SAGAR SHIVKUMAR GOGIA,AHMEDABAD vs. THE ACIT, CENTRAL CIRCLE-2(3), AHMEDABAD
What did the Tribunal hold?
The Tribunal held that the additions made on account of alleged on-money payments for the purchase of Shop No. E-338 in "Sumel Business Park-III Project" (Rs. 1,70,01,400) and Shop No. 11 in "Orbit Project" (Rs. 2,78,20,000) were not sustainable. The Tribunal noted that the additions were based solely on digital data extracted from the mobile of the assessee's father and a statement recorded from him, which indicated a proposed payment for a different shop that did not materialize. The Tribunal relied on the Delhi High Court's decision in Ishita Varshney Jain vs. ACIT, emphasizing that third-party information, by itself, is only a starting point and cannot be treated as substantive evidence without independent corroboration. The AO failed to conduct independent investigations or establish a nexus between the seized documents and the assessee. No incriminating material was found from the assessee, and the additions were based on suspicion and conjecture, not concrete evidence. The onus was on the Revenue to prove the payment of on-money, which it failed to do. The Tribunal cited the Supreme Court's decision in K.P. Varghese, stating that an assessee cannot be burdened with proving a negative. Therefore, the additions were deleted. Grounds related to Section 153D were not pressed and were dismissed. The Tribunal did not expressly leave any issue undecided.
What were the facts?
A search action under Section 132 of the Income Tax Act, 1961, was conducted on October 15, 2019, in the case of a "Land Broker and Financer Group," which included the assessee, Sagar Shivkumar Gogia. For Assessment Year 2020-21, the assessee filed a return of income on January 6, 2021, declaring a total income of Rs. 1,31,84,250. Following a notice under Section 143(2), the Assessing Officer (AO) made additions on account of on-money paid for property purchases. The assessment was completed under Section 143(3) on September 27, 2021, at a total income of Rs. 5,80,05,650. The assessee's appeal to the Commissioner of Income Tax (Appeals) was dismissed. The assessee is now in appeal before the Income Tax Appellate Tribunal (ITAT).
What were the issues?
1. Whether the assessment order passed by the AO is illegal and liable to be quashed for violating the mandatory provisions of Section 153D of the Act, and whether the purported approval under Section 153D was illegal, bad in law, and without application of mind. (Assessee's contention: The AO's order is illegal due to violations of Section 153D and the approval was not applied with due diligence. Revenue's contention: Not recorded). 2. Whether the CIT(A) erred in confirming the addition of Rs. 1,70,01,400 made by the AO alleging on-money payment for the purchase of Shop No. E-338 in "Sumel Business Park-III Project" under Section 69 read with Section 115BBE of the Act. (Assessee's contention: No on-money was paid, detailed submissions and evidence were rejected, and no corroborative evidence was produced by the AO. Revenue's contention: Not recorded). 3. Whether the CIT(A) erred in confirming the addition of Rs. 2,78,20,000 made by the AO alleging on-money payment for the purchase of Shop No. 11 in "Orbit Project" under Section 69 read with Section 115BBE of the Act. (Assessee's contention: No on-money was paid, detailed submissions and evidence were rejected, and no corroborative evidence was produced by the AO. Revenue's contention: Not recorded). 4. Whether the additions were made without conducting independent inquiry under Section 133(6)/131, relying on documents not related to the assessee, misinterpreting statements, using material collected at the assessee's back without confrontation, relying on statements recorded without cross-examination opportunity, and indulging in surmises and conjectures without direct evidence. (Assessee's contention: All these procedural and substantive defects occurred. Revenue's contention: Not recorded).
Which sections of the Income-tax Act were involved?
