CHANDRAVADAN NANUBHAI PATEL,SURAT vs. ITO, WARD-2(2)(5), SURAT

In The Income Tax Appellate Tribunal, Surat Bench, Surat Before Dr. Arjun Lal Saini, Accountant Member And Shri T. R. Senthil Kumar, Judicial Member I.T.A. No. 568/SRT/2025 [ Assessment Year: 2016-17 ] Chandravadan Nanubhai, Income Tax Officer, Patel, 11/6 Tanki Faliya, Vs. Ward-2(2)(5), Kosmada-1, Kosmada, Aaykar Bhavan, Majura Gate, Surat-395006 Surat, Gujarat-395001 �थायी लेखा सं/.जी आइ आर सं/.PAN/GIR No.: CWZPP6970M (Appellant) (Respondent) Appellant by : Shri P M Jagasheth, CA Respondent by : Shri Ajay Uke, Ld. Sr. DR Date of Hearing : 27/04/2026 Date of Pronouncement : 06/07/2026

:: ORDER :: Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year 2016-17, is directed against the order passed under section 250 of the Income Tax Act, 1961 by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals), which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the I.T. Act, dated 21.12.2018. 2. The grounds of appeal raised by the assessee are as follows: “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in adopting indexed cost of acquisition of property sold at only Rs.1,97,63,447/- as against Rs.4,49,51,223/- taken by

assessee on the basis of valuation report of Govt. approved valuer thereby making huge addition of Rs. 1,27,49,353/- to the income of assessee. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making reference to Departments Valuation Officer although he has failed to point out any discrepancy/defect in the valuation report of Govt. approved valuer submitted by assessee. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in disallowing deduction of Rs. 3,31,450/- claimed u/s 54B of the I.T. Act. 4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty proceedings u/s.271(1)(c) of the Income Tax Act, 1961. 5. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.”

has been verified, duly considered and taken into account at the time of finalization of the assessment proceedings. During the assessment proceedings it is observed that the assessee has sold land for a consideration of Rs.6,50,25,600/-, alongwith one more co-owner. The assessee has shown Long Term Capital Loss of Rs.1,24,38,423/-, from the sale of the said land. During assessment proceedings notices u/s 142(1) of the I.T. Act were issued on 05/10/2018, and 18/10/2018, the same were duly served upon the assessee. In response to the notices issued u/s 143(2) & 142(1) of the Act, the assessee had not submitted any details. Therefore, show cause notice was issued on 20.11.2018. The contents of the show cause notice are as under: "Please refer to the pending assessment proceedings for the A.Y.2016-17 in your case and earlier notices issued by this office on various dates requiring details for completion of assessment proceedings. From the records, it is noticed that till date no details has been provided by you in this matter. Therefore you are required to show cause with all necessary supporting evidences as to why the following additions should not be made to your total income. 1. On verification of information available with this office it is noticed that during the year under consideration you have deposited cash of Rs. 12.37 lakh in your account with Bank of Baroda, Bardoli Branch, Surat. You are required to show cause with supporting evidences as to why the above cash deposits and other deposits in your said bank account should not be treated as your unexplained income and added to your total income. 2. On verification of information available with this office it is noticed that during the year under consideration you have sold immovable property for consideration of Rs.6,50,25,000/-. You are required to show cause with supporting evidences as to why the above sale consideration should not be treated as your unexplained income and added to your total income.

Rs.83,16,600/-(i.e.2*4158300) which is on very higher side (i.e. @Rs.221/- per square meter) looking to the area and type of the land. The assessee has also not submitted any valuer's report in support of cost of acquisition though he has mentioned about the valuer's report in his working for capital gain. Therefore, the matter was referred to the valuation officer on 22.11.2018 to determine the fair market value of the land as on 01.04.1981. Notice u/s.133(6) was also issued to the Sub-registrar Kamrej on 04.12.2018 to provide sale instances of some properties in the area for the year 1981. However, the valuation report as well as the reply from sub -registrar regarding sale instances in the area were not received by the assessee. Therefore, the value of the land as on 01.04.1981 was taken by the assessing officer at Rs.15,07,840/- [i.e.@Rs.40/- per square meter, which is the average rate prevailing at that time in the area], subject to the outcome of the valuation report from the Departmental Valuation Officer. Assessee's share in the cost of land as on 01.04.1981 is Rs.7,53,920/-(i.e. one- half of the total cost as assessee's share in property is one-half). Accordingly, the working of capital gain was made and assessing officer and worked out long- term captain gain to the tune of Rs. 3,68,01,348/-.Therefore, in view of the above discussion assessee's Long Term Capital Gain Income was worked out at Rs. 2,43,62,925/- (Rs. 3,68,01,348- Rs. 1,24,38,423) from the sale of immovable property. As the assessee has shown capital gain income of Rs.1,24,38,423/- from the sale of the said land, therefore total addition made on account of long term capital gain was worked out at Rs.3,68,01,348/-. As the valuation report was still pending in this matter, it was stated by the assessing officer that the order may be rectified/modified accordingly in order to give effect to the valuation report, whenever the report is received.

