TaxTMI 
TaxTMI 
2026 (1) TMI 681
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....the following grounds of appeal: (1) That on facts, and in law, the learned CIT(A) has grievously erred in confirming the addition of Rs. 66,77,877/- made towards computation of LTCG by adopting a different FMV as on 01/04/1981. (2) That on facts, and in law, the learned CIT(A) has grievously erred in partly confirming the addition of Rs. 2,24,53,400/- made by disallowing the claim of deduction u/s 54B of the Act. (3) That on facts, in law, and on evidence on record, the entire addition ought to have been deleted, as prayed for. (4) The appellant craves leave to add, alter, amend any ground of appeal." 3. The brief facts of the case are that the assessee, Shri Pravinsinh Bhawansinh Vaghela, filed his r....
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....eturned income. 4. Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals). The first issue considered by the CIT(Appeals) related to the cost of acquisition as on 01.04.1981. During appellate proceedings, a remand report was called for and the matter was referred to the Departmental Valuation Officer, who valued the land at Rs.3 per sq. meter as on 01.04.1981. However, the CIT(Appeals) held that the rate of Rs.5 per sq. meter adopted by the Assessing Officer was fair and reasonable and, accordingly, confirmed the Assessing Officer's action in adopting the cost of acquisition at that rate. Thus, the ground relating to enhancement of cost of acquisition was dismissed. The second grou....
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....e was eligible for deduction under section 54F of the Act and recomputed the allowable deduction at Rs.33,88,000/- as against Rs.26,74,471/- allowed by the Assessing Officer. This ground of appeal was allowed. The final ground of appeal concerned the addition of Rs.36,00,000/- treated as unexplained gifts. On examination of bank statements, cash book, and flow of funds, the CIT(Appeals) found that the amount represented the assessee's own money routed through the bank accounts of his son and daughter and subsequently withdrawn in cash for making payments towards purchase of agricultural land. Since the source of funds was the sale consideration already subjected to capital gains tax, the CIT(Appeals) held that the addition under section 68 ....
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....ound No. 2, the Counsel submitted that the learned CIT(A), though correctly holding that the original asset transferred by the assessee was agricultural land and that the assessee was eligible for deduction under section 54B in principle, gravely erred in restricting the deduction to Rs.80,62,820/- instead of allowing the full claim of Rs.3,05,16,220/-. It was submitted that the assessee had purchased two agricultural land parcels at village Sorna, Kapadvanj, and the total cost of acquisition, including stamp duty, registration charges, vakil fees, land levelling and fencing expenses, aggregated to Rs.3,05,16,220/-, which was duly claimed as deduction under section 54B of the Act. Attention was drawn to the directions of the CIT(A) calling ....
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....icer or the CIT(A). No further queries were raised by the Assessing Officer on this issue, which clearly indicates acceptance of the factum of incurring such expenses. It was argued that the CIT(A) erred in treating these expenses as improvement cost and denying deduction under section 54B of the Act. In view of the above submissions, the Counsel prayed that the addition sustained on account of long-term capital gain be deleted and the deduction under section 54B be allowed in full, including land levelling and fencing expenses, and the appeal of the assessee be allowed accordingly. 7. In response, the Ld. DR placed reliance on the observations made by the Ld. CIT(Appeals) in their respective orders. 8. We have heard the rival content....
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.... registered sale deeds along with stamp duty and registration charges, as against the assessee's claim of Rs.3,05,16,220/-. The assessee has contended that the entire amount represents the actual cost of acquisition of the new agricultural lands and that the factum of payment of Rs.3,05,16,220/- stands accepted in the remand report. At the same time, we find that the learned CIT(Appeals) has given a reasoned finding while restricting the deduction by interpreting the expression "purchase" occurring in section 54B of the Act and by placing reliance on the registered documents. In the facts of the present case and in view of the findings concurrently recorded by the Assessing Officer and the learned CIT(Appeals), we do not find merit in the a....