MAHESH SHRIVASTAVA, RAIPUR,RAIPUR vs. ITO-3(1),RAIPUR, RAIPUR

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ITA 702/RPR/2025Status: DisposedITAT Raipur05 February 2026AY 2008-09Bench: SHRI PARTHA SARATHI CHAUDHURY (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)14 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the deeming fiction provided under Section 50C for computing the full value of consideration is solely for determining capital gains as defined in Section 48. This deeming fiction cannot be extended to the computation of exemption under Section 54F. The Tribunal relied on the Supreme Court decisions in Amarchand N. Shroff and Mother India Refrigeration Industries (P.) Ltd., which state that deeming provisions cannot be extended beyond their intended purpose. The Tribunal also invoked the legal maxim 'lex non cogit ad impossibilia' (the law cannot compel a person to do something impossible), stating that it is impossible for an assessee to invest an amount exceeding the actual sale consideration received. Therefore, the value adopted for computing capital gains under Section 50C cannot be treated as the net consideration for the purpose of Section 54F exemption. The Tribunal directed the AO to allow complete exemption under Section 54F, as the cost of the new asset was not less than the net consideration in respect of the original asset. The appeal was allowed.

What were the facts?

The assessee, Mahesh Shrivastava, filed an appeal against the order of the CIT(A), NFAC, Delhi, for Assessment Year 2008-09. The Assessing Officer (AO) reopened the case under Section 147 r.w.s 143(3) of the Income Tax Act, 1961, alleging escapement of capital gains. The assessee and his siblings (1/6th share each) sold land at Labhandi, Raipur, for Rs. 1,30,50,000/-. The Stamp Valuation Authority valued the property at Rs. 5,75,11,000/-. The AO invoked Section 50C and computed capital gains based on this higher value, resulting in an addition of Rs. 74,50,583/-. The AO allowed an exemption of Rs. 19,64,099/- under Section 54F, but the assessee claimed full exemption. The CIT(A) dismissed the assessee's appeal, confirming the AO's order.

What were the issues?

1. Whether the AO and CIT(A) erred in invoking Section 50C of the Income Tax Act, 1961, to determine the capital gains by adopting the stamp duty valuation of Rs. 5,75,11,000/- instead of the actual sale consideration of Rs. 1,30,50,000/-, and consequently confirming the addition of Rs. 74,46,583/-. 2. Whether the CIT(A) erred in confirming the addition of Rs. 74,46,583/- by disregarding the provisions of Section 54F of the Income Tax Act, 1961, when the actual sale consideration of Rs. 21,75,000/- (assessee's 1/6th share) was reinvested entirely, entitling the assessee to full exemption. Assessee's Contentions: - The AO and CIT(A) erred in invoking Section 50C and confirming the addition. - The entire sale consideration was reinvested in a residential house, entitling the assessee to full exemption under Section 54F. - The case is on parity with the identical case of the assessee's brother, Shri Naresh Kumar Shrivastava, where the addition was deleted by the ITAT. - Relied on the ITAT order in ITA No. 303/RPR/2024 dated 23.08.2024 in the case of Shri Naresh Kumar Shrivastava. Revenue's Contentions: - The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 50C,Section 54F,Section 147,Section 143(3),Section 48

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY, JM &

For Appellant: Shri Veekaas S Sharma, CA
Hearing: 05.01.2026

O R D E R

Per Avdhesh Kumar Mishra, AM:

1.

This appeal for Assessment Year (‘AY’) 2008-09 filed by the assessee is directed against the order dated 30.09.2025 of Commissioner of Income Tax (Appeals), NFAC, Delhi [‘CIT(A)’].

2.

The assessee has raised following grounds of appeal: - 1. “On the facts and in the circumstances of the case, the Learned A.O has erred on facts and in law in making addition of Rs.74,46,583/- on account of Long Term Capital Gain by invoking Section 50C of the Income Tax Act, 1961 based on value adopted for stamp duty purposes at Rs.1,60,31,000/- (assessee’s 1/6th share being Rs.26,71,833/-) and the Learned CIT (Appeals), National Faceless Appeal Centre, Delhi has erred in conforming the addition of Rs.74,46,583/- disregarding the provisions of Section 54F as the actual sale consideration amounting to Rs.21,75,000/- (being 1/6th of Rs.1,30,50,000/-) stood reinvested entirely which 1. Mahesh Shrivastava vs. ITO, Ward-3(1) entitles the assesse for exemption u/s 54F from whole amount of Long Term Capital Gain as held by the Hon’ble Bench in dated 23.08.2024 in the case of assessee’s brother namely Shri Naresh Kumar Shrivastava, hence, it is prayed that the addition of Rs.74,46,583/- made by the Ld. A.O. and confirmed by the Learned CIT(Appeals) may kindly be deleted.

2. On the facts and in the circumstances of the case, the Learned A.O has erred on facts and in law by making an addition of Rs.74,46,538/- on account of Long Term Capital Gain by invoking the provisions section 50C of the Income Tax Act, 1961 which has been further confirmed by the Learned CIT(Appeal), Delhi, despite of the fact that the Learned CIT(Appeal), Delhi in the identical case of the assessee’s brother namely Shri Naresh Shrivastava relating to the same property had deleted the addition of Rs.69,13,333/- vide order dated 01.05.2024 in view of determination of FMV at Rs.1,60,31000/- (assessee’s 1/6th share being Rs.26,71,833/-) by the Court of Collector of Stamp vide order dated 30.09.2021 and the Hon’ble ITAT, Raipur Bench vide order dated 23.08.2024 deleted the entire addition in the said case, therefore, in view of the parity of facts and keeping in view the principles of consistency, it is prayed that the addition made by the Ld. A.O and sustained by the Ld. CIT(Appeal) ,may kindly be directed to be deleted.

3.

The Appellant caves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal.”

3. The genesis of this appeal, as evident from the record, are that the appellant assessee has filed his original Income Tax Return (‘ITR’) of the relevant year declaring income of Rs.95,000/- on 30.03.2009. Later on, the case was reopened on the reasoning that the Capital Gains determinable under section 50C of the Income Tax Act, 1961 (‘Act’) on transfer of the land by the appellant assessee during the relevant year had escaped assessment. The appellant assessee along with his siblings (assessee’s share is 1/6th) had sold land, situated at Labhandi, Raipur, admeasuring 16.71 Acres (6.66 Hectare) for Rs.1,30,50,000/- in the relevant year. However, the Stamp Valuation Authority/Sub-

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