M.S. STOCK INVESTMENT PVT LTD,DELHI V. ITO WARD-16(1), DELHI

ITA 2330/DEL/2025

AI Insights

The case involves M.S. Stock Investment P. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) confirming the addition of Rs. 1,47,50,445 as Long Term Capital Gain. The addition was initially made by the Assessing Officer, who classified the land sold by the assessee as non-agricultural, thus taxable under the Income Tax Act, 1961. The assessee argued that the land was agricultural and provided various documents to support this claim, including a remand report and certificates from local authorities. However, both the Assessing Officer and the CIT(A) dismissed the appeal, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838181 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 09-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Assessee Lawyers: K. SAMPATH
• Keywords: Set aside; Capital asset
• Section: 271(1)(c); 2(14)

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA No.2330/Del/2025, A.Y. 2015-16 M.S. Stock Investment P. Ltd. 2785, First Floor, Lothian Road, Kashmir Gate New Delhi 110006 PAN: AAACM8985B Vs. Income Tax Officer, Ward-16(1), Delhi (Appellant) (Respondent) Appellant by Sh. K. Sampath, Advocate Sh. V. Rajakumar, Advocate Respondent by Sh. Ajay Kumar Arora, Sr. DR Date of Hearing 15/12/2025 Date of Pronouncement /02/2026 O R D E R PER RAJ KUMAR CHAUHAN , J.M. : 1. The appeal is directed against the order dated 17.03.2025 of Learned Commissioner of Income Tax (Appeals)/ NFAC, Delhi [hereinafter Printed from counselvise.com ITA No. 2330/Del/2025 M.S.Stock Investment P. Ltd. 2 referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] wherein the addition on account of Long Term Capital Gain amounting to Rs. 1,47,50,445/- made by the Assessing Officer (AO), holding that the land sold by the assessee was not agricultural land, was confirmed. 2. Aggrieved by the impugned order, the Assessee is in appeal before us and has raised following ground of appeal: “On the facts and in the circumstances of the case and in law the Ld. NFAC/CIT(A) erred in – 1. confirming the addition made by the Assessing Officer in a sum of Rs. 1,47,50,445/- on account of gain sale of agricultural land treating the land in question as non-agricultural land u/s 2(14)(iii) of the Act; 2. initiating proceeding u/s 271(1)(c) of the Act; The above actions being arbitrary, fallacious, unwarranted and illegal must be quashed with directions for appropriate relief.” 3. We have heard the Ld. AR for the assessee who has argued that various documents which formed part of the paper book were submitted before the ld. AO and even the remand report dated 06.06.2019 along with annexures has not been considered by the AO who has wrongly interpreted the word Zarai (Urdu) which is used in Printed from counselvise.com ITA No. 2330/Del/2025 M.S.Stock Investment P. Ltd. 3 place of Krishi (Hindi). It is further, argued that the Khasra Girdawari maintained by the Halka Patwari which has shown that the harvesting of the crop was recorded in the record of the patwari the wheat crop was shown as recorded since 2013 for both the seasons i.e. Saawni, and Haari Fasal. 4. Ld. AR has referred to Page No. 11 of the paper book which is the remand report whereas the report of the Sub-Registrar, Rai which is placed as page 12 of the paper book categorically states that the questioned land was outside Municipal Limits at the time of registration of sale deed, and the same is stated in endorsement of Sale Deed No. 1999 and Sale Deed No. 5587. The Ld. AR further referred page no. 15 of the paper book which is a certificate issued by Secretary, Municipal Committee, Kundli which also shows that the land in question was falling within the area of Gram Panchayat, Kundli on 13.08.2014 when the land was sold. It is therefore argued that the ld. CIT(A) in the impugned order has failed to consider all these things while dismissing the appeal, hence, the Ld. AR prayed for allowing the appeal or if the Jurisdictional Tribunal deems fit the matter may be restored to the file of the Ld. AO for considering all the Printed from counselvise.com ITA No. 2330/Del/2025 M.S.Stock Investment P. Ltd. 4 documentary evidence already placed before the Ld. AO which shall establish that the land is agricultural land. 5. The Ld. DR on the other hand supported the judgment of the lower authorities stating that the assessee could not satisfy the requirement of Section 2(14)(iii) of the Act for proving that the land sold was agricultural land. 6. We have considered the rival submission and examined the record. On perusal of the assessment order, it is noticed that the submission made before the Ld. AO and the documents filed has not been considered and the Ld. AO simply concluded that the assessee could show only that it has sold the land but not the agricultural land because the Patwari of the village Kundli has confirmed that the major part of the land is not agricultural land. Similarly, in the impugned order, Ld. CIT(A) has dismissed the appeal on the ground that the assessee has not been able to establish that the land under consideration was beyond 8 kilometers distance from the municipal Limits which is an essential condition for treating the land as rural agricultural land to qualify as not a capital asset u/s 2(14) (iii) of the Act. Printed from counselvise.com ITA No. 2330/Del/2025 M.S.Stock Investment P. Ltd. 5 7. We have noticed that the observation of the Ld. AO as well as Ld. CIT(A), does not conform to the material brought on record during the assessment proceedings and both the Ld. Lower authorities seems to have ignored the documentary evidence produced by the Ld. AO as have been submitted before us by way of paper book especially the documents placed at page No. 11, 12 and 15 of the paper book. However, the assessee has not submitted the sale deed which is also the relevant document for considering the question regarding the land in question being agricultural land as has been claimed by the assessee/ appellant. In these circumstances, we deem it expedient to restore the matter to the file of the Ld. AO for considering the documentary evidence already placed on record, during the assessment proceeding, with the liberty to the assessee to satisfy the Ld. AO about the land being agricultural land by submitting any further necessary document if required. For these reasons, the impugned order is not sustainable, and accordingly set aside. The matter is restored to the file of the Ld. AO who shall follow the directions given by us and decide the matter afresh after affording opportunity of hearing. The appellant shall submit the necessary Printed from counselvise.com ITA No. 2330/Del/2025 M.S.Stock Investment P. Ltd. 6 information and documents before the Ld. AO within the period of 60 days from this order. 8. In the result, the appeal of the assessee is allowed in above terms for statistical purposes. Order pronounced in open Court on 18th February, 2025 Sd/- Sd/- (M. BALAGANESH) (RAJ KUMAR CHAUHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:18/02/2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT/PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "