ANILKUMAR GOVINDBHAI PRAJAPATI,AHMEDABAD vs. THE DY. CIT, CENTRAL CIRCLE-2(1)(1), AHMEDABAD

ITA 1778/AHD/2025Status: DisposedITAT Ahmedabad30 September 2026AY 2022-232 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided both issues in favour of the assessee. Regarding Ground No. 1, the Tribunal held that since the cost of improvement was not in dispute, the statute provides for indexation benefit. Therefore, the Assessing Officer (AO) was directed to grant indexation in accordance with the law. For Ground No. 2, the Tribunal found that the issue of deposits amounting to Rs. 6,58,918/- was beyond the purview of limited scrutiny and beyond the reasons for scrutiny selection. Consequently, the Tribunal held that no addition was called for on this count. The ratio for Ground No. 1 is that if the cost of improvement is accepted, indexation benefit should be provided as per statutory provisions. The ratio for Ground No. 2 is that additions under Section 69A are not sustainable if the issue falls outside the scope of the selected scrutiny parameters.

What were the facts?

The assessee, Anilkumar Govindbhai Prajapati, filed an appeal against the order dated 25.08.2025 passed by the Commissioner of Income Tax (Appeals) (NFAC), Delhi, for Assessment Year 2022-23. The Assessing Officer (AO) had disallowed the cost of improvement for indexation purposes, stating that complete details and supporting documentary evidence were not furnished, although the cost of construction, gate, and boundary wall were accepted. The AO also made an addition of Rs. 6,58,918/- under Section 69A of the Income-Tax Act, 1961, due to the assessee's failure to provide documentary evidence for certain deposits. The appeal was heard by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench.

What were the issues?

1. Whether the assessee is entitled to indexation benefit on the cost of improvement for long-term capital gains (LTCG) amounting to Rs. 10,52,074/-, despite the AO's disallowance due to lack of complete details and supporting evidence? This issue turns on the interpretation of provisions related to capital gains and indexation. 2. Whether the addition of Rs. 6,58,918/- under Section 69A of the Act is sustainable, given that the assessee failed to furnish supporting documentary evidence for the impugned deposits? Assessee's Contentions: For Ground No. 1, the assessee argued that since the cost of improvement itself was not in dispute, the statute provides for indexation benefit, and therefore, it should be allowed. Revenue's Contentions: The judgment does not record specific contentions from the revenue for either ground.

Which sections of the Income-tax Act were involved?

Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-SHRI RAHUL CHAUDHARY

For Appellant: Shri M.S. Chhajed, AR
For Respondent: Shri Drop Singh Meena, Sr. DR
Hearing: 08.07.2026Pronounced: 30.09.2026

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

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The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals) (hereinafter referred to as “Ld. CIT(A)”), National Faceless Appeal Centre (NFAC), Delhi vide order dated 25.08.2025, under section 250 of the Income-Tax Act, 1961 (hereinafter referred to as “the Act”) for the AY 2022-23. Ground No. 1 – Indexation – LTCG – Rs.10,52,074/-

2.

The relevant facts for adjudication of this issue are that the Assessing Officer did not allow cost of improvement on the grounds that complete details of such cost of improvement along

The order continues below.

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