RAMILABEN SURESHBHAI PATEL,NA vs. ARI GUJARATVS.INCOME TAX OFFICER WARD 5 NAVSARI, NAVSARI GUJARAT

PDF · subscribers
ITA 438/SRT/2025Status: DisposedITAT Surat10 July 2026AY 2018-196 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the property sold was agricultural land, which is not a capital asset. Therefore, no capital gains arise on its sale. The Tribunal also noted that similar decisions were made in the cases of other co-owners.

What were the facts?

The assessee, an individual, did not file an income tax return as her income was below the taxable limit. The department received information about her share in the sale of immovable property for Rs. 14,00,000. The Assessing Officer made an addition of Rs. 14,00,000, which was confirmed by the CIT(A).

What were the issues?

Whether capital gains tax is leviable on the sale of agricultural land and whether the transaction was completed given the dishonor of cheques and pending civil suit.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 2(14),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

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

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 438/SRT/2025 Assessment Year: 2018-19

Ramilaben Sureshbhai Patel Income Tax A-17, Vishal Nagar, Officer Gandevi Road, Italva, Vs Ward-5, Navsari, Navsari Gujarat-396445 PAN: ATWPP9904F (Appellant) (Respondent) Assessee Represented: Shri Mayank A. Ogrivala, CA Revenue Represented: Ms. Neerja Sharma, Sr. D.R. Date of hearing : 04-05-2026 Date of pronouncement : 10-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the assessee as against the appellate order dated 13.02.2025 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 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2018-19.

I.T. A No. 438//SRT/2025 A.Y. 2018-19 Page No 2 Ramilaben Sureshbhai Patel vs. ITO

2.

Brief facts of the case are, the assessee is an individual and deriving income from other sources which is below taxable income, hence, not filed the income return for the A.Y 2018-19. Information received by the department, that the assessee is one fifth co-owner of sale of immovable property for consideration of Rs. 70,00,000/- wherein the assessee’s share was Rs. 14,00,000/- which has not offered from taxation. Therefore, a notice u/s 148 of the Act was issued on 30.03.2022. In response the assessee filed her return of income on 28.04.2022 declaring total income of Rs. 5,437/-. In the re-assessment proceedings, the assessee submitted the land sold by the assessee and her brothers and sisters are agricultural land and not liable for capital gains, the above land jointly owned are part of ancestoral property as follows: Sr. No. Name Share Amount (in Rs.) 1 Shantaben Somabhai Patel 20% 14,00,000/ 2 Sureshbhai Somabhai Patel 20% 14,00,000/ 3 Jayaben Somabhai Patel 20% 14,00,000/ 4 Damyantiben Somabhai Patel 20% 14,00,000/ 5 Ramilaben Sureshbhai Patel 20% 14,00,000/- Total 100% 70,00,000/-

3.

The assessee also submitted the Purchaser of land paid post date cheques, which were also dishonored, thereby civil suits filed against the Purchaser, which is pending in Navsari District Court. Thus, the sale deed made is null and void. Therefore requested to drop re-assessment proceedings, the assessee further submitted that one of the co-owner case namely Jayaben Somabhai Patel, wherein the re- assessment proceedings initiated for the very same sale of land was

I.T. A No. 438//SRT/2025 A.Y. 2018-19 Page No 3 Ramilaben Sureshbhai Patel vs. ITO

concluded that the land being agricultural land, no capital gains arises on transfer of the same. Thereby accepted, the return of income filed by that assessee vide re-assessment order dated 01.03.2023 passed u/s 147 r.w.s 144B of the Act.

4.

The above submissions were not accepted by the Assessing Officer, thereby made addition of Rs. 14,00,000/- as the assessee’s income and demand tax thereon.

5.

Aggrieved against the re-assessment order, the assessee filed appeal before ld. CIT(A) who has also confirmed the addition made by the Assessing Officer.

6.

Aggrieved against the appellate order, the assessee is in appeal before us, raising the following grounds of appeal as under:-

1.

