KALPESH BALVANTBHAI AHIR,SURAT V. ITO, SURAT

ITA 763/SRT/2025

AI Insights

The case involves Kalpesh Balvantbhai Ahir, who appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 2,062,884 as long-term capital gain from the sale of a property. The property, co-owned by the assessee and his father, was sold in A.Y. 2011-12, but the income was assessed in A.Y. 2012-13. The assessee argued that the capital gain should be assessed in the year the sale agreement was executed and not in the subsequent year. The Tribunal considered the timing of the sale agreement and the receipt of advance payment, leading to the decision to reassess the capital gain based on the jantri value at the time of the agreement.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 823042 (ITAT-SURAT)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 17-07-2025
• Other Referred Cases: CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY UKE
• Assessee Lawyers: POONAM JO SHI
• Keywords: Set aside; Sale consideration of property below Jantri Value; Fair market value; Cost of acquisition
• Section: 144; 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SURAT” BENCH, SURAT [Conducted through E-Court at Ahmedabad] BEFORE SHRI SANJAY GARG, JUDICAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 763/Srt/2025 (िनधाŊरण वषŊ / Assessment Year : 2012-13) Kalpesh Balvantbhai Ahir 4, Roop Sagar Society, A K Road, Surat, Gujarat- 395008 बनाम/ Vs. Income Tax Officer Ward-3(2)(4), Surat ᭭थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ALPPA1348B (Appellant) .. (Respondent) अपीलाथŎ ओर से /Appellant by : Ms. Poonam Joshi, AR ŮȑथŎ की ओर से/Respondent by : Shri Ajay Uke, Sr. DR Date of Hearing 09/12/2025 Date of Pronouncement 22/12/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’), dated 10.12.2024 for the Assessment Year 2012-13 in the proceeding under Section 144 r.w.s. 147 of the Income Tax Act, 1961 (in short ‘the Act’). 2. There was a delay of 139 days in filing of this appeal. The assesse has filed an affidavit explaining the reason for delay. It Printed from counselvise.com ITA No. 763/Srt/2025 [Kalpesh Balvantbhai Ahir vs. ITO] A.Y. 2012-13 - 2 – is submitted that the order of the Ld. CIT(A) was received on email ID. However, the assessee was not regular in checking his email ID. As a result, he could not access the order of the Ld. CIT(A) in time. It was only when the penalty proceeding was initiated that the assessee came to know about the appellate order. Thereafter, he consulted his Counsel and the present appeal was filed and in the process there was a delay of 139 days. Considering the explanation of the assessee, the delay in filing of the appeal is condoned. 3. Brief facts of the case are that the assessee did not file his return of income for A.Y. 2012-13. The AO has received information that the assessee alongwith ten other co-owners had sold an immovable property on 24.10.2011 for a consideration of Rs.1,38,27,499/-. On the basis of this information, the case of the assessee was reopened by issue of notice u/s.148 of the Act on 29.03.2019. The assessee had explained that the capital gain arising of the sale of the property was disclosed by his father Shri Balvantbhai Dhanjibhai Ahir. The AO, however, was not satisfied with the explanation of the assessee. He found that though the property was sold for a consideration of Rs.1,38,27,499/-, the stamp duty was paid at a higher jantri rate of Rs.1,93,26,531/-. On the basis of the sale value as per jantri rate, an amount of Rs.21,47,392/- was added in the hands of the assessee on account of long term capital gain derived on the sale of immovable property. The assessment was completed u/s.144 r.w.s. 147 of the Act on 09.12.2019 at total income of Rs.21,67,062/-. Printed from counselvise.com ITA No. 763/Srt/2025 [Kalpesh Balvantbhai Ahir vs. ITO] A.Y. 2012-13 - 3 – 4. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 5. Now, the assessee is in second appeal before us. The following grounds have been taken in this appeal: “1. On the facts and in the circumstances of the case and in law the Id. CIT(Appeals) erred in confirming the addition to the extent of Rs.2062884/- made by the Id. AO by treating the Long Term Capital Gain against sale of land in the assessment for A.Y.2012-13 when the transaction of sale of land in question pertains to A.Y.2011-12 and the same is already considered in the hands of Shri Balvantbhai Ahir, father of the appellant by jurisdictional AO, in the assessment year 2011-12 as the property was owned by Shri Balvantbhai Ahir and his brothers and the Satakath (Agreement to Sale) was executed on 18.2.0211and the possession was also given on the said date. Therefore, the addition of Rs.2147392/- made in the hands of appellant may kindly be deleted. 