BANWARI,BHIWADI vs. ITO, BHIWADI

ITA 1710/JPR/2025Status: DisposedITAT Jaipur29 September 2026AY 2014-155 pages
AI SummaryRemanded

What were the facts?

The assessee, an individual farmer, sold agricultural land on September 6, 2013, receiving Rs. 11,35,000/- as his 5% share. He reinvested this in constructing a residential house. The department, having information that his share was Rs. 6,88,000/-, initiated reassessment proceedings under Section 148 as no return was filed. The assessee failed to respond to the notice, leading to an ex-parte reassessment order adding Rs. 6,88,000/- as income. The assessee then filed a rectification application under Section 154, claiming indexed cost of acquisition (Rs. 1,19,548/-) and deduction under Section 54B for reinvestment. The Assessing Officer (AO) denied the indexed cost and Section 54B deduction, citing the non-filing of the return, but allowed senior citizen tax rates. The CIT(A) upheld the AO's order. The assessee appealed to the ITAT.

What did the Tribunal hold?

The Tribunal noted that the reassessment order had treated the entire sale consideration of Rs. 6,88,000/- as income without considering the cost of acquisition, indexed cost of acquisition/improvement as per Section 48. The assessee had provided a Registered Valuer's report for ascertaining the cost of acquisition and construction during rectification proceedings, which was not considered by the lower authorities. The Tribunal found this to be against the provisions of Section 48. Therefore, in the interest of justice, the Tribunal set aside the matter to the file of the jurisdictional AO. The AO was directed to provide the assessee with another opportunity for a hearing and to pass a fresh order after computing the capital gains by considering the cost of acquisition and allowing the deduction under Section 54B, subject to verification of relevant records. The assessee was cautioned to utilize this final opportunity effectively.

What were the issues?

1. Whether the assessee is entitled to the benefit of indexed cost of acquisition in the computation of capital gains, as per Section 48 of the Income Tax Act, 1961? 2. Whether the assessee is eligible for the deduction under Section 54B of the Act, given the reinvestment of sale proceeds in a residential property? 3. Whether the doctrine of merger applies to the rectification order under Section 154 and the original order under Section 147? Assessee's arguments: - The assessee contended that the AO and CIT(A) erred in not providing the benefit of indexed cost of acquisition and deduction under Section 54B, as the sale proceeds were invested in a residential property. - The assessee also argued that the CIT(A) erred in not applying the doctrine of merger to the rectification order and the original assessment order, and that the appeal was rejected on technical grounds rather than merits. Revenue's arguments: The judgment does not record any specific arguments made by the revenue before the Tribunal.

Which sections of the Income-tax Act were involved?

Section 154,Section 148,Section 48,Section 54B,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri Ankit Gupta, CA

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 24.11.2025 passed by Addl./Joint Commissioner of Income Tax (Appeal), Panchkula, arising out of rectification order passed u/s. 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to Asst. Year 2014-15. 2. The Registry has noted that there is delay of 86 day in filling the appeal. The assessee explained that being a legal heir, he is not aware of the order passed by Ld. CIT(A) and the same communicated to his

I.T.A No. 1710/JPR/2025 Page No 2 Banwari

late father’s email ID. Later, he came to know about the ex-party or

The order continues below.

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