IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”, DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESDIENT (THIRD MEMBER), SHRI VIMAL KUMAR, JUDICIAL MEMBER &

SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER Assessment Year: 2016-17 DCIT, Vs. Bhupinder Singh Bhalla, Circle 52(1), B-37, Kailash Colony, New Delhi New Delhi PIN: 1100 48 PAN No. AEIPB8618M (Appellant) (Respondent)

Appellant by: Shri Jitender Singh, CIT-DR Respondent by: Dr Rakesh Gupta, Adv. (Virtual) S/Shri Somil Aggarwal, (Virtual) & Deepesh Garg, A dvocates Date of Hearing: 13.02.2026 Date of pronouncement: 13.02.2026

O R D E R

PER VIMAL KUMAR, JUDICIAL MEMBER:

The appeal filed by the Revenue is against order dated 25.08.2023 of Learned Commissioner of Income-Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi (hereafter referred to as “Ld. CIT(A)”) under Section 250 of the Income-Tax Act,1961 (hereinafter referred to as “the Act”) arising out of assessment order dated 30.12.2018 under Section 143(3) of the Act by the Assistant Commissioner of Income Tax, Circle 53(1), Delhi (hereinafter referred to as “the AO”) for assessment year 2016-17.

2. Brief facts of case are that assessee having income from business and profession, house property, capital gains and other sources, filed return of income on 16.10.2016 declaring income of Rs.21,63,53,810. The return was processed under Section 143(1) of the Act. The case was selected for scrutiny assessment through CASS for limited scrutiny based on following reasons:

1. “Substantial increase in capital in a year”.

2. “Large deduction claimed u/s. 54B, 54C, 54D, 54G, 54GA".

3. “Large long term capital gain”.

3. Notice under Section 143(2) of the Act dated 22.06.2016 was served on assessee. Subsequently, notices under Section 142(1) dated 10.07.2018 and 06.09.2018 were served on assessee. In response to notices under Section 143(2) and 142(1) of the Act, Learned Authorised Representative of assessee made submissions through e-assessment module. On completion of assessment proceedings, Ld. AO vide order dated 30.12.2018 made addition of Rs.41,71,72,652/-. Against order dated 30.12.2018 of Ld. AO, assessee filed appeal before Ld. CIT(A) which was allowed vide order dated 25.08.2023.

4. Being aggrieved, the appellant/revenue preferred present appeal.

5. Learned Authorized Representative for the Revenue submitted that Ld.CIT(A) failed to consider that the addition of Rs.41,71,72,652/- on account of deduction under Section 54B of Rs.78,54,42,491/- as claimed by assessee minus unutilized amount of Rs.36,82,69.839/- in capital gain account on which tax is paid during assessment year 2018-19 claimed by the assessee on purchase of land does not fall within the ambit of section 54B of the Act ignoring the basic facts of the case. Ld. CIT(A) wrongly held that no evidence of film shooting etc. by Ld. AO was collected. The Inspector had visited the place without notice to the assessee.

6. Learned Authorized Representative for the assessee stated that the order passed by the Ld. AO is bad in law violating the provisions of section 142(3) of the Act and put his reliance on the following points:

“Ld. CIT(A)’s order, Inspector’s report and not confronted with the assessee violation of section 142(3);

ITAT orders vide ITA No.3523/Del/2013 dated 13.12.2013 in the case of M K Chabbra vs. ITO No.3523/Del/2013 and ITA No. 1026/Del/2016 dated 06.02.2018 in the case of Kamla Devi Sharma v/s ITO Jaipur.

6.1 Reliance was placed on ITAT’s order in the case of ITO v/s Babita Gupta ITA 5313/Del/2019 as under:

“In this case assessee purchased agricultural land against GPA and agreement to sell such agreements are not allowed as per judgment of SC of Suraj Lamp and Industries. GPA and agreement to sell were allowable by CIT(A) and ITAT delhi for exemption u/s 54B in this case since the requirement of the said section is complied. The allow ability of section 54B has been accepted against GPA and agreement to sell but in my case the assessee has all the documents much mor