5. It is also worthwhile to mention that the assessee has not submitted any supporting evidences with respect to claim of deduction u/s.54B of the Income- tax Act, before the assessing officer, therefore, the deduction claimed u/s 54B of the Act, amounting to Rs.3,31,450/- was also disallowed and taken as NIL, while working of Capital Gain Income.

In view of the above discussion, it is clear that admission of additional evidence is in contravention to Rule 46A of the IT Rules, 1962 as none of the condition mentioned in rule 46A is applicable in this case and therefore same should not be accepted. Part (b): Merits of the Additional Evidence During the remand proceedings, No specific directions to enquire the issue(s) were issued to the undersigned. However, on perusal of material provided by your goodself, following two issues are under consideration. TAX DEPI A. Cost of Acquisition: During the assessment proceedings, Ao has noticed that the cost of acquisition of the property, as on 01.04.1981, has been taken at Rs. 83,16,600/-(i.e.2*4158300) which is on very higher side (i.e. @Rs.221/-per square meter) looking to the area and type of the land. The assessee has also not submitted any valuers report in support of cost of acquisition. Therefore, the matter was referred to the valuation officer on 22.11.2018 to determine the fair market value of the land as on 01.04.1981. However, as the valuation report was not received assessment order was passed on 21.12.2018 by taking valuation @Rs. 40/Sq. Mtr During remand proceedings, No specific directions has been issued to enquire the issue. Further as the matter is quite old and this case was originally belongs to erstwhile ITO, ward 2(2)(5) Surat. Due to restructuring in the department, this ward was later on merged with ITO, ward 2(3)(4) Surat. Later on, in September 2023, said ward 2(2)(5) Surat was demerged from ward 2(3)(4) and included in newly created ward 2(3)(2), Surat. Due to this merger and demerger of wards, currently case record is not traceable and therefore whether valuation has already been done in this case or not is not clear at present. A request has been made to DVO to furnish the status of the valuation and reply is currently awaited. However, assesse has made submission to your goodself and stated that valuation report has been received on 17.12.2019 taking valuation @ Rs. 97/Sq. Mtr. Relevant part of the assesse's submission is as under. "13. It is further submitted that pursuant to reference made by A.O to DVO, the report of DVO has been received on 17.12.2019 & impugned land is valued by him at the rate of Rs. 97/- per Sq. Mtr. As such the value of land adopted by A.O is much lower than the valuation made by DVO. Even the value adopted by DVO is very much on lower side & he has failed to point out any cogent defect in the valuation report of Govt approved valuer. As such the value needs to be adopted on the basis of report of Govt approved valuer only." B. Deduction u/s 54B of the Act: During assessment proceedings, assessee has not submitted any supporting evidences with respect to claim of deduction u/s.54B of the Income-tax Act, and therefore the deduction claimed u/s.54B amounting to Rs.3,31,450/- may kindly be not accepted. During remand proceedings, No specific directions has been issued to enquire the issue. Further, the evidences forwarded by your goodself does not include any explanation on allowbility of claim u/s 54B of the Act. However, following facts are worth mentioning: (i) As per section 54B of the Act, Certain conditions are required to be satisfied. Details of said pre-conditions vis-à-vis assessee's eligibility is discussed as under:

As evident from the above table, it is clear that assesse is not fulfilling the conditions laid down u/s 54B of the Act. 3. In view of the above facts: A. Admission of additional evidence is in contravention to Rule 46A of the IT Rules, 1962 as none of the condition mentioned in rule 46A is applicable in this case and therefore same should not be accepted.

