ITO Vs Jennis Pankajbhai Shah (ITAT Surat)
The ITAT Surat adjudicated three appeals for AY 2014-15 arising from assessment and subsequent appellate and rectification proceedings concerning an addition of Rs. 20,12,245/- relating to purchase of immovable property. The assessee had declared total income of Rs. 1,98,220/- and agricultural income of Rs. 6,00,627/-. During scrutiny, the AO noted that the assessee and another co-owner purchased property at Moje Nani Bhatlav, Bardoli, District Surat, for Rs. 21,00,000/-, while the Stamp Authority valued it at Rs. 61,24,490/-. The AO proposed taxing 50% of the difference, amounting to Rs. 20,12,245/-, under section 56(2)(viib) and ultimately made the addition while completing assessment under section 143(3) on 09.12.2016. The assessee contended that the property was rural agricultural land excluded from the definition of “capital asset” under section 2(14)(iii).
The CIT(A), by order dated 16.08.2023 under section 250, proceeded on incorrect factual premises, treating the appeal as arising from a section 154 rectification order instead of the section 143(3) assessment order. The CIT(A) also adjudicated the maintainability of an alleged section 154 application before the AO, although the assessee stated that no such application had been filed. The assessee subsequently approached the CIT(A) under section 154, but the application was rejected, with the CIT(A) stating that the ITBA portal did not permit withdrawal and restoration of the earlier appellate order and directing the parties to approach the ITAT.
