RAJU KUMAR YADAV ,PATNA vs. INCOME TAX OFFICER WARD 6(4) PATNA , PATNA

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ITA 588/PAT/2025Status: DisposedITAT Patna24 April 2026AY 2016-175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal acknowledged the assessee's plea for a fresh opportunity due to non-receipt of notices and the complexity of capital gains taxation under Section 45(5A) concerning JDA completion certificates. Therefore, the case was remitted back to the Assessing Officer for a fresh decision.

What were the facts?

The assessee's appeal concerns capital gains tax for AY 2016-17, arising from a Joint Development Agreement (JDA). The Assessing Officer initiated reassessment proceedings and computed capital gains based on the registered JDA. The assessee failed to appear before the CIT(A) despite notices, leading to an ex-parte dismissal of the appeal.

What were the issues?

The primary issues are whether capital gains were correctly taxed in AY 2016-17 under Section 45(5A) and if the cost of acquisition and indexation were properly considered for inherited land.

Which sections of the Income-tax Act were involved?

Section 45(5A),Section 147,Section 148,Section 144,Section 250,Section 48,Section 49,Section 55,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, PATNA

Hearing: 20.04.2026Pronounced: 24.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PATNA (VIRTUAL HEARING AT KOLKATA) SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER SHRI SONJOY SARMA, JUDICIAL MEMBER

ITA No. 588/PAT/2025 Assessment Year : 2016-2017

Raju Kumar Yadav, Vs. Income Tax Officer, S/o Jairam Ray House No. 174, Ward 6(4), Patna Gayatri Mandir Dhanaut, Patna - 801506 [PAN: BJRPR8285D]

APPELLANT RESPONDENT

Assessee by : Sh. Atul Dayal, Advocate Revenue by : Sh. Manab Adak, JCIT

Date of hearing : 20.04.2026 Date of Pronouncement : 24.04.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

This is an appeal filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the Ld. Addl./Joint Commissioner of Income Tax (Appeals)- 1, Chennai, [hereinafter referred to as “the Ld. CIT(A)], dated 10.10.2025, DIN & order No. ITBA/APL/S/250/2025-26/1081637286(1) on the following grounds of appeal:

2 ITA No. 588/PAT/2025 Raju Kumar Yadav “1. The authorities below erred in taxing capital gains in A.Y. 2016-17 ignoring Section 45(5A). Since the appellant is an individual and the JDA is a registered specified agreement, capital gains are chargeable only in the year in which the completion certificate is issued and not in the year of execution of JDA or handing over possession. Without prejudice, even otherwise, no income accrued or arose to the appellant in A.Y. 2016-17. The Share Distribution Agreement was executed on 18.08.2021 in F.Y. 2021- 22, at a time when the construction of the project was not complete and continues to remain incomplete even as on date. Taxing such income in the wrong assessment year is illegal and unsustainable in law. No ascertainable consideration. The Assessing Officer erred in estimating consideration based on FAR and assumed construction cost. At the time of entering into the JDA, neither the constructed area nor its value was ascertainable, and no consideration was received by the appellant. 2. The land was inherited from the appellant's father. As per Sections 48, 49 and 55, the cost of acquisition should be taken as the cost to the previous owner, with option to adopt FMV as on 01.04.2001, and indexation should be allowed accordingly. The same was wrongly denied. 3. Interest u/s 234A and 234B has been levied mechanically. When capital gains themselves are not chargeable in A.Y. 2016-17, interest is consequential and liable to be deleted. The reassessment was initiated and completed without due consideration of facts and on mere assumptions, rendering the reassessment order bad in law. The appellant craves leave to add, alter or amend any grounds of appeal at the time of hearing. PRAYER In view of the above facts and grounds, the appellant respectfully prays that: 1. The impugned order of the Ld. CIT(A) be set aside; 2. The additions made by the Assessing Officer be deleted.” 2. Briefly stated the facts of the case are that during the course of reassessment proceeding under Section 147/148 of the Act dated 28.11.2019, the income was assessed under Section 45A of the Act on the basis of registered JDA and capital gain was computed. Further, share distribution agreement was executed on 08.08.2021. Accordingly,

3 ITA No. 588/PAT/2025 Raju Kumar Yadav the Assessing Officer computed the income at ₹ 49,61,250/- and assessed under Section 147/144 of the Act.

3.

Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A). During the course of first appellate proceedings, the Ld. CIT(A) issued various notices on different dates as the evident from the table granted by the Ld. CIT(A) at page number 7 but there was no any response from the assessee side. Accordingly, he dismissed the appeal of the assessee on the basis of material available before him.

4.

Aggrieved from the above order, the assessee is in appeal before the ITAT.

5.

The Ld. Counsel submitted that the notice issued by both the authorities could not be seen by the assessee either it may be settled for the spam folder or could not be same and further submitted that the capital gain tax can be levied only in the year in which the completion certificate issue as per section 45A of the Act on the execution of JDA. When the land and building are handed over. He further requested that one more chance granted to the assessee and assessee will substantiate his case with cogent documents.

6.

On the other hand, the Ld. DR relied on the order of lower authorities.

4 ITA No. 588/PAT/2025 Raju Kumar Yadav 7. Considering the rival submissions and perusing the entire material available on record and orders of authorities below. Here the case was taken up for reassessment under Section 147 read with section 144 of the Act against which the assessee filed appeal for levy of capital gain and on the basis of registered JDA dated 09.06.2015. Subsequently, supplementary JDA was executed on 19.08.2021. However, case could not be represented before the Ld. CIT(A) and the Ld. CIT(A) after providing various opportunities to the assessee and decided exparte. Considering the prayer of the assessee, facts of the case and in the interests of justice, we are remitting this issue back to the file of Assessing Officer for fresh decision as per law and after giving a reasonable opportunity of being heard to the assessee. The assessee is directed to substantiate his case with cogent documents in support of his claim and not seek unnecessary adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

8.

In the result, appeal of the assessee is partly allowed for statistical purposes.

Order pronounced on 24.04.2026.

Sd/- Sd/- (Sonjoy Sarma) (Laxmi Prasad Sahu) Judicial Member Accountant Member Dated: 24.04.2026 AK, Sr. P.S.

5 ITA No. 588/PAT/2025 Raju Kumar Yadav Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches

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