SHAILENDRA KUMAR,GAYA vs. INCOME TAX OFFICER, GAYA

This matter relates to addition made by the Assessing Officer on account of agricultural land sold by the assessee being capital asset. The assessee sold the land situated in rural area. According to the assessee, the land in question is an agricultural land situated in Sherghati, Circle- Dobhi, Thana – Gamhariya. Since the land is situated in a rural area outside the municipal corporation by more than 8 kms, the same cannot be treated as capital gain as the land is not a capital asset. The Assessing Officer made the addition in the hands of the assessee in the absence of any evidence of the agricultural produce having been sold and also on the perception that the assessee not claimed any expenses incurred in carrying out agricultural operation. Further the Assessing

In the course of appellate proceedings, the Ld. CIT(A) has not admitted the proof of agricultural land on the count that the assessee has not explained properly as to why the assessee was prevented from producing the documents at the time of assessment proceeding.

Before us, the assessee filed two written submissions; one dated 03.09.2025 and other one dated 08.09.2025 and along with the submissions, the assessee filed a certificate issued by the Block Development Officer bearing No.1171 dated 25.10.2023 stating that the land is beyond 15 kms. from the Gaya Municipality and further that the population of the area is only approximately 1000. Further that, he has drawn our attention to the notification issued by the Central Government in relation to urbanisation of areas, the Schedule whereof at Column 11 speaks “Gaya: where certain areas have been falling outside the municipal limits of Gaya, whereas the name of the village of the assessee is not mentioned therein.

Under the circumstances, the Ld. Counsel, Mr. A. K. Rastogi has submitted before us that sufficient proof of the agricultural activity having being done by the assessee and the land in question is admittedly an agricultural one which is also evident by the certificate issued by the Block Development Officer as mentioned hereinabove dated 25.10.2023 has not taken into consideration by the authorities below. In fact, the rejection of the admission of additional evidence has caused prejudice to the assessee and therefore, the matter be sent to the file of the Assessing Officer for making an enquiry regarding the characteristic of the land in question and to pass necessary orders. 2

We have heard the rival submissions made by the respective parties and perused the relevant materials available on record. We find that even though the annexures to the written submission dated 25.10.2023 filed by the assessee supports his claim of agricultural land being sold by him, we find that necessary investigation is required to be done by the competent authority before coming to a conclusion in regard to the land in question whether agricultural or not. Thus, having regard to the entire aspect of the matter, we dispose of this appeal by setting aside the issue to the file of the Assessing Officer with a direction upon him to conduct an enquiry on the land in question and to pass an order after granting an opportunity of being heard to the assessee and upon considering the evidence on record or any other evidence which the assessee may choose to file at the time of hearing of the matter. The Assessing Officer is directed to pass a reasoned order strictly in accordance with law preferably within a period of 8 months from the date of passing of this order.

In the result, the appeal of the assessee is allowed for statistical purposes.