[Cites 10, Cited by 0]
Gujarat High Court
Saptak Infrastructures Llp vs Income Tax Officer, Ward 3(3)(5), ... on 15 April, 2026
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/3417/2026 JUDGMENT DATED: 15/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3417 of 2026
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✔
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SAPTAK INFRASTRUCTURES LLP
Versus
INCOME TAX OFFICER, WARD 3(3)(5), AHMEADBAD
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Appearance:
MR. TUSHAR HEMANI, SR. ADVOCATE WITH MS VAIBHAVI K
PARIKH(3238) for the Petitioner(s) No. 1
AADITYA D BHATT(8580) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 15/04/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
RULE returnable forthwith. Learned Senior Standing
Counsel Mr. Aaditya D. Bhatt waives service of notice of
rule on behalf of the respondent.
1. Since a short issue is involved, with consent of learned
advocates for the respective parties, the matter is taken
up for final hearing.
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2. By way of present writ petition, the petitioner is
assailing the impugned notice dated 29.03.2025 issued
under Section 148 of the Income Tax Act, 1961 (for short
"the IT Act") for the assessment year 2019-20.
BRIEF FACTS:
3. The petitioner, a Limited Liability Partnership engaged
in the business of real estate development, filed its return
of income for assessment year 2019-20 on 13.08.2019
declaring total income at Rs. 1,39,22,508/-. During the
year under consideration, the petitioner sold land bearing
Survey No. 109/1/1 situated at Village Gota to M/s.
Samsara Buildtech Private Limited by registered sale
deed dated 06.04.2018 for a consideration of Rs.
5,00,00,000/-. A search action under Section 132 of the IT
Act was conducted on 28.09.2021 at the premises of B
Safal Group and City Estate Management India, a real
estate broker providing brokerage services to the B Safal
Group. During the course of the search, inquiry registers
were found and seized from the premises of City Estate
Management India containing details of various lands and
plots in and around Ahmedabad along with their survey
numbers, area and asking rates. In one of such inquiry
registers, a noting dated 18.10.2015 was found in respect
of land at Village Gota bearing Survey No. 109/1/1. On
the basis of the said information, the Respondent
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recorded a satisfaction note on 10.03.2025 which was
approved by the Principal Commissioner of Income Tax-3,
Ahmedabad on 10.03.2025. Thereafter, the Chief
Commissioner of Income Tax, Ahmedabad-1 granted
approval under Section 151 of the IT Act on 25.03.2025.
The Respondent thereafter issued the impugned notice
dated 29.03.2025 under Section 148 of the IT Act,
alleging that the petitioner had received on-money of Rs.
14,43,96,215/- from B Safal Group on sale of the aforesaid
land being the difference between the consideration
recorded in the Sale Deed and the price quoted in the
inquiry register noting dated 18.10.2015. The petitioner
filed detailed objections against the said notice on
17.07.2025 requesting the Respondent to drop the
reassessment proceedings. The Respondent disposed of
the said objections vide order dated 06.12.2025. Hence,
the petitioner has approached this Court by way of the
present writ petition.
SUBMISSIONS ON BEHALF OF THE PETITIONER:
4. Learned Senior Advocate Mr. Tushar Hemani has
submitted that the Assessing Officer has sought to reopen
the assessment only on the basis of a noting found in the
seized inquiry register and the statement of Shri Pravin
Nagjibhai Bavadiya, the broker and proprietor of City
Estate Management India. It is submitted that the
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relevant noting in the seized inquiry register is dated
18.10.2015, whereas the petitioner actually sold the
concerned land bearing Survey No. 109/1/1 at Gota by
registered sale deed dated 06.04.2018 - i.e.,
approximately two and a half years after the date of the
noting. The noting, therefore, predates the actual sale
transaction by a substantial period and, as per the
statement of Shri Pravin Nagjibhai Bavadiya himself
recorded under Section 131 of the IT Act on 27.12.2021,
the inquiry registers merely contain details of "land/plots
available for sale at different locations near Ahmedabad"
and their current status of sale was not known to him.
Accordingly, the register entry cannot be treated as a
record of any concluded transaction executed by the
petitioner.
4.1 It is submitted that the name appearing in the seized
inquiry register is "Arvindbhai Sheladiya" - a person
entirely unconnected to and unknown by the petitioner.
The petitioner's name is nowhere to be found in the
seized register. The Department has not conducted any
inquiry whatsoever from Arvindbhai Sheladiya, whose
name actually appears in the register. Furthermore,
neither the seized inquiry register nor the statement of
Shri Pravin Nagjibhai Bavadiya recorded under Section
131 of the Act makes any reference to the petitioner. The
jurisdictional condition that the seized material must
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"pertain to" or "relate to" the assessee is not satisfied in
the present case.
