Rahulkumar Shantilal Shah Vs ITO (ITAT Surat)
The appeal for Assessment Year 2016–17 was filed against an order dated 05.03.2025 passed under section 250 of the Income-tax Act, 1961, confirming additions made by the Assessing Officer. The assessee had originally filed a return declaring total income of ₹10,96,540. During the relevant year, an open plot of land was sold, resulting in Long Term Capital Gain of ₹35,91,084, against which a deduction was claimed.
The Assessing Officer held that the assessee was eligible only for proportionate deduction under section 54F. In the absence of documentary evidence supporting the cost of construction of the residential house, the deduction was restricted to ₹8,83,884, leading to an addition of ₹27,07,200. Penalty proceedings under section 271(1)(c) were also initiated.
The assessee challenged the assessment before the Commissioner of Income Tax (Appeals). However, the appeal was dismissed ex parte, and the assessment order was confirmed without adjudicating the issues on merits.
Before the Income Tax Appellate Tribunal, Surat Bench, the assessee contended that adequate opportunity of hearing had not been granted by the first appellate authority. It was further submitted that additional evidence had now been placed on record, including ledger account statements relating to the purchase of plots and a completion certificate dated 23.11.2017 issued by a Government Approved Valuer. According to the assessee, these documents were crucial for determining the correct quantum of deduction under section 54F and had not been examined earlier.
