[Cites 1, Cited by 0]
Gujarat High Court
Gopal Bhachabhai Jatiya vs Ito Ward - 1 , Gandhidham on 24 February, 2026
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/15184/2024 JUDGMENT DATED: 24/02/2026
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 15184 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
==========================================================
Approved for Reporting Yes No
✔
==========================================================
GOPAL BHACHABHAI JATIYA
Versus
ITO WARD - 1 , GANDHIDHAM
==========================================================
Appearance:
MS. MANVI DAMLE, ADVOCATE FOR MR. JAIMIN R DAVE(7022) for the
Petitioner(s) No. 1
MS HIRVA R DAVE(10742) for the Petitioner(s) No. 1
MAUNIL G YAJNIK(9346) for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 24/02/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. Rule, returnable forthwith. Mr. Maunil Yajnik, learned
Senior Standing Counsel waives service of notice of rule on
behalf of the respondent.
2. On 17.02.2026, this Court passed the following order:
"Heard learned advocate Ms. Manvi Damle for
learned advocate Mr.Jaimin Dave for the petitioner.
It is not in dispute that the sale deed dated
NEUTRAL CITATION
C/SCA/15184/2024 JUDGMENT DATED: 24/02/2026
undefined
28.08.2018 and 29.08.2018 respectively have been
cancelled and the cancelled registered sale deeds are
produced on record of the writ petition from page 86
onwards. It is noticed by us that after cancellation of the
sale deeds, the payment has also been reversed. It
further appears that the sale deeds have been cancelled
because the original sale deeds were executed by
fraudulent persons. Therefore, keeping the aforesaid
facts, the Assessing Officer shall issue necessary
orders/communication dealing with the aforesaid aspects
by the next date of hearing. Hence, we direct the
Assessing Officer/respondent to file necessary affidavit
dealing with the aforesaid aspects by the next date of
hearing.
List the matter on 24.02.2026.
To be listed on top of the Board."
3. Today, learned Senior Standing Counsel Mr. Maunil
Yajnik has tendered an additional affidavit dated 23.02.2026,
the same is ordered to be taken on record. The Paragraph No.
2 of the additional affidavit reads as under:
"2. The deponent states that the said documents do appear to
be cancellation of the registered sale deed by the competent
court and subsequently it's effect on the revenue record and
bank account details of the assessee whereas, the reversal of
transaction consideration is shown to be reversed. However,
the present deponent states that the said documents were not
provided to the respondent authority during 148A
proceedings and hence, the present deponent never had
chance to verify the same. The same are being produced for
the first time before this Honourable Court and hence,
present deponent would humbly request this Honourable
Court to remand the matter back for thoroughly re-verifying
the aforesaid documents produced by way of additional
affidavit."
4. Thus, the respondent authority has admitted that for the
first time before this Court, the petitioner has produced the
documents relating to cancellation of the sale deed by the
NEUTRAL CITATION
C/SCA/15184/2024 JUDGMENT DATED: 24/02/2026
undefined
competent authority and its effect having been given in the
revenue record and the bank account details of the assessee.
5. Thus, it appears that during the assessment proceedings
under Section 148A of the Income Tax Act, 1961, these
documents were not produced. Learned Senior Standing
Counsel Mr. Yajnik has urged that the matter may be
remanded to the respondent authority to pass a fresh
assessment order.
6. At this stage, Mr. Manvi Damle, learned advocate for the
petitioner has pointed out the judgment of the Bombay High
Court in the case of The Commissioner of Income Tax 8 v. M/s
Lok Housing & Constructions Limited, (Income Tax Appeal
No. 877 of 2013 decided on 13.04.2015) in support of her
contention and submitted that the impugned order may be
quashed and set aside.
7. We may, at this stage, refer to the observations of
Paragraph No. 12 of the decision of the Bombay High Court in
the case of M/s. Lok Housing & Constructions Limited (supra),
which reads thus:
"12. On both counts, the Tribunal has in a detailed discussion
of more than 40 paragraphs found that there is no substance
in the objections of the Revenue. If the Revenue is trying to
show that the relevant transactions were sham and not real,
then it has to bring in satisfactory material. The Tribunal
found in paras 37 to 40 of the impugned order that the
income which was earlier disclosed was not as such because
NEUTRAL CITATION
C/SCA/15184/2024 JUDGMENT DATED: 24/02/2026
undefined
the Agreements were terminable or could have been
cancelled. Once they were have reverted back to cancelled,
the properties the assessee. They are are duly reflected in the
balance sheet and as assets of the assessee. There were
revised accounts and which were also scrutinized. They were
found to be in order and meeting the accounting practice
adopted. Therefore, the accounting policy also could not have
been faulted. In para 42 of the impugned order, the Tribunal
held that income could not have really accrued because of the
fact that these Agreements were cancelled. Then the issue of
their cancellation has been gone into, and correct legal in
extensive details. The principles were applied and a finding of
fact is arrived at in para 48, that no income could be said to
have really accrued to the assessee as a result of the five
transactions in the immovable properties and income was
chargeable to tax in the year under consideration. Once
income had not accrued to in the real sense, original return
represents wrong statement the then the which was
corrected by the assessee by filing a revised return.
Therefore, no hypothetical income of the assessee could have
been brought to tax."
8. The SLP against the said judgment being Civil Appeal
No. 277 of 2016 has been dismissed by the Supreme Court on
24.04.2025.
9. Thus, in wake of the admitted fact that while passing the
impugned orders and the notices, the Assessing Officer has
not considered the factum of cancellation of sale deeds, the
reversal of the payments and thus the impugned orders are
hereby quashed and set aside, in view of the observations of
NEUTRAL CITATION
C/SCA/15184/2024 JUDGMENT DATED: 24/02/2026
undefined
the Bombay High Court in the case of The Commissioner of
Income Tax 8 v. M/s Lok Housing & Constructions
Limited (supra). Rule is made absolute.
(A. S. SUPEHIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE/DB/02
