ATULBHAI BALUBHAI PATEL,AHMEDABAD V. THE ITO, WARD-5(3)(1), AHMEDABAD

ITA 431/AHD/2025

AI Insights

The case involves Atulbhai Balubhai Patel, an individual engaged in civil construction, who appealed against the orders of the Assessing Officer and the CIT(A) regarding the assessment of long-term capital gains (LTCG) for the Assessment Year 2013-14. The primary contention was the incorrect assessment year for the receipt of capital gains from a development agreement entered with M/s. Sahjanand Land Corporation. The Assessing Officer treated the entire consideration as received in AY 2013-14, leading to an addition of LTCG, which was contested by the assessee. The Tribunal's decision favored the assessee, acknowledging the actual receipt basis of income declaration and the eligibility for Section 54EC deduction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712813 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.P SRIVASTAVA
• Assessee Lawyers: PRITESH SHAH
• Keywords: Capital Gains
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.431/Ahd/2025 (Assessment Year: 2013-14) Atulbhai Balubhai Patel, 401, Shyamal Flat, Gujarat Brahman Society, Paldi, Ahmedabad-38007 [PAN :AASPP 1880 F] Vs. Income Tax Officer, Ward 5(3)(1), Ahmedabad (Appellant) .. (Respondent) Appellant by : Shri Pritesh Shah, CA Respondent by: Shri B.P Srivastava, Sr. DR Date of Hearing 15.07.2025 Date of Pronouncement 29.07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- The captioned appeal has been filed by the assessee against the order dated 13.02.2025 passed by the Ld. ADDL/JCIT(A), Panchkula (hereinafter referred to as \"CIT(A)\" for short), passed u/s 250 of the Income-tax Act, 1961, (hereinafter referred to as \"the Act\" for short) for the Assessment Year (AY) 2013-14. 2. The assessee has raised the following grounds of appeal: 1. The Learned CIT(A), NFAC erred in law and on facts in confirming the addition of Long Term Capital Gain of Rs.17,92,747/- made by the AO, such addition is requested to be deleted. 2. The learned CIT(A), NFAC erred in law and on facts in confirming the disallowance of Section 54EC of the Income Tax Act, 1961, made by the AO, such deduction is requested to be allowed. 3. The assessee is an individual and doing the business in Civil Construction work. He filed his return of income for the year under consideration on 17.12.2013 declaring taxable income of Rs.5,56,300/-. The case of the assessee Printed from counselvise.com ITA No. 431/Ahd/2025 Atulbhai Balubhai Patel Vs. ITO Asst. Year : 2013-14 - 2– was selected for scrutiny assessment and thereafter the assessment was framed by the Assessing Officer u/s 143(3) of the Act, making Rs.17,92,747/- towards long-term capital gains by adopting a higher sale consideration based on a 30% share in land. 3.1 The brief facts relating to this issue are that the assessee, a co-owner of agricultural land, entered into a Development Agreement with M/s. Sahjanand Land Corporation for a total consideration of Rs.3,25,00,000/-, with his 30% share being Rs.97,50,000/-, and while he declared Long Term Capital Gain (LTCG) of Rs.77,00,000/- in AY 2013–14 and the remaining Rs.28,00,000/- in the subsequent year based on actual receipts, the Assessing Officer, relying on the Development Agreement and purchase deed executed during the relevant financial year indicating transfer of possession, treated the entire Rs.97,50,000/- as consideration received in AY 2013–14, resulting in an addition of Rs.17,92,747/- as LTCG. 3.2 Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who confirmed the addition made by the Assessing Officer. 3.3 Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 4. Before us, Ld. AR submitted that the declaration of LTCG was made on an actual receipt basis, duly supported by ledger copies and builder confirmations. The Ld. AR submitted that although the Development Agreement was entered in FY 2012–13, the full consideration was not received in that year. The consideration of Rs.28,00,000/- was received and offered to tax in AY 2014–15, and exemption under Section 54EC was also claimed for investment made on 13.10.2013, within the permissible time limit. Printed from counselvise.com ITA No. 431/Ahd/2025 Atulbhai Balubhai Patel Vs. ITO Asst. Year : 2013-14 - 3– 5. We have heard the rival contentions and perused the material available on record. It is an undisputable fact that the capital gains have been duly invested and is eligible for deduction u/s 54EC. Hence, no liability of tax arises in the case of the assessee. 6. In the result, appeal of the assessee is allowed. The order is pronounced in the open Court on 29.07.2025 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 29.07.2025 **btk आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 21.07.2025 2. Date on which the typed draft is placed before the Dictating Member ….28..07.2025 3. Other Member ……….28..07.2025… 4. Date on which the approved draft comes to the Sr.P.S./P.S …..28..07.2025… 5. Date on which the fair order is placed before the Dictating Member for pronouncement ….29..07.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S …….29..07.2025… 7. Date on which the file goes to the Bench Clerk …….29..07.2025.. 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "