HEMANT JASHUBHAI GANDHI,SURAT V. ACIT CIRCLE 1(3), SURAT

ITA 361/SRT/2025

AI Insights

This case involves an appeal by Hemant Jashubhai Gandhi against the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2016-17. The primary issues in the appeal were the disallowance of the indexed cost of inflation amounting to Rs.38,69,451/- and the disallowance of the cost of improvement of Rs.4,76,250/-. The assessee contested that these costs were wrongly disallowed, and the CIT(A) had erred in confirming these disallowances without proper consideration of the adjournment request and the merits of the case. The Tribunal found merit in the assessee's arguments regarding the cost of improvement and restored the matter of the indexed cost of inflation to the Assessing Officer for re-examination.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830833 (ITAT-SURAT)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 25-03-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: AJAY UKE
• Assessee Lawyers: ASHISH BHOOLA
• Keywords: Set aside; Opportunity of being heard

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.361/Srt/2025 (Assessment Year: 2016-17) Hemant Jashubhai Gandhi, 20-B, Shree Shaktinagar Society, Opp. Experimental School, Nr. Ambika Ni Ketan Temple, Parle Point, Surat-395007. [PAN : AAWPG3547 Q] Vs. The Assistant Commissioner of Income Tax, Circle-1(3), Surat. (Appellant) .. (Respondent) Appellant by : Shri Ashish Bhoola, AR Respondent by: Shri Ajay Uke, Sr. DR Date of Hearing 21.01.2026 Date of Pronouncement 23.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Assessee against the order dated 19.06.2025 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“the CIT(A) in short), under Section 250 of the Income-tax Act, 1961 (“the Act”), relating to the Assessment Year 2016-17. 2. The assessee has raised the following grounds of appeal: 1. That CIT(A) has erred passing ex-parte order without considering adjournment request dtd 23/12/2024 seeking time up to dtd 07/01/2025 and erred in confirming repurchase of property legally purchased through agreement of sale and disallowance of Cost of Inflation of Rs.38,69,451/- 2. The CIT(A) has erred in confirming disallowance of Rs.4,76,250 (1.e.75% of Rs.6,35,000/-) being Cost of Improvement fully incurred by the 3. That the disallowance of Cost of Inflation of Rs.38,69,451/- & disallowance of Cost of Improvement of Rs.4,76,250/- of may kindly be deleted or alternatively the case Printed from counselvise.com ITA No. 361/Srt/2025 Asst. Year : 2016-17 - 2– may kindly be set aside to CIT(A) with direction to give reasonable opportunity of being heard. 4. The appellant craves leave to add, amend, alter, vary and/or withdraw any or all the above grounds of Appeal. Ground No. 1 3. With regard to Ground No. 1 relating to the indexed cost of inflation, we find that the issue has not been examined by the Assessing Officer in the correct perspective. Accordingly, the matter is restored to the file of the Assessing Officer for fresh examination and passing the order after due verification. Thus, this ground of appeal is allowed for statistical purposes. Ground No.2 and 3 4. In respect of Ground Nos. 2 and 3, the Assessing Officer made disallowance on account of indexed cost of inflation and cost of improvement, which was summarily confirmed by the Ld. CIT(A). Upon perusal of the records and the details of expenses filed by the assessee before us, which have been duly examined, we are of the view that the cost of improvement of Rs.4,76,250/- is allowable. Accordingly, the appeal of the assessee on Ground Nos. 2 and 3 is allowed. 5. In the result, the appeal of the assessee is partly allowed for statistical purposes. The order is pronounced in the open Court on 23.01.2026. Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Surat; Dated 23.01.2026 **mv Printed from counselvise.com ITA No. 361/Srt/2025 Asst. Year : 2016-17 - 3– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(A)- 5. िवभागीय Ůितिनिध , आयकर अपीलीय अिधकरण , /DR,ITAT, Surat, 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Surat 1. PC on 17.10.2025……………. 2. Date on which the typed draft is placed before the Dictating Member …03.11.2025…………. 3. Other Member ……06.11.2025………. 4. Date on which the approved draft 5. The date on which the file goes to the Assistant Registrar for signature on the order 6. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "