Can gross sale consideration be the capital gain in the hands of the assessee?

IN THE INCOME TAX APPELLATE TRIBUNAL
“SMC” BENCH, AHMEDABAD
(Conducted through Virtual Court)
BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT
AND
SHRI WASEEM AHMED, ACCOUNTANT MEMBER
ITA No.766/Ahd/2019

Asstt.Year : 2014-15

Rekhaben Jayeshkumar Patel
28, Shyam Villa Bunglow
B/h.Shatyam Complex
Science City Road
Solagam
Ahmedabad 380 060.
PAN : BIBPP 3410 P

vs

ITO, Ward-4(2)(4)
Ahmedabad.

Assessee by : Shri Chetan Agarwal, AR
Revenue by : Shri Kamlesh Makwana, Sr.DR

Date of Hearing : 11/11/2021

Date of Hearing : 11/11/2021

O R D E R

Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-4, Ahmedabad dated 21.1.2019 passed for the Asstt.Year 2014-15.

2. Brief facts of the case are that the assessee has filed her return of income on 5.12.2014 declaring total income of Rs.1,94,220/-. During the course of assessment proceedings, it came to notice of the AO that the assessee has sold two immovable properties valued at Rs.2,33,00,000/- and Rs.61,31,318/- on 7.10.2013. The assessee has 1/6th and 1/10th share in both proprieties. The AO has confronted the
assessee as to why she has not disclosed capital gain resulted to her on sale of these properties. After hearing the assessee, the ld.AO has made addition of Rs.38,83,332/- with regard to the first property only where the assessee has 1/6th share. Appeal to the CIT(A) did not bring any relief to the assessee.

3. In the present case, the assessee has pointed out that it was an agriculture land though fallen within eight kilometers of municipality. In other words, this is an urban agriculture ancestral land, and therefore, valuation as on 1.4.1984 is required to be made for the purpose of ascertaining the cost of acquisition, and thereof, benefit of indexation is to be given. After this exercise, if any loss or gain resulted to the assessee is to be computed. We find merit in this contention of the ld.counsel for the assessee, and accordingly we set aside both orders of the Revenue authorities. We remit this
issue to the file of the ld.AO, who shall ascertain status of the land in the hands of the assessee; that is, whether it is an ancestral land or not; when the assessee has inherited it; what was cost of acquisition in the hands of the ancestors i.e. prior to succession happened in favour of the assessee. He has to find out cost of acquisition and make indexation thereafter. After this exercise, the ld.AO will compute long term capital gain or loss if any in the hands of the assessee. With the above observation, this issue is relegated to file of the AO for adjudication.

4. In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 1st December, 2021 at Ahmedabad.

Please find attached the enclosed file for the full judgement.