B. Valuation done by Departmental DVO may kindly be considered for calculation of capital Gain. If the copy of valuation report of the DVO is required, additional time may kindly be granted to the AO to trace the case record/procure it from DVO. C. Claim of deduction u/s 54B may kindly be not accepted as assesse is not fulfilling the conditions laid down u/s 54B of the Act. Therefore, it is requested that the addition made by the assessing office may kindly be sustained and the additional evidences submitted by the assesse may kindly be not admitted..." 5.3 A copy of the remand report was forwarded to the appellant for his comments on the observations of the JAO and for further submissions. Accordingly, the appellant submitted a rejoinder, which is reproduced hereunder: "....Part-A: Admissibility of additional evidence: - 2. In our earlier submission, prayer to admit additional evidences is already made as per para 20 of the submission dated 02.08.2023. However, in remand report, the Ld. assessing officer has raised his objections with regard to admissibility of fresh evidences under Rule 46A of the I.T. Rules. The assessing officer in his remand report page number 3 in para 2 has contended that the assessee has made additional submission at the time of appellate proceedings which was never submitted by the assessee in the assessment proceedings and hence not admissible as per the provisions of rule 46A of the I.T. Rules. In this regard it is to state that this is not the case where assessee did not extend any cooperation or did not file any details asked by Ld. assessing officer. 3. In fact the assessee has filed the following documents in the course of assessment proceedings along with his reply letter dated 21.11.2018: ……. On perusal of the above table, it is clear that except the valuation report of the govemment approved valuer, assessee filed all the documents during the scrutiny proceedings with the assessing officer. In rebuttal of the comment of the assessing officer in row 3 of the table on page no. 2 of the remand report that it was the duty of the assessee to file all the evidences to support his claim, we have to state that assessing officer never asked for the copy of the valuation report of the govt. approved valuer and assessee was under impression that he has to file the documents which have been called for by the assessing officer and assessing officer had never called for the valuation report and hence was not filed by the assessee under the bona fide belief. 4. Hence, it is proved that assessee's case was covered by following exceptions laid down in rule 46A of the Income Tax act, which shall read as rule 46A (1) (b) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer, AND (c) Where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant any ground of appeal; Thus, as the assessee was prevented by sufficient cause from producing before the assessing officer the evidences which were inevitable for grounds of appeal, these evidences should be allowed to be admitted in the course of appellate proceedings. Additional evidence must be allowed for reasonable cause: -

5. As the assessee was prevented by sufficient cause, the additional evidences must be allowed for reasonable cause. Reliance is placed on the decision of Delhi tribunal: ITAT Delhi ONS Creations Private Limited Vs ITO ITA No. 6250/Del/2013 In the case of M/s ONS Creations Private Limited Vs. ITO, it was held by ITAT Delhi that if additional evidence cannot be produced before AO for a reasonable cause by assessee, the CIT (A) must admit the additional evidences and assessee must be given an afresh opportunity of being heard. Rule 46A cannot over ride principles of natural justice: 6. In case the evidences surfaced after the assessment orders and assessee moved with such evidences and produce before the CIT (A) which are the vital evidences and touch the roots of the case, the admissibility of such evidences cannot be denied over riding the principles of natural justice. i. In the case of Jute Corporation of India Ltd. v. CIT 1991 AIR 241, 1990 SCR Supl. (1) 340 the Hon'ble Supreme Court, while dealing with the powers of the Appellate Assistant Commissioner observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income Tax Officer. Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. ii. The Hon'ble Delhi High Court's judgment in the case of CIT v. Virgin Securities and Credits P. Ltd (2011) 332 ITR 396 (Del) wherein the Hon'ble Court held that the CIT(A) should admit the additional evidence if he finds that the same is crucial for the disposal of the appeal. iii. Further Hon'ble Delhi High Court's judgment in the case of Chandrakant Chanu Bhai Patel 202 Taxman 262 wherein it has been held that if additional evidence is without any blemish and in order to advance the cause of justice, the same ought to be admitted. iv. ITAT Mumbai Avan Gidwani Vs ACIT I.T.A. No. 5138/Mum/2015From the facts narrated above, we notice that the assessee could collect various evidences only after passing of the assessment order. According to the assessee, these additional evidences are vital documents which are required to be considered in order to adjudicate the issue in a judicious manner. The principle "Audi alteram partem", i.e. no man should be condemned unheard is the basic canon principles of natural justice and accordingly we find merit in the contentions of the assessee that Rule 46A of the Income Tax Rules cannot be override the principles of natural justice v. The Hon'ble Supreme Court in the case of Collector Land Katji, 167 ITR 471 (SC) have held that when technical considerations are pitted against the cause of substantial justice it is the cause of substantial justice that must prevail. Hence, additional evidences be admitted at any stage of proceedings with a motive to provide justice.

