Remand for fresh adjudication due to non-consideration of sale agreement and additional evidence on capital gains bifurcation.

आदेश/ORDER

PER MAKARAND VASANT MAHADEOKAR, AM:

This appeal is filed by the assessee against the order passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre(NFAC), Delhi [hereinafter referred to as “CIT(A)”] under section 250 of the Income-tax Act, 1961[hereinafter referred to as “the Act”], dated 26.09.2025, for the Assessment Year 2022–23, arising out of the assessment order passed by the Assessing Officer under section 143(3) read with section 144B of the Act, dated 27.03.2024.

Facts of the Case

2. For the Assessment Year 2022–23, the assessee filed its original return of income on 30.09.2022, declaring total income at Nil. Subsequently, the assessee filed a revised return of income on 30.12.2022.The case was selected for scrutiny under the Computer Aided Scrutiny Selection (CASS) on the basis of various risk parameters, inter alia, relating to addition of assets with high rate of depreciation, high liabilities as compared to low income, claim of large refund, and significant variation in stock figures.

3. During the year under consideration, the assessee transferred assets situated at Surat Special Economic Zone, namely Plot Nos. 268, 269, 270 and 271. According to the records, the assessee was holding leasehold rights in the said plots, which were originally obtained on sub-lease basis from Diamond and Gems Development Corporation Limited (DGDC), Surat. For transfer of the facility, the assessee entered into a Memorandum of Understanding with M/s Qontrac Prints Pvt. Ltd. for transfer of the entire facility, comprising leasehold land rights, factory building and other assets.

4. In the original return of income filed on 30.09.2022, the assessee disclosed the transaction under the head “Long Term Capital Gain on sale of land or building” and declared aggregate sale consideration of Rs. 27,77,52,161/-, against indexed cost of acquisition of Rs. 46,66,14,214/-, resulting in a long-term capital loss of Rs. 18,88,62,053/-.

5. In the revised return of income filed on 30.12.2022, the assessee reclassified the transaction under “Capital Gain on assets not covered under clauses B1 to B8 of Schedule CG” and declared indexed cost of acquisition at Rs. 49,73,72,283/-, sale consideration at Rs. 27,77,52,161/-, and long-term capital loss of Rs. 21,96,20,122/-.

6. During the course of assessment proceedings, the Assessing Officer examined the claim of long-term capital loss on transfer of leasehold rights. The assessee was specifically required to furnish complete details and documentary evidence in support of the capital loss claimed.

7. In response, the assessee submitted that while filing the revised return of income, the cost of acquisition of leasehold rights had been erroneously taken on the basis of Ind AS 116 valuation by adopting fair value as cost of acquisition. The assessee furnished a rectified computation of income and admitted that excess depreciation of Rs. 1,90,24,156/- had been claimed earlier. The assessee further stated that the correct long- term capital gain on sale of leasehold rights was Rs. 4,57,36,573/-, as against the capital loss declared in the revised return, thereby admitting understatement of income.

8. The Assessing Officer, however, noted that in the said reply, the assessee had shown sale consideration of leasehold rights at Rs. 11,76,46,508/-, whereas in both the original return as well as the revised return of income, the sale consideration was consistently disclosed at Rs. 27,77,52,161/-. The assessee was