ATUL KUMAR TIWARI, RAIPUR,RAIPUR vs. INCOME TAX OFFICER-1, AMBIKAPUR, AMBIKAPUR

At the very outset, the Ld. Counsel for the assessee brought to the notice of this Bench the grounds of appeal filed in Form 35 as assailed before the Ld. CIT(Appeals)/NFAC and submitted that the Ld. CIT(Appeals)/NFAC had however not adjudicated the Ground of Appeal No.1 filed before it which itself should have determined the very crucial factor whether the land transferred by the assessee is a capital asset or not. The said Ground of Appeal No.1 as in Form 35 is extracted as follows: “1. On the facts and in the circumstances of the case, the Learned A.O has erred in facts and in law in rejecting the explanation of the assessee that the land transferred by the assessee did not constitute capital asset as defined u/s. 2(14) of the Income Tax Act as the land was rural agricultural land that gave rise to capital receipt not chargeable to tax. Relief sought: It is prayed that the addition of Rs.1,10,07,750/- may kindly be deleted.”

The Ld. Sr. DR fairly admitted that this ground has not been adjudicated by the Ld. CIT(Appeals)/NFAC.

Having heard the submissions of the parties, I am of the considered view that admittedly this ground goes to the root of the matter for factual determination whether the said transferred land is capital asset or agricultural property. This core issue shall determine the taxability in the hands of the assessee. This inadvertent error has occurred in the order of the Ld. CIT(Appeals)/NFAC as had been admitted by the parties herein before me. That in the interest of substantive justice, I restore this ground of appeal back to the file of the Ld. CIT(Appeals)/NFAC for adjudication as per law while complying with the principles of natural justice. The assessee shall also comply with the hearing notices and represent the matter on merits before the first appellate authority. That since this main ground for purposes of tax implications has been restored to the file of the Ld. CIT(Appeals)/NFAC, other grounds assailed before me are left open and unadjudicated.

That as per above terms, the appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 22nd day of May, 2026.