Section 132,Section 143(3),Section 143(2),Section 153D,Section 69,Section 115BBE,Section 133(6),Section 131,Section 65B,Section 69B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER IT(SS)A No.79/Ahd/2025 Assessment Year: 2020-21
Sagar Shivkumar Gogia, Assistant Commission of E-339, Sumel Business Park- Income Tax, III, Central Circle – 2(3), Opposite New Cloth Market, Room No.303. 3rd Floor, Aayakar Bhavan S.O. Ahmedabad – 380 002. Vs. (Gujarat). Ashram Road, [PAN – BBPPG 2286 M] Ahmedabad – 380 009. (Gujarat). (Appellant) (Respondent) Assessee by Shri Dhinal Shah, AR Revenue by Shri R. P. Rastogi, CIT-DR Date of Hearing 25.09.2025 Date of Pronouncement 18.12.2025
O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-12, Ahmedabad (in short “the CIT(A)”) dated 15.04.2025 for the Assessment Year (A.Y.) 2020-21 in the proceeding under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The brief facts of the case are that a search action under section 132 of the Act was carried out in the case of “Land Broker and Financer Group” on 15.10.2019. During the course of search, the residence and office premises of the assessee were also covered. This being the search
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 2 of 20 year, the assessee had filed the return of income for the A.Y. 2020-21 on 06.01.2021 declaring total income of Rs.1,31,84,250/-. Subsequently, a notice under Section 143(2) of the Act was issued on 16.12.2020. In the course of assessment, additions were made on account of on-money paid for purchase of properties and the assessment was completed under section 143(3) of the Act on 27.09.2021 at total income of Rs.5,80,05,650/-.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the first appellate authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.
Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: -
“1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts.
i) On the facts and circumstances of the case, the learned CIT(A) has erred in rejecting the contention of the assessee that the assessment order passed by the AO is illegal and liable to be quashed as the same has been passed violating the mandatory provisions of section 153D of the Act.
(ii) That the purported approval u/s 153D of the Act is illegal, bad in law and also without application of mind.
(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.1,70,01,400/- made by the AO alleging that assessee has paid on money towards purchase of Shop No. E-338 in "Sumel Business Park-
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 3 of 20 III Project' under section 69 read with section 115BBE of the Income Tax Act.
(ii) That the abovesaid addition has been confirmed rejecting the detailed submissions and explanations along with the evidences brought on record by the assessee to justify that no such on-money was paid by the assessee.
(iii) That the abovesaid addition has been confirmed rejecting the contention of the assessee that no corroborative evidence has been brought on record by the AO in support of his allegation that assessee has paid the on-money towards purchase of property.
(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 2,78,20,000/- made by the AO alleging that assessee has paid on money towards purchase of Shop No. 11 in "Orbit Project' under section 69 read with section 115BBE of the Income Tax Act.
(ii) That the abovesaid addition has been confirmed rejecting the detailed submissions and explanations along with the evidences brought on record by the assessee to justify that no such on-money was paid by the assessee.
(iii) That the abovesaid addition has been confirmed rejecting the contention of the assessee that no corroborative evidence has been brought on record by the AO in support of his allegation that assessee has paid the on-money towards purchase of property.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the addition has been made without conducting any independent enquiry under section 133(6)/131 of the Act.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the addition has been made relying upon the document which has no bearing with the assessee.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that AO has erred in drawing adverse inference against the assessee by misinterpreting the statement recorded during the course of search.
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 4 of 20 8. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the addition has been made relying upon the material collected at the back of the assessee without confronting the same to the assessee and without providing proper and adequate opportunity to the assessee to rebut the same.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the addition has been made relying upon the statement recorded at the back of the assessee without providing the opportunity to cross examine the same.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the abovesaid addition despite the same has been made by indulging in surmises and conjectures without bringing on record any direct evidence against the assessee, only on the basis of presumption and assumption.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the abovesaid addition made by the AO using the data extracted from the digital devices without following the procedure prescribed under section 65B of the Indian Evidence Act.
The appellant craves leave to add, amend or alter any of the grounds of appeal.”
Ground nos.1 & 2 were not pressed by the Ld. AR of the assessee, hence, both these grounds are dismissed.
Addition on account of on-money payment
Ground no.3 pertains to addition of Rs.1,70,01,400/- on account of on-money towards purchase of Shop No. E-338 in “Sumel Business Park- III Project” by the assessee. Similarly, ground no.-4 pertain to addition of Rs.2,78,20,000/- on account of on-money towards purchase of Shop No. 11 in “Orbit Project”. As the facts involved in respect of these additions
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 5 of 20 are similar, we deem it proper to adjudicate both the grounds together. The other grounds from Ground-5 to 11 are subsidiary grounds in respect of these two additions.
