SHRI SHAILESH BALDEVBHAI PATEL,,AHMEDABAD vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2),, AHMEDABAD

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ITSSA 151/AHD/2017Status: DisposedITAT Ahmedabad26 May 2025AY 2010-114 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee had raised an additional ground before the CIT(A) claiming exemption under Section 54B in respect of the sale of land at Survey Nos. 197/1 and 198/1, stating that the proceeds were from the sale of agricultural land. However, the CIT(A) had not adjudicated this additional ground. The Tribunal observed that if this fact of non-adjudication by the CIT(A) had been brought to the High Court's notice, the High Court might have set aside the matter to the CIT(A). Since the matter was set aside to the Tribunal, and it was evident that the additional ground was not adjudicated by either the CIT(A) or the AO, the Tribunal, in the interest of natural justice, decided to set aside the matter back to the jurisdictional Assessing Officer. The AO is directed to decide the issue on merits after giving the assessee a proper opportunity of hearing and passing an order in accordance with the law. The additional ground filed by the assessee is allowed for statistical purposes.

What were the facts?

The appeal before the ITAT Ahmedabad pertains to Assessment Year 2010-11, filed by Shri Shailesh Baldevbhai Patel against the Deputy Commissioner of Income-tax, Central Circle-1(2), Ahmedabad. The matter was restored to the Tribunal by the Hon'ble High Court of Gujarat due to the Tribunal's failure to decide on the nature of the 'Motera land'. The High Court observed that the Tribunal had decided the nature of the 'Nardipur land' but not the 'Motera land'. The assessee contended that the Motera land was agricultural land and thus not a capital asset under Section 2(14) of the Income Tax Act. The Assessing Officer and the CIT(A) had proceeded to compute capital gains on the transfer of lands at Survey Nos. 197/1 and 198/1.

What were the issues?

1. Whether the Tribunal ought to have considered the additional ground regarding the nature of the 'Motera land' as agricultural land under Section 2(14) of the Income Tax Act, 1961? Assessee's Contention: The assessee argued that the land situated at 'Motera' was agricultural land and therefore not a 'capital asset' as defined under Section 2(14) of the Act. The CIT(A) had not adjudicated this point, nor had the Assessing Officer. The assessee sought for the matter to be set aside to the Assessing Officer to decide this specific issue. Revenue's Contention: The judgment does not record specific arguments from the Revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 2(14),Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: DR. BRR Kumar & Shri T. R. Senthil Kumar

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member

IT(SS)A No: 151/Ahd/2017 Assessment Year: 2010-11 Shri Shailesh Baldevbhai Deputy Commissioner Patel, of Income-tax, 1 & 2, Ghanshyam Nivas, Vs Central Circle-1(2), Nr. Sanskruti Ahmedabad Bungalows, Motera, Ahmedabad-380005 [PAN : AFJPP 0887 J] (Respondent) (Appellant) Assessee Represented: Shri Tushar Hemani, Sr. Adv. & Shri Parimalsinh B. Parmar, AR Revenue Represented: Shri A. P. Singh, CIT-DR Date of hearing : 19-03-2025 Date of pronouncement : 26-05-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is restored back to the file of the Tribunal by the Hon’ble High Court of Gujarat vide its Judgment dated 27-02-2024 in Tax Appeal No. 767 of 2023 by observing as follows: “10. In rejoinder learned Senior Advocate Mr. Hemani invited attention of the Court details submitted by the appellant for Motera land being agricultural land and submitted that the Tribunal ought to have considered additional ground which is common for both the land i.e. Motera land and Nardipur land however the Tribunal has decided only the nature of the land of situated at Nardipur and not decided the same about Motera land.

I.T.(SS)A No. 151/Ahd/2017 A.Y. 2010-11 Page No 2 Shri Shailesh Baldevbhai Patel vs. DCIT

11.

In view of the above facts emerging from the record and on perusal of the impugned orders passed by the Tribunal, it appears that the Tribunal has not considered the nature of the land situated at Motera as to whether the same would be agricultural land as per the provision of section 2(14) of the Act or not. In such facts, we deem it fit to remand the matter of the appellant to the Tribunal to decide only the issue qua the nature of the land situated at Motera as to whether such land is an agricultural land as per the provision of section 2(14) of the Act or not? The appeal is accordingly disposed of.”

2.

Ld. Senior Counsel submitted that the land in question at “Motera” was an “agricultural land” not falling within the ambit of “capital asset” as defined under section 2(14) of the Act was argued before Ld. CIT(A). However Ld. CIT(A) has not adjudicated whether it’s an agricultural land or not, but computed the capital gains on transfer of lands at Survey Nos. 197/1 and 198/1 is chargeable to Long Term Capital Gain. Similar is the case by the Ld. Assessing Officer, therefore requested to set aside the matter back to the file of Assessing Officer to decide whether the land situated at Motera was an “agricultural land” which would fall within the ambit of “capital asset” as defined u/s. 2(14) of the Act during the relevant period.

3.

We have carefully considered the submissions and perused the materials available on record. Perusal of the Ld. CIT(A)’s order makes it clear by way of Additional Ground No. 1(a), the assessee claimed that “Ld. A.O. erred in not granting exemption u/s. 54B in respect of sale of land at Survey No. 197/1 and 198/1 when the amount in respect of the said land which was received before the Sale Deed and as per the MOU was towards sale of agricultural

I.T.(SS)A No. 151/Ahd/2017 A.Y. 2010-11 Page No 3 Shri Shailesh Baldevbhai Patel vs. DCIT

land at the time of receipt. Hence to that extent of such proceeds, the capital gain ought to have been considered as gain on sale of agricultural land”. However perusal of the appellate order makes it clear that Ld. CIT(A) has not adjudicated this additional ground raised by the assessee. In fact, if this correct fact of non- consideration of additional ground by CIT(A) ought to have been brought before Hon’ble High Court of Gujarat, the Hon’ble High Court would have set aside the matter back to the file of Ld. CIT(A). As this matter is setaside back to the file of this Tribunal, we are satisfied that this Additional Ground was not adjudicated either by the Ld. CIT(A) or by the Ld. A.O. Therefore in the interest of Principle of Natural Justice, we deem it fit to setaside the matter back to the file of Jurisdictional Assessing Officer to decide the issue on merits by giving proper opportunity of hearing to the assessee and pass order in accordance with law.

4.

In the result, the additional ground filed by the Assessee is allowed for statistical purpose.

Order pronounced in the open court on 26-05-2025

Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 26/05/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A)

I.T.(SS)A No. 151/Ahd/2017 A.Y. 2010-11 Page No 4 Shri Shailesh Baldevbhai Patel vs. DCIT

5.

DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

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