On the facts and in the circumstances of the case, and in law, the order passed by the learned CIT(A), NFAC under section 250 of the Income Tax Act is not a reasoned order, as it does not deal with each ground of appeal separately and fails to consider key submissions regarding dishonour of cheques and the pending court proceedings for cancellation of the sale agreement. 2. On the facts and in the circumstances of the case, and in law the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 14,00,000/- as long-term capital gain without considering that the transaction of sale did not materialize due to dishonour of cheques and breach of sale deed terms. 3. On the facts and in the circumstances of the case, and in law, the learned Commissioner of Income Tax (Appeals) has erred in sustaining the addition of Rs. 14,00,000/- even though the land sold is not a capital asset as defined under section 2(14) of the Income Tax Act. 4. On the facts and in the circumstances of the case, and in law, the learned Assessing Officer failed to appreciate that no such addition was made in the

I.T. A No. 438//SRT/2025 A.Y. 2018-19 Page No 4 Ramilaben Sureshbhai Patel vs. ITO

case of one of the joint owners, namely Smt. Jayaben Somabhai Patel, despite identical facts. 5. On the facts and in the circumstances of the case, and in law, both the learned Commissioner of Income Tax (Appeals) and the learned Assessing Officer have erred in not allowing the deduction of the cost of acquisition from the sale consideration. Your appellant further reserves his right to add, alter or to amend any of the aforesaid grounds at the time of hearing of an appeal and all the above grounds are without prejudice to each other.

7.

Ld. Counsel appearing for the assessee submitted before us three paper books:- I. Carrying document, written submissions, copy of Sale Deed, copy of civil suit for Cancellation of Sale Deed, bank statements, reassessment order passed in the case of Jayaben Amrutbhai Patel. II. Wherein, Application for production additional evidences before this Tribunal invoking Rule 29 of the ITAT Rules, namely copy of ld. CIT(A) order in another co-owner case namely Smt. Damyantiben Patel, translated copy of the Civil Suit, population of village Hansapor as per last census, copy of Bank Statement of Joint co-owners and total receipt against the Sale Deed combining all holders. III. Copies of case law of compilation.

7.1. We have given our thoughtful consideration and perused the materials available on record. Ld. Sr. DR appearing for the Revenue could not controvert re-assessment order passed in the case of Smt. Jayaben Amrutbhai Patel, wherein it was held that the subject matter of property is an agricultural land and no capital gains arises on sale

I.T. A No. 438//SRT/2025 A.Y. 2018-19 Page No 5 Ramilaben Sureshbhai Patel vs. ITO

of agricultural land as held by the assessment unit of Income Tax Department which reads as follows:-

“1. Reasons for inference drawn that no variation is required on this issue. In response to the notice issued u/s. 148, the assessee filed return of income declaring income of Rs. 28,430/-, In respect of sale of immovable property, the assessee submitted that the property sold was an agricultural property and provided a copy of sale deed in support of her claim. The sale deed provided by the assessee is in Gujarati. Accordingly, the same was forwarded to a Technical Unit for translation and from the report of the Technical Unit, it is confirmed that the property sold is an agricultural property. As the assessee could provide documentary evidence in support of her claim that the immovable property sold is an agricultural property which is not a capital asset on which no capital gains arises, no adverse inference is drawn in this case and accordingly, no variation is made in this case to the income returned by the assessee.”

8.

Similarly, the additional evidences filed by the assessee namely ld. CIT(A)’s order dated 31.07.2025 passed in the case of another co- owner namely Smt. Damyantiben Ramubhai Patel wherein the ld. CIT(A) held that no capital gains arises on the sale transaction by observing as follows:- “…4.1. The appellant, a joint owner of agricultural land in Jalalpore, Navsari, entered into an agreement to sell the property for Rs.70,00,000, with a personal share of Rs.14,00,000. However, the transaction failed because the buyer's cheques were dishonoured, and a civil suit was filed to cancel the sale deed. The appellant contended that providing extensive despite documentation and explanations- including proof that the land was agricultural, evidence of joint ownership, and bank statements showing no payment received the Assessing Officer (AO) added the entire Rs.70,00,000 to the appellant's income, ignoring the submissions and treating the sale as completed.”

9.

Considering the above decisions of the Income Tax Department and other co-owner cases for the very same piece of agricultural land

I.T. A No. 438//SRT/2025 A.Y. 2018-19 Page No 6 Ramilaben Sureshbhai Patel vs. ITO

and we have no hesitation in deleting the addition made by the Assessing Officer. Thus, the Grounds raised by the assessee are hereby allowed.

10.

In the result, the appeal filed by the assessee is allowed.

Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 10-07-2026

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat: Dated 10/07/2026 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Surat 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, सूरत

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →