ROHITBHAI JIVRAMBHAI PATEL,VADODARA vs. INCOME-TAX OFFICER, WARD 3(1)(2), VADODARA

ITA 679/AHD/2026Status: DisposedITAT Ahmedabad30 September 2026AY 2018-196 pages
AI SummaryRemanded

What were the facts?

The assessee, Rohitbhai Jivrambhai Patel, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, which upheld the Assessment Order passed by the Income-Tax Officer (ITO) for Assessment Year 2018-2019. The ITO had disallowed a deduction of Rs. 1,79,94,050/- claimed by the assessee under Section 54B of the Income Tax Act, 1961. The assessee, a joint owner, sold agricultural land on August 11, 2017, and claimed deduction for investment in new agricultural lands. The ITO noted that the new lands were purchased via registered deeds dated February 24, 2020, and July 16, 2020, which fell beyond the statutory two-year period from the sale date. The CIT(A) confirmed this disallowance, holding that transfer of title only occurs upon execution of a registered sale deed.

What did the Tribunal hold?

The Tribunal held that mere delay in the registration of the final conveyance deed beyond the assessee's control should not bar a legitimate statutory exemption. While the CIT(A) confirmed the disallowance based on the delay in registered sale deeds and the failure to establish possession within two years, the assessee presented purchase agreements and a possession letter. Since the revenue contended that some documents were not placed before the lower authorities, and neither the AO nor the CIT(A) conducted a factual verification of possession within the stipulated period, the Tribunal set aside the CIT(A)'s order. The matter was restored to the Assessing Officer for verification of the agreements, possession letter, and other documents. If the AO finds that possession was obtained and consideration was paid within the two-year period, the deduction under Section 54B shall be allowed. The assessee is directed to furnish all necessary evidence, and a reasonable opportunity of being heard will be granted. All contentions of the assessee are left open.

What were the issues?

1. Whether the assessee is entitled to a deduction under Section 54B of the Income Tax Act, 1961, for the purchase of new agricultural lands, when the registered sale deeds were executed beyond the statutory period of two years from the date of sale of the original asset, despite the sale consideration being paid and possession allegedly taken within the period? (Question of law and fact, concerning Section 54B of the Act). Assessee's Contention: The assessee argued that the entire sale consideration was paid and possession was obtained within the two-year statutory period. A delay in the registration of the sale deed should not disentitle them from the deduction. They relied on *Sanjeev Lal v. CIT*, *CIT v. T.N. Aravinda Reddy*, *CIT v. R.L. Sood*, and *Balraj v. CIT*. Revenue's Contention: The revenue contended that 'purchase' under Section 54B(1) requires a valid transfer of immovable property. As per Section 54 of the Transfer of Property Act, 1882, legal title passes only upon registered sale deeds, which were executed beyond the two-year period. Therefore, the disallowance was rightly confirmed.

Which sections of the Income-tax Act were involved?

Section 54B,Section 143(3),Section 144B,Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, A” BENCH, AHMEDABAD

Per Rahul Chaudhary, Judicial Member:

1.

The present appeal has been preferred by the Assessee against the Order, dated 13/01/2026, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had dismissedthe appeal against the Assessment Order, dated 31/03/2021, passed under Section 143(3) of the Income Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2018-2019. 2. The Assesse has raised the following grounds of appeal :

1.

On the facts and in the circumstances of the case and in law, the Id. CIT(A), has grossly erred in con

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 54B

All 804 judgments and leading authorities on Section 54B →

Recent GST High Court judgments

Search GST case law →