JAGDISHCHANDRA A. PATEL,VADODARA vs. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, VADODARA

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ITSSA 124/AHD/2023Status: DisposedITAT Ahmedabad20 August 2025AY 2013-1415 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the initiation of proceedings under section 153C was valid. The seized documents, including banakhats and receipts, along with the admission of Rajesh Patel regarding cash received from Anuj Patel, corroborated by the statements of the farmers, provided sufficient evidence of the cash component of the transaction. The Tribunal noted that Rajesh Patel acted as a conduit for both cheque and cash payments. The farmers' statements, when confronted with the banakhats, confirmed the transactions with Rajesh Patel and subsequent sale deeds with Anuj Patel and others at his direction. The Tribunal found that the assessee's plea of denial of cross-examination was an afterthought, as this issue was not raised before the Assessing Officer. The affidavits and cancellation deeds obtained after the search were considered self-serving. The Tribunal also clarified that since the addition was based on accounted cash paid in acquisition of land, the area deducted by the government would not be a parameter for deduction. Therefore, the additions made by the Assessing Officer and confirmed by the CIT(A) were upheld.

What were the facts?

These three appeals by two assessees, Jagdishchandra Ambalal Patel and Anujkumar Jagdishbhai Patel, for Assessment Years 2012-13 and 2013-14, challenge a common order of the CIT(Appeals). The case stems from a search action on March 7, 2014, in the Bafna Panchal group, which covered premises of Rajesh Patel. Loose papers seized from Rajesh Patel's locker related to land at Jambuva, Survey Nos. 344 & 345, possession of which was with Anuj Jagdishchandra Patel. Banakhats for these lands were also found. Final sale deeds were executed in favor of Anuj Patel and family members for a consideration lower than that in the banakhats. Consequently, proceedings under section 153C were initiated against the assessees. The Assessing Officer added the difference between the sale value in the banakhats and the registered sale deeds as unexplained investment in land, which was confirmed by the CIT(A).

What were the issues?

1. Whether the initiation of proceedings under section 153C of the Income-tax Act, 1961 (the Act) was valid in the absence of any documents belonging to the appellant found in the possession of the searched person, rendering the assessment void ab initio? 2. Whether the addition of Rs. 8,05,667/- as unexplained investment in land, comprising Rs. 6,83,981/- based on a banakhat between Smt. Nilaben Rajesh Patel & others and farmers, and Rs. 1,21,686/- based on a declaration by Shri Rajesh Patel, is bad in law and facts? 3. Whether the income of Rs. 1,21,686/- based on a declaration made by Rajesh Patel was correctly considered? 4. Whether the income of Rs. 6,83,981/- based on a document alleged to be created later, to which the appellant was not a party, was correctly considered? 5. Whether the deduction for land area deducted by the Government, when the land is used for non-agricultural purposes, should have been considered? Assessee's Contentions: - Proceedings under section 153C were invalid as no documents belonging to the assessee were found from the searched person. - The alleged cash payment is not supported by the seized material, and documentary evidence provided by the assessee was not properly examined. - Statements of farmers were used without providing copies or affording cross-examination opportunities. - The banakhat was allegedly created later, and the assessee was not a party to it. - Deduction for government-deducted land area should be allowed. Revenue's Contentions: - Sufficient material existed to prove undisclosed investment in lands. - Rajesh Patel admitted receiving cash from Anuj Patel in connection with the transactions. - Farmers, when confronted with documents, admitted to executing agreements with Rajesh Patel and subsequently sale deeds with Anuj Patel and others at his direction. - Affidavits and cancellation deeds obtained later were self-serving and post-facto. - The issue of cross-examination was not raised before the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 153C,Section 250,Section 132,Section 131,Section 245D(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE

For Appellant: Shri Tushar Hemani, Sr. Advocate &, Shri Parimalsinh B. Parmar, AR
For Respondent: Shri Sher Singh, CIT-DR
Hearing: 03.07.2025Pronounced: 20.08.2025

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

सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 18.08.2025 2. Date on which the typed draft is placed before the Dictating Member . 18.08.2025 3. Other Member 18.08.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S 18.08.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 20.08.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 20.08.2025 7. Date on which the file goes to the Bench Clerk 20.08.2025 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……………………………………

IT(SS)A Nos. 123 to 125/Ahd/2023 Jagdishchandra & Anujkr Jagdishchandra Patel Asst. Year : 2012-13 & 2013-14 - 15–

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