RAMESHWAR RAMGOPAL GOUD,NASHIK V. INCOME TAX OFFICER, WARD-1(2), NASHIK, NASHIK

ITA 90/PUN/2024

AI Insights

The case involves Rameshwar Ramgopal Goud, who appealed against the order of the CIT(A)/NFAC regarding the taxability of long-term capital gains on the sale of agricultural land. The Assessing Officer had treated the sale proceeds as taxable under long-term capital gains, while the CIT(A) partly allowed the appeal by deleting some additions but confirmed the capital gains tax. The Tribunal found inconsistencies in the CIT(A)'s decision and remanded the case for a fresh decision on the nature of the property sold.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669044 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P. MURKUNDE
• Assessee Lawyers: ROHAN DESPANDE VIRTUAL
• Keywords: Capital asset; Unexplained cash credit; Capital Gains; Principle of natural justice
• Section: 143(3); 142(1); 68; 2(14)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.90/PUN/2024 िनधाŊरण वषŊ / Assessment Year : 2013-14 Rameshwar Ramgopal Goud, SOS Dignostic Center, A-5, Umiya Apartment, Canada Corner, Sharanpur Road, Nashik- 422005. PAN : AAUPG2994D Vs. ITO, Ward-1(2), Nashik. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 20.11.2023 passed by Ld. CIT(A)/NFAC for the assessment year 2013-14. 2. The assessee has raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre ought to have held that the long term asset being immovable property sold by the Appellant was agricultural land and not a capital asset chargeable to tax within the meaning of s. 2(14) of the Income-tax Act, 1961. 2. On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre erred in holding that the Assessee by : Shri Rohan Despande (Virtual) Revenue by : Shri Ramnath P. Murkunde Date of hearing : 21.04.2025 Date of pronouncement : 23.06.2025 ITA No.90/PUN/2024 2 agricultural land sold by the Appellant for a consideration of Rs. 3,00,00,000/- (Rupees three crores) was amenable to long term capital gains. 3. Without prejudice to the foregoing and strictly in the alternative, the Impugned Order passed by the National Faceless Appeal Centre violates the principles of natural justice by failing to consider the submissions filed by the Appellant and failing to provide an opportunity of hearing despite the Appellant seeking the same. 4. The Appellant craves leave to add, alter, modify or delete any of the above Grounds of Appeal.” 3. Facts of the case, in brief, are that the assessee is an individual engaged in the profession of medical consultancy furnished his return of income on 02.08.2013 declaring total income of Rs.1,95,670/-. The case was selected under scrutiny through CASS. Statutory notices u/s 143(2) and 142(1) were issued respectively along with questionnaire. During the course of assessment proceedings, it was found by the Assessing Officer that the assessee has sold agricultural land of Ra.80 lakhs as per the registered sale deed, however it was claimed by the assessee that he has sold the above land for Rs.3 crore. Out of this amount, he claimed to have purchased two flats of Rs.1,24,00,000/-. The assessee also claimed that the land being an agricultural land and therefore no capital gain arises. The Assessing Officer completed the assessment u/s 143(3) of the IT Act by determining total income at Rs.2,38,74,050/- as against the income returned by the ITA No.90/PUN/2024 3 assessee at Rs.1,95,670/-. The above assessed income includes long term capital gain of Rs.16,78,378/- and unexplained cash credit of Rs.2,20,00,000/- u/s 68 of the IT Act. 4. After considering the reply of the assessee, Ld. CIT(A)/NFAC partly allowed the appeal of the assessee and directed the Assessing Officer to delete the addition of Rs.2,20,00,000/- regarding unexplained cash credit u/s 68 of the IT Act and further directed to treat the above amount of Rs.2,20,00,000/- as received against the sale of agricultural land and accordingly directed to calculate capital gain on the sale value of Rs.3 crore. However, at the same time, he confirmed the addition of Rs.16,78,378/- under the head long term capital gain. It is this order against which the assessee is in appeal before this Tribunal. 5. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is contradictory since at one hand he directs the Assessing Officer to recalculate the long term capital gain on the sale of impugned agricultural land and at the same time confirms the addition of Rs.16,78,378/- under the head long term capital gain on sale of impugned agricultural land. Ld. AR submitted before us that the ITA No.90/PUN/2024 4 impugned immovable property sold, was an agricultural land, therefore no capital gain arises on it, since it does not fall under the definition of capital asset as provided u/s 2(14) of the IT Act. Ld. AR further submitted before us that Ld. CIT(A)/NFAC ought to have decided that the impugned land was an agricultural land and was not falling in the definition of capital asset as provided under the Income Tax Act. Ld. AR also submitted before the bench that the agricultural land was cultivated by the assessee since long and agricultural income was regularly shown in the income tax return of the assessee, the 7/12 extracts also supports the statement of the assessee that the concerned land is an agricultural land and it was not converted into a non-agricultural land. In support of its contentions, Ld.AR relied on various judgements of Hon’ble Supreme Court as well as of Hon’ble High Courts and also of Co- ordinate Bench of this Tribunal wherein it was held that if the Revenue records recognised the impugned land to be agricultural land and the cultivation of the land is also proved the gain resulting in the hands of the assessee upon the sale thereof would be exempted and not chargeable to tax as capital gains. Accordingly, Ld. AR requested to delete the addition on account of capital gain confirmed by Ld. CIT(A)/NFAC. ITA No.90/PUN/2024 5 6. Ld. DR appearing from the side of the Revenue relied on the order passed by Ld. CIT(A)/NFAC and requested to confirm the same. 7. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book and case laws furnished and relied on by the assessee. In this regard, we find that it is the sole grievance of the assessee that Ld. CIT(A)/NFAC erred in not deciding the issue that the impugned land sold is a capital asset or not a capital asset. We find that it was the contention of Ld. AR of the assessee that the impugned land sold, was an agricultural land, duly supported by Revenue records wherein the same land was recognised as being cultivated agricultural land, secondly the assessee is continuously showing agricultural income in his returns prior to sale of the same land and the assessee also relied on various judgements of the decisions of Hon’ble Courts and Co-ordinate Bench of this Tribunal wherein it has been held that when in Revenue records the land is being recognised as agricultural land the gain if any arising on the sale of the above land cannot give rise to taxable capital gain in the hands of the assessee. We also find that Ld. CIT(A)/NFAC at one hand directed the Assessing Officer to recalculate the long term capital ITA No.90/PUN/2024 6 gain by treating the receipt of Rs.3 crore as received against the sale of the impugned land and at the same time confirmed the long term capital gain of Rs.16,78,378/- calculated by the Assessing Officer in the hands of the assessee. Accordingly, we find force in the arguments of Ld. counsel of the assessee that Ld. CIT(A)/NFAC has erred in not deciding the issue raised by the assessee and therefore we deem it appropriate to remand the matter back to the file of Ld. CIT(A)/NFAC to decide the issue raised before us through ground no.1- that whether the long term asset being immovable property sold by the assessee was agricultural land and not a capital asset chargeable to tax within the meaning of section 2(14) of the IT Act, afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant documents/evidences/ explanations and case laws in support of its contentions without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. Thus, the ground no.1 raised by the assessee is partly allowed. ITA No.90/PUN/2024 7 8. The ground no.2 is consequential & ground no.2 & 3 are general in nature, hence not adjudicated & dismissed as such. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 23rd day of June, 2025. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 23rd June, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "