IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER Assessment Year : 2012-13 Shri Ramesh Kumar, C/o. Janatha The Assistant Construction Co., Commissioner of #4-6-577/31, Mahendra Income Tax, Arcade, Circle – 2[1], Karangalpady, Vs. Mangaluru.

Mangaluru – 575 003.

PAN: AJLPK8423B APPELLANT RESPONDENT Assessee by : Shri V. Srinivasan, Advocate Revenue by : Shri N. Balusamy, JCIT-DR Date of Hearing : 17-07-2025 Date of Pronouncement : 18-09-2025

ORDER

PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the Ld.CIT(A)-2, Panaji dated 29/10/2024 in respect of the A.Y. 2012-13 and raised the following grounds:

“1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. The learned CIT[A] is not justified in upholding the assessment of capital gains for the year under appeal with regard to the transaction entered into with one Mr. Srinath Hebbar without appreciating that the appellant had not granted possession of the property to Mr. Srinath Hebbar in terms of any registered agreement of sale entered into during the year and therefore, the provisions of section 2[47][v] of the Act read with section 53A of the Transfer of Property Act was not attracted to the case of the appellant under the facts and in the circumstances of the appellant's case.

3. The learned CIT[A] ought to have appreciated that there was only an unregistered agreement of sale dated 29/08/2012 entered into by the appellant with Mr. Srinath Hebbar in the next financial year that regulated the understandings between the appellant and Mr. Srinath Hebbar based on which the appellant had duly recognized transfer of his undivided interest in land as and when sale deeds were registered in favour of the nominees at the instance of Mr. Srinath Hebbar and therefore, the taxation of long term capital gains for the year under appeal was erroneous in law.

3. Without prejudice to the above, the learned CIT[A] erred in enhancing the extent of capital gains by erroneously reducing the extent of cost of land allowed by the learned A.0. as a deduction under the facts and in the circumstances of 7-e appellant's case.

3.1 The learned CIT[A] is not justified in enhancing the assessment without issuing a notice for enhancement to the appellant as mandated u/s 251[2] of the Act under the facts and in the circumstances of the appellant's case.

4. Without prejudice to the above, the learned CIT[A] is not justified in refusing to allow the deduction of Rs. 2,60,00,000/- for acquiring 24 cents of land from Janatha Construction Company and a further sum of Rs. 42,00,000/-towards eviction of tenants in the property under the facts and in the circumstances of the appellants case.

5. Without prejudice to the above the extent of capital gains assessed is excessive and liable to be reduced substantially.

6. The learned CIT[A] is not justified in upholding the disallowance of the interest paid of Rs.1,09,965/- claimed under the head under the head “Other sources” under the facts and in the circumstances of the appellant's case.

6.1 The learned A.O. had overlooked the fact although a graphic nexus of the amounts borrowed vis-a-vis the income earned subjected to tax under the head Other sources could be portrayed and demonstrated since the funds have been utilized for the composite activities of the business and the activity resulting in the income derived from other sources and such monies borrowed have not been utilized for personal purposes, the said claim made is allowable under the head “Business” if for any reason it is not allowable as a deduction under the head “Other Sources”.

7. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s.234-A, 234-B and 234-