ACIT Vs Sandhya Maulik Patel (Supreme Court of India)
Background and Section 153C Proceedings
The litigation arose from notices dated 13.10.2021 issued under Section 153C of the Income-tax Act, 1961 for AYs 2014-15 to 2020-21. A search under Section 132 had been conducted on 15.10.2019 in the case of land broker Shri Dhaval Teli at Ahmedabad. During the search, digital data/images from his mobile phone were acquired, including images of an MoU concerning land bearing Survey No. 329. The petitioners subsequently filed returns, obtained the satisfaction notes recorded by the Assessing Officer (AO), objected to the initiation of proceedings and challenged the Section 153C action before the Gujarat High Court.
Proceedings and Submissions Before Gujarat High Court
The petitioners contended that the material found during the third-party search did not relate to them. The MoU referred to a transaction between seller Dilipbhai Patel and proposed buyer Dhirenbhai Bharvad for Rs.39.32 crore and recorded cash payment of Rs.1 crore, whereas the petitioners’ names did not appear in that MoU. The AO subsequently obtained information concerning a registered sale deed dated 12.04.2018 under which the petitioners purchased the land for Rs.12 crore and inferred an undisclosed investment of Rs.27.32 crore. The petitioners relied, inter alia, upon CIT Vs Radhey Shyam Bansal (2011) 337 ITR 217 (Delhi), CIT Vs Late Sh. Raj Pal Bhatia (2011) 333 ITR 315 (Delhi) and PCIT Vs Abhisar Buildwell (P.) Ltd. (2023) 454 ITR 212 (SC).
