HEMANTKUMAR GAJANAN LAD,KALAMBOLI vs. THE INCOME TAX OFFICER, WARD-5, PANVEL

IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH “A”, PUNE

BEFORE SHRI R. K. PANDA, VICE PRESIDENT
AND SHRI VINAY BHAMORE, JUDICIAL MEMBER

आयकर अपील सं. / ITA No.2765/PUN/2024
िनधाᭅरण वषᭅ / Assessment Year : 2012-13

Hemantkumar Gajanan Lad,
703, Krushidhan CHS, Sector
3, Kalamboli- 410218. PAN : ABJPL6243N
Vs.
ITO, Ward-5, Panvel.

Appellant

Respondent

आदेश / ORDER

PER VINAY BHAMORE, JM:

This appeal filed by the assessee is directed against the order dated 31.07.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2012-13. 2. There is delay in filing of the present appeal. We are satisfied with the reasons mentioned in the affidavit for condonation that the applicant was prevented by sufficient cause for not filing the appeal within the prescribed time limit. Ld. DR has not raised any objection to condone the delay, therefore we condone the delay and proceed to adjudicate the appeal.
Assessee by :
Shri Ajinkya M. Vaishampayan
Revenue by :
Shri Ramnath P. Murkunde

Date of hearing
:
02.06.2025
Date of pronouncement
:
04.06.2025
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3. Facts of the case, in brief, are that the assessee is an individual filed his return of income on 31.01.2017 declaring total income of Rs.2,30,840/- for the year under consideration. A notice u/s 148 was issued on 27.03.2017 as it was found that the assessee along with others had entered into an agreement with M/s Shriram
Builders & Developers for transfer of his rights in respect of Plot
No.20 & 20A, Sector-22, at Ulwe Node, Tal: Panvel Dist. Raigad vide tripartite agreement dated 12.09.2011. Under the provisions of section 45(1) of the IT Act, the assessee was required to offer capital gains as a result of above transaction. However, it is seen that the assessee has not offered the said capital gains for taxation.
After verification of the submissions of the assessee, the Assessing
Officer completed the assessment u/s 143(3) r.w.s. 147 on 31.07.2017 by bringing the short term capital gains of Rs.1,86,49,906/- into tax & determining total income of Rs.1,88,80,750/- as against income returned by the assessee at Rs.2,30,840/-.
4. Since the assessee remained absent, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee for want of prosecution.
It is this order against which the assessee is in appeal before this Tribunal.
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5. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified.
Ld. AR further submitted before us that Ld. CIT(A)/NFAC admittedly issued notices of hearing to the assessee but the assessee remained unaware since the email ID mentioned on the income tax portal belonged to the brother of the assessee, who unfortunately died two years back. Apart from above, it was also submitted by Ld. AR that after filing the appeal a written submission was also furnished on 07.11.2017 before Ld. CIT(A)-
2, Thane but the same was not considered by Ld. CIT(A)/NFAC while deciding the issue. Apart from above, it was also brought to the knowledge of the bench that the case of the brother of the assessee involving similar issue for same assessment year has already been sent back to the file of the Assessing Officer to decide the issue afresh as per fact and law after providing reasonable opportunity of hearing to the assesse. Accordingly, Ld. AR requested before the bench to set-aside the order passed by Ld.
CIT(A)/NFAC & further requested to remand the matter back to the file of the Assessing Officer to decide the issue afresh.
6. Ld. DR appearing from the side of the Revenue submitted before us that despite due service of notices of hearing the assessee
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remained absent before Ld. CIT(A)/NFAC. Accordingly, Ld. DR requested before the Bench to confirm the order passed by Ld.
CIT(A)/NFAC.
7. We have heard Ld. Counsels from both the sides & perused the material available on record. In this regard, we find that that the first appeal order was passed ex-parte since the assessee remained absent due to circumstances beyond his control. We also find that Co-ordinate Bench of this Tribunal in the case of Nandkumar Gajanan Lad vs. ITO vide ITA No.778/PUN/2022 for A.Y. 2012-13 order dated 01.06.2023 while dealing with the similar issue for the same assessment year in the case of brother of assessee has already set-aside the order passed by Ld.
CIT(A)/NFAC and remanded the matter back to the file of Assessing Officer to decide the issue afresh by observing as under :-
“4. We have heard the rival submissions and perused the relevant material on record. Indisputably, the agricultural land of the assessee along with other co-owners was acquired under the Land Acquisition
Act, 1894 and its possession was taken over by CIDCO in the year
