Appellant: Kamlesh, Gurgaon – PAN: CQEPK1545E
Respondent: ITO, Ward-2(3), Gurgaon
For the Assessee: Shri M.R. Sahu, CA
For the Department: Shri Anuj Garg, Sr. DR
The appellant, Kamlesh from Gurgaon, filed this appeal against the order dated March 6, 2020, by the Commissioner of Income Tax (Appeals)-2, Gurgaon, which pertained to the assessment year 2011-12. The appeal is primarily centered around the claim that funds received from the sale of agricultural land in a rural area should not be taxed, according to provisions under the IT Act 1961.
The appellant has raised several grounds stating that the proceeds from the sale of agricultural land are exempt from taxation under the IT Act, asserting that such transactions should not contribute to taxable income.
Initially, the Assessing Officer (AO) discovered that the appellant had made a substantial investment in immovable property during the financial year 2010-11 which was not declared in any tax return for AY 2011-12. Following a notice under section 148 of the Income Tax Act, the appellant’s representative submitted evidence including a sale agreement and transaction details, suggesting the funds were derived from the sale of agricultural land.
However, due to the absence of the original sale deed during the assessment proceedings and non-compliance with further requests for information, the AO concluded the investment was from undisclosed sources and assessed the income significantly higher than declared. This led to an appeal to the CIT(A), which was dismissed due to lack of representation.
The case was brought before the ITAT, where the appellant’s lawyer argued that the sale of agricultural land was exempt from tax and that procedural lapses due to the pandemic and other factors hindered a proper response during earlier proceedings. The Tribunal acknowledged these issues and decided to remand the case back to the CIT(A) for a thorough review, allowing the appellant to submit additional evidence.
The Tribunal set aside the previous order of the CIT(A) and allowed the appeal for statistical purposes, directing a fresh examination of the case with instructions for the CIT(A) to consider all new evidence and conduct a full hearing.
This case highlights the complexities involved in tax exemption claims for agricultural land sales and the importance of complying with procedural requirements during tax assessments. It also underscores the appellate process’s role in ensuring that justice is served by reconsidering initial findings when substantial new evidence is presented.
The order was pronounced in the open court immediately following the conclusion of the hearing on July 6, 2022, by both the Accountant and Judicial Members of the bench.
Kamlesh vs. ITO Ward 2(3), Gurgaon (2011-12): Appeal for Tax Exemption on Sale of Agricultural Land
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