MALINI SATISH PAREKH,SURAT vs. ITO, WARD 2(3), SURAT

ITA 900/SRT/2024Status: DisposedITAT Surat01 October 2026AY 2013-147 pages
AI SummaryAllowed

What were the facts?

The assessee, Malini Satish Parekh, is an individual who did not file a return of income for Assessment Year 2013-14, despite selling immovable property. The Assessing Officer (AO) reopened the case under Section 147 and issued a notice under Section 148. The assessee was one of 16 co-owners of an agricultural land sold for Rs. 3,30,00,000/-, with a stamp duty value of Rs. 7,12,04,081/-. The AO made an addition of capital gains of Rs. 44,50,255/- under Section 144 r.w.s. 147, applying Section 50C. The Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the assessee's appeal. The assessee contended she signed the sale deed as a party rejoinder to clear title without receiving consideration, as her father had relinquished his rights in 1986.

What did the Tribunal hold?

The Tribunal held that the additions made by the AO and confirmed by the CIT(A) were not justifiable. The Tribunal noted that the Revenue itself had taken a stand in the co-owners' cases (Bharatiben Ganeshbhai Parekh and Minakshiben Bipinchnadra Parekh) that the immovable property was situated beyond 8 kms from the local limits of the municipal corporation. The Tribunal also considered the certificates produced, which stated the land had a population of 1650 and was situated beyond 8.2 kms from the Surat Municipal Corporation limits. These documents supported the assessee's claim that the land was rural agricultural land and not a capital asset. Therefore, the capital gains were not chargeable to tax. The Tribunal allowed the assessee's appeal, setting aside the additions made by the AO and confirmed by the CIT(A). No issue was expressly left undecided.

What were the issues?

1. Whether the agricultural land sold is a capital asset within the meaning of Section 2(14)(iii)(b) of the Income Tax Act, 1961, considering its distance from the then local limits of Surat Municipal Corporation. 2. Whether the agricultural land sold is a capital asset within the meaning of Section 2(14)(iii)(a) of the Income Tax Act, 1961, considering the population of the village where it is situated. 3. Whether the addition of Rs. 44,50,255/- is justified when the assessee allegedly had no rights in the land and received no consideration, having signed the sale deed solely to clear title. Assessee's Contentions: - The land is situated 8.2 Kms from Surat Municipal Corporation limits, thus not a capital asset under Section 2(14)(iii)(b). - The village population is 1650 as per the 2011 Census, making it not a capital asset under Section 2(14)(iii)(a). - The assessee's father relinquished his rights in 1986, conferring no rights on the assessee. She signed the sale deed without consideration to avoid future claims and clear title. - The AO failed to deduct the indexed cost of acquisition and ignored that the land was not a capital asset. - Relied on the case of Vinod Nihalchand Jain Ltd. vs. ITO and the department's stand in co-owners' cases. Revenue's Contentions: - The land is situated within 8 Kms of Surat Municipality Corporation limits, making it a capital asset under Section 2(14). - The stamp duty value attracted Section 50C. - The assessee failed to furnish supporting documents for the cost of acquisition and sale expenses. - The AO correctly determined the sales consideration attributable to the assessee and added it as capital gains.

Which sections of the Income-tax Act were involved?

Section 2(14),Section 144,Section 147,Section 148,Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

For Respondent: Shri Ashish Kumar, Sr. DR
Pronounced: 01.10.2026

PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 07.08.2024 for the Assessment Year (in short “AY”) 2013-14. 2. The assessee has raised the following grounds of appeal:

“1. The learned Commissioner of Income-tax (Appeals) has grievously erred in law and on facts in confirming the order u/s. 144 r.w.s. 147 of the Act without adequate verification of facts available in the case of actual

The order continues below.

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