INCOME TAX OFFICER WARD 2(4), PUNE, SWARGATE vs. MANGAL BALASAHEB GOLE, KOTHRUD
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRAAssessment year : 2021-22
PER R.K. PANDA, VP:
This appeal filed by the Revenue is directed against the order dated
04.03.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2021-22. 2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 30.11.2021 declaring total income of Rs.31,38,150/-. The case was selected for scrutiny and accordingly statutory notice u/s 143(2) of the Income
Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued on 28.06.2022. Subsequently a notice u/s 142(1) of the Act was also issued calling for various details. During the course of assessment proceedings the Assessing Officer, on verification of the details filed by the assessee, noticed that the assessee has sold various pieces of agricultural land for Rs.8,74,35,200/- on which he has arrived at long term capital gain of Rs.30,35,942/-. He noted that the assessee considered the 2
cost of acquisition with indexation u/s 48 of the Act at Rs.1,51,41,000/- and Rs.3,26,45,958/- and claimed deduction u/s 54B of the Act on reinvestment in agricultural land for Rs.3,66,12,300/-. The Assessing Officer referred the matter to verification unit and received a report from the Verification Unit on 05.12.2022
wherein the deduction claimed by the assessee u/s 54B of the Act was certified.
However, the Assessing Officer was not satisfied with the cost of acquisition and cost of improvement in respect of certain blocks of land and denied the cost of acquisition of Rs.3,05,76,548/- in absence of any satisfactory explanation given before him.
In appeal the Ld. CIT(A) / NFAC deleted the disallowance made by the Assessing Officer by observing as under:
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4. Aggrieved with such order of the Ld. CIT(A) / NFAC the Revenue is in appeal before the Tribunal by raising the following grounds:
1. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs.3,05,76,548/- made by the Assessing Officer under the head "Long-Term Capital Gains” on account of disallowance of cost of acquisition, despite the fact that the assessee failed to furnish any documentary evidence in support of the said cost in respect of certain parcels of land.
Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying upon the report of the Verification Unit (VU) while allowing the assessee's claim of cost of acquisition, even though the VU was only verified the agricultural usage of land for the purpose of Section 54B and had not examined or verified the cost of acquisition or cost of improvement?
Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the AO had rejected the assessee's claim "bluntly" without appreciating that the disallowance was based on specific findings, including the non-submission of purchase deeds or any credible supporting documentation for certain land parcels?
Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the assessee's claim of cost of acquisition without calling for a remand report or providing an opportunity to the AO to verify the additional documents furnished during appellate proceedings, thereby violating the principles of natural justice?
The appellant craves leave to add, amend, modify, or alter any of the above grounds of appeal at the time of hearing or thereafter, as may be deemed necessary.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. A perusal of the order of the Ld. CIT(A) / NFAC shows that he has decided the issue in favour of the assessee on the basis of detailed working filed along with necessary supporting documents. However, he has not called for any remand report from the Assessing Officer nor given any opportunity to the Assessing Officer to verify the additional documents furnished during the appeal proceedings which were never produced before the Assessing Officer. A 4 perusal of the assessment order shows that despite several opportunities the assessee has time and again defaulted in providing proper details of purchase to the satisfaction of the Assessing Officer. The Assessing Officer, therefore, calculated the capital gain on the basis of material available before him on record. As per the assessment order the assessee was given 7 opportunities including the Video conference to which the assessee never filed any details. Under these circumstances, we find merit in the arguments of Ld. DR that the Ld. CIT(A) / NFAC should not have deleted the addition merely on the basis of submissions and the details filed before him without calling for any remand report from the Assessing Officer and without giving any opportunity to the Assessing Officer to verify those documents. We, therefore, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate his case by filing requisite details for claiming the cost of acquisition and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the Revenue are accordingly allowed for statistical purposes.
In the result, the appeal filed by the Revenue is allowed for statistical purposes.
Order pronounced in the open Court on 15th December, 2025. (ASTHA CHANDRA)
VICE PRESIDENT
पुणे Pune; दिन ांक Dated : 15th December, 2025
GCVSR
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आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to:
अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent
4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file.
आदेशानुसार/ BY ORDER,
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