INCOME TAX OFFICER, WARD 1, AHMEDNAGAR V. SUDARSHAN ZUMBERLAL BAFNA, AHMEDNAGAR

ITA 2204/PUN/2025

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals)/NFAC, Delhi, which pertained to the Assessment Year 2012-13. The Revenue challenged the deletion of a disallowance of deduction claimed under section 54F of the Income Tax Act, 1961, amounting to Rs. 2,44,57,693. This deduction was related to expenses on interior work and a deposit in the Capital Gains Accounts Scheme. The Tribunal had previously quashed the order under section 263, which had led to the disallowance, making the current appeal by the Revenue infructuous. Additionally, the Revenue's pending appeal to the Bombay High Court was deemed not maintainable due to the low tax effect involved.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834447 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 24-09-2025
• Other Referred Cases: ITA No.1272/PUN/2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRADDHA NICHAL
• Assessee Lawyers: B. S. RAJPUROHIT
• Keywords: Set aside; Tax effect; Capital Gains; Revision of order
• Section: 143(3); 54F

Judgement Text

" आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE MS. ASTHA CHANDRA, JUDICIAL MEMBER AND SHREE DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2204/PUN/2025 धििाारण वर्ा / Assessment Year : 2012-13 Income Tax Officer, Ward – 1, Ahmednagar Vs. Sudarshan Zumberlal Bafna, Bafna Peth Shrirampur, Dist.-Ahmednagar-413709 PAN : AAVPB3556D अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri B.S. Rajpurohit Department by : Smt. Shraddha Nichal Date of hearing : 02-02-2026 Date of Pronouncement : O4-02-2026 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the Revenue is directed against the order dated 29.07.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2012-13. 2. The Revenue has raised the following grounds of appeal : “i) On the facts and the circumstances of the case and in law, the Ld. CIT(A)/NFAC is not justified in set aside the assessment order u/s 143(3) r.w.s. 263 of the Act as the matter is under subjudice before the Hon’ble Court of Bombay against the decision of the Hon’ble ITAT in ITA No.1272/PUN/2017 dated 13.11.2019. ii) On the facts and circumstances of the case and in law, the Ld. CIT(A)/NFAC is not justified in deleting the disallowance of deduction of Rs. 2,44,57,693/-(Rs. 1,44,57,693/- regarding interior work plus Rs. 1,00,00,000/- deposited in Capital Gains Accounts Scheme), claimed by the assessee u/s 54F of the Act despite the fact that this amount was never part of cost of new residential property as per purchase agreement/deed. Printed from counselvise.com 2 ITA No.2204/PUN/2025, AY 2012-13 iii) On the facts and circumstances of the case and in law, the Ld. CIT(A)/NFAC is not justified in adjudicating the part of deduction of u/s 54F of Rs. 1,00,00,000/- without considering that the assessee has never established that this amount was utilized for construction of new asset, in fact, as per purchase deed/agreement, this amount was never part of net asset purchased by the assessee. iv) The appellant craves to add, amend, alter or delete the above ground of appeal during the course of appellate proceedings before the Hon’ble Tribunal.” 3. The Ld. Counsel for the assessee at the outset submitted that the Ld. Assessing Officer (“AO”) in the instant case has passed the order u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 (the “Act”) on 18.12.2017 determining the total income of the assessee at Rs.7,54,78,463/-as against the returned income of Rs.5,10,20,770/- pursuant to the order passed u/s 263 of the Act thereby making an addition of Rs.2,44,57,693/- on account of disallowance of assessee’s claim of deduction u/s 54F of the Act. Referring to the copy of the order of the Tribunal, he submitted that section 263 order has since been dismissed by the Tribunal vide ITA No.1272/PUN/2017, order dated 13.11.2019 and therefore, the subsequent proceedings become infructuous. 3.1 Further, without prejudice to the above argument, the Ld. AR submitted that the Revenue is in appeal before the Hon’ble Bombay High Court against the order of the Tribunal which is still pending. However, since the tax effect involved in the consequential order of the Ld. AO u/s 143 r.w.s. 263 is below Rs.1 crore, the appeal of the Revenue is not maintainable before the Hon’ble High Court in view of the CBDT Circular No. 17/2019, dated 08.08.2019. 4. The Ld. DR fairly conceded that the Tribunal has quashed the section 263 proceedings. 5. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. It is an admitted fact that the Tribunal vide ITA No.1272/PUN/2017, order dated 13.11.2019 has quashed the order dated 29.03.2017 passed by the Pr. Commissioner of Income Tax (PCIT) u/s 263 of the Act. It is also the submission of the Ld. AR that the Revenue’s appeal against the order of Printed from counselvise.com 3 ITA No.2204/PUN/2025, AY 2012-13 the Tribunal (supra) before the Hon’ble High Court is not maintainable as per CBDT Circular No. 17/2019, dated 08.08.2019. The Revenue has raised no objection to the aforesaid arguments of the Ld. AR. We find the Ld. AO in the instant case has passed the order u/s 143(3) r.w.s. 263 of the Act on 18.12.2017 by making disallowance of Rs.2,44,57,693/-. Since the order passed u/s 263 of the Act by the PCIT has since been quashed by the Tribunal, therefore, the subsequent proceedings pursuant to such order passed u/s 263 become infructuous. The grounds raised by the Revenue are accordingly dismissed. 6. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on 04th February, 2026. Sd/- Sd/- (Dr. Dipak P. Ripote) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 04th February, 2026. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "