SHAILENDRA KUMAR SOGANI,BHOPAL vs. DEPUTY COMMISSIONER OF INCOME TAX 4(1), BHOPAL

ITA 1076/IND/2025Status: DisposedITAT Indore12 October 2026AY 2012-1362 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was entitled to the deduction under Section 54B. Citing the decision in Pitambar Lal V/s ITO and the principle that the language of Section 54B and 54EC regarding investment is pari materia, the Tribunal noted that the claim for deduction under Section 54B cannot be denied solely because the investment in new agricultural land was made prior to the transfer of the existing agricultural land, provided the investment was made from the consideration received against this transfer. The Tribunal relied on the decision of the Pune Bench upheld by the Bombay High Court in Subhash Vinayak Supnekar. Regarding the addition of Rs. 3,74,541/- on account of commission income, the Tribunal found the revenue's working in Para 7 of the assessment order to be erroneous. It concurred with the assessee's submission that the total payment received from IOC was Rs. 24,27,853/-, and the differential amount was wrongly calculated. The Tribunal also found the revenue's contention regarding the unregistered agreement of sale to be unacceptable, considering it a document based on customs and usages, and not argued to be bogus or fictitious. The Tribunal set aside the impugned order and allowed the appeal, deleting the additions.

What were the facts?

The assessee, Shailendra Kumar Sogani, filed an appeal against the order of the CIT(A) for Assessment Year 2012-13. The original assessment order dated 06.12.2017, passed under Section 143(3) read with Section 147, computed the total income at Rs. 47,21,080/-, which included additions of Rs. 15,22,500/- and Rs. 3,74,521/-. The revenue had reopened the assessment under Section 147, believing income of Rs. 48,21,258/- had escaped assessment. The reasons cited included alleged incorrect claim of deduction under Section 54B on sale of agricultural land and concealment of commission income from petrol and diesel sales. The assessee contended that the sale consideration was distributed among legal heirs as per a family settlement, and the purchase of new agricultural land was made prior to the sale but from anticipated sale proceeds. The assessee also argued that the commission income calculation by the revenue was erroneous.

What were the issues?

1. Whether the assessee was eligible for deduction under Section 54B of the Income Tax Act, 1961, on the sale of agricultural land, when the new agricultural land was purchased prior to the date of transfer of the original land, but from the consideration received against this transfer? (Mixed question of law and fact) 2. Whether the addition of Rs. 3,74,521/- on account of commission income from petrol and diesel sales was justified? Assessee's contentions: On issue 1, the assessee argued that the sale consideration of Rs. 6,00,00,000/- was distributed among 18 members as per a family settlement, and all members declared their share. The purchase of new agricultural land on 01.03.2012 and 25.03.2012 was made from the anticipated sale proceeds of the land sold on 31.03.2012. Reliance was placed on the ITAT, Indore Bench decision in Pitambar Lal V/s ITO and the Bombay High Court decision in Subhash Vinayak Supnekar (supra). On issue 2, the assessee contended that the revenue's calculation of commission income was erroneous, as the total payment received from IOC was Rs. 24,27,853/-, not Rs. 28,02,374/-, making the differential amount of Rs. 3,74,521/- wrongly calculated. The breakup of Rs. 24,27,853/- included evaporation loss. Revenue's contentions: The revenue argued that the deduction under Section 54B was wrongly claimed as the purchase of new land was before the sale of the old land. The revenue also alleged concealment of commission income. The revenue's contention that the agreement of sale dated 20.12.2010 was an unregistered document with no evidentiary value was also raised.

Which sections of the Income-tax Act were involved?

Section 253,Section 250,Section 143(3),Section 147,Section 148,Section 54B,Section 2(47),Section 54EC,Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

For Respondent: Shri Binay Kumar Rai, Sr.DR
Hearing: 17.09.2026Pronounced: 12.10.2026

Per Paresh M Joshi, J.M:

This is an appeal filed by the Assessee under section 253 of the income tax Act 1961,[ hereinafter referred to as the Act

for the sake of brevity] before this tribunal, as & by way of a second appeal .The Assessee is aggrieved by the order

bearing No:-ITBA/APL/S/250/2025-26/1082613608(1)

dated 14.11.2025 passed by the Ld. CIT(A) u/s 250 of the Act, which is hereinafter referred to as the “Impugned

order”. The Relevant Assessment year is 2012-13 and the SHAILENDRA KUMAR SOGANI ITA No. 1076/Ind/2025 - A.Y. 2012-13

corresponding previous year period is from 01.04.2011 to 31.03.2012. 2. Factual Matrix

2.

1 That as and by way of an Assessment order made u/s 143(3) RWS 147 of the Act, the total

The order continues below.

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