RAJENDRA CHANDANMAL PAGARIA, L/H OF LATE SHRI CHANDANMAL DAGDULAL PAGARIA,AURANGABAD vs. THE INCOME TAX OFFICER, WARD- 3(1), AURANGABAD, AURANGABAD

ITA 1221/PUN/2026Status: DisposedITAT Pune25 September 2026AY 2011-1216 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the DVO's valuation report could not be accepted as it was. Firstly, the assessee's objections, submitted via email, were not entertained by the DVO due to a technicality (lack of power of attorney), and the report was finalized without deciding these objections. Secondly, the DVO's report dated 19.08.2019 was furnished beyond the six-month period prescribed by Section 142A(6) of the Act, as the reference was made on 26.12.2018, making the due date 30.06.2019. The Tribunal relied on the decision in Golden Tulip Hospitality (P.) Ltd. vs. ACIT. Therefore, no addition could be made on the basis of a belated and procedurally flawed valuation report. The Tribunal also found merit in the assessee's argument regarding the expenses of Rs. 2,25,000/-, considering the circumstances of cancellation and re-execution of sale agreements. Accordingly, the Tribunal set aside the order of the CIT(A)/NFAC, directed the AO to allow the deduction of Rs. 2,25,000/- towards transfer expenses, and to consider the actual sale consideration of Rs. 74,00,000/- for calculating long-term capital gain instead of Rs. 84,73,500/-. The grounds of appeal were allowed.

What were the facts?

The assessee, Rajendra Chandanmal Pagaria, is an individual who did not file a return of income for Assessment Year 2011-12. The case was reopened under Section 147 based on AIR information regarding NHAI Bonds worth Rs. 50,00,000/-. The assessee filed a return declaring Rs. 2,10,160/-. Subsequently, the assessee disclosed the sale of urban agricultural land on 29.06.2010 for Rs. 74,00,000/-, stating the NHAI Bonds were purchased from this sale consideration. The Assessing Officer (AO) noted the stamp duty value was Rs. 1,28,00,000/-. As the assessee disputed this, the AO referred the valuation to the Departmental Valuation Officer (DVO) under Section 50C(2). The AO completed the assessment by treating stamp duty value as sale consideration, allowing indexed cost of acquisition, disallowing transfer expenses, and allowing deduction under Section 54EC for NHAI bonds, resulting in a taxable long-term capital gain of Rs. 55,60,350/- and total income of Rs. 57,70,510/-. The CIT(A)/NFAC partly allowed the appeal, accepting the DVO's valuation of Rs. 84,73,500/- but rejecting the claim for transfer expenses.

What were the issues?

1. Whether the CIT(A) was justified in confirming additions made by the AO on issues not forming the basis of the reasons recorded for issuing notice u/s. 148, especially when the addition was not for the issue that was the subject of the reasons recorded? (Assessee's contention: The AO made additions beyond the scope of the reasons recorded for reopening. The revenue did not provide specific arguments on this point in the judgment.) 2. Whether the CIT(A) was justified in adopting the sale consideration at Rs.84,73,500/- based on the DVO's report, when the actual consideration was Rs.74,00,000/-, considering that the DVO's report was time-barred as per Section 142A(6), arbitrary, and issued without considering the assessee's objections? (Assessee's contention: The DVO's report is time-barred under Section 142A(6), arbitrary, and ignored objections. Revenue's contention: Not explicitly recorded in the judgment.) 3. Whether the CIT(A) was justified in confirming the disallowance of Rs.2,25,000/- for transfer expenses from the sale proceeds of the capital asset? (Assessee's contention: The expenses were incurred for cancellation of an earlier sale agreement and entering into a new one, and were justified. Revenue's contention: Not explicitly recorded in the judgment.)

Which sections of the Income-tax Act were involved?

Section 148,Section 143(3),Section 142(1),Section 50C,Section 50C(2),Section 142A(6),Section 54EC,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Sanjeev Mutha (Virtual)
For Respondent: Shri Rajesh Haladkar
Hearing: 02.07.2026Pronounced: 25.09.2026

PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 19.08.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2011-12. 2

2.

There is delay in filing of the present appeal. After going through the application for condonation of delay, we are satisfied with the reasons mentioned in the application for condonation of delay duly supported by an affidavit that the applicant was prevented by sufficient cause for not filing the appeal within the prescribed time limit. After hearing Ld. DR, we condone the delay and proceed to adjudicate the appea

The order continues below.

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