1986. Certain sum, whose exact figure was not known to the ld. AR nor has been referred to in the orders of the authorities below, admitted to be less than Rs.2.00 lakh (say, Rs. X) was awarded as compensation. In 1990, the Government of Maharashtra came out with 12.5% scheme covering even the transactions of compulsory acquisition taking place prior to that date. Under this scheme, urban land equal to 12.5% of the area compulsorily acquired was to be allotted. Simultaneously, the amount originally paid as compensation
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was to be refunded with certain addition. In the present case, such 12.5% of the assessee’s land with other co-owners is equivalent to Plot Nos.20 & 20A as referred to herein above. These plots were allotted to the assessee on 26-08-2011 and the assessee paid
Rs.8,58,250/- to CIDCO, with net outflow of certain figure, say Rs. Y
(Rs. 8,58,250/- minus Rs. X). The assessee transferred these two plots on 12-09-2011 for a sum of Rs.10.75 crore, both the events happening during the previous year relevant to the assessment year under consideration. On an overview, it can be seen that there are basically two transfer transactions of the assessee, first, the transfer by compulsory acquisition of land by the Government of Maharashtra and the, second, of the transfer of plots to M/s. Shriram Builders &
Developers, which were allotted to the assessee in lieu of the compulsory acquisition. In a nutshell, the assessee was allotted the two plots as quid pro quo for the compulsory acquisition of his land after paying back Rs. Y. In that view of the matter, the fair market value of these two plots minus Rs. Y will constitute full value of consideration in the first transaction of transfer of agricultural land by compulsorily acquisition. The AO, on page 8 para 5.3 of his order, has observed that the first transaction of transfer by compulsory acquisition will not attract capital gain because it was a transfer of agricultural land. On page 11 of his order, the AO further observed that the date of allotment of the plots was 26-08-2011. Had the compulsory acquisition been of some non-agricultural land, the capital gain chargeable to tax would have resulted by taking the fair market value of the two plots minus Rs. Y as full value of consideration.
5. Now we turn to the second transaction of the transfer of Plot
Nos.20 & 20A taking place during the year, which happened on 12-
09-2011, namely, around 15 days from the date of allotment of plots.
As the same plots which were allotted to the assessee as a consideration against the acquisition of his agricultural land in the first transfer transaction became subject matter of transfer in the second transaction, their fair market value on the date of allotment, namely, 26-08-2011 will naturally constitute their cost of acquisition in the second transaction of their sale to M/s. Shriram Builders &
Developers. The AO adopted a sum of Rs.8,58,250/- paid by the assessee to CIDCO as cost of acquisition of the two plots in the computation of capital gain in the second transaction, which is neither here nor there. This amount is nothing but refund of the original compensation awarded to the assessee prior to 12.5% scheme along with certain addition. Once the two plots got allotted in lieu of compulsory acquisition of the assessee’s agricultural land, their fair market value on the date of allotment minus Rs. Y, substituted the earlier amounts received as full value of consideration. Neither the original receipt of compensation in seclusion can be construed as the fair market value of the property in the first transaction of transfer
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nor its subsequent refund to CIDCO with certain addition in isolation as the cost of acquisition in the second transfer transaction. In fact, cost of acquisition of the two plots in the second transaction of transfer is their fair market value on the date of their allotment to the assessee, which constituted the basis for the full value of consideration in the first transfer transaction. In view of the foregoing discussion, the capital gain in the second transaction needs to be computed by taking the assessee’s share in Rs.10.75 crore as full value of consideration to be reduced by his proportionate share in the value of plot Nos. 20 & 20A, Sector-22, at Ulwe, Tal. Panvel, Dist.
Raigad on 26-08-2011 allotted by CIDCO. Since the necessary figure of the fair market value of the two plots on 26.8.2011, being, the cost of acquisition in the second transaction is not available, we set-aside the impugned order and remit the matter to the file of the AO for determining it afresh in the light of our above observations. Needless to say, the assessee will be allowed a reasonable opportunity of hearing.

पुणे / Pune; ᳰदनांक / Dated : 04th June, 2025. Sujeet
आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to :
1. अपीलाथᱮ / The Appellant.
2. ᮧ᭜यथᱮ / The Respondent.
3. The Pr. CIT concerned.
4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच,
पुणे / DR, ITAT, “A” Bench, Pune.

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Senior Private Secretary

आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.