Case Law Details
Chandra Khilwani Vs ITO (ITAT Ahmedabad)
In Chandra Khilwani Vs ITO (ITAT Ahmedabad), the assessee appealed against the order dated 24-09-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising from reassessment proceedings under Sections 147 read with 144B of the Income Tax Act, 1961 for Assessment Year 2019-20.
The assessee, a retired school teacher, had not filed a return of income for A.Y. 2019-20 as her income was below the taxable limit. During a survey under Section 133A conducted on 30-05-2019 at the premises of a builder group, a loose Excel sheet was found containing alleged “cash payment details.” The Assessing Officer (AO) noted that shop numbers 17 to 20 reflected cash payments totaling Rs.52,00,000/- and cheque payments of Rs.40,00,000/-, and the assessee’s name and PAN appeared against shop no. 19. A notice under Section 148A(b) was issued alleging escaped income of Rs.55,81,008/-.
In response, the assessee stated that she had not purchased any property during financial year 2018-19 and had instead purchased one shop in July 2021 in a different project, with the sale deed executed in October 2021. She clarified that the entire consideration was paid through cheque from her SBI and Post Office accounts and produced the registered sale deed dated 13-10-2021. She denied making any cash payment.
The AO was not satisfied and passed an order under Section 148A(d), alleging cash payment of Rs.13,00,000/- for shop no. 19 and completed reassessment by determining total income at Rs.17,81,650/-. The CIT(A) upheld the addition of Rs.14,00,000/-.
Before the Tribunal, the assessee contended that the Excel sheet relied upon by the AO related to a different project named “Westfields,” with booking dates in March 2019, whereas she had purchased a shop in a different project in July 2021. She also produced a notarized affidavit dated 07-09-2023 from the developer confirming that no cash payment was received from her and that there were no financial transactions during A.Y. 2019-20.
The Tribunal examined the Excel sheet and noted discrepancies. The sheet mentioned three shops and certain cash entries but did not clearly establish receipt of cash from the assessee. The AO had not referred to any statements recorded during survey nor explained the nature of the document. The Tribunal found that the AO failed to correlate the seized Excel sheet with the property actually purchased by the assessee.
Relying on the jurisdictional High Court decision in PCIT, Central vs. Kaushik Nanubhai Majithia, the Tribunal reiterated that an unsigned Excel sheet found during survey, without corroborative material, is insufficient proof of a transaction. The High Court had held that mere payment of tax by a developer based on such entries does not establish that the assessee made such payments, especially in the absence of adjudication, corroboration, and opportunity to the assessee.
Applying the same principle, the Tribunal held that the addition made solely on the basis of the Excel sheet, without proper reconciliation or supporting evidence, was unsustainable. The developer’s affidavit further clarified that no cash was received from the assessee and that there were no transactions in the relevant assessment year.
Accordingly, the Tribunal deleted the addition and allowed the appeal of the assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the Assessee as against appellate order dated 24-09-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2019-20.
2. Brief facts of the case is that the assessee is a retired school Teacher, as her income was below taxable income for the Asst. Year 2019-20, the assessee has not filed the Return of Income. There was a survey action u/s. 133A of the Act on 30-05-2019 in the premises of the builder/developer M/s. Samanway Sparsh group, wherein one loose Excel sheet was found wherein “k details” means cash payment details found. The A.O noted that on purchase of shop no. 17 to 20, the purchaser has made cash payment of Rs.52,00,000/- and balance Rs.40,00,000/- paid by cheques, wherein assessee’s Name and PAN Number reflecting in the excel sheet. Hence a notice u/s. 148A(b) of the Act dated 14-03-2023 issued to the assessee as to why not the income chargeable to tax amounting to Rs.55,81,008/- has escaped assessment for the Asst. Year 2019-20.
2.1. In response, the assessee filed a reply on 22-03-2023. The assessee explained that her total income (after 80C deduction) was Rs.2,81,010/- which is below taxable income, hence not filed the return for A.Y. 2019-20. However she has not purchased any immovable property during the financial year 2018-19, but purchased one shop in Samanway Samipy project in the month of July 2021 and Sale Deed was executed in the month of October 2021. Entire payment was made through cheques from SBI Bank Account and Post Office Savings account and no cash payment was made by the assessee and produced copy of the registered Sale Deed dated 13-10-2021. The A.O. was not satisfied with the above reply of the assessee and passed order u/s. 148A(d) of the Act dated 30-03-2023 that cash payment of Rs.13,00,000/- paid for purchase of shop no. 19 and other income not disclosed by the assessee. Therefore it is a fit case to issue notice for escapement of income for the Asst. Year 2019-20 and issued notice u/s. 148 of the Act. The assessing officer completed the reassessment by making assessed income at Rs.17,81,650/- and demanded tax thereon.
3. Aggrieved against the reassessment order, the assessee filed an appeal before Ld. CIT(A) who has confirmed the addition made by the assessing officer.
