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

ITA 679/AHD/2026Status: DisposedITAT Chandigarh30 September 2026AY 2018-196 pages
AI SummaryRemanded

What were the facts?

The assessee, Rohitbhai Jivrambhai Patel, filed an appeal against the order of the CIT(A), Delhi, dated 13/01/2026, which upheld the Assessment Order dated 31/03/2021 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961, for Assessment Year 2018-2019. The AO had disallowed a deduction of Rs. 1,79,94,050/- claimed by the assessee under Section 54B of the Act. The assessee, a joint owner, sold agricultural land on 11/08/2017 for a total consideration of INR 6,67,23,250/-, his share being INR 3,33,61,625/-. He claimed a deduction of INR 3,24,98,500/- for investing in new agricultural lands. The AO noted that the new lands were purchased via registered deeds dated 24/02/2020 and 16/07/2020, which fell outside the statutory two-year period from the sale date.

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 prevent a legitimate statutory exemption. While the sale consideration was paid within the statutory period, the CIT(A) had confirmed the disallowance based on the failure to establish possession within two years. The assessee has now provided purchase agreements, a possession letter, and other documents. Since the revenue contended that some of these documents were not presented to 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 file of the AO for verification of the agreements, possession letter, and other documents. If the AO finds that possession was obtained and consideration was paid within the stipulated two years, 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 provided. All contentions of the assessee are left open. Ground No. 1 is allowed for statistical purposes.

What were the issues?

1. Whether the assessee fulfilled the conditions for claiming deduction under Section 54B of the Income Tax Act, 1961, when the registered sale deeds for the new agricultural lands were executed beyond the statutory two-year period from the date of sale of the original asset. Assessee's Contention: The assessee argued that the entire sale consideration for the new agricultural land was paid within the statutory two-year period, and possession was obtained within this period. Therefore, a delay in the execution or registration of the sale deed should not disentitle them from the deduction. They relied on *Sanjeev Lal v. CIT* (SC), *CIT v. T.N. Aravinda Reddy* (SC), *CIT v. R.L. Sood* (Del), and *Balraj v. CIT* (Del). Revenue's Contention: The revenue contended that under Section 54B(1) of the Act, 'purchase' 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. Since the registered deeds were executed beyond the two-year period, the disallowance was rightly confirmed. The revenue argued that in the absence of registered deeds or evidence of possession within two years, the deduction was not admissible.

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 →