SHRI SURENDRA SINGH,JABALPUR vs. INCOME TAX OFFICER WARD 2(2), JABALPUR

ITA 60/JAB/2019Status: DisposedITAT Jabalpur03 June 2026AY 2015-1637 pages
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What did the Tribunal hold?

The Tribunal held that the assessee's appeal ground regarding the cost of acquisition was partly allowed for statistical purposes. The Tribunal found that the denial of exemption for the second house construction was based on divergent reasons by the AO and CIT(A), and that the adjudication suffered from non-compliance with Rule 46A. The Tribunal noted that while the plot acquisition was outside the time limit for exemption, the construction cost incurred within the prescribed period could still qualify. The Tribunal set aside the denial of exemption and remitted the issue to the AO for verification of construction expenses, directing them to deal with it in accordance with the preceding paragraphs. The Tribunal dismissed the Revenue's ground no. 2, holding that the agreement to sell transaction complied with the first and second provisos to section 50C(1) of the Act, and the benefit of retrospective application of the first proviso to section 50C was available. The Tribunal also held that the sale consideration noted in the registered transfer/sale deed executed by the assessee was to be considered. The Tribunal found that the part consideration documented in the agreement was received through account payee cheques, and these details travelled to the registered sale deed. Therefore, the Revenue's ground no. 2 was dismissed.

What were the facts?

The assessee, Shri Surendra Singh, filed his return for AY 2015-16 declaring taxable income of ₹1,22,89,550 and NIL long-term capital gain (LTCG) after claiming exemption under section 54 of the Income Tax Act, 1961, for ₹2,59,54,878. The Assessing Officer (AO) rejected the assessee's adopted cost/indexed cost of acquisition and sale consideration for two immovable properties. The AO, using the District Valuation Officer's (DVO) valuation, recomputed LTCG at ₹14,60,27,824. After restricting the section 54 exemption to ₹60,78,000 for a flat purchase, the balance LTCG of ₹13,99,49,824 was added to the total income. The Commissioner of Income-tax (Appeals) [CIT(A)] partly allowed the assessee's appeal, averaging the cost of acquisition, replacing sale consideration with amounts from registered sale deeds, and upholding the denial of exemption for a house construction as time-barred. Both the assessee and the Revenue filed appeals before the ITAT.

What were the issues?

1. Whether the Tribunal had to decide if the CIT(A) erred in upholding the cost of acquisition at ₹1,90,46,912 against the assessee's adopted value of ₹3,29,88,925, with the assessee arguing the DVO's report was based on imagination. The Revenue argued in its appeal that the CIT(A) erred in rejecting the cost of acquisition as on 01.04.1981 as per the DVO's report without examining its merit and without giving an opportunity to the AO/DVO, and also erred in averaging the cost of acquisition. 2. Whether the Tribunal had to decide if the CIT(A) erred in allowing deduction under section 54 for a flat at ₹60,78,000 and denying it for a house property, with the assessee claiming entitlement to exemption for one house of choice. The Revenue argued in its appeal that the CIT(A) erred in holding the property was transferred in AY 1996-97 and section 50C was not applicable, and erred in preferring the agreement over the registered sale deed. 3. Whether the Tribunal had to decide if the CIT(A) erred in directing tax in AY 2015-16 instead of AY 2011-12, based on a revised computation not being a revised return, with the assessee arguing the agreement to sell occurred in AY 2011-12 and part payment was received. The Revenue argued that the CIT(A) erred in preferring the agreement over the registered sale deed and directing adoption of fair market value for AY 2011-12 as against the FMV adopted by the AO for AY 2015-16, and that section 50C provisions were not applicable to the facts of the case as the agreement took place during the period relevant for AY 2011-12.

Which sections of the Income-tax Act were involved?

Section 54,Section 250,Section 246A,Section 249,Section 143(3),Section 50C,Section 142A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JABALPUR BENCH, MP

Before: HON’BLE SHRI KUL BHARAT & SHRI G.D. PADMAHSHALI

For Appellant: Mr Sapan Usrethe [‘Ld. AR’]
For Respondent: Mr Shravan Kumar Meena [‘Ld. DR’]
Pronounced: 03/06/2026

PER G. D. PADMAHSHALT;

These cross appeals by the assessee and the Revenue are directed against order dt 13/05/2019 passed u/s 250 of the Income Tax Act, 1961 [‘the Act’] by the Commissioner of Income-tax (Appeals)—1, Jabalpur [‘Ld. CIT(A)’] for assessment year 2015-16 [‘AY’].

ITAT-Jabalpur Shri Surendra Singh Vs DCIT = ITA Nos. 0

The order continues below.

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