5. In support of the aforesaid submissions, learned
Senior Advocate has placed reliance on the judgment and
order dated 24.11.2025 passed in Sandhya Maulik Patel
v. Asstt. CIT [2025] 181 taxmann.com 123 (Gujarat),
Naliniben Jagdishkumar Gandhi v. ITO [2026] 183
taxmann.com 126 (Gujarat) and Deepak Chinubhai Shah
v. Dy. CIT (Special Civil Application No. 13298 of 2025)
and allied matters.
SUBMISSIONS ON BEHALF OF THE RESPONDENT:
6. While opposing the aforesaid submissions, learned
Senior Standing Counsel Mr. Aaditya D. Bhatt, appearing
for respondent-revenue, has contended that from the
search conducted on B Safal Group and City Estate
Management India on 28.09.2021, inquiry registers were
seized from broker Shri Pravin Nagjibhai Bavadiya. These
registers are not mere dumb documents but are
structured business records of a professional real estate
broker, systematically maintained with precise survey
numbers, village locations, area measurements and rates.
In his statement recorded on oath under Section 131 of
the IT Act on 27.12.2021, the broker admitted ownership
of these registers and confirmed that they belong to his
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business, thereby activating the statutory presumption of
truthfulness under Sections 132(4A) and 292C of the Act.
6.1 It is further submitted that on verification of revenue
records through the AnyROR portal, it was found that the
land bearing Survey No. 109/1/1 at Village Gota, as
recorded in the seized inquiry register, was sold by the
petitioner on 06.04.2018. The asset-based nexus between
the seized document and the petitioner's transaction is
thus established through the exact survey number match.
Under Explanation 2(iv) to Section 148 of the IT Act,
when documents seized from any other person "pertain
to" or information contained therein "relates to" the
assessee, the Assessing Officer shall be deemed to have
information suggesting escapement of income. It is
submitted that the discrepancy in dates and the name of
the third party are matters relating to the merits of the
proposed addition and are to be adjudicated during the
course of the assessment proceedings. It is, therefore,
urged that the present writ petition may be dismissed.
6.2 It is further submitted that the Assessing Officer is
not required to conclusively prove escapement of income
at the stage of issuing the notice. The threshold is merely
"information suggesting escapement" and the same has
been met in the present case. The entry in the seized
register reflecting a rate of Rs. 42,000/- per square yard
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for land bearing Survey No. 109/1/1 at Gota, as against
the sale consideration of Rs. 5 crores recorded in the sale
deed, constitutes sufficient tangible material for invoking
jurisdiction under Section 148 of the IT Act.
6.3 It is further submitted on behalf of the respondent
that the action of reopening is well-supported by the
pronouncements of the Hon'ble Supreme Court. Reliance
is placed on Raymond Woollen Mills Ltd. v. ITO [1999]
236 ITR 34 (SC), wherein it was held that at the stage of
issuance of notice under Section 148, the Court is not
required to go into the merits of the matter, and whether
income had or had not escaped assessment is not the
relevant consideration at that stage. Reliance is also
placed on CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd.
[2007] 291 ITR 500 (SC) and Anshul Jain v. PCIT [2022]
143 taxmann.com 38 (SC). It is further submitted that the
expression 'pertains to' or 'relates to' as employed in
Explanation 2(iv) to Section 148 is wider in amplitude
than the expression 'belongs to' as used in Section 153C;
therefore, the seized document need not directly belong
to the assessee--a mere relation to or pertaining to the
assessee's income is sufficient to invoke the reopening
jurisdiction.
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ANALYSIS AND OPINION:
7. We have heard the learned advocates appearing for
the respective parties at length and have also perused the
documents placed on record. The action of reopening of
assessment against the petitioner is premised on a search
conducted at the office premises of City Estate
Management India on 28.09.2021. During the search,
inquiry registers of broker Shri Pravin Nagjibhai
Bavadiya were seized. The relevant extract of the seized
inquiry register which forms the sole basis for the
impugned notice reads as under:
18/10/15 | Village:- Gota | B/h. Voda Phone Tower | S. No.
109/1/1 | 3800 Sq.Y | Rate:- 42,000/- | NA | Arvindbhai
Sheladiya
8. On the basis of the aforesaid entry in the seized
inquiry register, the Assessing Officer formed the opinion
that the petitioner had received on-money of Rs.
14,43,96,215/- on sale of land bearing Survey No. 109/1/1
at Village Gota and accordingly sought to reopen the
assessment year 2019-20.
