JAGDISHBHAI VASHARAMBHAI ITALIYA,AHMEDABAD vs. THE ITO, WARD-3(1)(1), AHMEDABAD

ITA 150/AHD/2026Status: DisposedITAT Ahmedabad14 October 2026AY 2015-169 pages
AI SummaryRemanded

What were the facts?

The assessee, Jagdishbhai Vasharambhai Italiya, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2015-16. The appeal challenged additions made by the Assessing Officer (AO) and sustained by the CIT(A). The disputed additions aggregated to Rs. 80,82,888/-. These included Rs. 16,44,500/- as long-term capital gains from the sale of agricultural land, Rs. 25,87,755/- under Section 56(2)(vii)(b) of the Income Tax Act, 1961, and Rs. 36,50,633/- under Section 69 of the Act. The assessee contended that the lands were agricultural and thus not capital assets, and alternatively, requested a DVO report for valuation. The AO and CIT(A) rejected these contentions.

What did the Tribunal hold?

The Tribunal held that the order of the CIT(A) should be set aside and the case restored to the AO for fresh adjudication. The primary reason for this decision was the procedural irregularity of not providing the assessee with a copy of the remand report dated 29-05-2019, thereby denying the opportunity to file a rejoinder. The Tribunal also noted that the assessee's plea for referring the valuation of land to the DVO under Section 50C(2) was rejected, despite the assessee disputing the stamp duty valuation and relying on the precedent in Bhupendrabhai Bhikhalal Patel vs. ITO. Furthermore, the Tribunal observed that the AO and CIT(A) did not address the issue of the land being used for agricultural purposes for less than two years, and the assessee had not claimed under Section 54B. The Tribunal also acknowledged the assessee's contention regarding their share in jointly purchased land (16.21% vs. one-third adopted by AO) and directed the AO to give an opportunity to produce evidence for this. Consequently, the AO was directed to give the assessee a copy of the remand report, refer the valuation of land to the DVO where stamp duty value exceeded fair market value, and allow the assessee to produce evidence for their share in jointly purchased land.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the addition of Rs. 16,44,500/- as long-term capital gains on the sale of agricultural land was justified, considering the assessee's claim that it was agricultural land and the AO's finding that it was eligible for Non-Agricultural (NA) use and located within the Dholera Special Investment Region (SIR). 2. Whether the addition of Rs. 25,87,755/- under Section 56(2)(vii)(b) was justified, given the assessee's contention that the lands were agricultural and the rejection of the request for a DVO report for valuation. 3. Whether the addition of Rs. 36,50,633/- under Section 69 was justified, concerning unexplained investments in agricultural lands, the assessee's explanation of unsecured loans, and the AO's rework of the cash flow. Assessee's arguments: The assessee argued that the lands sold were agricultural and therefore not capital assets under Section 2(14). Alternatively, if Section 50C were applicable, the Jantri value was higher than the fair market value, necessitating a DVO reference, which was wrongly rejected. The assessee also claimed that the term 'Bin Kheti Pre Patra' was misinterpreted. Regarding Section 69, the assessee claimed to have explained the source of investment through unsecured loans. The assessee also contended that a copy of the remand report was not provided, preventing a rejoinder. Revenue's arguments: The Revenue, through the Sr. DR, argued that for Section 54B to apply, the land needed to be used for agricultural purposes for at least two years preceding transfer, which was not met. For other issues, the Revenue relied on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 250,Section 2(14),Section 50C,Section 56(2)(vii)(b),Section 69,Section 133(6),Section 271(1)(c),Section 210,Section 234A,Section 234B,Section 234C,Section 234D,Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: Shri Narendra Prasad Sinha & Shri Tapas Ram Misra

For Appellant: Shri Jaimin Shah, A.R
For Respondent: Shri Amit Pratap Singh, Sr. DR

PER TAPAS RAM MISRA, JUDICIAL MEMBER:

The present appeal has been filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 26.11.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2015-16. I.T.A No. 150/Ahd/2026

2.

The assessee has raised the following grounds of appeal:

“01. That the Ld. CIT(A) has erred b

The order continues below.

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