MAHADEV BAPU SHELKE,KHALAPUR vs. INCOME TAX OFFICER WARD 4, PANVEL

ITA 3322/PUN/2025Status: DisposedITAT Pune29 September 2026AY 2015-165 pages
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What were the facts?

The assessee, Mahadev Bapu Shelke, filed his return of income for Assessment Year 2015-16 on March 21, 2016, disclosing a total income of Rs. 3,22,990/-. The case was selected for limited scrutiny due to large cash deposits and property transfer. The Assessing Officer (A.O.) noted that the assessee received consideration on sale of land which was less than the stamp duty value, attracting Section 56(2)(vii)(b). The A.O. found the assessee entered into a development agreement on November 10, 2014, for the land, wherein the developer would hand over 40% of the developed area and a cash consideration of Rs. 51,70,000/-. The A.O. determined the capital gains on sale of property below market value, making an addition of Rs. 4,39,91,992/-, invoking Section 56(2)(vii)(b) for a differential value of Rs. 21,39,500/-, and also added bank interest, pension income, and unexplained cash deposits. The total assessed income was Rs. 4,68,53,200/-. The CIT(A) deleted the addition for unexplained cash deposits but sustained other additions. The assessee appealed to the ITAT.

What did the Tribunal hold?

The Tribunal noted that the assessee had filed an application for admission of additional evidence under Rule 29 of the ITAT Rules, which included affidavits confirming the agricultural use of the land and bills for seeds used in agricultural activities. The Tribunal acknowledged that such evidence plays a vital role in decision-making. Considering the facts, circumstances, and the additional evidence, the Tribunal found that the assessee should not suffer due to non-filing of material information. Therefore, the Tribunal set aside the order of the CIT(A) and restored the disputed issues along with the evidences to the file of the Jurisdictional Assessing Officer for fresh adjudication on merits. The assessee was to be provided an adequate opportunity of hearing and was directed to cooperate in submitting information. The grounds of appeal were allowed for statistical purposes.

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Long Term Capital Gains on the sale of land by treating it as a capital asset under Section 2(47) of the Income Tax Act, 1961, and in invoking Section 56(2)(vii)(b) of the Act for the differential value, overlooking the assessee's submissions that the land was used for agricultural purposes? Assessee's Contention: The assessee argued that the CIT(A) erred in confirming the A.O.'s action by overlooking that the land was used for agricultural purposes and therefore not a capital asset. The assessee also filed an application for admission of additional evidence under Rule 29 of the ITAT Rules, including affidavits and purchase bills for seeds, to substantiate agricultural use. Revenue's Contention: The Ld. DR submitted that the additional evidence was not examined by the lower authorities and supported the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 2(47),Section 56(2)(vii)(b),Section 143(1),Section 143(3),Section 142(1),Section 133(6),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE

Before: DR. MANISH BORAD & SHRI PAVAN KUMAR GADALE

Hearing: 28.09.2026Pronounced: 29.09.2026

PER PAVAN KUMAR GADALE, JUDICIAL MEMBER:

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The appeal is filed by the assessee against the order of the NFAC/CIT(A), Delhi passed under Sections 143(3) and u/sec250 of the Income Tax Act. The assessee has raised the grounds of appeal challenging the order of the CIT(A) in sustaining the addition of Long Term Capital Gains on sale of land treating as capital asset u/sec2(47) of the Act by the Assessing officer.

2.

The brief facts of the case are that, the assessee has filed return of income for the A.Y. 2015-16 on 21.03.2016

ITA.No.3322/PUN/2025 Mahadev Bapu Shelke disclosing a total income of Rs. 3,22,990/- and the

The order continues below.

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