Shri Dhinal Shah, Ld. AR of the assessee, explained that in the course of search, certain digital data from mobile of Shri Shivkumar L Gogia, father of the assessee, was extracted under identification as under:
(a) LAMBORGINI MOBILE Volume-1 - Page nos.1 to 62, and (b) LAMBORGINI MOBILE Volume-1 - Page nos.1 to 50. The “Image No.IMG-20181026-WA0027.jpeg” (page no.12), was handwritten financial transaction of Shri Shivkumar L. Gogia which is reproduced at page no.4 of the assessment order. The Ld. AR explained that in the course of statement of Shri Shivkumar L. Gogia recorded on 24-25.01.2020, this document was explained as proposed payment for purchase of Shop No.339, “C” Block Sumel Park-III, opp. Raipur Gate, Ahmedabad. As per his statement, this Shop was purchased by Shri Shivkumar L. Gogia at the rate of Rs.36,200/- per sq. ft. and sold at the rate of Rs.43,500/- per sq. ft. It was also submitted by Shri Shivkumar L. Gogia that the said deal did not materialise and was cancelled.
The Ld. AR submitted that the assessee had purchased a Shop No. E-338 in Sumel Park-III project on 06.08.2019 for a consideration of Rs.28,00,000/-. The Assessing Officer, on the basis of the document recovered from the mobile of assessee’s father had adopted the purchase price of the property at Rs.36,200/- per sq. ft. and worked out the purchase consideration of the shop of area 547 sq. ft. at Rs.1,98,01,400/-. Accordingly, an addition for on-money payment of Rs.1,70,01,400/- in this
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 6 of 20 transaction, was made by the AO, which was held as undisclosed investment of the assessee.
Shri Dhinal Shah, Ld. AR submitted that this addition of Rs.1,70,01,400/- in respect of on-money payment was based on mere presumption & surmise. He submitted that no evidence for any on-money payment made by the assessee or any other family member was found in the course of search. The addition was based on the document seized from the mobile of assessee’s father who had categorically stated that the transactions noted at page no.12 did not materialise. The Assessing Officer did not bring any corroborative evidence on record to establish that the assessee had made payment of on-money towards purchaser of property. No independent enquiry was conducted by him and the Assessing Officer had wrongly drawn adverse inference against the assessee by mis-interpreting the statement recorded during the search. The Ld. AR submitted that Shop no.C-339 was sold by Shri Mukesh Galani and Shri Mohanlal R Galani on 24.02.2015 to Awas Infrastructure Group Finance Limited for a consideration of Rs.18,50,000/-. Thereafter, Awas Infrastructure Group Finance Limited had sold the said Shop No.C- 339 to one Shri Kiran Kumar Rameshlal Parwani on 02.08.2016 for a consideration of Rs.22,00,000/-. The assessee has brought on record copy of sale deed in respect of these transactions. The Ld. AR submitted that Shop no C-339 was never acquired by Shri Shivkumar L. Gogia. The Ld. AR further submitted that Shri Shivkumar L. Gogia had subsequently retracted his initial statement dated 24-25.01.2020, on 02.11.2020. Regarding the delay in retraction, it was explained that copy of statement of Shri Shivkumar L. Gogia was provided to him only on 01.10.2020 and the retraction was made by him within one month thereof. The Ld. AR reiterated that since the transaction as appearing in page no.12 of the
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 7 of 20 Mobile data didn’t take place, the Assessing Officer was not correct in adopting the rate appearing therein, in the assessee’s case. He further submitted that the document relied upon by the AO was a dumb document and no action could have been taken on that basis.
Regarding the next addition of Rs.2,78,20,000/-, it was explained that it was made on the basis of Image No.IMG-20190220-WA0015.jpeg (Page No.47) found and seized from Lamborgini mobile of Shri Shivkumar L. Gogia. This document is reproduced at page no.23 of the assessment order. The content of this document was explained by Shri Shivkumar L. Gogia in his statement recorded u/s 131 of the Act on 25.01.2020. He had explained that the noting appearing in page no.47 related to purchase of one showroom by him in “Orbit Project”, made in cash. The property was purchased at the rate of Rs.16,500/- per sq. ft. for a consideration of Rs.4,06,56,000/-, which was subsequently sold at the rate of Rs.18,500/- per sq. ft. for a total consideration of Rs.4,55,84,000/-. The purchase and sale transaction were done without documentation and Shri Shivkumar L. Gogia had admitted of having derived profit of Rs.49,28,000/- in this transaction. The Assessing Officer had found that the assessee had also acquired Shop No.11 in the same Orbit Project for a consideration of Rs.1,50,80,000/-. The Assessing Officer had adopted the purchase price of this property at the rate of Rs.16,500/- per sq. ft. on the basis of the rate as mentioned in the seized document page no.47 referred above and accordingly worked out the total purchase consideration at Rs.4,29,00,000/-. The difference of Rs.2,78,20,000/- was treated as on- money paid by the assessee for acquiring this property and accordingly, an addition was made.
