SANJAYKUMAR ARVINDBHAI RUPARELIYA L/H ARVINDBHAI BALUBHAI RUPARELIYA,SURAT vs. ITO, WARD 3(1)(2), SURAT

Facts of the case in brief are that assessee filed return of income for AY 2015-16 on 16.10.2015 declaring total income at Rs.2,87,540/-. The case was selected for scrutiny and in response to the notices issued by the AO, the assessee filed various submissions and details. The assessee was engaged in the business of construction and he had purchased immovable property with 8 other persons and his share in the purchase of land was Rs.66,27,500/-. The assessee stated that he made payment of Rs.66,27,500/- to purchase land out of the funds received on sale of agricultural land. He claimed deduction of Rs.38,38,548/- against short-term capital gains (STCG) gains arising sale of agricultural land. The AO issued show cause notice stating that the land was purchased by assessee on 29.03.2012 and same was sold on 27.01.2014 by receiving payment against the land sold. However, the land was registered on 23.04.2014. The AO held that the assessee held the land for less than 2 years and that the land was not used for agricultural purposes in the 2 preceding years. Hence, the claim of deduction of Rs.38,38,548/- u/s 54B was not permissible. The same was accordingly added to the total income of assessee. Aggrieved by the addition made by AO, assessee preferred appeal before CIT(A).

The appellant contended before CIT(A) that the agricultural land was purchased on 29.03.2012 and was sold on 23.04.2014. Hence, it was held for more than 2 years. The appellant stated that he received the payment for the said land on 27.01.2014 but he had not transferred the right in the property nor given the possession to the buyer till the sale agreement was registered on 23.04.2014. The appellant had also carried out agricultural activities for more than 2 years. Merely on the basis of receipt of payment, it cannot be said that all the right and possession were transferred to the purchaser. The CIT(A) noted that appellant had shown agricultural income during one year i.e., AY 2014-15 only. He has not shown any agricultural income during AY 2013-14. He has also not shown any agricultural income in the subject AY i.e., 2015-16. The appellant could not produce any evidence, such as the crops cultivated, sale bills of agricultural produce etc., during the assessment or appellate proceedings. Though the land was in possession of assessee for 2 years, there was nothing to show that any agricultural activity was carried out by the appellant. Hence, deduction u/s 54B cannot be allowed. The CIT(A) further observed that there was no evidence that the new land purchased was being used for agricultural purposes. In the result, the ground was dismissed by the CIT(A).

Aggrieved by the order of CIT(A), the appellant has filed present appeal before the Tribunal. The Ld. AR has filed a paper book including the death certificate of Arvindbhai Balubhai Rupareliya, Form-7/12 of agricultural land

On the other hand, Ld. Sr-DR for the Revenue supported order of lower authorities. He submitted that adequate opportunities were granted by the AO and CIT(A) during the assessment and appellant proceedings respectively. Hence, the order of CIT(A) may be upheld.

We have heard both the parties and perused the materials on record. We have also deliberated the case law relied on by the Ld. AR of the assessee. There is no dispute that the agricultural land was purchased by appellant on 29.03.2012 and was sold on 27.04.2014 though the appellant started receiving payment against the sold land from 27.01.2014. However, both lower authorities have found that no agricultural activity was conducted by the appellant in the impugned land during the year under consideration. No documentary evidence like details of the crop cultivated, sale bills of agricultural produced etc., were submitted before the lower authorities. The ITA No.1305/SRT/2024/AY.15-16 Arvindbhai B. Rupareliya Ld. AR, on the other hand, submitted that the appellant died during the appellate proceedings and, hence, could not furnish complete details in support of agricultural activity and resultant income therefrom. We are of the considered view that the assessee deserves one more opportunity to contest its case on merit. Considering all the facts and peculiar circumstances of the case, in the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file CIT(A) with a direction to pass a speaking order in accordance with law after granting adequate opportunity of hearing to assessee. The assessee is directed to be vigilant and diligent and furnish all details and explanation as needed by CIT(A) by not seeking adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee is treated as allowed for statistical purposes.

In the result, appeal of the assessee is treated as allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 18/07/2025. (SUCHITRA R. KAMBLE) (BIJAYANANDA PRUSETH) न्याियक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER सूरत /Surat "दनांक/ Date: 18/07/2025 Dkp Outsourcing Sr.P.S*