7. Thus, relying on the above judgements, and the non-filing of evidences during assessment proceedings was due to bona fide reasons as above, it prayed that the evidences filed during appellate proceedings are required to be admitted as additional evidence as these are crucial for disposal of appeal for justice. Part-B- Submission on merits: - Regarding Cost of acquisition: 8. During the assessment proceedings, the assessing officer observed that the assessee has taken cost of acquisition as on 01.04.1981, of the property sold in the year under consideration of Rs. 221 per square metre. But assessing officer observed that rate (i.e. @ Rs. 221/- per sq. mt.) adopted by assessee on the basis of valuation report of government approved valuer is on higher side & he made reference to DVO on 22.11.2018 for determining FMV as on 01.04.1981. However, as report of DVO was not received till date of passing the assessment order, the assessing officer estimated the cost of acquisition @40 per Sq. Mtr. based on sale instances (average rate) prevailing at the time in the area. 9. In the remand report, the Ld..A. O. proposing on taking the valuation as per the report of department valuation officer. However, the same is not acceptable on the following fronts: 10. In support of the valuation adopted by assessee, the report of Govt. approved valuer is filed on record. Now, if the assessing officer does not want to accept the report, he has to record the reasons for not accepting the same & going by the report of DVO. The reasons in either case must have nexus with the claim made by the assessee and the objection, which may be raised by the department against the valuation determined in the report of the approved valuer. AO has not recorded any finding either on the validity of the claim/objection filed by the assessee nor did he record any finding on the sufficiency of valuation of the approved valuer submitted by the assessee 11. In the remand report assessing officer has not given any reason for not accepting the value shown in the valuation report submitted by assessee of the government approved valuer & no comments are offered on our above written submission also 12. The fair market value as on 01/04/1981 adopted by assessee for working out capital gain on sale of land at the rate of Rs. 221/- per Sq. Mtr. is supported by the report of government approved valuer. The assessing officer is proposing to deny the value adopted by the assessing officer only on the basis that assessee had not filed the valuation report of the impugned land in support of his claim of cost of acquisition, during assessment proceedings. 13. DVO is not technically qualified to undertake valuation of agricultural land as same can be done only by a qualified person approved by government. Valuation of agricultural land requires can be done by valuer who has done study from agricultural university / possess relevant degree for valuing agricultural land. Whereas on the other hand, DVO has not done any such specific study & consequently, he is not authorised to carry out valuation of agricultural land. 14. Valuation report of agricultural land has been submitted in appropriate form i.e. form 02 by registered valuer in which various aspects typically related to agricultural land like quality and fertility of land, mode of irrigation available, special features such as fertility and quality of land etc. have been specifically taken into consideration and commented upon. However, it is evident on perusal of valuation report of DVO that such important aspects concerning valuation of agricultural land are not at all discussed by him. This clearly manifest that valuation report submitted by DVO cannot be considered whereas, valuation report of registered valuer is