4. Aggrieved against the appellate order, assessee is in appeal before us raising the following Grounds of Appeal:
1. The order passed by the Ld. CIT(A) is against the law, equity and principle of natural justice.
2. The Ld. CIT(A) has erred in law and on facts in upholding the addition made of Rs.14,00,000/- by Ld. A.O.
3. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.
5. Ld. Counsel appearing for the assessee brought to our notice to the reassessment order passed by the assessing officer more particularly Page no. 9 of the assessment order wherein the so called excel sheet relied by the A.O. for reopening of assessment. The excel sheet deals with the project namely “Westfields” promoted by M/s. Samanway Sparsh group. That too booking date is mentioned as March 2019, whereas the assessee purchased the shop on 14-10-2021 by making cheque payments of Rs.5,00,000/-each dated 20-07-2021, one is drawn from State Bank of India and another from Post Office Savings account. Thus the assessee has not made any cash payment to the developer which is confirmed by the developer through a Notarized Affidavit dated 07-09-2023. Thus the assessing officer is not correct in making addition of Rs.13,00,000/- in the hands of the assessee and requested to delete the addition.
6. Per contra, the Ld. D.R. appearing for the Revenue supported the orders passed by the lower authorities and requested to confirm the addition.
7. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. The excel sheet relied upon by the assessing officer is reproduced below:
7.1. The first four entries in the above excel sheet is relating to the project “Westfields” wherein Serial No. 53 a cash amount of Rs.5,00,000/- mentioned but receipt of the cash is not mentioned. Whereas shop nos. 17, 19 and 20B for Rs.52,00,000/- is mentioned. Shop no. 19 carries the name of assessee and her PAN Number. This excel sheet is discussing with three shop nos. only. Whereas the assessing officer held that for shop nos. 17 to 20 (four shops) total payment of Rs.92,00,000/- in which Rs.40,00,000/-was paid in cheques and Rs.52,00,000/- paid in cash. The A.O. further not made any reference about the statements recoded during the course of survey, when the survey was conducted on 30-05-2019, but the assessee purchased the shop in July 2021 which is totally a different project.
8. It is well settled principle of law by Jurisdictional High Court that excel sheet found and seized during the course of survey is not sufficient proof of the transaction between the assessee and the developer. The nature of the document was not explained by the assessing officer while proceedings against the assessee, thereby the additions were rightly deleted by the Ld. CIT(A) and ITAT. Therefore Hon’ble High Court, dismissed the appeal filed by the Revenue in the case of PCIT, Central vs. Kaushik Nanubhai Majithia in Tax Appeal No. 20 of 2024 dated 06-03-2024 by observing as follows:
“2. The excel sheet, according to the learned Counsel for the Revenue, contained the details of payment made by the assessee to the developer, with respect to which tax had been paid by the developer before the Settlement Commissioner. The findings returned by the CIT(A) and ITAT on the issue is sought to be assailed on the ground that the payment of tax by the developer, in whose premises search was conducted, before the Settlement Commissioner, with respect to the amount entered in the excel sheet found from the possession of the assistant working with the developer, is sufficient proof of the transaction between the assessee and the developer.
3. We find inherent fallacy in this submission, inasmuch as, there is no basis for conducting proceedings against the assessee merely for the fact that the developer had paid tax on the amount shown in the excel-sheet. There is no adjudication with regard to the payment, which was shown in the excel-sheet to the effect that the same was actually paid by the assessee to the developer. Even otherwise, the concurrent findings returned by the CITA and ITAT are that the document found from the premises of the third party namely excel-sheet, which is the basis of the proceedings was without any signature and there is no corroborative material to substantiate the said document. The nature of the document has not been explained by the Assessing Officer while proceeding against the assessee. The statements of the persons recorded during search with reference to the alleged, seized material, was not provided to the assessee and hence, the entire proceedings under Section 153C of the IT Act of 1961 stood vitiated.
4. Learned Counsel for the petitioner could not successfully demolish the facts, which are recorded concurrently by the CITA and ITAT,
5. No question of law much less any substantial question of law arises to entertain this appeal. The same is accordingly, dismissed.”
8.1. Even in the present case, the assessing officer merely relied upon the excel sheet which is relating to the year 2019 but different units of the project “Westfields” and not the property namely shop no. 19 in Samanway Samipy purchased by the assessee. Thus the assessing officer failed to correlate the excel sheet seized by the department. Further the developer vide Notarized Affidavit dated 07-09-2023 stated that the developer has not received any cash payment from the assessee, other than the sale consideration of Rs.10,00,000/- by cheque payments. Further the developer clarified, there was no financial transactions with the assessee during the Asst. Year 2019-20. Thus the addition made by the assessing officer merely relying upon the excel sheet without proper reconciliation and therefore the addition made thereon is liable to be deleted.
9. In the result, the appeal filed by the Assessee is hereby allowed.
Order pronounced in the open court on 20-02-2026
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