Sima Ravisingh Kachhawah Vs ITO (ITAT Nagpur)
The assessee filed an appeal before the ITAT Nagpur challenging the order dated 29 August 2024 passed by the CIT(A)/NFAC under sections 147 read with 144 and 250 of the Income Tax Act. The assessee raised multiple grounds contesting the legality and validity of the assessment and appellate orders, stating that the authorities failed to consider the facts, submissions, and documents on record and confirmed additions without proper adjudication. The grounds also challenged the reopening of assessment, the treatment of real estate transactions as long-term capital gain under section 50C instead of business income under section 44AD, and the disallowance of deduction under section 80C. The assessee claimed that the entire transaction value had already been declared as turnover in the return of income filed in response to the notice issued under section 148.
There was a delay of 244 days in filing the appeal before the Tribunal. The assessee filed an affidavit explaining the reasons for delay. As the Department had no objection and the cause was considered reasonable, the Tribunal condoned the delay and admitted the appeal.
The brief facts indicate that the assessee filed the return of income for assessment year 2018–19 declaring ₹4,10,160. The Assessing Officer received information through the Insight Portal categorised as High-Risk CRIU/VRU, indicating that the assessee sold an immovable property during financial year 2017–18 for ₹6 lakh while the stamp duty valuation was ₹23 lakh. Considering this information, the Assessing Officer formed a belief that income had escaped assessment and issued a notice under section 148. The assessee responded that the land had been acquired earlier, developed into plots over time, and that advances were received in earlier years. The sale was registered during the year based on the actual consideration received. The assessee contended that it was engaged in a plotting business, consistently showing income under section 44AD as business income. The Assessing Officer, however, treated the transaction as a transfer of a capital asset and computed long-term capital gain using the stamp duty valuation. The AO made an addition of ₹21,24,257 under section 50C, disallowed deduction of ₹75,600 under section 80C, and assessed total income at ₹26,04,260 in the order passed under sections 147, 144, and 144B.
