Vithalrao Ranganathrao Ambarwadikar Vs ACIT (ITAT Pune)
Summary: The appeal before the Pune Bench of the Income Tax Appellate Tribunal concerned two issues for AY 2013-14: long-term capital gain of Rs.9,92,38,664/- arising from sale of land and disallowance of interest expenditure. The assessee, an individual engaged in the business of dealership of HPCL Petrol Pump, had declared total income of Rs.15,98,709/- in the return filed on 30.09.2013. The assessment was completed u/s. 143(3) of the Income-tax Act, 1961 on 31.03.2016, and the CIT(A) passed the appellate order u/s. 250 on 14.07.2025.
On the capital-gain issue, the assessee contended that the land sold was agricultural land and therefore was not a capital asset. It was also submitted that the Assessing Officer had relied on a Municipal Corporation certificate dated 06.10.2023 stating that the land was within 8 KM, without supplying its copy to the assessee. The assessee further submitted that no agricultural activities had been carried on since the land was purchased and stated that the claim under section 54B was therefore not valid.
The Revenue submitted that the land bearing City Survey No. 18348/2/A, admeasuring 1350.25 Sq. Mtr., situated at Hamalwadi, Near Railway Station, Aurangabad, was urban land. The assessee had purchased it from Maharashtra Housing and Area Development Authority, which, according to the Revenue, did not sell agricultural land. The Revenue relied on the sale deed and the proximity of the land to the Aurangabad Railway Station and contended that the land was within 8 KM of Aurangabad Municipal Corporation. On this basis, it argued that the assessee’s claim that the land was agricultural was factually incorrect.
