SMT. PUSHPA AGRAWAL,INDORE vs. ITO WARD 5(2), INDORE, AAYKAR BHAWAN, OPPOSITE WHITE CHURCH, RESIDENCY AREA, INDORE

ITA 499/IND/2024Status: DisposedITAT Indore30 October 2025AY 2012-1318 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's lands were excluded from the definition of 'capital asset' under Section 2(14)(iii) of the Act. This was based on certificates from Gram Panchayats stating the lands were situated at distances of 10 Kms and 8 Kms from the Indore Municipal limit, thus exceeding the prescribed 8 km distance. The Tribunal found the AO's observation regarding non-filing of documentary evidence to be incorrect, as the assessee had submitted relevant certificates. The AO was also found to be incorrect in linking the distance to the Tehsil rather than the Municipality. Consequently, the resultant capital gain was not taxable. The Tribunal directed the AO to delete the addition of Rs. 67,56,545/-. Grounds No. 2 to 4 raised by the assessee were allowed. Regarding Ground No. 1 challenging the validity of re-opening under Section 147, the Tribunal deemed it unnecessary to adjudicate as the addition was deleted on merit. The issue of agricultural use of land, initially raised by the AO for re-opening, was noted as dropped by the AO in the assessment order and thus not adjudicated.

What were the facts?

The assessee, Smt. Pushpa Agrawal, filed her return for AY 2012-13 declaring a total income of Rs. 3,50,327/-, including short-term capital gain of Rs. 68,11,461/- from the sale of agricultural land. She claimed exemption under Section 54B, offering a taxable gain of Nil. The Assessing Officer (AO) completed a scrutiny assessment accepting the Nil taxable gain. Subsequently, following an audit objection regarding the eligibility for Section 54B exemption, the AO re-opened the case under Section 147. The AO questioned the agricultural use of the land and its classification as a capital asset. The assessee argued the lands were beyond 8 km from Indore municipal limits, thus not capital assets under Section 2(14)(iii)(b). The AO, after seeking information from Tehsildars, made an addition of Rs. 67,56,545/-. The CIT(A) dismissed the assessee's appeal. The assessee appealed to the ITAT.

What were the issues?

1. Whether the proceedings initiated by the AO under Section 147 of the Income-tax Act, 1961, were legal, valid, and within jurisdiction? (Question of law and fact). The assessee contended that the re-opening was illegal, without jurisdiction, and void ab initio, possibly due to a change of opinion. The revenue's contentions are not explicitly recorded regarding this ground, other than its action of re-opening. 2. Whether the addition of Rs. 67,56,545/- as short-term capital gain made by the AO was legal and erroneous? (Question of law and fact). 3. Whether the CIT(A) erred in affirming the addition by treating the agricultural lands sold as capital assets, ignoring that they fell under the ambit of Section 2(14)(iii) of the Act? (Question of law and fact). 4. Whether the CIT(A) erred in affirming the addition by grossly ignoring the details and documentary evidence on record? (Question of fact).

Which sections of the Income-tax Act were involved?

Section 54B,Section 143(3),Section 147,Section 148,Section 2(14)(iii),Section 133(6),Section 2(14)(iii)(b)

AI-generated summary — verify with the full judgment below

arrest eur, IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER

AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER Assessment Year:2012-13

Pushpa Agrawal, ITO 5(2) 41-42, Mangal Murti Nagar, | g-pqy | Indore Indore “Vs. (Assessee/Appellant) (Revenue/Respondent)

PAN: AFCPA0674F Assessee by | Shri Kunal Agrawal, AR Revenue by | Shri Ashish Porwal, Sr. DR

Date of Hearing 15.10.2025 Date of Pronouncement 30.10.2025

3Tg3v0 RD ER

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 23.04.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 31.12.2018 passed by learned ITO-5(2), Indore [“AO”] u/s 143(3) r.w.s. 147 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed this appeal.

2.

The background facts leading to present appeal are as under:

(i) The assessee-individual filed her original return of income of AY 2012-

13 u/s 139 on 30.03.2013 declaring a total income of Rs. 3,50,327/-.

Smt. Pushpa Agrawal ITA No. 499/Ind/2024 - AY 2012-13

In the return so filed, the

The order continues below.

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