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 8 of 20 11. Shri Dhinal Shah, Ld. AR of the assessee submitted that the dates appearing in the seized document (page no.-47) were from 26th August to 13th December and, therefore, some of the transactions were after the date of search. Therefore, no addition could have been made on the basis of this document. He further submitted that this transaction was subsequently denied by Shri Shivkumar L. Gogia and the profit of Rs.49,28,000/- was not offered by him in his return of income. He contended that there was no shop of area 2464 sq. ft. as mentioned in this seized document (page no.47) in the Project Orbit and, therefore, the AO was not correct in relying upon this document for making the addition in the hand of the assessee. He submitted that the addition was based on mere presumption and no corroborative evidence for the payment of any cash for purchase of the property was found in the course of search. That there was no corroborating evidence to support the presumption of payment of on-money in cash by the assessee towards purchase consideration and neither such evidence was found in the course of search.
Per contra, Shri R. P. Rastogi, Ld. CIT-DR submitted that the Assessing Officer had relied upon the documents found from the mobile of assessee’s father for making the two additions. Those documents were duly explained by Shri Shivkumar L. Gogia in his statements recorded on different dates. Ld. CIT-DR explained that the assessee had purchased the properties in the same year in which his father Shri Shivkumar L. Gogia had acquired the properties in Sumel Business Park-III as well as in Project Orbit. Therefore, the AO had rightly adopted the rate as appearing in the seized documents for working out the actual purchase consideration paid by the assessee. Ld. CIT-DR further submitted that
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 9 of 20 additions were also made in the case of Shri Shivkumar L. Gogia on the basis of those documents (which has been relied upon for making addition in the case of the assessee) and those additions were sustained by the Ld. CIT(A). He, therefore, strongly supported the order of the AO and the Ld. CIT(A) in respect of both the additions.
We have considered the rival submissions. The Assessing Officer has made addition of Rs.1,70,01,400/- on account of on-money payment for purchase of shop in Sumel Park-III Project. As per the sale deed, the shop was acquired by the assessee on 06.08.2019 for a consideration of Rs.28,00,000/-. However, the Assessing Officer had adopted the cost of acquisition of this property at the rate of Rs.36,200/- per sq. ft. as appearing in the seized document page no.12 of Lamborghini Mobile data of assessee’s father. It will be relevant here to examine the explanation given by Shri Shivkumar L. Gogia in respect of this page no.12. Shri Gogia in his statement recorded u/s 131 of the Act dated 24.01.2022, in reply to question no.11 had stated as under: -
Page No. 12 contain the details of proposed payments to be made for purchasing the Shop No. 339, C- Block, Sumel Park-3, Opp. Raipur Gate, Ahmedabad. However, the deal could not materialize and I did not purchase the shop. I want to submit that no payments were made with regard to the deal.
Shri Shivkumar L. Gogia had thus initially stated that this document had details of proposed payments but had denied having purchased the Shop No. – 339, C Block, Sumel Park-III and stated that no payments were made with regard to this deal. In the next question, Sri Gogia was again asked to explain the transaction appearing on page no.12, to which he had replied as under: -
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 10 of 20 Sir, on this there is working of cost of Shop No. 339, C- Block, Sumel Park-3, Opp. Raipur Gate, Ahmedabad. The Shop has been purchased by me at the rate 36,200/- per square feet and sold at the rate of Rs.43,500/- per square feet. This Shop has been of purchased by me and Sonubhai alias Rajendra Keswani. On this page the figures are written on coded form. i.e. the figure written on the right hand side top corner against my name is 72.84 which is in fact 72,84,000. And the figure of 19.76 written against Sonu alias Rajendra Keswani is in fact Rs.19,76,000/-. The total payment made for purchase of the shop is Rs.92,60,000/-. The payments made towards purchase of this shop are made in cash. On the lower part of right hand side of page is figure of 1.60 which is Rs.1,60,000/- which is paid for clearing the outstanding rent. Rs. 80,000/- has been paid in cash and balance amount of Rs. 80,000/- is paid by cheque. The amount of Rs.53,000/- has been received back by us. The outstanding amount of Dalali to be paid is Rs.1,13,000/-. On the left hand side of the page the shop is proposed to be sold for total sale consideration of Rs.1,89,97,000/- which is written in coded form as 1.89970 and thereby earning profit of Rs.97,10,000/- which is written in coded form as 97.10. Towards the sale consideration, we have received token amount of Rs.40,00,000/- which is written in coded form as 40/-. However, the deal got cancelled and the token amount of Rs.40,00,000/- was returned. As the deal got cancelled no documentation has been done in our name. Tomorrow, I will furnish the name of persons to whom we have paid cash of Rs.92,60,000/- as purchase consideration and have received cash of Rs.40,00,000/- as token towards sale consideration. Tomorrow, I will furnish complete details of the deal after verifying my records.
