Chakravati Chiman Vs ITO (ITAT Surat)
Section 69B Addition Deleted Because Ancestral Land Involved No Purchase Cost; Capital Gains Addition Quashed Because Revenue Failed to Prove Land Was a Capital Asset; ITAT Allows Appeal Because Registered Records Showed Rural Agricultural Land; Section 115BBE Tax Deleted Because No Unexplained Investment Existed in Ancestral Land.
The ITAT Surat allowed the assessee’s appeal for Assessment Year 2014-15 after condoning a delay of 109 days in filing the appeal. The Tribunal accepted the assessee’s explanation that he became aware of the CIT(A)’s order only after receiving a demand notice and found sufficient cause to condone the delay.
The assessee, one of 15 co-owners of ancestral agricultural land situated at Village Koparli, Taluka Pardi, District Valsad, had not filed a return of income. The Assessing Officer reopened the assessment under Section 147 after receiving information that the assessee’s share of sale consideration from the land transaction was Rs.3,61,000. The assessee maintained that the land was rural agricultural land and therefore not a capital asset under Section 2(14) of the Income-tax Act.
The Assessing Officer rejected the claim, treated the land as a capital asset, computed short-term capital gain of Rs.2,94,295, and also added Rs.66,705 as unexplained investment under Section 69B read with Section 115BBE on account of the alleged purchase cost. The CIT(A) upheld both additions, observing that the sale deed, stamp duty and Collector’s conversion order indicated that the land was no longer agricultural land at the time of transfer.
