SH.ANIL SINGH,DEHRADUN vs. DCIT, CC, DEHRADUN

The issues involved in both captioned appeals are common, therefore, they were heard together and accordingly, adjudicated by a common order.

First we take the appeal of the assessee in ITA No.196/DDN/2024 for Assessment Year 2015-16.

In first appeal, Ld. CIT(A) though uphold the re-opening of assessment however, as against the addition of total sale consideration as business income hold the profit earned as taxable under the head “Long Term Capital Gain” (“LTCG”) and the addition is reduced to INR 60,78,202/- being LTCG from sale of land after allowing the benefit of indexations.

Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before the Tribunal by taking various Grounds of appeal as mentioned in the appeal memo.

Ground of appeal No.1 raised by the assessee is with respect to the re-opening of assessment and Ground of appeal No.2 raised

In respect of Ground of appeal No.1, ld. AR for the assessee submits that assessee has disclosed all the material facts in the return of income filed where consideration received from the sale of agricultural income was claimed as exempt income which stood accepted in the order passed u/s 143(1) of the Act and no new fact was brought on record by the AO before recording the satisfaction of escapement of income. Therefore, the re-opening of assessment is bad in law.

On the other hand, Ld. CIT DR for the Revenue vehemently supported the orders of the lower authorities and submits that the assessment was completed u/s 143(1) of the Act and therefore, there was no verification of the income declared on the part of the AO. Further, the assessee has converted the land use from agricultural to Awasiya and therefore, there was the intention of the assessee to explore the land for the purpose of profits which is clearly a case of adventure in the nature of trade and therefore, he requested for the confirmation of the order of Ld. CIT(A) on account of re-opening of assessment u/s 147 of the Act.

With respect to Ground of appeal No.2, Ld.AR for the assessee submits that the assessee owned the subject land as agricultural in nature therefore, the entire sale consideration and profit thereon was exempted however, Ld. CIT(A) has wrongly treated the same as

On the other hand, Ld. CIT DR for the Revenue submits that when land use was converted into the Awasiya, the capital asset has been converted into business the character of the land is changed from agriculture and therefore the ld. CIT(A) has rightly treated it as capital asset and accordingly, the profits from the as sale of such asset should be assessed as Long terms capital gain, and thus he requested for the confirmation of the order of ld. CIT(A).

Heard the contentions of both the parties at length and perused the material available on record. So far as Ground of appeal No.1 of the assessee of re-opening of assessment is concerned, it is observed that return of income filed by the assessee was processed u/s 143(1) of the Act and no assessment u/s 143(3) was completed thus the facts stated by the assessee were verified at any stage. It is further observed that Ld. CIT(A) has considered all these aspects and thereafter, observed that there was a live link between the material available and the escaped income and the reasons recorded. Once it is established that some income has escaped assessment, the AO is required to record the reason to believe of such escapement at the time of re-opening of assessment. We find no error in the order of ld. CIT(A) who made following observations in para 6.1 of the order:-

With respect to Ground of appeal No.2 of the assessee, it is observed that the AO has treated the entire transaction as business income and without allowing the deduction on account of cost, had brought to tax the entire sale proceeds. Ld. CIT(A) has treated the land owned by the assessee as capital asset and by allowing the benefit of indexation, has reduced the addition made by the AO as business income into LTCG of INR 60,78,202/-. Before us, the assessee has failed to controvert the findings of ld. CIT(A). Thus looking to the fact that assessee has changed the land use of the subject land from ‘Agriculture’ to ‘Awasiya’ and thereafter sold the same after converting it into small pieces of land therefore, it is an

In the result, appeal of the assessee is dismissed.

Now we take appeal of the assessee in ITA No.195/DDN/2024 for Assessment Year 2016-17.

In the result, appeal of the assessee is dismissed.

In the final result, both captioned appeals of the assessee in ITA No.196 & 195/DDN/2024 for Assessment Year 2015-16 & 2016- 17 respectively, are dismissed. Order pronounced in the open Court on 05.06.2026.