri Kanubhai D Patel). For the sake of ready reference the order passed in the case of Smt. Lilaben Rameshbhai Savaliya,(Legal Heir of Rameshbhai N. Savaliya) in ITA No.1124/Ahd/2017 for AY 2010-11 is reproduced as under: “…10. We have heard both the parties and perused all the relevant material available on record. From the perusal of ‘Annexure A-2’ documents ITA No. 1125/Ahd/2017 Kanubhai Dhulabhai Patel Vs. DCIT Asst. Year : 2010-11 - 3– as well as the statement of Shri Paresh Hiralal Modi Gives the picture that the MOU was at the drafting stage and was not final and, in fact, the Assessing Officer at no point of time, demonstrated that the amount mentioned in MOU was the actual amount paid by the seller to the buyer, either from the seller’s account or from the buyer’s account (from respective party’s premises and which were not finalized in the eyes of law cannot be assumed that the same have been acted upon by the parties mentioned therein. In fact, in this case, the parties were not fully mentioned or incorporated as an entire document, but was kept blank in certain clauses. Therefore, this document cannot be the sole criteria for making the addition in consonance with the statement of Shri Paresh Hiralal Modi. Thus, the Assessing Officer as well as the CIT(A) were not justified in making this addition. Thus, ground no.1 is allowed…” 4. Thus, respectfully following the decision of ITAT, Ahmedabad Bench (supra), we hereby delete the addition made by the Ld. CIT(A). Hence, this ground of appeal of the assessee is allowed. 5. The second ground pertains to unexplained investments in the land at Ropda of Rs.5,52,428/- in cash. The relevant part of the order of the Ld. CIT(A) on this issue is as under:- “7. The next ground of appeal was related to purchase of land at Ropda for Rs. 552428/- in cash. The assessee was requested to explain source of investment with supporting evidence. The AO after considering submission of the assessee rejected the same on the ground that the land was purchased in cash. It was mentioned by the AO that the assessee did not disclose any income from agriculture in his return of income nor did he submit any proof of agriculture income and expenses despite adequate opportunity provided to him. The only explanation of the assessee was that the investment was made out of balance available with him. Therefore, the AO held that the assessee could not establish source of investment in the purchase of land in Ropda and accordingly the addition was made. 7.1 In the appeal proceedings, the AR of the appellant submitted that the AO himself mentioned in the assessment order that the assessee declared agricultural income of Rs. 305700 and payment ITA No. 1125/Ahd/2017 Kanubhai Dhulabhai Patel Vs. DCIT Asst. Year : 2010-11 - 4– for purchase of land was made out of savings of this agriculture income and from other regular income. Therefore, the action of the AO was not justified. 5.1 We find from the record, though the assessee has explained before the Assessing Officer that he had agricultural income of Rs.3,05,700/-, the same was not accepted by the Assessing Officer. Thus, the argument of the Ld. AR taken up before the Ld. CIT(A) was not correct on facts of the case. 5.2 Before us, the Ld. AR argued that the assessee has agricultural income of Rs.3,05,700/- and the remaining amount was from his own savings in cash with which the land at Ropda of Rs.5,52,428/- was purchased. On going through the record, a conscious call is being taken by this bench to treat the amount of Rs.2,46,730/- as past savings of the assessee and an amount of Rs.3,05,700/- is being confirmed in the absence of any evidences to prove earning of agricultural income. Accordingly, the appeal of the assessee on this ground is partly allowed. 6. In the result, appeal of the assessee is partly allowed. The order is pronounced in the open Court on 03.07.2025 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 03.07.2025 MV ITA No. 1125/Ahd/2017 Kanubhai Dhulabhai Patel Vs. DCIT Asst. Year : 2010-11 - 5– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , , , अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 26.06.2025 2. Date on which the typed draft is placed before the Dictating Member 01.07.2025 3. Other Member …02.07.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S . 03.07.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 03.07.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 03.07.2025 7. Date on which the file goes to the Bench Clerk 03.07.2025 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…………………………………… "