Dhan Bahadur Gagan Chand Vs CIT (ITAT Mumbai)
In the case of Dhan Bahadur Gagan Chand vs. Commissioner of Income Tax (CIT), the appellant challenged the order dated August 2, 2023, passed by the Commissioner of Income Tax (Appeals) [CIT(A)] under Section 250 of the Income Tax Act, 1961. The CIT(A) confirmed the addition of ₹1,45,60,000/- as capital gain to the appellant’s total income, which was originally added by the Assessing Officer (AO) in the assessment order dated December 28, 2018, for the assessment year (AY) 2016-17.
Background
The appellant filed his return of income for AY 2016-17 on July 29, 2016, declaring a total income of ₹26,33,430/-. The case was selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS). During the scrutiny, the appellant submitted that he had entered into a development agreement with M/s. Indo Asian Buildcon Pvt. Ltd. on March 23, 2016, for the development and construction on a land parcel (Gut No. 274) at Dhakne, which he had purchased on November 29, 2013, for ₹20,00,000/- (the AO recorded the purchase price as ₹21,00,000/-).
The AO found that the government valuation/stamp duty valuation of the land was ₹1,66,60,000/-, with a stamp duty of ₹5,00,000/- and a registration fee of ₹30,000/- paid by the appellant. Consequently, the AO added a short-term capital gain of ₹1,45,60,000/- to the appellant’s total income for AY 2016-17. The appellant appealed against this addition to the CIT(A), who upheld the AO’s order. The appellant then brought the matter before the Income Tax Appellate Tribunal (ITAT) Mumbai.