9. The first and foremost aspect which strikes us on a
perusal of the seized material is the date of the noting in
the inquiry register. The date of the noting is 18.10.2015,
which falls in Assessment Year 2016-17. However, the
petitioner sold the land bearing Survey No. 109/1/1 at
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Village Gota to M/s. Samsara Buildtech Private Limited by
registered sale deed dated 06.04.2018, i.e.,
approximately two years and six months after the date of
the noting. The entry in the register, therefore, predates
the actual sale transaction by a considerable period. In
this background, the entry dated 18.10.2015 can, at best,
be viewed as a market survey reflecting the asking rate
for land at Village Gota as on that date. Notably, the
statement of Shri Pravin Nagjibhai Bavadiya recorded
under Section 131 of the IT Act himself confirms that the
inquiry registers contain details of land "available for sale
at different locations near Ahmedabad" and that its
current status on sale was not known to him. Since the
actual sale by the petitioner was executed approximately
two and a half years after the date of the register entry,
the noting cannot be treated as a record of any
transaction executed by the petitioner during the
assessment year 2019-20. Moreover, the register entry
pertains to the period of Assessment Year 2016-17 and is
wholly incapable of imputing escapement of income for
Assessment Year 2019-20, which is the year sought to be
reopened.
9.1 We find that, even on the question of the evidentiary
weight to be attached to the seized inquiry register, the
revenue's case is materially weakened by the admissions
made by Shri Bavadiya himself during his statement
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recorded in the course of the search. At Question No. 14,
Shri Bavadiya candidly admitted that sometimes clients
come with land documents or title deeds and these
belonged to the clients and not to him. This admission
directly and significantly undermines the blanket
presumption under Section 292C that all entries in the
inquiry register necessarily record actual financial
transactions carried out by or through Shri Bavadiya.
Further, at Question No. 26, it emerges that the 'owner of
the land' is typically the person whose name is entered in
the register--confirming that the name reflected therein
is that of the owner or broker who listed the property,
and not necessarily a party who paid or received any
undisclosed consideration. These specific admissions by
the searched person himself effectively negate the
foundation upon which the revenue has sought to invoke
a generalised presumption under Section 292C to treat
the inquiry register entries as conclusive evidence of on-
money transactions involving the petitioner.
10. The name "Arvindbhai Sheladiya" appearing in the
seized inquiry register is of a person who is entirely
unconnected to the petitioner or the sale transaction in
question. No inquiry has been conducted from Arvindbhai
Sheladiya, whose name actually appears in the register.
The petitioner's name is nowhere to be found in the
seized register. Furthermore, the statement of Shri
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Pravin Nagjibhai Bavadiya recorded under the provisions
of Section 131 of the IT Act does not in any manner
mention the name of the petitioner. Thus, we do not find
any direct or indirect link between the petitioner and the
seized document. The revenue has attempted to reopen
the assessment year 2019-20 only on the basis of some
vague information allegedly connected from the seized
document, which does not in any manner relate to the
present petitioner.
11. Even otherwise, this issue is no more res integra as
the same is covered in favour of the assessee by the
judgements of this Court in the cases of Sandhya Maulik
Patel v. Asstt. CIT [2025] 181 taxmann.com 123 (Gujarat)
and Naliniben Jagdishkumar Gandhi v. ITO [2026] 183
taxmann.com 126 (Gujarat). In the case of Naliniben
Jagdishkumar Gandhi, this Court has, after considering a
similar entry in the same inquiry register seized in the
same search, held as follows:
"Except the seized documents as mentioned herein-above,
and the statements of the searched person Shri Bavadiya,
there is no material recorded by the Assessing Officer which
would reveal the name of the petitioner. It is true that cash
transactions operate in very clandestine manner, and the re-
assessment cannot be quashed, but the revenue has to prove
a live link connecting the assessee. The only link is the survey
number of the petitioner. It is pertinent to note that the date
of the seized document referred is of 11.08.2017 and it is the
case of the Assessing Officer that the entire plot of land was
sought to be sold at the rate of Rs.17,000/- per square yard in
the year 2017 as per the entry made in the register (seized
document)."
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We find further support in two recent decisions of
this Court arising from the very same search. In Trupti
Aakash Desai v. ITO, Ward 3(3)(5), Ahmedabad [Special
Civil Application No. 985 of 2026, decided on
08.04.2026], this Court, dealing with the search at B
Safal Group conducted on 28.09.2021 and the very same
seized inquiry register, held that the entries therein
'cannot be used in vacuum' and that a live and direct
nexus between the seized material and the assessee
sought to be reopened is a sine qua non. In Kantilal
Parsotamdas Patel v. ITO [Special Civil Application No.
3676 of 2026, decided on 08.04.2026], this Court,
following the aforesaid line of reasoning and dealing with
a similar set of facts arising from the same search,
quashed the reassessment proceedings. The present case,
on its facts and in law, is indistinguishable from both
these decisions and deserves to succeed on this additional
ground as well.
FINAL ORDER
12. Hence, we are of the opinion that the assessment has
been sought to be reopened on the basis of conjectures
and surmises. The seized inquiry register entry does not
establish any live nexus with the petitioner. There is no
direct or indirect link between the seized document and
the present petitioner. The invocation of the proceedings
under Section 148 of the IT Act is ill-conceived and
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unsustainable. Accordingly, the captioned writ petition
stands allowed. The impugned Notice dated 29.03.2025
issued under Section 148 of the IT Act is hereby quashed
and set aside.
(A. S. SUPEHIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE/DSUPPL -1/30
