NEERAJ KUSHWAH,GWALIOR vs. INCOME TAX OFFICER 2(2) GWALIOR, GWALIOR

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ITA 574/AGR/2025Status: DisposedITAT Agra22 April 2026AY 2022-235 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted additional evidence from the assessee and remanded the matter back to the Assessing Officer for fresh adjudication. The Assessing Officer is directed to verify the additional evidence and decide the case on merits.

What were the facts?

The assessee declared a short-term capital gain on immovable property, claiming a significant cost of improvement. The Assessing Officer added this entire amount to the assessee's income for lack of evidence. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the CIT(A) erred in sustaining the addition for unexplained cost of improvement without considering the assessee's claim and evidence. Whether the matter should be remanded for verification of additional evidence.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 250,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (DB

Before: SHRI S RIFAUR RAHMAN & SHRI SUNIL KUMAR SINGH

For Appellant: Shri Rajendra Sharma, Adv. &, Shri Manuj Sharma, Adv
For Respondent: Shri Harsh Siddharth Gautam, Sr. DR
Hearing: 20.04.2026Pronounced: 20.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE: SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 574/Agr/2025 Assessment Year: 2022-23 Neeraj Kushwah Vs. Income Tax Officer 2(2) Chandra Nagar Bhaind City Centre, Koteshwar Mandir Gird Gwalior – 474 003 Gwalior – 474 011 PAN : DFHPK4755P (Appellant) (Respondent) Assessee by Shri Rajendra Sharma, Adv. & Shri Manuj Sharma, Adv. Department by Shri Harsh Siddharth Gautam, Sr. DR Date of hearing 20.04.2026 Date of pronouncement 20.04.2026 ORDER

PER: SUNIL KUMAR SINGH, JM. This appeal has been preferred against the impugned order dated 16.10.2025 passed in Appeal no. NFAC/2021-22/10333934 by the Ld. Commissioner of Income tax/NFAC Delhi [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year A.Y. 2022-23, wherein learned CIT(A) has dismissed assessee’s appeal, sustaining the addition of Rs. 2,26,12,350/- made on account of unexplained improvement expenses made vide, assessment order dated 28.02.2024.

ITA No.574/Agr/2025

2.

The brief facts under appeal state that the appellant assessee filed his return of income on 28.12.2022 for A.Y. 2022-23, declaring total income of Rs. 11,90,070/-. The case was selected for scrutiny under CASS, for showing low LTCG and High improvement cost. Statutory notices u/s 143(2) r.w.s. 142(1) of the Act, were issued and served upon the assessee along with questionnaire to produce the evidences and verify the genuineness of improvement cost of immovable property. Assessee did not file any reply. However, assessee responded in part against centralized communications dated 26.10.2023. Assessee reported an amount of Rs. 2,26,12,350/- as cost of improvement without indexation against full value consideration of Rs. 2,34,37,038/- and disclosed Rs. 8,24,688/- as short term capital gain on immovable property. Assessing officer observed that the sale consideration did not match with one claimed in ITR. Ld. AO further, observed that no evidence was provided in respect of claimed cost of improvement of Rs. 2,26,12,350/- and added this amount to the income of the assessee, vide assessment order dated 28.02.2024. 3. Aggrieved, assessee preferred an appeal before learned CIT(A), who dismissed assessee’s first appeal. 4. Assessee has raised following grounds under appeal. 1. That the order passed by NFAC dt. 16.10.2025 is not in 1 accordance with the provisions of section 250(6) of Income tax Act is bad in law liable to be set aside.

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ITA No.574/Agr/2025

2.

That while sustaining the addition, made by the AO, disallowing of the cost with expenditure towards improvement, while computing the short term capital gain, the NFAC has completely ignored that the appellant has duly filed all the necessary documents in support of their claim, cost of the land with expenses under improvement which are liable to be allowed while computing the short term capital gain, no addition is liable to be made, addition made by the AO, sustained by NFAC is liable to be deleted. 3. That while sustaining the addition, the NFAC has not appreciated the facts and evidences filed during the course of assessment proceeding, after taking into consideration all, no addition is liable to be made, addition made by the AO, sustained by NFAC is liable to be deleted. 4. While sustaining the addition as made by the AO, the NFAC has completely ignored, assessment order passed by the AO is also not in accordance with the provisions of section 144B of Income tax Act, is arbitrary against the provisions of Income tax, additions are made, which the NFAC has not sustained without appreciating the facts, addition sustained is liable to be deleted. 5. The order passed by NFAC dt. 16.10.2025 is liable to be set aside.”

5.

Perused the records and heard Ld. Representative for the appellant assessee and Ld. Sr DR for the respondent revenue. 6. The main question for determination under appeal is as to whether Ld. CIT(A) has erred in sustaining the addition of Rs. 2,26,12,350/- claimed by assessee without indexation, ignoring assessee’s cost of improvement, while calculating short term capital gain on immovable property ? 7. Ld. Representative for the assessee has submitted that both the revenue authorities have ignored the cost of improvement, while calculating short term capital gain on immovable property. Ld. AR submits that the assessee wants to file additional evidence in the form of certificate obtained from the Civil Engineer certifying that assessee has made investment towards improvement of underdeveloped land purchased and construction 3 | P a g e

ITA No.574/Agr/2025

of roads etc. The said certificate could not be filed before the revenue authorities as the assessee expected the revenue authorities to act upon assessee’s earlier submissions alone. The additions evidence is necessary for the just decision of the case. Ld. AR further submitted that the additional evidence may be sent back to the assessing officer for its verification. 8. Learned Sr DR for the respondent revenue has supported impugned order. 9. We have gone through the impugned order. It appears that assessee could not file the required documentary evidence in respect of the cost of improvements in respect of the said immovable property. In the interest of justice and fair play, we deem it just and appropriate to admit additional evidence filed by appellant assessee and remit the matter back to the file of learned assessing officer for adjudicating the matter a fresh on merit after considering/verifying the additional evidence filed by the assessee. We further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the learned assessing officer for the expeditious and effective disposal. Needless to say that learned assessing officer shall ensure the observance of the principles of natural justice. The appeal is liable to be allowed for statistical purposes.

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ITA No.574/Agr/2025

10.

In the result, the assessee’s appeal is allowed for statistical purposes. Impugned order dated 16.10.2025 is set aside.

Order pronounced on 20.04.2026 Sd- Sd- (S RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated:22.04.2026 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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