It is thus found that Shri Shivkumar L. Gogia had stated that Shop No.339 was purchased by him at Rs.36,200/- per sq. ft. and sold at Rs.43,000/- per sq. ft. along with one Shri Sonubhai alias Rajendra Keshwani and in the process, they had earned profit of Rs.97,10,000/-. He had, however, also stated that this deal was cancelled and the token amount of Rs.40,00,000/- as appearing in the seized document was returned. The AO had merely relied upon the initial statement od Sh. Shivkumar L. Gogia for taking purchase price of the property by the assessee at Rs.36,200/- per square feet. Sh. Gogia had subsequently retracted his statement and his subsequent explanation for page number- 12 of the mobile data was as under:
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 11 of 20 24. That, in reply to Q. no.11 on Pg. no.9 and 10 of statement recorded in Aaykar Bhavan on 24/01/2020, where questions and answers were typed by Inspector of Dy. Director search on computer in English. He showed me digital data Pg. no.12 of Volume-1 (Pg. no. 13). The reply to image of digital data on Pg. no. 12 of Volume-1 was given by me that this is proposal given by some broker for purchase of shop no. C- 339 and 4 other shops, as at the top of paper 5 is written. However, the deal did not materialize, I did not purchase the shops and no payment was made by me. Also, I had written "Token Cancelled" across the page. Whereas in Q. no. 12, elaborated reply of Q. no. 11 was given and explained that the proposal was for 5 shops at 92.60 Lakh, which include 1 shop (C-339) of Sonubhai alias Rajendra Keshwani at 19.76 Lakh. Broker called for to give token of 40 Lakh against these 5 shops. Broker also promised that within 12 months from 14/06/2015 these 5 shops should be sold at Rs.1,89,97,000/- thereby earning profit of Rs.97,10,000/-. But the same was not feasible to me due to location of shops, so, I refused the proposal/deal. Whereas, in statement different reply was typed and my reply was twisted by IT Officer without my knowledge.
Now, I inquired that Shri Sonubhai alias Rajendra Keshwani has sold shop no. C-339 on 02/08/2016 at Rs.22 lakh, index and sale deed papers (Pg.no.14 to 18). Thus, the notings on this page for proposal of 5 shops including one shop C-339 of Shri Sonubhai alias Rajendra Keshwani. Thus, this deal was not materialized.
The subsequent explanation of the Sh. Shivkumar L. Gogia was that the transaction noted in Page no.-12 of Mobile Data was not in respect of one property but for 5 shops. The figure “5” is found appearing in this document, therefore, the contention of Sh. Shivkumar L. Gogia can’t be outrightly brushed aside. Be that as it may, the fact that emerges is that the entry appearing in page number 12 and the explanation of the Sh. Gogia in this regard, was not conclusive.
The assessee has contended that page no-12 was a dumb document and no addition could have been made on that basis. The AO had taken the figure of “36200” appearing in this page as the rate of purchase. We have carefully gone through this document. In this seized document, only figure of “36200” is appearing and no “rate” or “per sq. ft.” is found prefixed or suffixed to this figure. Therefore, there was no explicit evidence to conclude that the figure of “36200” represented per sq. ft. rate
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 12 of 20 of purchase. So far as the “rate” is concerned, this document is found to be a dumb document. Therefore, the AO was not correct in treating the figure of “36200” as the rate of purchase of shop by the assessee, in the absence of any corroborative evidence in this respect and particularly when Shri Shivkumar L. Gogia had denied the transaction.
