SYED MOHD QADIR ALI,LUCKNOW vs. D/ACIT-4, LUCKNOW

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ITA 358/LKW/2023Status: DisposedITAT Lucknow15 October 2026AY 2017-183 pages
AI SummaryWithdrawn

What did the Tribunal hold?

The Tribunal noted that the assessee had submitted that the dispute had been settled under the Vivad se Vishwas Scheme, 2024, and placed on record a letter dated 21.08.2026 along with Form No. 2. This indicated that the assessee had availed the benefits of the scheme, and the declaration had been accepted by the designated authority. Consequently, the substratum of the dispute forming the subject matter of the appeal stood resolved, rendering the grounds of appeal infructuous. The assessee no longer wished to pursue the appeal and respectfully sought leave to withdraw it. The Learned Departmental Representative had no objection to the withdrawal. Therefore, the Tribunal permitted the assessee to withdraw the appeal and dismissed it as withdrawn. A liberty was granted to the assessee to approach the Tribunal for restoration of the appeal in case of failure of the settlement. The specific grounds of appeal were not adjudicated on merits.

What were the facts?

The assessee, Syed Mohd Qadir Ali, filed an appeal against the order of the NFAC, Delhi, for Assessment Year 2017-18. The appeal raised several grounds concerning the validity of the assessment, the disallowance of indexed cost of improvement, the nature of expenses incurred on land improvement, and the classification of the land as agricultural. However, at the outset of the hearing, the assessee's counsel submitted that the dispute had been settled under the Vivad se Vishwas Scheme, 2024. A letter dated 21.08.2026, along with Form No. 2, was placed on record, indicating the assessee's intention to settle the dispute and withdraw the appeal. The Learned Departmental Representative had no objection to the withdrawal.

What were the issues?

1. Whether the entire assessment order is invalid and void ab initio due to the non-issuance of a notice under section 143(2) within the prescribed time frame for AY 2017-18? (Question of law) 2. Whether the assessee is entitled to the entire claim of indexed cost of improvement amounting to Rs. 8,74,33,067/- for computing Long Term Capital Gains on the transfer of land? 3. Whether expenses incurred for making the land fit for agricultural activity after acquisition can be included in the cost of improvement under section 55, or are they revenue expenditure? 4. Whether the disallowance of a part of the improvement expenses was justified on the ground of failure to produce bills, considering the difficulty in retrieving bills from 2001-2004? 5. Whether Long Term Capital Gains Tax is leviable on the transfer of the land if it was agricultural land on the date of transfer? Assessee's Contentions: The assessee argued that the entire assessment was invalid due to a procedural lapse (Ground 1). Without prejudice, the assessee claimed the full indexed cost of improvement (Ground 2). Expenses incurred for making the land fit for agricultural use should be included in the cost of improvement (Ground 3). The disallowance of expenses due to missing old bills was unjustified given the difficulty in retrieval (Ground 4). The land was agricultural on the date of transfer, thus no LTCG was leviable (Ground 5). Crucially, the assessee submitted that the dispute was settled under the Vivad se Vishwas Scheme, 2024, and sought to withdraw the appeal. Revenue's Contentions: The revenue did not present any arguments on the merits of the grounds of appeal as the assessee sought withdrawal due to settlement under the Vivad se Vishwas Scheme, 2024. The Learned Departmental Representative had no objection to the withdrawal.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 55

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW

For Appellant: Shri Shubham Rastogi, CA
For Respondent: Shri Vachaspati, CIT(DR)

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 27.09.2023 pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: -

“1. On the facts and circumstances of the case and in law, the entire assessment order is invalid and ab initio void in law as no notice under section 143(2) of the IT Act was issued to the appellant by the jurisdictional AO within 6 months from the end of the FY relevant to AY 2017-18 (2) On the facts and circumstances of the case and in law and without prejudice to the Ground no. 1, the Ld. CIT(Appeal) should have allowed the appellants entire claim of indexed cost of improvement amounting to Rs. 8,74,33,067/- while computing the appellants income under the head Long Term Capital Gains for the AY 2017-18 on the transfer of land at Khasra No. 472,468,431 Viii. Baghamau, Pargana Tehsil and District Lucknow. (3). On the facts and circumstances of the case and in law, the Ld. CIT(Appeal) has erred in holding that a part of the above expenses incurred by the appellant for the improvement / alteration of the land, after the said land was acquired by him, can not be included in the cost of improvement as defined in section 55 of the IT Act as these expenses were incurred for the purpose of making the land fit for agricultural activity and these expenses were in the nature of revenue expenditure (4). On the facts and circumstances of the case and in law, the Ld. CIT (Appeal) has wrongly disallowed apart of the expenses incurred on the improvement / alteration of the above land on the Ground that the appellant has failed to produce the bills

