MANOHARLAL JIWANDAS SACHANI,NAGPUR vs. ITO WARD-5(3), NAGPUR

ITA 170/NAG/2025Status: DisposedITAT Nagpur19 June 2026AY 2018-199 pages
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What were the facts?

The assessee leased agricultural land to a partnership firm in which one of the lessors' sons was a partner. The Assessing Officer invoked Section 269UA(f) and treated the lease as a transfer of immovable property, applying Section 50C for capital gains. The CIT(A) sustained this by invoking Section 2(47)(vi) of the Act, considering the long lease period.

What did the Tribunal hold?

The Tribunal held that the CIT(A) erroneously relied on Section 53A of the Transfer of Property Act and that a lease agreement, even for a long period, does not automatically constitute a transfer of capital asset under Section 2(47)(vi) of the Income Tax Act. The lease was executed for establishing a family business and did not indicate an intention to alienate property rights perpetually.

What were the issues?

Whether a long-term lease of agricultural land to a partnership firm, where a lessor's son is a partner, constitutes a 'transfer' of a capital asset for the purpose of calculating capital gains under Section 50C.

Which sections of the Income-tax Act were involved?

Section 269UA(f),Section 50C,Section 45,Section 56(2)(X),Section 2(47)(v),Section 2(47)(vi),Section 53A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH :: NAGPUR

For Appellant: Shri K.P. Dewani, Adv
For Respondent: Shri Surjit Kumar Saha, Sr. DR
Hearing: 08.06.2026Pronounced: 19.06.2026

PER ANUBHAV SHARMA, JM:

This appeal filed by the assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi, (for short, “CIT(A)”), dated 30/01/2025 passed under section 250 of the Income Tax Act, 1961 (for short, “Act”) which is emanating from the assessment order dated 30.04.2021 passed u/s. 143(3) r.w.s. 144B of the Act by the ITO, for the Assessment Year (AY) 2018-19. 2. On hearing both the sides, we find that the controversy involved in the appeal of the assessee is the addition made by Ld. Assessing Officer (‘in in short AO') invoking provisions of Section 269 UA(F) of the Act by considering the lease granted by the assessee to a par

The order continues below.

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