Pravin Nagjibhai Bavadiya Vs DCIT (ITAT Ahmedabad)
Material Facts: The assessee, an individual engaged in real estate brokerage through his proprietary concern, City Estate Management, and the Revenue filed cross appeals against a common order of the Commissioner of Income Tax (Appeals) for Assessment Years 2019-20 to 2022-23. Following a search under Section 132 in the cases of B Safal Group and City Estate Management Group, the Revenue seized inquiry registers, loose papers and rough jottings relating to property transactions. Based on these materials, reassessment proceedings were initiated and additions were made towards estimated brokerage income and unexplained cash deposits. The CIT(A) partly allowed the appeals by reducing the estimated brokerage rate, treating the additions as business income under Section 28 instead of Section 69A, and deleting the addition towards cash deposits. Both parties preferred appeals before the Tribunal.
Procedural History
The Tribunal considered the cross appeals together. The assessee did not press the jurisdictional grounds. The Tribunal first decided the lead case for Assessment Year 2021-22 and applied the same reasoning, where applicable, to Assessment Years 2019-20, 2020-21 and 2022-23.
Legal Issues
- Whether estimated brokerage additions based on inquiry registers and loose papers were sustainable.
- Whether brokerage income could be estimated in the absence of corroborative evidence.
- Whether additions could be made under Section 69A instead of Section 28.
- Whether additions based on loose papers and Excel sheets found during search were sustainable.
Relevant Statutory Provisions
- Sections 28, 69A, 115BBE
- Sections 132, 133(6), 142(1), 143(3), 147 and 148
- Sections 153A and 153C of the Income-tax Act, 1961
Parties’ Submissions
