AAKASHDEEP FARMS PVT. LTD.,AHMEDABAD vs. THE ITO, WARD-1(1)(1), AHMEDABAD

ITA 115/AHD/2026Status: DisposedITAT Chandigarh24 September 2026AY 2020-218 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the fact of land purchase and the difference between stamp duty value and sale consideration (Rs. 3,29,09,469) were not disputed. The assessee's grievance was that the AO adopted the stamp duty value on the date of sale deeds instead of the Banakhat agreements, and that substantial payments were made through banking channels at the time of Banakhat. The Tribunal observed that while sale deeds referred to advance payments by cheque, they lacked specific details like Banakhat dates, cheque numbers, and dates. Crucially, the evidence for payment of advance on or before the Banakhat date, and the encashment of cheques, was not brought on record by the assessee. The proviso to Section 56(2)(x) requires payment by account payee cheque or banking channel on or before the agreement date for stamp duty value on the agreement date to be considered. Since this crucial evidence was lacking, the Tribunal found that the issue required verification of facts. Therefore, the matter was set aside to the jurisdictional AO with a direction to allow the assessee another opportunity to produce copies of Banakhats, details of cheque payments made on or before the respective Banakhat dates, bank statements, copies of cheques, dates of presentation and encashment, and accounting entries. The AO is to verify these and decide the issue by a speaking order. The grounds related to interest under Sections 234A, 234B, 234C and penalty under Section 270A were not adjudicated as they are consequential. The assessee's grounds were allowed for statistical purposes.

What were the facts?

The assessee, Aakashdeep Farms Pvt Ltd, filed its return for AY 2020-21 declaring a loss. The case was selected for scrutiny due to low income relative to high investment and property purchase values being less than stamp duty values. The assessee purchased nine properties where the stamp duty value exceeded the sale consideration by Rs. 3,29,09,469. This difference was treated as income under Section 56(2)(x) of the Income Tax Act, 1961. The Assessing Officer (AO) completed the assessment at a total income of Rs. 3,28,93,460. The assessee's appeal to the National Faceless Appeal Centre (NFAC), Delhi (CIT(A)) was dismissed. The assessee is now in appeal before the ITAT.

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Rs. 3,29,09,469 under Section 56(2)(x) of the Act, based on surmises and conjectures, without appreciating the assessee's evidence and documents? 2. Whether the CIT(A) erred in upholding the AO's finding that the transactions were planned to evade tax, despite documentary evidence like Banakhats, Sale Deeds, NA permission orders, Jantri valuation charts, and payment proofs establishing bona fide agricultural land transactions? 3. Whether the CIT(A) erred in disregarding the chronology of events, where agreements to sell (Banakhats) were executed on 05/09/2019, prior to payment of NA conversion charges (18/09/2019) and grant of NA permission (27/09/2019), thereby proving the lands retained agricultural character at the time of Banakhat? 4. Whether the CIT(A) erred in not considering the first and second provisos to Section 56(2)(x), which mandate adopting the stamp duty value as on the date of agreement if consideration is paid by account payee cheque on or before the agreement date? 5. Whether the CIT(A) erred in sustaining the addition under Section 56(2)(x) without appreciating that nearly 90% of the consideration was paid at the time of Banakhat through banking channels, transferring substantial rights and possession, and that the agreed consideration was not below the Jantri value on the Banakhat date? Assessee's Contentions: - The AO incorrectly rejected Banakhat evidence and made disallowance. The stamp duty value as on the date of agreement should be taken as per Section 56(2)(x). - Majority of payment was made by cheque at the time of Banakhat, hence Jantri rate on Banakhat date should be adopted. - Agreements to sell were executed prior to NA conversion charges and permission, proving lands retained agricultural character. - Provisos to Section 56(2)(x) were not considered, which allow using stamp duty value on agreement date if consideration is paid by account payee cheque on or before the agreement date. - Substantial rights and possession were transferred at Banakhat, with nearly 90% payment via banking channels, and agreed consideration was not below Jantri value on Banakhat date. - Grant of NA permission is discretionary and subject to restrictions; not every application results in conversion. - Jantri rates from official AUDA site showed agreed consideration was not less than fair market value on Banakhat date. - Assessee acted bona fide, disclosed all facts, paid applicable stamp duty, and caused no loss to revenue. - Levy of interest under Sections 234A, 234B, and 234C, and initiation of penalty under Section 270A are consequential and should not be adjudicated now. Revenue's Contentions: - A company cannot purchase agricultural land, hence stamp duty value of non-agricultural land should be considered as on the date of Banakhat. - Evidence of payment by cheque on Banakhat date was not produced before lower authorities. - Sale deeds refer to advance payments but do not mention Banakhat dates, cheque numbers, or dates. No evidence of cheque encashment for advance payments was provided. - Assessee has not placed satisfactory evidence of advance payments made on Banakhat dates.

Which sections of the Income-tax Act were involved?

Section 56(2)(x),Section 143(3),Section 144B,Section 2(47),Section 234A,Section 234B,Section 234C,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Hardik Vora, AR
For Respondent: Shri Arvind Kumar Namdeo, SR-DR
Hearing: 29.07.2026Pronounced: 24.09.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the Assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 24.11.2025 for the Assessment Year (A.Y.) 2020-21 in the proceeding u/s 143(3) r.w.s. 144B of the Income Tax Act [hereinafter referred as “The Act”].

2.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2020-21 on 07.11.2020 declaring loss of Rs.16,005/-. The case was selected for limited scrutiny under CASS to examine the low income in comparison to very high investment and also to examine Aakashdeep Farms Pvt Ltd. Vs I

The order continues below.

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