MUNISHAMAPPA SHIVANNA,BANGALORE vs. ITO WARD-2(1)(3), BANGALORE

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 25.11.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1082959582(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2016-17.

ITA No.434/Bang/2026 Munishamappa Shivanna, Bengaluru Page 2 of 5 Grounds Raised Tax Effect in INR 1) The impugned order passed by the Ld CIT(A) is opposed to law, facts and circumstances of the case and is liable to be General ground quashed. 2) The Ld CIT(A) erred in confirming the reassessment order passed u/s 147 r.w.s.144B, without appreciating that the notice issued u/s 148 dated 25/03/2023 by the Jurisdictional Rs 54 AO is without jurisdiction, void ab initio and non est in law, (inclusive of having been issued in contravention of the mandatory interest u/s faceless reassessment scheme notified u/s 151A of the 234A and 234B) Income-tax Act, 1961 and the e-Assessment of Income Escaping Assessment Scheme, 2022. 3) The Ld CIT(A) erred in disposing of the appeal ex parte and in limine without adjudicating the grounds raised and the submissions made by the Appellant thereby violating the Same as above principles of natural justice and the mandate of section 250(6) of the Act. 4) Without prejudice to the above, the learned authorities below Same as above erred in subjecting the transfer of Transferable Development Rights (TDR) to tax under the head "Capital Gains", without appreciating that the cost of acquisition of such TDR is indeterminate and not capable of computation under the provisions of the Act, and consequently, the charging provisions fail in view of the law laid down by the Honorable Supreme Court in CIT v. B.C. Srinivasa Shetty [1981] 128 ITR 294 (SC). 5) Without prejudice to the grounds above and assuming without admitting that the transfer of Transferable Development Rights is chargeable to tax under the head "Capital Gains", the Ld CIT(A) erred in law and on facts in confirming the disallowance of deduction claimed u/s 54F of the Income-tax Act, 1961 inasmuch as: a) the Appellant had, within the prescribed period, constructed a residential house and invested the consideration received from transfer of the capital asset. b) the deduction u/s 54F was denied solely on the ground of non-production of individual bills and vouchers, despite the construction and quantum of investment being duly evidenced by a registered valuer's report, building construction account, bank statements and completion certificate issued by the local authority.

ITA No.434/Bang/2026 Munishamappa Shivanna, Bengaluru Page 3 of 5 3. At the outset, the ld. AR of the assessee drew our attention to the ground No.3 as raised by the assessee & vehemently submitted that the ld. CIT(A)/NFAC dismissed the appeal of the assessee vide order dated 25/11/2025 stating that the assessee had not filed written submission despite various notices dated 17/07/2025, 16/09/2025, 26/09/2025, 10/10/2025 & 28/10/2025 issued to the assessee & nothing has been annexed to challenge the finding of the AO and accordingly dismissed the appeal of the assessee. Further, the ld. AR of the assessee drew our attention to the page Nos. 09-10 of the Paper book & submitted that in fact the assessee had uploaded the detailed written submissions along with the relevant case laws in support of the case on 25/11/2025 vide e- proceedings Response Acknowledgement No. 640070591251125 which were not considered by the ld. CIT(A)/NFAC while passing the Appellate Order which is a gross violation of principles of natural justice.

ITA No.434/Bang/2026 Munishamappa Shivanna, Bengaluru Page 4 of 5 640070591251125 which were not considered by the ld. CIT(A)/NFAC while passing the Appellate Order. Further, before us, the ld. AR of the assessee also drew our attention to the fact that the entire sales Consideration received by the assessee was treated as Long term Capital Gain without providing the deduction towards indexed cost of acquisition. Further, it is submitted that the AO merely on the ground of non-submission of bills & vouchers in respect of expenditure claimed for construction of house disallowed the deduction claimed u/s 54F of the Act despite the fact that the assessee during the course of assessment proceedings submitted the ledger copy of building construction A/c, copy of the Sale deed, copy of bank statement, Valuation report & Completion Certificate. Thus, in our considered opinion the construction of building is not in dispute & therefore the AO should not have completely disallowed the claim of deduction u/s 54F of the Act. The AO by completely ignoring the valuation report & completion certificate had denied the deduction claimed by the assessee u/s 54F of the Act. This being so, in the interest of justice, equity & fair play and as requested by the ld. AR of the assessee, we deem it fit & proper to remit the entire issue in dispute to the file of the ld. AO to decide in accordance with law after taking into consideration the valuation report submitted by the assessee in the absence of bills & vouchers. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly. 6. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 7th Sept, 2026

Sd/- Sd/- (Balakrishnan S.) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 7th Sept, 2026. VG/SPS

ITA No.434/Bang/2026 Munishamappa Shivanna, Bengaluru Page 5 of 5

Copy to:

Asst. Registrar, ITAT, Bangalore.