Sanjay Bajpai Vs ACIT (ITAT Raipur)
The ITAT Raipur considered the assessee’s appeal for AY 2012-13 against the CIT(A), NFAC order dated 07.11.2025 arising from an assessment under Section 143(3) dated 25.03.2015. The assessee was engaged in purchasing large tracts of land, developing them into saleable plots and selling them. The appeal challenged additions and disallowances concerning closing stock, agricultural income, Section 14A, Section 36(1)(iii), development and project expenses, indirect expenses and depreciation under Section 38(2). Regarding the closing stock, the Assessing Officer had added Rs.2,12,80,946/- by including 3,05,583 sq. ft. of land used for roads and gardens in the valuation. The assessee submitted that such land was not saleable under the approved layout and that the same accounting method had been consistently followed. The Tribunal noted that land used for roads and gardens could not be sold to purchasers and, under Section 145A, inventory is valued at the lower of actual cost or net realisable value. It held that the net realisable value of that portion was Nil and directed deletion of the Rs.2,12,80,946/- addition.
Regarding the Rs.3,00,000/- agricultural income addition, the assessee claimed that agricultural land had been leased to farmers and the rent received constituted agricultural income. However, the Tribunal noted that no specific evidence had been filed before either the Assessing Officer or CIT(A) and confirmed the addition.