If the Assessing Officer was going to adopt the cost of acquisition of the Shop No. E-338 in Sumel Business Park-III, Project purchased by the assessee, at the rate of Rs.36,200/- per sq. ft. as mentioned in the seized document page no.12, he was required to establish that the transaction of Shri Shivkumar L. Gogia had actually taken place at that rate. Alternatively, the AO was required to establish that the fair market value of the property was Rs.36,200/- per sq. ft. No evidence was brought on record to establish the fact that Shri Shivkumar L. Gogia had purchased the Shop No.339 at the rate of Rs.36,200/- per square feet, for a consideration of Rs.92,60,000/-. For that matter, no evidence for purchase of this property by Shri Shivkumar L. Gogia has been brought on record. In the absence of any such evidence, the Assessing Officer was not correct in taking the figure of “36200” appearing in the seized document, as the “rate” for working out the cost of acquisition of the property by the assessee. The Assessing Officer did not make any enquiry to find out the stamp duty value of the property. Neither the matter was referred to the DVO to find out the market value of the property. No evidence, whatsoever, was brought on record to establish that the fair market value of the shop purchased by the assessee was at the rate of Rs.36,200/- per square feet. As rightly contended by the assessee, no evidence for any cash payment by the assessee for purchase of the properties was found in the course of search. In view of these facts the
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 13 of 20 addition made by the AO is found to be based on mere presumption and not on any material fact.
The next addition made by the Assessing Officer is on account of on-money payment of Rs.2,78,20,000/- towards acquisition of the Shop No.11 in Project Orbit. The assessee had acquired this shop for a consideration of Rs.1,50,80,000/- on 20.08.2019. The Assessing Officer had, however, adopted the rate as appearing in the seized documents page no.47, found from the Mobile of his father. The copy of the seized document is reproduced below for a better understanding: -
Shri Shivkumar L. Gogia in his initial statement had explained the contents of this document (page-47 of the seized document) as under:
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 14 of 20 The notings appearing on Page No.47 are made by me. This notings are related to one Showroom in Orbit project which has been purchased by me in cash. The Orbit Project is located on Rajpath-Rangoli Road, Ahmedabad. The area of this shop is 2464 Square feet and has been purchased at the rate of Rs.16,500/- per square feet totally amounting to Rs.4,06,56,000/-. This investment has been made in cash and the same has not been recorded in my books of accounts. Thereafter this shop has been outrightly sold out by me at the rate of Rs.18,500/- per square feet without doing documentation of the same. The total sale consideration received by me is Rs.4,55,84,000/- thereby deriving profit of Rs.49,28,000/-, which is out of my books of accounts. At present I am not able to recall the name of person from whom I have bought the shop and subsequently sold. I will submit complete details of the transaction with my page-wise explanation to be submitted later on.
Shri Shivkumar L. Gogia had initially stated that the property referred in page no. 47 was purchased by him for a consideration of Rs.4,06,56,000/- and sold at Rs.4,55,84,000/-, thereby earning profit of Rs.49,28,000/-. Though this transaction was initially stated to be in respect one showroom in Orbit project, in the subsequent retraction affidavit Shri Shivkumar L. Gogia had stated that the transaction was not in respect of any showroom in project Orbit but it pertained to certain land dealing. The explanation of Shri Shivkumar L. Gogia in this respect was as under:
“That, in reply to Q. no.9 on Pg. no.8 of statement recorded in Aaykar Bhavan on 25.01.2020, where questions and answers are typed by Inspector of Dy. Director search on computer in English. He showed me digital data Pg. no. 47 of Volume-1 (Pg. no.19). The reply of image of digital data on Pg. no.47 of Volume-1 was given by me, where I stated that this notings are related to purchase of 2464 sq. yard land and has been purchased before 5 to 6 years @ Rs.16,500/- per sq. yard. Thereafter, this land has been outrightly sold out @ Rs.18,500/- per sq. yard at Rs.4,55,84,000/-, deriving profit of Rs.49,28,000/-, which is out of my books of accounts. This reply was also twisted by IT Officer and word of 'Land' changed to 'Showroom in Orbit Project'. In fact there is no showroom in Orbit Project having area of 2464 sq. ft. Thus, my statement is twisted without my knowledge.
The AO had merely relied on the initial statement of Shri Shivkumar L.Gogia that the transaction in page no-47 was in respect of showroom in Project Orbit. It is found that the name “Orbit” is nowhere appearing in the
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 15 of 20 seized page no.-47. Sh. Gogia had stated that the property was purchased for a consideration of Rs.4,06,56,000/-. However, this purchase consideration of Rs. 4,06,56,000/- is also not found appearing in this seized document. The two figures appearing in this seized document are Rs. 4,55,84,000/- and Rs.3,44,64,000/-. In the absence of any purchase consideration or the purchase rate mentioned in the seized document, the Assessing Officer was not correct in adopting the rate of Rs.16,500/- per sq. ft. as the purchase price of the shop by the assessee. The AO had blindly relied upon the initial statement of Shri Shivkumar L. Gogia without examining the entries in this seized document and without making any enquiry to find out the fair market value of the property. There was no evidence available to conclude that the page no.-47 pertained to project Orbit nor the property referred in this page was acquired at the rate of Rs.16,500/- per sq. feet.
