Sonu Grover Vs ITO (ITAT Delhi)
The Delhi ITAT partly allowed the assessee’s appeal against the order of the Commissioner of Income Tax (Appeals)-NFAC for Assessment Year 2022-23 arising from an assessment made under Section 143(3) read with Section 144B of the Income Tax Act, 1961.
The assessee, an individual, filed the return declaring total income of ₹14,00,780/-. The case was selected for complete scrutiny under CASS due to risk parameters relating to large agricultural income. During the relevant financial year, the assessee sold a residential flat in Dwarka, Delhi for ₹1,40,00,000 and agricultural land situated at Village Khori Jamalpur, Faridabad for ₹1,25,00,000. In the return, the assessee treated the gain arising from sale of agricultural land as exempt under Section 10(1), contending that it was rural agricultural land not falling within the definition of “capital asset” under Section 2(14). The assessee also claimed exemption under Section 54 in respect of capital gains arising from the sale of the residential flat, stating that the capital gains had been deposited in the Capital Gains Accounts Scheme (CGAS).
During assessment, the Assessing Officer held that the agricultural land was situated within 8 kilometres of the jurisdiction of the Faridabad Municipal Corporation and therefore constituted a capital asset under Section 2(14). The Assessing Officer also denied the exemption under Section 54 on the ground that sufficient evidence regarding utilisation of the sale proceeds or a valid deposit under the Capital Gains Accounts Scheme had not been furnished. Consequently, the assessment was completed by determining the total income at ₹1,19,59,957.
