ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(1) AHMEDABAD, AHMEDABAD vs. DEEPAK PARMANANDBHAI NIMBARK, AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member

IT(SS)A No: 145/Ahd/2025 Assessment Year: 2018-19

The ACIT Deepak Parmanandbhai Central Circle-2(1), Nimbark Ahmedabad Vs 15, Parivar Society, Nr. Satyagruh Chhavni, Bodakdev, Ahmedabad Gujarat-380015 (Appellant) PAN: ACEPN4320Q (Respondent) Revenue Represented: Shri Rignesh Das, CIT-DR Assessee Represented: Ms. Nupur Shah, A.R.

Date of hearing : 05-03-2026 Date of pronouncement : 24-04-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Revenue as against the appellate order dated 15-10-2025 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad, arising out of the assessment order passed under section 153C r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2018-19.

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2.1. During the assessment proceedings based on the seized materials particularly incriminating digital images and WhatsApp chats retrieved from the mobile phone of Shri Dhaval Arvind Teli, a land broker, the AO noticed that transactions pertaining to land situated at Makarba, Survey No 686/1+2+3/2(2072) owned by Shri Amitbhai Shah and Smt. Deepaben Shah, were reflected. These materials indicated that the land was sold to the assessee for a consideration of Rs.39.86 crores, out of which Rs.20 crores was paid through banking channels as per the registered sale deed dated 20-07-2017 and the balance amount was stated to have been paid in cash.

2.2. In his statement recorded u/s 131 of the Act on 25-11-2019, Shri Dhaval Teli categorically stated that he had brokered the deal of land admeasuring 5000 sq. yds situated at Makarba and facilitated the transaction between Amit Shah and the assessee. Further, he confirmed that the total deal value was Rs.39,86,65,000/- comprising cheque payment of Rs. 20 crores and cash payment of Rs.19,86,65,000/ to various parties including Shri Sanjay Agrawal, Shri Jayantibhal Patel and Shin Manoj Vadodariya. He further admitted to having earned brokerage of Rs. 5 lakhs from the assessee which

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remained unaccounted. In order to substantiate the fair market value of the property, the assessee himself requested a reference to the Departmental Valuation Officer (DVO). The DVO, vide report dated 25-04-2023, determined the fair market value of the said Makarba land at Rs.21,28,30,000/- as on 20-07-2017, as against the registered sale deed value of Rs.20,00,00,000/-. Thus, the AO held that the difference of Rs.1,28,30,000/- represented on-money cash payment over and above the registered consideration. The AO concluded that the seized images, WhatsApp chats, statement of Shri Dhaval Teli and the DVO's valuation report collectively established that the assessee had made unaccounted investment in cash towards the purchase of Makarba land. Accordingly, the AO treated the amount of Rs.1,28,30,000/- as unexplained investment u/s 69 of the Act and added the same to the total income of the assessee. The A.O. also disallowed donation of Rs.5 lakhs claimed u/s 80G of the Act.

“…..5.8 The appellant has submitted that he purchased the land situated at Makarba, Old Survey No 686/1+2+3/2(2072), for a total consideration of Rs.20,00,00,000/-as per the registered sale deed dated 20.07.2017. The Departmental Valuation Officer (DVO), vide report dated 25.04.2023, determined the fair market value of the said land at Rs. 21,28,30,000/-, resulting in a difference of Rs.1,28,30,000/-, which works out to approximately 6.42% higher than the declared consideration. The appellant has emphasized that this variation being less than 10%, falls within the tolerance limit recognized in law. It is his contention that as per judicial pronouncements and the third proviso to section 50C(1), introduced w.e.f. 01 04 2021 but held to be curative and retrospective in nature, any difference up to 10% between the value declared by the assessee and that adopted by the Stamp Valuation

