DHARMESHKUMAR PARSOTTAMBHAI UKANI,SURAT vs. DY. CIT, CENTRAL CIRCLE-4, SURAT

ITA 1398/SRT/2025Status: DisposedITAT Surat27 July 2026AY 2011-1211 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, in the interest of justice, decided to restore the matter back to the file of the Assessing Officer. The AO is directed to re-examine the issue in light of the submissions made by the assessee and the documents produced through the paper book. The assessee is also directed to cooperate with the set-aside proceedings by providing all necessary documents and evidence. The Tribunal noted that the assessee's claim regarding the agricultural nature of the land and its location beyond municipal limits, as well as the issue of dishonoured cheques, required further verification. The Tribunal did not decide on the validity of the reopening or the capital gains addition but remanded the matter for a fresh adjudication. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Dharmeshkumar Parsottambhai Ukani, filed his return of income for Assessment Year 2011-12. The Assessing Officer (AO) reopened the assessment under Section 147, believing income had escaped assessment. Information received indicated the assessee, along with three others, sold an immovable property for Rs. 80,00,000 on 24/09/2010. The AO noted that capital gains from this transfer were not disclosed. The AO issued a notice under Section 148 on 29/03/2018. The assessee did not attend or furnish submissions, despite opportunities. The AO added Rs. 30,00,000 under Section 69 as Long Term Capital Gain. The Commissioner of Income Tax (Appeals) confirmed this addition, stating the assessee failed to provide proof for the transactions. The assessee appealed to the ITAT.

What were the issues?

1. Whether the reopening of assessment under Section 147 by issuing notice under Section 148 of the Income Tax Act, 1961, was valid? The assessee argued that the reopening was bad in law as there was no "reason to believe that income has escaped assessment." The assessee also contended that the AO failed to pass a speaking order disposing of the objections against reopening. The revenue supported the AO's action. 2. Whether the addition of Rs. 30,00,000 under Section 69 of the Income Tax Act as Long Term Capital Gain was justified? The assessee contended that the land sold was rural agricultural land, excluded from the definition of a capital asset under Section 2(14), and thus not liable for capital gains tax under Section 45. The assessee provided evidence of the land's location beyond 8 kms from municipal limits and submitted that cheques received were dishonoured, leading to a civil suit. The revenue supported the AO's addition.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69,Section 139(1),Section 143(1),Section 129,Section 142(1),Section 271(1)(b),Section 2(14),Section 45

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH SMC, SURAT

Before: Shri T. R. Senthil Kumar & Shri Ratnesh Nandan Sahay

For Appellant: Shri Mehul Shah, C.A
For Respondent: Ms. Neerja Sharma, Sr.DR
Hearing: 07/05/2026Pronounced: 27/07/2026

PER: RATNESH NANDAN SAHAY, AM:

1.

This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-4, Surat [In short, ‘the ld. CIT(A)’] dated 16/09/2025 for the assessment year (AY) 2011-12, wherein the assessee has raised following grounds of appeal:

"

1.

On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in reopening assessment u/s. 147 by issuing notice u/s. 148 of the LT. Act, 1961. Dharmeshkumar Pa

The order continues below.

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