IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No.356/RJT/2024 Assessment Year: (2016-17)

(Hybrid Hearing)

Shri Denish Khodidas Patel Vs. The Pr.CIT-1 Raag Mahavir Society, Street Rajkot No.2, Nirmala Convent School Road, Rajkot – 360005, Gujarat èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AGIPP1382Q (Assessee) (Respondent)

Assessee by Shri Mehul Ranpura, AR Respondent by Shri Sanjay Punglia, CIT-DR Date of Hearing 17/12/2024 Date of Pronouncement 06/03/2025 आदेश / O R D E R PER DR. A. L. SAINI, AM:

By way of this appeal, the assessee has challenged the correctness of the order passed by the Ld. Principal Commissioner of Income Tax, Rajkot-1 [in short ‘Ld. PCIT’], under Section263 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), vide, order dated 26.03.2024.

2. The grievances raised by the assessee are as follows:

“1. The grounds of appeal mentioned hereunder are without prejudice to one another.

2. The order passed by PR. Commissioner of Income-tax, Rajkot-1 [hereinafter referred as to the “PCIT”] is bad in law, invalid and requires to be quashed, the same may kindly be quashed.

3. The LD. PCIT erred in law and on facts in arriving at a conclusion to the effect that the assessment order passed by the assessing officer was erroneous as well as prejudicial to the interest of the revenue on the ground that the assessing officer has not applied his mind and has not conducted any inquiry and not applied the correct position of law in respect applicability of section 50C of the Act on sale of plot at Mavdi. The order passed by PCIT required to b quashed and may kindly be quashed.

4. The Learned Pr. CIT erred on facts as also in law in setting aside the assessment order dated 24.03.2022 passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961, directing the assessing officer to pass a fresh assessment order. The order passed u/s. 263 of the Act by the learned Pr. CIT is totally unjustified on facts as also in law therefore the same may kindly be quashed.

5. Your Honor’s appellant craves leave to add, to amend, alter or withdraw any or more grounds of appeal on or before the hearing of appeal.”

3.The relevant material facts, as culled out from the material on record, are as follows. The assessee, before us, is an individual and has filed his return of income for assessment year (AY) 2016-17, on 10.10.2016, declaring total income of Rs. 3,86,070/- and agricultural income of Rs. 20,88,692/-. The assessment was finalized under section 147 the Income Tax Act, 1961, on 24.03.2022, accepting returned income.

4. Later on,the Learned Principal Commissioner of Income Tax, [in short ‘Ld. PCIT’], has exercised his jurisdiction under Section 263 of the Income-tax Act, 1961. On perusal of records, it was noticed by ld. PCIT that case of the assessee for the year under consideration was reopened on the basis of information that during the year consideration, the assessee, along with others have sold an immovable property for sale consideration of Rs.3,50,00,000/-. The stamp duty valuation authorities have valued said property at Rs. 3,92,06,122/-. Thus, there is difference of Rs. 42,06,122/- (Rs.3,50,00,000-Rs. 3,92,06,122) between valuation adopted for stamp duty purpose by the stamp duty valuation authorities and sale consideration declared in the sale deed. In the return of income for the year under consideration, the assessee has declared short term capital gain by taking sale consideration of above referred property at Rs. 21,00,000/-, being 6% of total sale consideration declared in the sale deed. During the course of assessment proceedings, the assessing officer has simply accepted assessee's submission without due verification and inquiry and not made any addition in this regard. Considering the value of the property adopted by the Stamp Duty Valuation Authority for the purpose of Stamp duty, Rs. 2,52,367/-, being 6% share