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Authority or DVO should be ignored. The appellant's contention is found to be considered in view of the following decisions of the Hon'ble ITAT, Ahmedabad on the similar issue as under:- i) The Hon’ble ITAT Ahmedabad, in the case of Bhojison Infrastructure Pvt. Ltd vs. Income Tax Officer, Ward 1(1)(2), Ahmedabad, ITA No. 395/Ahd/2022 dated 01.03.2023. (ii) The Hon'ble ITAT Ahmedabad in the case of Jayshriben Bharatbhai Patel vs. ITO, Ward-1(3)(2), Vadodara, ITA No. 449/Ahd/2020 dated 02.12.2022. (iii) The Hon'ble ITAT, "SMC" Bench Ahmedabad in the case of Maunang Farms Pvt. Ltd. vs. ITO, Ward 2(1)(4), Ahmedabad, ITA No. 110/Ahd/2024 (Α.Υ. 2012-13). (iv) The recent decision of Hon'ble ITAT Ahmedabad in case of DCIT Central Circle-1(2) vs. GSG Abode LLP vide IT(SS)A 21/Ahd/2024 and others vide order dated 18.09.2025. 5.9. In the decision of Hon'ble ITAT Ahmedabad referred above, the AO relied solely on the DVO's report prepared four years after the sale transaction (valuation done in 2022 for sale deed transaction dt. 30.10.2018) and made addition treating the difference between DVO's valuation and registered sale value as unexplained Investment u/s 69B of the Act. Thereafter, the Tribunal upheld the finding of the CIT(A) that the Assessing Officer was not justified in treating the difference between the DVO's valuation and the registered value as unexplained investment, and the addition made solely on the basis of the DVO's report were deleted. 5.10. In the present case, the DVO submitted his report on 25-04-2023, determining the fair market value of the Makarba land at Rs. 21,28,30,000/- as on 20-07-2017. It is pertinent to note that the valuation of the said land was carried out after a lapse of nearly five years from the date of the actual sale transaction, whereas the registered sale deed for the said property had been executed on 20-07-2017 for a consideration of Rs.20,00,00,000/-. The Assessing Officer, solely relying on the DVO's report, treated the difference of Rs. 1,28,30,000/- between the DVO's estimated value and the registered sale consideration as on-money payment allegedly made by the appellant towards the purchase of the said land, and accordingly added the same as unexplained investment under section 69 of the Act. The AO on the one hand has relied upon the DVO's report and on the other hand has presumed the payment of on-money of Rs. 19.86 Crore which is almost 15 times more of the variation in the sale price and DVO's report which has neither been proved from any direct documentary evidence nor from the evidence in the shape of valuation report etc. Once the AO had got the valuation of land done from the DVO, the AO having relied on such valuation was not supposed to presume further that the assessee might have paid the amount over and above than the fair market value of the land assessed by the DVO. The AO did not bring any direct or

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corroborative evidence showing that the assessee had paid any amount over and above the sale consideration recorded in the registered deed. Furthermore, it is observed that the difference between the value determined by the DVO and the actual sale consideration recorded in the registered document was merely Rs. 1.28 crore, which works out to approximately 6.42% of the sale value. Such a marginal variation falls well within the permissible range of estimation error, which has been judicially recognized by various courts and Tribunals, including Jurisdictional ITAT Ahmedabad in the case of DCIT vs. GSG Abode LLP & Ors. Order dated 18-09-2025). In that decision, the Tribunal held that even a variation up to 10% to 15% between the DVO's estimated fair market value and the declared sale price must be ignored, as such differences are attributable to inherent estimation disparities and cannot, by themselves, give rise to any presumption of understatement of consideration or receipt of on-money. The Tribunal further observed that where the valuation by the DVO is carried out several years after the transaction and reflects subsequent developments or improvements in the property, such higher valuation cannot form the basis for addition under section 69 of the Act In the present case, the DVO had undertaken valuation years after the transaction, during which time the property had undergone material changes naturally resulting in a higher estimated value. Therefore, applying the ratio of the aforesaid decision and jurisdictional ITAT Ahmedabad decision supra a difference of only 6.42% between the DVO's valuation and the registered sale value is well within the acceptable tolerance limit of valuation, methodology and estimation error. Therefore addition of Rs.1,28,30,000/- made on account of such a marginal variation of 6.42% between the DVO's value and actual consideration paid by the assessee, in absence of any corroborative evidence of on-money exchange between the buyer and the seller cannot be sustained. 511 in view of the discussion made herein above and decisions referred supra including the decision of Hon'ble jurisdictional ITAT Ahmedabad, addition of Rs.1,28,30,000/- is deleted. Accordingly, grounds of appeal no.1 & its sub- grounds related to the addition are allowed.”

