Cost of improvement of agricultural land under the Income Tax Act, 1961

IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD “SMC” BENCH
(Conducted Through Virtual Court)

 Before: Shri Amarjit Singh, Accountant Member
 And Ms. Madhumita Roy, Judicial Member

ITA No. 1676 /Ahd/2016
 Assessment Year 2011-12 

Shri Amit Laxmanbhai
Patel, 8, Maruti Hills
Bungalows, Satellite,
Ahmedabad-380015
PAN: ABJPP9877A
(Appellant)

Vs

The DCIT,
Central Circle-1(2),
Ahmedabad
(Respondent)

 Revenue by: Dr. Shyam Prasad, Sr. D.R.
 Assessee by: Shri Parin Shah, A.R.

 Date of hearing : 08-06-2021
 Date of pronouncement : 12-07-2021

ORDER

PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

This assessee’s appeal for A.Y. 2011-12, arises from order of the CIT(A)-11, Ahmedabad dated 04-03-2016, in proceedings under section 143(3) r.w.s. 153A of the Income Tax Act, 1961; in short “the Act”. 

2. The appeal of the assessee pertaining to assessment year 2009-10 to 2012-13 arose from the order of CIT(A) -11 Ahmedabad was adjudicated by the Co-ordinate Bench of the ITAT on 6th December, 2019. Subsequently, the assessee has filed miscellaneous application pointing out in respect of appeal adjudicated vide ITA No. 1676/Ahd/2016 on 6th December, 2019 inadvertently ground nos. 7 & 8 remained to be adjudicated. Therefore vide order dated 1st December, 2020 the order of the ITAT was recalled to adjudicate the ground nos. 7 & 8 of the aforesaid appeal filed by the assessee. The ground nos. 7 and 8 of the appeal of the assessee is reproduced as under:-

“7. Ld. CIT (A) erred in law in and on facts confirming disallowance made by AO of cost of improvement of Rs. 9, 60, 0007- indexed at Rs. 20, 82, 093/- computing long term capital gain on sale of agricultural land at Makarba. Ld. CIT (A) ought to have allowed cost of improvement incurred and rightfully claimed on land purchased in 1995 by the appellant.

8. Ld. CIT (A) erred in law and on facts in not adjudicating contention raised without prejudice to above ground that disallowance in any case deserved to be deleted since against investment of Rs. 1, 43, 09, 000/- in the new agricultural land LTCG claimed was only to extent of Rs. 1,19, 74, 290/- deducting indexed cost of improvement of Rs. 20, 82, 0937-. Thus even if the said improvement cost is added, LTCG would still be Nil.”

3. During the course of appellate proceedings before us, at the outset the ld. counsel has submitted that identical issue on similar fact pertaining to the claim of cost of improvement for computing long term capital gain on sale of agricultural land at Makarba was adjudicated by the Co-ordinate Bench of the ITAT in the case of the co-owner wherein 50% of the cost of improvement of the agricultural land was allowed. The ld. Departmental Representative is fair enough not to controvert this undisputed fact that the identical issue on similar fact has been adjudicated by the Co-ordinate Bench  of the ITAT as referred above. 

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