JANARDAN R PATEL L/H OF LATE SHRI RAVJIBHAI ISHWARBHAI PATEL,ANAND V. THE ITO, WARD-4, ANAND

ITA 812/AHD/2025

AI Insights

This case involves an appeal by Janardan R. Patel, the legal heir of the late Ravjibhai Ishwarbhai Patel, against the orders of the Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals) [CIT(A)]. The dispute centered on the assessment year 2012-13, where the ITO had assessed capital gains on the sale of agricultural land, which the appellant contested was part of a family settlement and not an actual sale. The CIT(A) upheld the ITO's decision, leading to the appeal before the Tribunal. The Tribunal's decision acknowledged procedural errors and the nature of the land transfer, leading to a partial allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787178 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 17-04-2025
• Other Referred Cases: CIT vs. B C Srinivassa Setty 128 ITR 294 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAMAL DEEP SINGH
• Assessee Lawyers: SAKAR SHARMA
• Keywords: Cost of acquisition; Tax effect
• Section: 148; 143(3); 142(1); 69; 139

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Janardan R. Patel, L/h of Late Sri Ravjibhai Ishwarbhai Patel, 1671, Mukhi Niwas, Bakrol Road, Opp. Vaibhav Cimena, VV Nagar, Anand-388001 PAN: BIXPP1977P (Appellant) Vs The ITO, Ward-4 Anand (Respondent) Assessee by: Shri Sakar Sharma, A.R. Revenue by: Shri Kamal Deep Singh, Sr. D.R. Date of hearing : 30-09-2025 Date of pronouncement : 17-11-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 03-01- 2024 passed by CIT(A)/ADDl/JCIT(A)-12, Delhi for assessment year 2012-13. 2. The grounds of appeal are as under:- “1. The Ld. CIT(A)-NFAC erred on facts and in law in dismissing appeal of the appellant in the name of dead person due to non prosecution even though appellant had already expired on 02-08-2019 and appeal being filed by the legal heirs to whom no notice(s) were issued. ITA No. 812/Ahd/2025 Assessment Year 2012-13 Printed from counselvise.com I.T.A No. 812/Ahd/2025 Janardan R. Patel L/h of Late Shri Ravjibhai Ishwarbhai Patel, A.Y. 2012-13 2 2. The Ld. CIT(A)-NEFC erred on facts and in law in upholding order passed by the Assessing Officer u/s 143(3) r.w.s. 147 in the name of a dead person. 3. The Ld. CIT(A)-NFAC erred on facts and in law in upholding order passed by the Assessing Officer u/s 143(3) r.w.s. 147 without appreciating that return claimed to have been filed in the name of appellant after his death on 12-11-2019 was not a valid return. 4. The Ld. CIT(A)-NFAC erred on facts and in law in upholding addition of Rs. 14,58,560/- on account of sale of agricultural land without appreciating that there was no actual sale of land but land was transferred through registration in the guise of sale deed as per of family settlement and therefore, no capital gain exigible on the said transaction. 5. The Ld. CIT(A)-NFAC erred on facts and in law in upholding addition of Rs. 14,58,560/- on account of sale of agricultural land without appreciating that appellant received only Rs. 2,00,000/- together with two brothers as consideration towards family settlement. 6. The Ld. CIT(AO-NFAC erred on facts and in law in upholding addition of Rs. 14,58,560/- on account of sale of agricultural land without granting deduction of indexed cost of acquisition without which computation of long term capital gain was impermissible as held by Hon'ble Supreme Court in the case of CIT vs. B C Srinivassa Setty 128 ITR 294 (SC), Total tax effect (see note below) Rs. 2,49,324/-” Additional Grounds of Appeal “1. Ld. CIT(A)-NFAC erred on facts and in law in not quashing the assessment order passed by the Assessing Officer without disclosing reasons for reopening and inviting appellant's objections thereon after filing of return of income in response to notice u/s 148 of the Act. 2. Ld. CIT(A)-NFAC erred on facts and in law in not quashing the assessment order passed by the Assessing Officer despite the fact that memo of sanction u/s 151 accorded by the Ld. PCIT was not disclosed to the appellant. 3. Ld. CIT(A)-NFAC erred on facts and in law in not quashing the assessment order passed by the Assessing Officer despite the Printed from counselvise.com I.T.A No. 812/Ahd/2025 Janardan R. Patel L/h of Late Shri Ravjibhai Ishwarbhai Patel, A.Y. 2012-13 3 fact that Assessing Officer proceeded with inquiry u/s 142(1) by issuing questionnaire together with Notice u/s 148 dated 30-03- 2019 even though time period to furnish return u/s 148 had not expired before which such inquiry was not permissible.” 