ASHOK KUMAR KHANDELWAL,INDORE vs. DCIT 1(1), INDORE, INDORE

ITA 283/IND/2024Status: DisposedITAT Indore22 October 2026AY 2014-1545 pages
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What did the Tribunal hold?

The Tribunal held that the appeal concerning the addition of capital gains and disallowance of Section 54F exemption (ITA No. 283/Ind/2024) was dismissed. The Tribunal noted that the assessee had voluntarily accepted the stamp duty value as sale consideration and withdrawn the Section 54F exemption during the assessment proceedings. The Tribunal upheld the Assessing Officer's action in computing the capital gains and disallowing the exemption based on the assessee's own admissions. Regarding the penalty appeal (ITA No. 302/Ind/2024), the Tribunal allowed the appeal and deleted the penalty. The Tribunal found that the notice issued under Section 274 read with Section 271(1)(c) was not specific, as it did not clearly state whether the proceedings were for concealment of particulars or furnishing inaccurate particulars. Relying on the jurisdictional High Court's decision in PCIT v/s. Kulwant Singh Bhatia and other precedents, the Tribunal held that such a vague notice violated the principles of natural justice and was bad-in-law. Therefore, the penalty order was set aside.

What were the facts?

The assessee, Ashok Kumar Khandelwal, is in appeal against the order of the CIT(A) for Assessment Year 2014-15. The Assessing Officer (AO) had determined the total income at Rs. 1,36,60,830/-. The assessee had purchased land in 2009 and introduced it as capital contribution to his buildership firm in AY 2014-15 at Rs. 60,28,000/-, while the guideline value was Rs. 1,40,00,000/-. The assessee claimed capital gains and exemption under Section 54F. During assessment, the AO questioned the adoption of sale consideration less than the stamp duty value and the eligibility for Section 54F exemption, as the assessee owned multiple residential properties. The assessee then voluntarily accepted the stamp duty value of Rs. 1,40,00,000/- as sale consideration for capital gains and withdrew the Section 54F exemption claim, offering the difference as additional capital gain.

What were the issues?

1. Whether the Tribunal was justified in upholding the addition of long-term capital gains as per Section 50C and disallowing the claim under Section 54F, considering the assessee's voluntary offer during assessment proceedings? (Question of law and fact, concerning Sections 50C and 54F). The assessee argued that the revised capital gain working and additional tax were voluntarily offered to buy peace and avoid litigation, and the intention was bonafide. The revenue contended that the AO correctly computed the capital gains and disallowed the exemption, and the assessee's subsequent offer did not negate the initial incorrect claim. 2. Whether the penalty imposed under Section 271(1)(c) was valid, given the show-cause notice issued by the AO was vague and did not specify the limb of the section under which proceedings were initiated? (Question of law, concerning Section 271(1)(c)). The assessee argued that the penalty notice was bad-in-law as it did not specify whether it was for concealment of particulars of income or furnishing inaccurate particulars, relying on jurisdictional High Court decisions. The revenue argued that the notice was sufficient and the assessee had furnished inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 253,Section 250,Section 143(3),Section 142(1),Section 50C,Section 54F,Section 45(3),Section 48,Section 112,Section 140A,Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI PARESH M. JOSHI & SHRI ARVIND SONI

Hearing: 06.10.2026

Per Paresh M. Joshi, JM: ITA No:-283/Ind/2024: This is an Appeal filed by the Revenue under section 253 of the Income tax Act 1961,[ herein after referred to as the Act

for the sake of brevity] before this tribunal. The Revenue is aggrieved by the order bearing No:-ITBA/NFAC

/S/250/2023-24/1061402369 (1) dated 23.02.2024 passed

by the Ld. CIT(A) u/s 250 of the Act which is hereinafter

referred as the “Impugned Order”. The Relevant Assessment

Ashok Kumar Khandelwal ITA No. 283/Ind/2024 & 302/Ind/2024 AY-2014-2015 Year is 2014-2015 and the corresponding Previous Period is from 01/04/2013 to 31/03/2014. 2. FACTUAL MATRIX

2.

1 That as and by way of an Assessmen

The order continues below.

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