MAHADEVBHAI K BHARWAD,AHMEDABAD vs. ITO, WARD-3(2)(1), AHMEDABAD

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ITA 2518/AHD/2025Status: DisposedITAT Ahmedabad12 June 2026AY 2018-194 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition was unsustainable as the Revenue failed to provide evidence that the assessee was the owner or had received the entire sale consideration. The assessee had only declared and offered tax on their actual share of Rs. 20,20,202/-.

What were the facts?

The assessee did not file a return of income, but information revealed a property sale. The Assessing Officer initiated proceedings under Section 148 and made an addition of Rs. 3,27,74,798/- due to non-compliance and discrepancy in declared sale consideration.

What were the issues?

Whether the addition made by the Assessing Officer was justified when the assessee was only a confirming party and had declared their actual share of the sale consideration.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 144B,Section 45,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-SHRI T.R. SENTHIL KUMAR

For Appellant: Shri Parin Shah, AR
For Respondent: Shri Kamal Deep Singh, Sr DR
Hearing: 23.04.2026Pronounced: 12.06.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT :

Delay Condoned. This appeal has been filed by the assessee against the order of the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as "CIT(A)" for short) dated 15.07.2025, passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2018-19.

2.

The assessee has raised following grounds of appeal :-

“1. The order passed by lower authorities is invalid, bad in law and required to be quashed. 2. Ld. NFAC erred in law and on facts in confirming reopening of assessment u/s 148 of the Act. 3. The reopening of assessment has been initiated for verification purpose and accordingly, the same is required to be quashed. 4. Ld. NFAC erred in law and on facts in confirming addition of Rs.3,27,74,798/- u/s 45 of the Act ignoring fact that share of the appellant is of Rs.20,20,202/- only.

ITA No. 2518/Ahd/2025 - Mahadevbhai K Bharwad Vs. ITO Asst. Year : 2018-19 - 2– 5. Both lower authorities ought to have granted deduction for indexed cost of acquisition while computing capital gain.”

3.

The brief facts, as culled out from the records, are that the assessee is an individual who did not file the return of income for the year under consideration. Subsequently, information was received by the Department through the Insight Portal under the Non-Filer Monitoring System (NMS) indicating that the assessee had sold an immovable property during the relevant year under consideration. On the basis of such information, proceedings under Section 148 of the Act were initiated. In response to notice under Section 148, the assessee filed return of income declaring total income of Rs.2,18,110/-, wherein capital gains arising from property transaction were also disclosed.

3.1 During assessment proceedings, the Assessing Officer observed that the sale consideration of the immovable property was Rs.3,47,95,000/-, whereas the assessee had declared only Rs.20,20,202/- as his share. Despite issuance of statutory notices under Sections 142(1) and 143(2), there was no compliance from the assessee. The assessment was therefore completed u/s 147 r.w.s. 144 and Section 144B of the Act, making addition of Rs.3,27,74,798/-.

4.

Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A), who, dismissed the appeal ex-parte for non-prosecution and confirmed the addition made by the Assessing Officer.

5.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

6.

Before us, the Ld. AR submitted that that the assessee was neither the sole owner nor the principal transferor of the property. The assessee's entitlement in the transaction was restricted to Rs.20,20,202/-, which had already been disclosed in the return of income filed in response to notice u/s 148 of the Act. The Ld. AR further submitted that the assessee was merely a confirming party to the registered sale deed

ITA No. 2518/Ahd/2025 - Mahadevbhai K Bharwad Vs. ITO Asst. Year : 2018-19 - 3– and that the amount received by him had already been offered to tax. It was argued that, in the absence of any material demonstrating that the assessee had received the entire sale consideration, no addition could be made merely on the basis of information available in the Departmental database. Accordingly, it was prayed that the addition be deleted. 7. The Ld. DR, on the other hand, supported the orders of the authorities below. The Ld. DR submitted that the assessee had failed to comply with the statutory notices issued during the assessment proceedings and had not furnished any supporting evidence before the Assessing Officer. It was contended that the Assessing Officer was justified in drawing an adverse inference and completing the assessment on the basis of information available on record.

8.

We have heard the rival submissions and perused the material available on record. The main issue for adjudication is whether the Assessing Officer was justified in treating the differential amount of Rs.3,27,74,798/- as taxable in the hands of the assessee. Before us, the assessee has placed on record a copy of the registered sale deed dated 10.11.2017 relating to the land situated at Village Vatva. On perusal of the said document, it is noticed that several persons are shown as executants/owners of the property and the assessee has been described only as a confirming party. As per AS26, the assessee was paid Rs.20,20,202/-.

8.1 The explanation furnished by the assessee is that he was not the owner of the land and was joined as a confirming party in the transaction. According to the assessee, he received a sum of Rs.20,20,202/- in connection with the transaction, which has already been disclosed in the return of income filed pursuant to the notice issued u/s 148 of the Act. We find that the Assessing Officer proceeded solely on the basis of information available in the Insight Portal showing a transaction value of Rs.3,47,95,000/- and, due to non-compliance during assessment proceedings, treated the differential amount of Rs.3,27,74,798/- as taxable in the hands of the assessee. However, no material has been brought on record by the Revenue to establish that the

ITA No. 2518/Ahd/2025 - Mahadevbhai K Bharwad Vs. ITO Asst. Year : 2018-19 - 4–

assessee was the owner or co-owner of the property, or that he had received the entire sale consideration. In fact, an amount of Rs.1,73,97,574/- has been received by six sellers and 5 confirming parties. The Revenue has not placed any evidence on record to show that any amount over and above Rs.20,20,202/- was received by the assessee. In the absence of any evidence showing receipt of the entire sale consideration by the assessee, the addition made merely on the basis of the total transaction value reflected in the information system cannot be sustained. Since the assessee has already offered for taxation the amount received by him, namely Rs.20,20,202/-, and no material has been brought on record to establish receipt of any higher amount, the addition of Rs.3,27,74,798/- made by the Assessing Officer and confirmed by the Ld. CIT(A) is held to be infructuous and liable to be deleted in the hands of the assessee. The assessee having already offered the amount of Rs.20,20,202/- received by him to tax, no further addition is called for.

9.

In the result, the appeal of the assessee is allowed.

The order pronounced in the open Court on 12.06.2026

Sd/- Sd/-

(T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 12/06/2026 **btk आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , अहमदाबाद / ITAT, Ahmedabad , ,

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