required to be considered as he is technically qualified to value agricultural land and has considered special features discussed above relating to impugned land. 15. It is specifically mentioned by registered valuer in his report that crops such as sugarcane, rice, groundnut were grown during the year. However, the DVO has not mentioned anything in this regard. 16. DVO has simply taken into consideration sale instances without even stating as to how far such land is situated compared to assessee's land & what are the differences in quality of soil, fertility factor etc. 17. It may be stated here that on perusal of order of DVO, it is evident that value as on 01.04.81 as per alleged comparable instances cited by him varied from Rs. 72.96 to Rs. 132.59 per sq. mt. & he has erred in adopting the lower value i.e. Rs. 97 per sq. mt. for making valuation in assessee's case. When assessee has also filed report of Govt. Approved valuer before assessing officer wherein, also comparable sale instances have been relied upon which shows the value ranging from Rs. 82.56 to Rs 3671.97 per sq. Mt., FMV as on 01.04.1981 ought to have been estimated on some rational basis @ Rs. 221 instead of at only Rs. 97 per sq mt. 18. Besides this, the registered valuer has filed detailed submission and has mentioned following features of impugned land taken into consideration for valuing impugned land at Rs. 160 per sq. mt. 1. The land is situated in the proximity to the Gamtal of Kosmada ii. It is abutting on the main road. iii. It is easily approachable by all types of surface transportation. iv. The land is leveled one and regular in shape. v. It was Jarayat type, old tenured and negir land. vi. It is suitable for two seasonal crops. Therefore, the rate referred by assessing officer cannot be taken into consideration for adopting fair market value as on 01/04/1981 & this is more so because no reason is given as to why method of valuation adopted by Government approved valuer is not acceptable. 19. It is further submitted that impugned land being agricultural land its valuation can be made only by the person who possesses required qualification to undertake task of valuation of agricultural land. The valuation report of such land is required to be issued in form no. 02 as per rule 8D and such report is enclosed in paper book whereas, the DVO is not qualified to undertake the task of valuation of agricultural land as he does not possess the required qualification. It is also evident on the perusal of valuation report of DVO that the same is not in the prescribed form and does not deal with various technical aspects associated with agricultural land. Hence, the report given by DVO is not applicable in the instant case and the valuation as on 01.04.1981 has to be adopted on the basis of report of registered valuer. 20. In this context, your attention is invited to Rule 8A of Wealth Tax Rules wherein different categories of valuers and their qualifications required to undertake task relating to valuation of different kind of assets has been specified. It is evident on perusal of sub-rule 3 of rule 8A of Wealth Tax Rules that the valuer of agricultural land shall have following qualifications: 21. The report of registered valuer is submitted before your honour and it is evident that he possesses the required qualification to undertake valuation of agriculture land. However, the valuation officer of the department does not possess the required qualification as he is only an

Engineer and does not fulfil the criteria laid down in above rule. He may be qualified to value non-agricultural land but the task relating to valuation of agriculture land requires specific skills and experience. The Wealth Tax Rules are also clear about the qualification of valuers for undertaking task of valuation of immovable property including non-agricultural and agricultural lands, valuation of stock & shares, plant and machinery, jewellery etc. As per rule 8D of Wealth Tax Rules, registered valuer has to submit his report in rule 8D in respect of valuation of agricultural land after considering various features associated with agricultural land. However, report of DVO does not deal with various aspects envisaged in Form O2 and consequently his report is unreliable. It is evident on perusal of his report that no basis has been given for arriving at the rate of Rs. 97/- per sq. mtr. only as against the rate of Rs. 221/- worked out by registered valuer in his report. DVO has not even stated that valuation of impugned land has been made by him considering it as agricultural land or non-agricultural land and even comparable cases relied upon by him does not contain details of such aspects. Valuation cannot be made on basis of such instances as document consideration is significantly undervalued due to very high rate of stamp duty. Here reliance can be placed on Kamataka High court decision in case of N Govind Raju vs ITO-125 DTR 352 and also in case of Smt. Krishna Bajaj vs CIT-267 CTR 172 wherein it is observed that in determining FMV under Act neither guideline value prescribed for purpose of stamp duty nor net wealth value arrived at under wealth tax act can be a guiding factor. Reliance can also be placed on Supreme Court judgement in case of Fiewajee Nagnathan vs RDD AIR 1994 SCW 2852 wherein it was held at basic value register prepared and maintained for purpose of collecting stamp duty has no statutory foundation and cannot be accepted. 22. It is therefore submitted that there is no justification in adopting the value of property as on 01.04.1981 as per order u/s 55A of the act. In this regard, reliance is also placed on detailed written submissions dated 02.08.2023 filed earlier. Hence, income from long term capital gain may kindly be computed as per working given by us in our earlier submissions. 23. Without prejudice to the above, reliance is placed on the decision of ITAT Mumbai Bench decision in case of ACIT V. Shri Dilip Shoorji - ITA no. 5987/Mum/13 dated 12/07/2016 wherein Honourable ITAT has held that valuation be done on the basis of average of value adopted by registered valuer & DVO. Reliance can also be on ITAT Surat Bench decision in case of Smt. Alkaben Ajaybhai Patel ITA No. 2770/Ahd/2014 dated 21.05.2018. Hence, if addition is not deleted in toto, in that case, valuation of property may kindly be done on the basis of above formula as held by ITAT. IN the instant case the average value comes to Rs. 159/- as under- Value as per Govt. approved Valuer - Rs. 221/- Sq. Mtr. Value as per DVO-Rs. 97/- Sqr. Mtr. Average = [Rs. 221/- plus Rs. 97/-)/2 = Rs. 159/- Sqm. Mtr. 24. Hence, if addition is not deleted in toto then the same may kindly be Proposed disallowance of exemption amounting to Rs. 3,31,450/- claimed by assessee u/s 54B of the Act- 25. In this regard, it is submitted that assessee has made investment in purchase of other agricultural land situated at Block No. 307, Moje Parab, Tal.- Kamrej, Surat for a total consideration of Rs. 3,31,450/- for which registered deed is executed on 04.11.2015 and the same is eligible for deduction u/s 54B of the act. a. In page no. 4 of the remand report, Ld. A.O. mentioned the conditions for claiming exemption u/s section 548 of the Act.