The statement of Shri Shivkumar L. Gogia can’t be treated as a gospel truth for making the additions in the hand of the assessee. The principle of surrounding circumstances and preponderance of probabilities required any other instance of actual purchase transaction or evidence for fair market value of the properties, at comparable rates. In the absence of any such evidence, the rate of Rs.36,200/- or Rs.16,500/- as adopted by the AO on the basis of data appearing in the mobile of assessee’s father, can’t be taken as sacrosanct. The Assessing Officer had also not given a finding that purchase of the two shops by the assessee was at a value lower than their Jantri value. Neither the matter was referred by the AO to the DVO to find out the fair market value of the properties. Further, if the properties were purchased at a rate higher than as appearing in the sale deeds, then certain evidence for payment of extra
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 16 of 20 consideration should have been found in the course of search. As already mentioned earlier, no evidence of payment of any on-money in respect of the purchase consideration of the shops, was found from the assessee or from any other family member, in the course of search. If the Revenue wanted to tax the on-money consideration of the purchase transactions, the burden was squarely on the Assessing Officer to establish that the assessee had paid on-money in these transactions. The seller of the properties had also not admitted having received any on-money payment in these transactions. In the absence of any such evidence, the additions as made by the Assessing Officer are found to be based purely on suspicion and assumption of facts and such additions can’t be sustained.
The assessee has relied upon the decision of Hon’ble Gujarat High Court in the case of CIT vs. Fairdeal Textile Park (P.) Ltd. (362 ITR 497). In that case, agreements were executed for purchase of land at Rs.2.80 Lakhs per bigha, whereas the sale deed was executed at the rate of Rs.70,000/- to Rs.80,000/- per bigha. The difference was treated by the Assessing Officer as on-money payment and the Hon’ble Jurisdictional High Court had held in that case as under: -
We could notice from the entire material that both the Assessing Officer and the CIT(A) were convinced that both the agreements executed between the company and Shri Natwarsingh since had reflected clearly the rate of the land at Rs.2.80 lakhs per bighas. Subsequent registered sale deed effected in the name of the company at the rate of Rs.70,000/- to Rs. 80,000/- per bighas was much lower in rate, and therefore, only inevitable conclusion was the exchange of on-money in the entire deal. It can be noted from the detailed discussion of both the authorities that except these agreements, there was no other evidence on the record. Admittedly, the land had been originally agreed to be purchased through middleman. The statement given by Shri Natwarsingh is eloquently making it clear that such agreement had not been acted upon. In his statement in an answer to the question raised by the authority, he had admitted that he had expected the purchase price to Rs.70,000/- to Rs.80,000/- per bigha, when he entered into the agreement to sell with the respondent assessee. He also had expected to purchase the land he agreed to sell from other agriculturists. Being sure of striking
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 17 of 20 such deals at the rate he had contemplated, he had entered into an agreement to sell for selling the land at Rs.2.80 lakhs per bigha to the company expecting huge profit in the process. However, when some of the owners denied to sell him the land at the price that he expected, the amount of Rs.90,000/- that was received by him from the company by way of token towards sale consideration was asked to be returned. He had been emphatic that such deal did not get through and therefore the amount had been returned to the company. It could be thus noticed from the statement recorded of the Director and others that the middleman had ensured the company to get the land at the rate of Rs.2.80 lakhs per bigha. However, on realizing that he needed to surreptitiously pocket the huge amount of money in the said deal, the purchase was made directly from the owners by the company, and therefore, the price at which it purchased in fact had come on the record. The Tribunal, therefore, rightly noted the essential fact that purchase of land was directly from the farmers. In absence of any other evidence of on-money payment, as also in absence of any suggestion of the market value of the land purchased by the respondents being far more than what had been reflected in the sale deed, the Tribunal did not endorse the views of both the Assessing Officer and that of CIT(Appeals). Another aspect that had weighed with the Tribunal was the fact that the registered documents had been executed at 'Jantri' value. There was no reference to the Valuation Officer to point out that the value of the land was below the market price.
Predominantly, the issue is based on factual matrix presented before the authorities. Cumulatively, all circumstances and the facts that had emerged on the record led the Tribunal to the decision which is impugned in the present appeal which according to us suffers from no perversity. [Emphasis supplied.]
