ITAT Ahmedabad Restores Godhavi Land On-Money Additions to CIT(A) After Finding Seized Loose Sheet Insufficient to Sustain Section 69A Additions

The Ahmedabad ITAT remanded on-money additions totalling crores against multiple members of the Popular Group, holding a single handwritten loose sheet could not sustain Section 69A additions without corroborative evidence.

A batch of 31 appeals and cross-objections arising from a search conducted on the “Popular Group, Ahmedabad” came before the Income Tax Appellate Tribunal, Ahmedabad “C” Bench on 14 May 2026. The central dispute in each appeal was whether additions under Section 69A of the Income Tax Act — running into several crores per assessee — could be sustained on the basis of a single handwritten loose sheet seized from one co-owner, Shri Alap Somabhai Patel, during a search conducted on 8 October 2020. The Tribunal, comprising Shri Siddhartha Nautiyal, Judicial Member, and Shri Narendra Prasad Sinha, Accountant Member, found the seized material uncorroborated and restored the on-money additions to the Commissioner of Income Tax (Appeals) for de-novo consideration across assessment years 2019-20, 2020-21 and 2021-22.

The Search, the Seized Sheet, and the Assessments

A search and seizure action under Section 132 was carried out on 8 October 2020 in the case of the Popular Group, Ahmedabad. Multiple family members and co-owners of non-agricultural land at Godhavi village, Ahmedabad district, were covered in the search. These included Alap Somabhai Patel, Dahiben Somabhai Patel, Amrutbhai Babaldas Patel, Mita Sanjay Sheth, Nima Somabhai Patel, Gordhanbhai Babaldas Patel, Chandubhai Babaldas Patel, Amathabhai Bababhai Patel, and Sonal Rajesh Khandwala, among others.

The central piece of evidence relied upon by the Assessing Officer was Annexure A-6, Page 10 — a handwritten loose sheet found at the residential premises of Shri Alap Somabhai Patel. The sheet contained numerical notings including “Godhavi 34000 × 25000 = 85 Cr” along with figures of “40” and “30”, and various names and loan-related entries on the left-hand side. During his statement recorded under Section 132(4), Alap Patel admitted the handwriting was his own and that the figures were in crores.

The Assessing Officer interpreted the right-hand side of the sheet as representing inflows from three tranches of Godhavi land sales. Using the rate of Rs. 25,000 per sq. metre applied to land areas identified from the AnyROR database, the Assessing Officer computed an estimated actual sale consideration of Rs. 151.63 crore against documented sale consideration of approximately Rs. 13.26 crore. On this basis, additions were made in the hands of each co-owner and seller under Section 69A, representing their proportionate share of the alleged unaccounted cash consideration. Notices under Section 153A had been issued following the search, and assessments were completed under Section 143(3) read with Section 153A.

The Assessee's Explanation and the CIT(A) Order

Before the Assessing Officer and subsequently before the CIT(A), the assessees offered a consistent explanation. Alap Patel contended that the seized page was prepared after Rakshabandhan on 3 August 2020 — several months after the Godhavi land transactions had been completed between November 2018 and October 2019. He stated that family disputes had arisen after ancestral lands were sold, and that his mother and sister had demanded reacquisition of equivalent land. The figure “34000” was said to represent approximately 34,000 sq. yards being the share of his mother and sister in the lands already sold, while “25000” was claimed to be only an estimated future purchase rate. The figure “85 crore” was therefore described as a projected future investment, not actual consideration received.

The assessees also pointed out that the seized sheet contained no survey numbers, no names of purchasers, no dates of transactions, no document numbers, and no signatures of any party. No cash, bullion, diaries, parallel accounts or digital evidence of on-money receipts was found either from the sellers or from the purchasers. Searches conducted on purchasers including Shri Jankhit Chandubhai Prajapati on 8 December 2020 and the B-Safal Group including Shri Rajesh Brahmbhatt and Rupesh Brahmbhatt on 28 September 2021 yielded no incriminating material showing payment of cash consideration at the alleged rate.

The CIT(A), Ahmedabad, by orders dated 14 August 2024 and 16 August 2024, deleted the additions. The CIT(A) found that the Assessing Officer's estimated calculations did not exactly match the figures of 85, 40 and 30 on the seized page. The CIT(A) observed that the sheet was a loose paper containing rough projections, that the statement of Alap Patel had to be read as a whole and not selectively, and that the absence of any incriminating material from the purchasers' side materially weakened the department's case. The CIT(A) relied on decisions including Glass Lines Equipments Co. Ltd. v. CIT [2001] 119 TAXMAN 813 (Gujarat High Court) for the proposition that a document must be read as a whole.