3.1. On the second issue of disallowance u/s. 80G of the Act, the AO examined the claim of deduction of Rs.18,63,111/- made by the assessee. In support of this claim, the assessee had furnished various donation receipts, including one issued by Brahmanand Saraswati Ved Vidya Trust for an amount of Rs.5,00,000/- dated 07-04-2017. The AO, however, observed that as per the order dated 24-11-2017 granting registration under section 12AA of the Act in the case of the said Trust, the registration was effective from 31-05-2017. Accordingly, the donation made on 07-04-2017 fell outside the effective date of

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registration. Consequently, the Assessing Officer concluded that the assessee failed to substantiate its claim and therefore, disallowed the said amount under section 80G of the Act, adding the same to the total income.

3.2. On appeal before Ld. CIT(A), held that registration of the Trust was operative from 31-05-2017 and thus assessee eligible for 50% of the donation by observing as follows:

“…..6.3 I have carefully considered the assessment order of the AO and the submissions made by the appellant. It is an undisputed fact that the appellant had claimed deduction u/s 80G of the Act amounting to Rs.18,63,111/- which included a donation of Rs.5,00,000/- made to Brahmanand Saraswati Ved Vidya Trust an 07-04-2017 The AO, while examining the said claim, noted that registration u/s 12AA was granted to the donee trust vide order dated 24-11- 2017 with effect from 31-05-2017. As such, the donation made on 07-04-2017 pre-dated the effective date of registration and, therefore, was held ineligible for deduction. The appellant has contended that detailed submissions were, in fact, made before the Assessing Officer vide letter dated 08-12-2022, explaining that only 50% of the donation, i.e. Rs.2,50,000/-, had been claimed in the return of income u/s 80G of the Act, and not the entire donation of Rs.5,00,000/-. The AO's finding with respect to the effective date of registration of the donee trust u/s 12AA cannot be disregarded. The order dated 24-11-2017 specifically records that the registration was operative from 31-05-2017. Therefore, the donation made on 07-04-2017 falls outside the period of eligibility. At the same time, it is also a matter of record that the appellant in the return of income, had restricted its claim to Rs.2,50,000/- being 50% of the donation amount in accordance with the section 80G of the Act. Therefore the disallowance is restricted to Rs.2,50,000/- only, being the actual amount claimed by the appellant in the return of income. The balance disallowance of Rs.2,50,000/-is hereby deleted. The ground of appeal No.2 is partly allowed.”

1) "In the facts and on the circumstances of the case and in law, the Learned CIT(A) has erred in deleting the addition made of Rs.1,28,30,000/- U/S. 69 r.w.s 115BBE of the Act without considering the fact of the case that the addition was not made merely on the basis of the DVO's valuation, but also incriminating evidences unearthed during the search action conducted."

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2) "In the facts and on the circumstances of the case and in law, the Learned CIT(A) has erred in deleting the addition made of Rs.5,00,000/- of the Act without considering the fact of the case that addition was made as per the provisions of section 80G(5)(vi) of the Act." 3) "The Revenue craves leave to add/alter/armed and/or substitute any or all of the grounds of appeal"

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money. Thus in our considered view, Ground No. 1 raised by the Revenue is devoid of merits and the same is liable to be dismissed.

Order pronounced in the open court on 24-04-2026

Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT True Copy JUDICIAL MEMBER Ahmedabad : Dated 24/04/2026 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद