[Cites 12, Cited by 0]
Gujarat High Court
Raivat Kalpeshbhai Shah vs Income Tax Officer,Ward 3(3)(2) ... on 15 April, 2026
Author: A.S. Supehia
Bench: A.S. Supehia
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C/SCA/3868/2026 JUDGMENT DATED: 15/04/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3868 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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RAIVAT KALPESHBHAI SHAH
Versus
INCOME TAX OFFICER,WARD 3(3)(2) AHMEDABAD
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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.
2. By way of present writ petition, the petitioner is assailing
the impugned notice dated 27.03.2025 issued under Section
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148 of the Income Tax Act, 1961 (for short "the IT Act") for
the assessment year 2020-21.
BRIEF FACTS:
3. The petitioner, an individual engaged in the business of
real estate, filed his return of income for assessment year
2020-21 on 11.02.2021 declaring total income at Rs.
8,54,240/-. During the year under consideration, the petitioner
sold land bearing Survey No. 591 situated at Village Godhavi
by registered sale deed dated 27.05.2019 to Luv Dharminbhai
Patel, Shivlal Damji Patel, Premdas Damji Patel and Mitesh
Amritbhai Patel for a consideration of Rs. 1,30,00,000/-. 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 13.03.2019 was found
in respect of land at Village Godhavi bearing Survey No. 591.
On the basis of the said information, the Respondent recorded
a satisfaction note on 15.03.2025 which was approved by the
Principal Commissioner of Income Tax-3, Ahmedabad on
21.03.2025. Thereafter, the Chief Commissioner of Income
Tax, Ahmedabad-1 granted approval under Section 151 of the
IT Act on 26.03.2025. The Respondent thereafter issued the
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impugned notice dated 27.03.2025 under Section 148 of the
IT Act, alleging that the petitioner had received on-money of
Rs. 8,54,53,897/- on sale of the aforesaid land. The petitioner
filed detailed replies in response to notices under Sections
142(1) and 143(2) of the IT Act reiterating the illegality of the
reopening. 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 at the outset
submitted that in this case, the Petitioner is seller of the land
in question whereas buyer is one Luv Dharminbhai Patel
(AQMPP9223E) having 55% share. On the basis of the very
same inquiry register entry found during the very same
search, proceedings were initiated in the hands of the buyer
Luv Dharminbhai Patel as well. The said Luv Dharminbhai
Patel challenged the said action of reopening (SCA 4336 of
2026) before this Hon'ble Court and the same has already
been allowed by this Hon'ble Court on 8th April, 2026. So if the
noting could not be used for initiating reopening proceedings
in the hands of the buyer, the same certainly cannot be used
for initiating reopening in the hands of the seller.
5. 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
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Management India. It is submitted that the relevant noting in
the seized inquiry register is dated 13.03.2019, whereas the
petitioner sold the concerned land bearing Survey No. 591 at
Village Godhavi by registered sale deed dated 27.05.2019 -
i.e., approximately two and a half months after the date of the
noting. The noting, therefore, predates the actual sale
transaction 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 dated 13.03.2019 is, at
best, a pre-transaction market inquiry and cannot be treated
as a record of any concluded sale transaction executed by the
petitioner on 27.05.2019. It is further submitted that the
Respondent has used the very same notation dated
13.03.2019 as the jurisdictional basis for two separate
reassessment proceedings - alleging payment of on-money on
purchase of the same land in assessment year 2019-20, and
receipt of on-money on sale in assessment year 2020-21. The
rate of Rs. 8,000/- per square yard recorded in the register
cannot simultaneously constitute the purchase price and the
sale price of the same property, revealing that the Assessing
Officer lacked any coherent prima facie satisfaction as
regards the year under consideration.
4.1 It is further submitted that the name appearing in the
seized inquiry register against the relevant entry is "Bro.
Manish Bopal" - a person who is entirely unconnected to and
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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 Shri Manish Bopal,
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 "pertain to" or
information contained therein "relate to" the assessee, as
required under Explanation 2(iv) to Section 148 of the IT Act,
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
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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 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. 591 at Village Godhavi, as recorded in the
seized inquiry register, was sold by the petitioner on
27.05.2019. 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
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"information suggesting escapement" and the same has been
met in the present case. The entry in the seized register
reflecting a rate of Rs. 8,000/- per square yard for land
bearing Survey No. 591 at Godhavi, as against the sale
consideration of Rs. 1,30,00,000/- 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.
ANALYSIS AND OPINION:
7. We have heard the learned advocates appearing for the
respective parties at length and have also perused the
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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:
13.3.19 / 213 | Moje:- Godhavi | Opp. Godhavi Village | S.
No. 591 | 20,000 sq. | Rate - 8,000 | Bro. Manish Bopal
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. 8,54,53,897/- on sale
of land bearing Survey No. 591 at Village Godhavi and
accordingly sought to reopen the assessment year 2020-21.
9. At the outset we note that the petitioner sold the land
bearing Survey No. 591 at Village Godhavi to, amongst others,
Shri Luv Dharminbhai Patel (PAN: AQMPP9223E), who holds
a 55% share in the said property. On the basis of the very
same inquiry register entry dated 13.03.2019 found during
the very same search, proceedings under Section 148 of the
IT Act were initiated in the case of Shri Luv Dharminbhai
Patel as well, alleging that he had paid on-money on purchase
of the said land. Shri Luv Dharminbhai Patel challenged the
said action of reopening by preferring Special Civil
Application No. 4336 of 2026 before this Court. The said
petition has been allowed by this Court on 08.04.2026,
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thereby quashing the reopening proceedings against the
buyer. The logical and necessary corollary of the said order is
that the buyer did not pay any on-money in the said
transaction. Since the same transaction is before this Court
from both sides - the seller and the buyer - and this Court has
already held that the buyer is not liable for any on-money in
respect of the same property based on the same seized
register entry, no unaccounted consideration could
conceivably have been received by the petitioner as seller in
the very same transaction. The revenue cannot blow hot and
cold simultaneously: having failed to sustain the allegation of
payment of on-money against the buyer, it cannot succeed in
sustaining the allegation of receipt of on-money against the
seller on the basis of the same material.
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 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
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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 "Bro. Manish Bopal" 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 Shri Manish Bopal, 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 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 2020-21 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
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(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)."
The aforesaid principle applies with equal force to the
present case, where not only is the survey number the only
link between the register entry and the petitioner, but the
very same register entry has already been adjudicated upon
by this Court in the context of the buyer's reassessment,
which has been quashed, leaving no foundation whatsoever
for the parallel proceedings against the petitioner-seller.
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
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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 reassessment proceedings against the buyer of
the very same land, based on the very same register entry,
have already been allowed by this Court vide order dated
08.04.2026 in Special Civil Application No. 4336 of 2026,
conclusively establishing that no on-money changed hands in
the transaction. The invocation of the proceedings under
Section 148 of the IT Act is ill-conceived and unsustainable.
Accordingly, the captioned writ petition stands allowed. The
impugned Notice dated 27.03.2025 issued under Section 148
of the IT Act is hereby quashed and set aside.
(A. S. SUPEHIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE/SUPPL-1/32
