Nikhil Anilbhai Dave Vs ITO (ITAT Ahmedabad)
Sale Receipts Are Not All Profit: ITAT Deletes ₹9 Lakh Addition After Allowing Purchase Cost
Gross Receipts Cannot Be Taxed by Ignoring Documented Cost
The Ahmedabad Bench of the Income Tax Appellate Tribunal deleted an addition of ₹9,00,000 arising from a land transaction after finding that the CIT(A) had compared the assessee’s gross receipts with the profit disclosed without giving credit for the corresponding acquisition cost. The assessee had received ₹29,30,000, including TDS of ₹29,300, while ₹9,00,000 represented his documented share of purchase consideration. After deducting that cost, the net income was ₹20,30,000, which had already been accounted for and offered by the assessee. viewOrder-22-1
Reassessment and Surviving ₹9 Lakh Addition
The assessee, an individual deriving income from agricultural activities, commission and brokerage and profit on sale of land, originally filed his return on 25 August 2019 declaring income of ₹9,29,290. Following a notice under Section 148 dated 20 April 2023, he filed a return declaring ₹12,29,290 after withdrawing a ₹3,00,000 deduction claimed under Section 80GGC. Assessment under Section 147 was completed on 13 March 2025 at ₹41,29,990, including an addition of ₹29,00,700 as short-term capital gain on sale of land. viewOrder-22-1
The CIT(A) partly allowed the appeal and deleted ₹20,00,700, leaving ₹9,00,000 in dispute before the Tribunal. viewOrder-22-1