ITA No.358/LKW/2023 Page 2 of 3 etc. of such expenses. The Ld. AO has failed to appreciate that these bills related to the years 2001 to 2004 and it was extremely difficult for the appellant to retrieve all the bills of the said period in short time. (5) On the facts and circumstances of the case and in law, the Ld. CIT(Appeal) should have held that no Long term Capital Gains Tax was leviable on the transfer of land at Khasra No. 472,468,431Vill. Baghamau, Pargana Tehsil and District Lucknow as the said land was agricultural land on the Date of Transfer.” 2. At the outset, the Ld. Counsel for the assessee submitted that the dispute has been settled under the Vivad se Vishwas Scheme, 2024 and prayed for withdrawal of the appeal. And a letter dated 21.08.2026 along with Form no. 2 is placed on record. The relevant contents of the letter dated 21.08.2026 is reproduced as under: -

“The above-captioned appeal bearing ITA. No.358/LKW/2023 for Assessment Year 2017-18 was filed by the assessee against the order passed by the Ld. Assistant Commissioner of Income Tax, Range-IV (hereinafter referred to as “Ld. AO”). The assessee, Syed Muhammad Qadir Ali (PAN AFIPA4631A), has voluntarily to settle the disputed Has under the Vivaad se Viswas Scheme, 2024 (hereinafter “the Scheme”) to bring a quietus to the long-pending litigation. In compliance with the procedural requirements of the Scheme, beaner has duly filed Form 1 on 23-04-3025 before the competent authority, making a formal declaration in respect of the tax arrears and disputes covered by the present appeal Pursuant to the aforesaid filing and upon due verification, the Ld. PCTT. Central Circle, has been pleased to issue Form 2 under the Scheme in 15- 08-2016, determining the amount payable and thereby accepting the assessee's declaration. A copy of the said Form 2 is annexed herewith for the kind perusal of this Home Tribunal It is submitted that the issuance of Ferra 2 by the designated authority signifies acceptance of the assessee's declaration and crystallizes the terms of the settlement Consequently, the very substratum of the dispute firming the subject matter of the present appeal stands resolved and the grounds of appeal have been rendered infructuous It is further submitted that the withdrawal of pending appeals is a mandatory and statutory prerequisite under the provisions of the Vivaad se Vishwas Scheme, 2024. The final settlement certificate under the Scheme can only be issued upon the assessee furnishing proof of withdrawal of the appeal. Therefore, the present petition is a necessary step towards effectuating the settlement. The Appellant submits that allowing the withdrawal of this appeal would be is furtherance of the laudable legislative intent behind the Scheme, which is to de-clog the judicial syst by reducing the pendency of has litigation and to provide taxpayers with an opportunity for finality and certainty.

ITA No.358/LKW/2023 Page 3 of 3 In view of the assessee having availed the benefits of the Vivaad se Vishwas Scheme, 2024, and the acceptance of the declaration by the Ld. PCTT, the assessee no longer wishes to pursue the present appeal before this Hon’ble Tribunal and respectfully seeks leave to withdraw the same unconditionally. Prayed It is, therefore, most humbly prayed that this Hon’ble Tribunal may be graciously pleased to: (a) Permit the withdrawal of the appeal in ITA. No.358/LKW/2023 for A.Y. 2017-18; and (b) Pass an order dismissing the appeal as withdrawn, in view of the settlement of the dispute under the Vivad se Vishwas Scheme, 2024.” 3. The Learned Departmental Representative has no objection for withdrawal of the appeal.

4.

In view of the facts discussed above, we permit the assessee to withdraw this appeal. Accordingly, the appeal is dismissed as withdrawn. However, a liberty is given to the assessee for approaching the Tribunal for restoration of this appeal in the event of failure of settlement of tax disputes. 5. In the result, the appeal of the assessee is dismissed as withdrawn. Order pronounced in the open Court on 15/10/2026.

Sd/- Sd/- [NIKHIL CHOUDHARY] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 15/10/2026 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant VIJAY Digitally signed 2. Respondent by VIJAY PAL 3. CIT SINGH PAL Date: 4. DR 2026.10.15 SINGH 15:45:50 5. Guard file +05'30' By order Sr. Private Secretary

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