In the case of Gayatri Enterprise vs. ITO (420 ITR 15), the Hon’ble Gujarat High Court held that there could not have been any presumption for the purpose of making addition under Section 69B of the Act. The observation of the Hon’ble High Court is reproduced below: -
Section 69B of the Act does not permit an inference to be drawn from the circumstances surrounding the transaction that the purchaser of the property must have paid more than what was actually recorded in his books of account for the simple reason that such an inference could be very subjective and could involve the dangerous consequence of a notional or fictional income being brought to the tax contrary to the strict provisions of Article 265 of the Constitution of India which must be "taxes on income other than agricultural income.
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 18 of 20 24. In the case of Ishita Varshney Jain vs. ACIT (2024) (12 TMI 260) Hon’ble Delhi High Court on the issue of third party information has held as under: -
“5. It is apparent from the above, that neither any books of account nor documents, either belonging to the petitioner or containing information pertaining to the petitioner, were found. The fact that an Agreement to Sell between two separate parties has been retrieved from the mobile phone of the husband of the petitioner, does not establish that the information pertains to the petitioner. As noted above, the information is that there was an Agreement to Sell between two separate parties. Therefore, the assumption that the said information pertained to the petitioner is clearly erroneous. It appears that the Assessing Officer has, based on the image of the Agreement to Sell sent on Whatsapp, assumed the value of one floor of the property and based on this assumption, the AO is seeking to impute that said value in a separate transaction involving the petitioner.
We do not consider it apposite or necessary to comment on this train of reasoning, as the scope of examination in this petition is limited. The only question to be addressed is, whether any asset, bullion, jewellery, books of account, documents were found during search, which either belonged to the petitioner or contained information pertaining to the petitioner. The fact that the image suggested a value of particular property, in respect of a transaction between two other parties, cannot be stated to be pertaining to the petitioner. [Emphasis supplied.]
The additions under challenge in the present case were made solely on the basis of initial statement of assessee’s father, without bringing on record any independent corroborative evidence to establish that the assessee had made investment in the properties in excess of the value as disclosed by him. It is a settled position of law that third-party information, by itself, constitutes only a piece of information or a starting point for inquiry. Such information cannot be treated as substantive evidence unless it is supported by independent material. In the present case, the Assessing Officer neither conducted any further investigation to verify the correctness of the information in the seized documents nor
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 19 of 20 established a live nexus between the said information and the assessee. It is also relevant to note that no incriminating material was found from the assessee to support the impugned additions on account of on-money payment. It is settled position of law that additions cannot be sustained merely on the basis of third-party statement or information, unless the same is corroborated by independent evidence and the assessee is afforded due opportunity to rebut such material. Suspicion, however strong, cannot take the place of legal proof.
As already discussed earlier, no evidence was found in the course of search regarding payment of any on-money by the assessee and the adverse view taken by the Assessing Officer was without any corroborative evidence. It is well settled proposition that the onus lies on the person who alleges. If the Assessing Officer had alleged payment of on-money for acquisition of properties, the onus was squarely on the Assessing Officer to bring on record concrete evidence to prove this allegation. The Hon’ble Supreme Court has held in the case of K.P. Varghese, 131 ITR 597 (SC) that the assessee cannot be placed an impossible burden to establish a negative i.e. he didn’t pay extra consideration in the instant case. No evidence for payment of any on- money was found in spite of the drastic action of search being conducted in the case of the assessee. The entries appearing in the seized documents cannot be held as conclusive for the purpose of addition in the case of a third party i.e. the present assessee. Where the veracity of entries itself is not conclusively established, the additions made by the Assessing Officer on that basis were not justified at all. The seized documents relied upon by the Assessing Officer were merely dumb documents in the hands of the assessee. The Revenue was unable to
IT(SS)A No.79/Ahd/2025 (Assessment Year: 2020-21) Sagar Shivkumar Gogia vs. ACIT Page 20 of 20 corroborate the seized documents with any transaction belonging/pertaining/relating to the assessee to give weightage to these seized documents. The additions are found to be based on mere suspicion, conjectures and surmises and without any concrete evidence to establish that the assessee had made payment of any on-money in the purchase of two properties. Therefore, the additions of Rs.1,70,01,400/- and Rs.2,78,20,000/- on account of on-money payment towards purchase of Shop No. E-338 in “Sumel Business Park-III Project” and Shop No. 11 in “Orbit Project” respectively, are deleted. The grounds taken by the assessee are allowed.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on this 18th December, 2025.
Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 18th December, 2025
PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order
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