KARAN DILIPKUMAR PATEL L/H OF LATE LALLUBHAI JOGIBHAI PATEL,DAMAN vs. DY. COMMISSIONER OF INCOME TAX, VAPI CIRCLE, VAPI

ITA 353/SRT/2024Status: DisposedITAT Surat14 October 2026AY 2011-124 pages
AI SummaryRemanded

What were the facts?

The assessee, Karan Dilipkumar Patel, L/H of late Lallubhai Jogibhai Patel, filed an appeal against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2011-12. The assessee had originally declared a total income of Rs. 25,82,790/- and later revised it to Rs. 2,43,83,480/-, including agricultural income of Rs. 11 lakhs. The Assessing Officer (AO) noted the sale of land for Rs. 5,50,00,000/- in AY 2010-11. The assessee claimed the surplus of Rs. 5,32,50,000/- as exempt under Section 10(38), considering the cost of acquisition as Rs. 17,50,000/- and arguing it was agricultural land. A notice under Section 148 was issued. The AO rejected the claimed purchase consideration, stating incomplete purchase deeds and lack of a valuation report as of 01.04.1981, leading to an addition of Rs. 4,93,12,007/- as long-term capital gains from non-agricultural land. The CIT(A) dismissed the assessee's appeal.

What did the Tribunal hold?

The Tribunal noted that while the assessee claimed the land was situated more than 8 kms from municipal limits and was agricultural, the AO had not verified this aspect. The AO had commented on the location by comparing it with another relative's treatment of similar land as a capital asset but did not conduct actual verification of the distance from municipal limits. Furthermore, the valuation report was not commented upon, and the AO had not called for a District Valuation Officer's (DVO) report. Therefore, the Tribunal found that these aspects required verification. Consequently, the matter was remanded back to the file of the AO for proper verification of the contested issues and adjudication as per the Income Tax Act, ensuring the assessee is given an opportunity of hearing following the principles of natural justice. The appeal was partly allowed for statistical purposes.

What were the issues?

1. Whether the land sold was agricultural land and thus not a capital asset under Section 2(14) of the Income Tax Act, 1961. The assessee argued that the land was agricultural and situated more than 8 kms from municipal limits, making it not a capital asset. The revenue relied on the AO's assessment and CIT(A)'s order. 2. Whether the income from the sale of land should be computed as long-term capital gains from non-agricultural land. The assessee contended that the AO's computation was incorrect. The revenue supported the AO's computation. 3. Whether the purchase consideration of Rs. 17,50,000/- should be rejected, and long-term capital gains computed by adopting a purchase cost of Rs. 7,99,999/-. The assessee argued for the higher purchase consideration. The revenue supported the AO's adoption of a lower cost. 4. Whether adequate opportunities for hearing were provided by the CIT(A), leading to an ex-parte order, and if the case should be set aside and restored to the AO or CIT(A). The assessee claimed a lack of adequate opportunity. The revenue did not record specific arguments on this point.

Which sections of the Income-tax Act were involved?

Section 2(14),Section 10(38),Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 14.10.2026

PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 14.02.2024 for the Assessment Year (in short “AY”) 2011-12. 2. The assessee has raised the following grounds of appeal:

“1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commis

The order continues below.

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