3. The assessee has filed his return of income u/s. 139 for assessment year 2012-13. On the basis of information, the Assessing Officer observed that the assessee has sold immoveable property aggregating to Rs. 43,75,680/- during financial year 2011-12 registered in the office of sub- registrar, Anand. As a result, the Assessing Officer observed that capital gain must have arisen on sale of property and it needs verification. After recording the reasons for reopening and obtaining prior permission, the case of the assessee was reopened and notice u/s. 148 was issued on 30-03-2019. The assessee has not submitted any details in response to the notices and subsequently show cause notice was issued on 07-11-2019. The assessee filed his return of income on 07-11-2019 u/s. 143(2) issued on 25-11-2019. The assessee submitted a reply on 12-11-2019 and provided a copy of acknowledgement of return of income, sale deed and bank statement. No capital gain was offered by the assessee and the assessee mentioned in reply that he is engaged in farming activity and derives income through agricultural activities. Due to some family problems, the assessee and his three brothers have filed suit for cancellation of sale deed in assessment year 2017-18 and has also produced the order dated 24-07-2017 for cancellation of sale deed. Since the assessee has not paid any capital gain arising on this transaction, as per the submission of the assessee, the Printed from counselvise.com I.T.A No. 812/Ahd/2025 Janardan R. Patel L/h of Late Shri Ravjibhai Ishwarbhai Patel, A.Y. 2012-13 4 assessee and his two brothers has sold immoveable property in assessment year 2012-13 as per the observation of the Assessing Officer and further held that no working of capital gain was given by the assessee at the assessment proceedings. The Assessing Officer in para 5 mentioned that the assessee paid stamp duty of Rs. 2,14,500/-. After taking cognizance of assessee’s reply, the Assessing Officer held that the total income of Rs. 14,58,560/- for 1/3 of the total transaction of Rs. 43,75,680/- should be treated as assessee’s capital gain and is liable to be taxed u/s. 69 of the Act. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The ld. A.R. submitted that there is a delay of 382 days in filing present appeal as the assessee did not receive any hearing notice from the CIT(A) and since the assessee when came to know about the order of the CIT(A) on 21-02-2025, the assessee immediately preferred appeal. The assessee has filed the detailed affidavit to that effect and the reason given therein appears to be genuine, hence delay is condoned. 6. As regards the merits of the case, the ld. A.R. submitted that the addition on account of sale of agricultural land is not justifiable as the fact remains that assessee’s actual sale of land but land transferred through registration in the guise of sale deed as per family statement and therefore no capital gain Printed from counselvise.com I.T.A No. 812/Ahd/2025 Janardan R. Patel L/h of Late Shri Ravjibhai Ishwarbhai Patel, A.Y. 2012-13 5 exigencies on the said transaction has happened. The ld. A.R. further submitted that the assessment order was passed on dead person and therefore the assessment itself is bad in law. The ld. A.R. submitted that it is only exchange that there is no capital gain. The ld. A.R. submitted that the Assessing Officer as well as the CIT(A) has not taken cognizance of the cancellation of deed and the order to that effect which is clearly mentioned in para 4 of the assessment order. 7. The ld. D.R. relied upon the assessment order and the order of the CIT(A). The ld. D.R. further submitted that the additional grounds filed by the assessee does not sustain as such at this juncture. 8. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the additional grounds taken by the assessee is that of legal ground and after going through the notice u/s. 148, it appears that the reopening of the assessment of the assessee is justified as proper procedure has been followed by the Assessing Officer thereby reasons recorded and approval taken properly. Thus, case laws in the present case relied by the assessee do not apply. As regards the merits of the case, it is pertinent to note that the assessee has clearly set out that there is a dispute within the family in which some family members were demanding legal rights over the three land survey nos. The assessee has to cancel the said deal against which counter was also filed by one Anantrai Chandubhai Patel apart from raising ownership claim over land survey no. 182 before land revenue authorities. Thus, no capital gain arise on the said transfer, it was a family Printed from counselvise.com I.T.A No. 812/Ahd/2025 Janardan R. Patel L/h of Late Shri Ravjibhai Ishwarbhai Patel, A.Y. 2012-13 6 arrangement itself and the payment of Rs. 2,14,500/- as stamp duty paid was a loss to the assessee as well his co-owners. The assessee has filed the family details and the disputes along with memorandum dated 26-05-2011 before us which clearly gives picture that there is a genuine case on the part of the assessee that said land deal has not taken place and there is no capital gain owned by the assessee in the present case. Thus, the appeal of the assessee is partly allowed. 9. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 17-11-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 17/11/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद Printed from counselvise.com "