Pravinsinh Bhawansinh Vaghela Vs ITO (ITAT Ahmedabad)
54B Relief Partly Upheld: Ahmedabad ITAT Allows Land-Levelling & Fencing Cost, valuation is a matter of estimation-Confirms FMV @ ₹5/sq.m as on 1-4-1981
Ahmedabad ITAT, ‘A’ Bench, in Pravinsinh Bhawansinh Vaghela Vs ITO (ITA No.829/Ahd/2019; AY 2012-13; order dated 18-12-2025), partly allowed the assessee’s appeal in a capital-gains dispute arising from sale of land.
On FMV as on 01-04-1981, the Tribunal upheld the CIT(A)’s adoption of ₹5 per sq. meter, noting that the AO’s DVO had estimated ₹3 per sq. meter and valuation is a matter of estimation; absent perversity, no interference was warranted. The assessee’s higher claim of ₹80 per sq. meter was therefore rejected.
On section 54B, the Tribunal agreed with the CIT(A) that the original asset was agricultural land and the assessee was eligible for deduction in principle, but restricted the main deduction to ₹80.62 lakh (registered purchase price plus stamp duty/registration), declining to allow the entire claimed cost of ₹3.05 crore merely on the basis of unregistered components.
However, the Tribunal allowed a specific relief by holding that land-levelling and fencing expenses of ₹27.54 lakh are integral to acquisition of agricultural land and qualify for deduction u/s 54B, following Prathur Tal v. ITO (Jaipur ITAT).
Accordingly, the appeal was partly allowed—FMV confirmation sustained, principal 54B restriction upheld, but levelling & fencing costs allowed as part of eligible investment.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), Gandhinagar (in short “Ld. CIT(A)”), Ahmedabad vide order dated 08.03.2019 passed for A.Y. 2012-13.
