DHARMENDRASINH MANHARSINH CHUDASAMA,AHMEDABAD vs. THE PCIT, AHMEDABAD-3, AHMEDABAD

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ITA 1200/AHD/2025Status: DisposedITAT Ahmedabad24 April 2026AY 2021-224 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found that the Assessing Officer had already complied with the directions of the PCIT during fresh assessment proceedings. The AO re-examined the land sale, treated it as taxable capital gains, and allowed the deduction under Section 54B, rendering the revisionary proceedings infructuous.

What were the facts?

The assessee appealed against an order passed by the Principal Commissioner of Income Tax under Section 263. The PCIT had directed the Assessing Officer to re-examine the taxability of a land sale receipt and consider it as arising from a non-agricultural land.

What were the issues?

Whether the revisionary proceedings under Section 263 were valid when the Assessing Officer had already addressed the issues raised by the PCIT in subsequent proceedings.

Which sections of the Income-tax Act were involved?

Section 263,Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

For Appellant: Shri Jaimin Shah, A.R
For Respondent: Shri Alpesh Parmar, CIT. DR
Hearing: 23.04.2026Pronounced: 24.04.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-

This appeal is filed by the Assessee against the appellate order dated 30.03.2025 passed by the Learned Principal Commissioner of Income Tax, Ahemdabad-3, relating to the Assessment Year 2021-22.

2.

The assessee has raised the following grounds of appeal: 1. The Principal Commissioner of Income Tax -1, Ahmedabad, has erred in law and on facts while issue of notice u/s 263 of the Income Tax Act. 1961dated 29/09/2024, and hence the proceedings itself is bad in law and required to be quashed. 2. That the Order passed u/s 263 of the IT Act, 1961 by PCIT-3, Ahmedabad dated 30/03/2025 is without jurisdiction and hence the order passed itself is bad in law and require to be quashed.

ITA No. 1200/Ahd/2025 Asst. Year : 2021-22 - 2– 3. That the assessment order passed dated 28/12/2022 by National Faceless Assessment Unit is neither erroneous nor prejudicial to the Interest of revenue, however the proceedings initiated u/s 263 of the IT. Act. 1961 by PCIT-1, Ahmedabad without appreciating the facts and circumstances of the case of the assessee, and hence the order passed u/s 263 is bad in law and requires to be quashed. 4. That the Ld. assessing officer has verified all the details and documents related to land transactions and accepted the land in question as agriculture land, there is no new material or information available with the PCIT-1 Ahmedabad however without appreciating the facts and circumstances the notice issued u/s 263 of the Act is bad in law and required to be quashed. 5. Without prejudice to the above grounds, the appellant is an agriculturist and during the year under consideration the appellant has purchased agriculture land before due date of filling his return of Income and the assessee is eligible to claim deduction u/s 54B of the Income Tax Act, 1961, which amount to revenue neutral. Therefore the capital gain on sale of agriculture land does not amount to prejudicial to the interest of revenue and therefore the proceedings initiated u/s 263 of the Act, is bad in law and require to be quashed. 6. Your appellant craves leave to add, alter, amend or drop any of the grounds till the appeal is finally heard and disposed off.

4.

Heard the argument of both the parties and perused the materials available on record.

5.

In the present case, an order under section 263 of the Act has been passed by the Ld. Principal Commissioner of Income Tax directing the Assessing Officer to examine and bring to tax the receipt of Rs.52,30,000/- by considering the same as arising from the sale of a taxable capital asset, i.e., non-agricultural land.

It is observed that in the original assessment order, an addition on account of loans was made by the Assessing Officer. The said issue

ITA No. 1200/Ahd/2025 Asst. Year : 2021-22 - 3– was carried in appeal before this Tribunal and the Tribunal, vide order dated 05.12.2024, restored the matter to the file of the Assessing Officer for examining the issue relating to loans. Pursuant to the directions of the Tribunal, the Assessing Officer conducted fresh assessment proceedings.

During the course of such proceedings pursuant to the order of the ITAT, the Assessing Officer (in the interest of Revenue) also examined the issue regarding the taxability of the receipt arising out of the sale of land situated at Dholera, which was the subject matter of the revisionary proceedings under section 263 of the Act passed by the Ld. PCIT vide order dated 30.03.2025. From the records and the assessment order passed pursuant to the order of the ITAT, we find that the Assessing Officer has duly re-examined the issue relating to the sale of agricultural land and treated the same as taxable capital gains. At the same time, the Assessing Officer has also examined the claim of re-investment made by the assessee under section 54B of the Act and upon verification, found the claim of the assessee to be valid. Accordingly, the Assessing Officer computed the capital gain arising out of the sale of land at Dholera after granting the eligible deduction under section 54B of the Act.

In these circumstances, the directions issued by the Ld. PCIT in the order passed under section 263 of the Act have already been complied with and the issue raised therein no longer survives for adjudication. Hence, the appeal before us against the order passed under section 263 of the Act has rendered to be infructuous. We clarify that since the issue involved in the order passed under section

ITA No. 1200/Ahd/2025 Asst. Year : 2021-22 - 4– 263 has already been considered by the Assessing Officer in his order dated 20.03.2026, no further action by the Revenue is required.

6.

In the result, the appeal filed by the assessee is dismissed as infructuous at this juncture.

The order is pronounced in the open Court on 24.04.2026.

S Sd/- Sd/- (TR SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy)rue Copy) Ahmedabad; Dated 24 .04.2026 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��थ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER, True Copy

सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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