Revenue's Challenge Before the Tribunal

The Revenue appealed the CIT(A)'s deletion orders. The department's grounds across the various appeals were substantially identical: that the CIT(A) erred in deleting the additions by ignoring incriminating documents found during search and written in the assessee's own handwriting; that the CIT(A) wrongly relied on findings in the case of purchaser Smt. Sonal Rajesh Khandwala; and that arguments advanced by purchasers or investors would be self-serving and could not nullify the evidentiary value of material seized from the seller's premises.

The assessees filed cross-objections raising, among other grounds, that the Assessing Officer had not obtained valid approval under Section 153D after application of mind, and that no independent inquiry under Section 133(6) or Section 131 had been made from purchasers regarding the alleged on-money.

Before the Tribunal, the assessees were represented by Shri Darshan B. Gandhi, Advocate, and the Revenue by Shri Rignesh Das, CIT-DR. The matter was heard on 7 May 2026 and pronounced on 14 May 2026.

How the Tribunal Reasoned on the Loose Sheet

The Tribunal examined the evidentiary quality of Annexure A-6, Page 10 in detail. It noted that Section 132(4A) uses the words “it may be presumed”, making the presumption rebuttable. The Tribunal referred to the Gujarat High Court's decision in Dharmendrasinh R. Waghela, which had held that the presumption under Section 132(4A) is rebuttable where the Revenue cannot bring on record corroborative material to support the addition.

The Tribunal found that the Assessing Officer had not correlated the seized material with corroborative evidence and had not made sufficient independent inquiry to establish that the document unearthed a concealed transaction. The figures on the seized sheet — 85, 40 and 30 — did not exactly match the Assessing Officer's own calculations of Rs. 87.72 crore, Rs. 37.17 crore and Rs. 26.73 crore respectively. The sheet contained no word “cash”, no survey numbers, no names of buyers, no dates, and no signatures. The Assessing Officer had accepted the left-hand side of the sheet as representing debts and projections of Alap Patel, yet treated the right-hand side as actual cash inflows — a distinction the Tribunal found unsupported by any independent evidence.

The Tribunal also relied on the Ahmedabad Bench's earlier decision in Priya Blue Industries Private Limited (IT[SS]A 4, 29/Ahd/2023, dated 28 June 2024), which had held that an addition based on a seized document that is merely a rough working without corroborative evidence is unsustainable. The Tribunal further referred to the Delhi High Court's decision in CIT v. Vatika Landbase (P.) Ltd. [2016] 67 taxmann.com 372, where an addition based on an unsigned and undated seized document was set aside because the Assessing Officer had made no inquiry from buyers regarding actual prices paid.

On the specific factual point that the seized page was prepared after the land transactions had been completed, the Tribunal noted the assessee's argument that no prudent person would keep unaccounted receivables outstanding for 10 to 24 months after execution of registered sale deeds. The absence of any cash trail, and the failure of searches on multiple purchasers to yield corroborative material, weighed with the Tribunal in finding the additions insufficiently supported.

The Section 153D Approval Ground

The cross-objections raised the ground that the Assessing Officer had not obtained valid approval under Section 153D after application of mind, and that the approval was granted mechanically. The Tribunal dismissed this ground across the appeals, holding it was squarely covered against the assessees by the Ahmedabad Tribunal's decision in Smt. Neelu Sanjay Gupta v. DCIT in IT(SS)A Nos. 147 & 148/Ahd/2019.

Outcome

The Tribunal restored the on-money additions under Section 69A to the file of the CIT(A) for de-novo consideration across all the connected appeals. The Revenue's appeals were allowed for statistical purposes. The assessees' cross-objections were dismissed. In the case of Gordhanbhai Babaldas Patel for A.Y. 2020-21, a second issue — deletion of an addition of Rs. 7,37,46,000 under Section 68 on account of unexplained loans given to relatives — was also restored to the CIT(A) for de-novo consideration, as both parties agreed the CIT(A) had proceeded on an incorrect factual understanding. In the case of Chandubhai Babaldas Patel, an addition of Rs. 9,50,000 under Section 69A in respect of seized cash was similarly restored to the CIT(A) for de-novo consideration. The order was pronounced in open court on 14 May 2026.