SANJAY GUPTA,INDORE vs. INCOME TAX OFFICER 2(4), INDORE

ITA 906/IND/2024Status: DisposedITAT Indore22 October 2026AY 2012-1313 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the assessee's appeal. Regarding Ground No. 1 (STCG and Section 54B), the Tribunal held that the assessee did not dispute the stamp duty valuation before the AO or in the earlier appellate proceedings. The objection seeking reference to the DVO under section 50C(2) was raised for the first time in the second round of appeal before the Tribunal, and the valuation issue had attained finality. Therefore, the ground seeking reference to the DVO was dismissed. On the denial of exemption under section 54B, the Tribunal found that the assessee failed to establish the agricultural use of the land during the prescribed period and did not claim the exemption in the original return. The claim made through a revised computation required independent satisfaction of substantive conditions, which were not met. Thus, the addition of Rs. 18,56,000/- towards STCG was sustained. Regarding Ground No. 3 (unexplained investment of Rs. 10,00,000/-), the Tribunal found that the assessee failed to satisfactorily establish the source of cash payment and the genuineness of the arrangement with Shri Eknath Nimbore. The cash-flow statement was unsubstantiated, and the subsequent banking transactions did not establish a direct nexus with the alleged cash payment. The confirmation and IT returns of Shri Eknath Nimbore were not conclusive. The addition of Rs. 10,00,000/- was sustained. For the unexplained bank credit of Rs. 5,00,000/-, the Tribunal observed that while identity documents and cheque receipt were furnished, there was no agreement to sell, cancellation agreement, or receipt acknowledging cash repayment to establish the underlying property transaction and its cancellation. The alleged cash repayment was also unsubstantiated. The addition of Rs. 5,00,000/- was sustained. Consequently, the appeal was dismissed.

What were the facts?

The assessee, Sanjay Gupta, filed his return for AY 2012-13 declaring total income and a short-term capital loss. The case was selected for scrutiny due to information regarding property sale and cash deposits. The Assessing Officer (AO) completed the assessment under section 143(3) on 25.03.2015, making additions of Rs. 1,31,92,000/-. The CIT(A) granted partial relief, deleting Rs. 43,66,000/-. The ITAT, in a prior appeal, set aside the CIT(A)'s order and restored the matter for fresh adjudication on specific issues: short-term capital gain (STCG) of Rs. 18,56,000/-, unexplained investment of Rs. 10,00,000/-, and unexplained bank credits of Rs. 5,70,000/-. The CIT(A), in its order dated 18.12.2024, sustained additions of Rs. 18,56,000/- (STCG) and Rs. 10,00,000/- (unexplained investment). Regarding unexplained bank credits of Rs. 5,70,000/-, the CIT(A) directed AO to verify Rs. 70,000/-, which was subsequently deleted. The present appeal by the assessee challenges the denial of exemption under section 54B and the additions of Rs. 10,00,000/- and Rs. 5,70,000/-.

What were the issues?

1. Whether the addition of Rs. 18,56,000/- on account of short-term capital gain is illegal, wrong, and unjustified, and whether the assessee is entitled to exemption under section 54B, considering the AO's failure to refer the property valuation to the Departmental Valuation Officer (DVO) as requested. Assessee's contention: The assessee argued for exemption under section 54B against STCG from agricultural land transfer. It was also argued that the AO failed to refer the property valuation to the DVO despite requests, making the STCG addition illegal. Reliance was placed on cases like Sonesh Bhatnagar v. ACIT. Revenue's contention: The revenue argued that the assessee failed to establish the agricultural use of the land preceding its transfer and had not claimed section 54B exemption in the original return. Regarding valuation, it was submitted that the objection was raised for the first time in the second round of appeal. 2. Whether the additions of Rs. 10,00,000/- towards unexplained investment and Rs. 5,70,000/- towards unexplained bank credits are illegal, wrong, and bad-in-law. Assessee's contention: For the Rs. 10,00,000/- investment, the assessee relied on the confirmation, bank statement, cash-flow statement, and income-tax returns of Shri Eknath Nimbore. For the Rs. 5,00,000/- bank credit, reliance was placed on the confirmation and identity documents of Geeta Devi Sankala, cheque copies, and bank statements. Revenue's contention: The revenue argued that the cash-flow statement was unsupported, and the assessee failed to establish the source of cash balances. For bank credit, it was submitted that the assessee failed to substantiate the underlying transaction and alleged cash repayment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 139(1),Section 50C(2),Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI PARESH M. JOSHI & SHRI ARVIND SONI

For Appellant: Shri Ram Gilda, AR
For Respondent: Shri Binay Rai Sr.DR
Hearing: 03.09.2026Pronounced: 22.10.2026

Per Arvind Soni, A.M.:

This appeal has been filed by the Assessee against the order dated 18.12.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "the ld. CIT(A)"] for Assessment Year 2012-13 arising out of assessment order framed under section 143(3) of the Income- tax Act, 1961 ("the Act").

2.

The assessee filed his return of income under section 139(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”),

Sanjay Gupta ITA No. 906/Ind/2024 – AY 2012-13 on 17.09.2012 for A.Y. 2012-13, declaring total income of Rs. 3,29,332/- and short-term capital loss of Rs. 21,54,100/-. The case was selected for scrutiny on the basis of

The order continues below.

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