b. Regarding the condition -Agricultural land should be used by the individual or his parents for agricultural purpose at least for a period of two years immediately preceding the date of transfer. Assessing officer contended that assessee has not furnished any explanation as well as evidences with additional evidences which can establish that sold Agricultural land has been used by the assessee or his parents for agricultural purpose, at least for a period of two years immediately preceding the date of transfer.--- In this regard it is submitted that assessee in the reply letter dated 21.11.2018, filed the working of capital gain and in the annexure 4, filed the registered sale deed of the property sold in the year under consideration. In the sale deed the land record extracts in form 7/12 and 8-A are attached. On perusal of the same, it is purposes. c. Within a period of two years from the date of transfer of old land the taxpayer should acquire another agricultural land----Assessing officer contended that no details evidence has been furnished along with additional evidence to establish that purchased, land is an agricultural land. Further, purchased land is not an agriculture land as mentioned in the registered deed: In this regard it is submitted that assessee has already filed the purchase deed of the property purchased for claiming deduction u/s 54B of the I.T. act. It's clearly mentioned in the purchase deed of property that it's a land can be converted in non-agricultural land by paying a premium. The land records in form 7/12 and 8A are also included in the purchase deed of the property. Relevant pages of purchase deed are pasted hereunder: 27. From the above images it is clear that the land purchased for claiming exemption u/s 54B is the agricultural land only and the assessee has fulfilled all the conditions for availing benefit of exemption u/s 54B of I.T. act. Therefore, assessee should be allowed the benefit of exemption u/s 54 B of the I.T. act." 5.4 I have gone through the grounds of appeal, assessment order and submissions made by the appellant. The remand report of the Assessing Officer as well as the rejoinder of the appellant has also been perused. It was submitted by the AO that after considering all the documents submitted during the appellate / remand proceedings it is found that the addition made by the assessing officer may kindly be sustained and the additional evidences submitted by the assessee may kindly be NOT admitted. 5.4.1 It is seen from the assessment order that" as valuation report is still pending in this matter, it is stated that the order may be rectified / modified accordingly in order to give effect to the valuation report, whenever the report is received". In the remand report, the JAO submitted that valuation done by Departmental DVO may kindly be considered for calculation of capital gain. Under the circumstances and in view of the above reasons, the AO is directed to adopt the value given by the DVO and rework the capital gain. Ground No. 2 and 3 of the appeal are partly allowed for statistical purpose. 6.0 Ground No. 3 is with regard to the disallowance of deduction claimed u/s. 54B of the IT Act. This issue is not emanating the from the assessment order. However, in the remand report, the AO has submitted that as per sec. 54B certain conditions are required to be satisfied and it is clear that the assessee is not fulfilling the conditions laid down u/s. 54B of the IT Act Relied on the remand report, the claim of the appellant u/s. 54B of the IT Act is dismissed. 7. In the result, the appeal is partly allowed for statistical purpose.”

evidences of assessee and adjudicate the issue in accordance with law. Ground number 3 raised by the assessee is allowed for statistical purposes.

Sd/- Sd/- [ Shri T. R. Senthil Kumar ] [ Dr. Arjun Lal Saini ] �याियक सद�य/Judicial Member लेखा सद�य/Accountant Member //True Copy// राजकोट/Rajkot िदनांक/ Date: 06/07/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Surat 6. Guard File By order

Sr. Private Secretary ITAT, Surat