2. Without prejudice to the above, on the facts and in the circumstances of the case and in law the Id. CIT(Appeals) erred in not accepting the Jantri value on the date of execution of Satakhat for computing capital gain and applied the Jantri rate applicable to FY-2011-12. Therefore, the Jantri value on the date of execution of Satakhat should be adopted for computing capital gain and not that of FY 2011- 12 as adopted by the AO and upheld by the CIT(Appeals) under the deeming provisions of section 50C.” 6. Ms. Poonam Joshi, Ld. AR of the assessee submitted that the AO was not correct in working out the sale consideration on the basis of jantri value of the property at Rs.1,93,26,531/-. She explained that an agreement for the sale of the property was made in the earlier year in February 2011 and 50% of the payment was already received as advance at the time of signing of the agreement. Therefore, the jantri value of the property as on the Printed from counselvise.com ITA No. 763/Srt/2025 [Kalpesh Balvantbhai Ahir vs. ITO] A.Y. 2012-13 - 4 – date of the signing of the agreement should have been considered by the AO in accordance with 1st Proviso to Section 50C of the Act. She further submitted that the AO was not correct in treating the entire proportionate sale consideration as the long term capital gain derived by the assessee, without allowing any set off for the cost of acquisition of the property. 7. Per contra, Shri Ajay Uke, Ld. Sr. DR submitted that since the assessee did not file his original return of income, the AO had rightly disallowed the benefit of the first Proviso to Section 50C of the Act to the assessee. He further submitted that the assessee had all along denied any capital gain arising on the sale of this property and the details in respect of cost of acquisition of property was never brought on record. He, therefore, supported the order of the lower authorities. 8. We have considered the rival submissions. The fact that the assessee was 1/9th co-owner of the property sold vide sale deed dated 24.10.2011 for a consideration of Rs.1,38,27,499/-, is not under dispute. The fact that stamp duty of Rs.9,47,000/- on jantri value of this property at Rs.1,93,26,531/- was paid, is also not under dispute. The AO had adopted 1/9th shares of the jantri value being Rs.21,47,392/- as long term capital gain derived by the assessee in this transaction. The contention of the assessee is that prior to sale deed, an agreement was executed in February 2011 and advance payment was also received at the time of signing of the agreement. Therefore, jantri value of the property for the F.Y. 2010-11 should have been considered by the AO in accordance with 1st Proviso to Section 50C of the Act. The AO had disputed Printed from counselvise.com ITA No. 763/Srt/2025 [Kalpesh Balvantbhai Ahir vs. ITO] A.Y. 2012-13 - 5 – the Satakhat (Agreement) for the reason that the same was not registered. However, the AO had given a finding in the assessment order that as per Satakhat, 50% of the payment was received between February 2011 and March 2011. It is further mentioned in the assessment order that the initial payment of Rs.3,00,000/- was received in cash whereas the remaining payment of Rs.63,99,999/- was received through banking channel. Thus, the advance payment towards sale of the property was not disputed or disbelieved by the AO. When the assessee had already received 50% of the payment at the time of signing of the agreement, the AO was not correct in rejecting the contention of the assessee that jantri value of the property at the time of signing of the agreement could not be considered as the agreement was not registered. The fact remains that the agreement for sale was duly acted upon and advance payment of 50% was received within one month of signing of the agreement. 9. It was held by the Hon’ble Supreme Court in the case of CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC), that the amendment to Section 50C of the Act regarding considering the stamp duty valuation at the time of signing of agreement, was retrospective in nature. Therefore, the AO should have considered the jantri value of the property as on the date of the agreement. Further, the AO was also not correct in treating the entire sale consideration as long term capital gain without allowing any deduction towards the cost acquisition of the property. In the interest of justice, therefore, we deem it proper to set aside the matter to the file of the Jurisdictional AO with Printed from counselvise.com ITA No. 763/Srt/2025 [Kalpesh Balvantbhai Ahir vs. ITO] A.Y. 2012-13 - 6 – a direction to adopt the jantri value of the property on the date of signing of agreement and also allow set off for cost of acquisition of the property, in order to correctly work out the long term capital gain derived by the assessee in this sale transaction. The assessee is also directed to make compliance before the JAO in the course of set aside proceeding and bring on record the evidence for cost of acquisition of the property as well as the jantri value of the property as on date of agreement. If necessary, the AO may also make independent inquiry to find out the jantri value of the property as on date of agreement and also to ascertain the fair market value of the property as on 1st April, 2001, if the same was acquired prior to that date. 10. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced on 22/12/2025 Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 22/12/2025 S. K. SINHA True Copy 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, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. By order/आदेश से, Deputy/Asstt. Registrar/DDO ITAT, Surat Printed from counselvise.com "