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Judgment
Per Renu Jauhri, Accountant Member:
The above captioned appeal is preferred by the assessee against the order dated 20.09.2025, passed by CIT(A)/NFAC u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for A.Y. 2016-17.
The assessee has raised following grounds of appeal:
"1.That the Learned Commissioner of Income Tax (Appeals) ("Ld. CIT(A)") vide an untenable/erroneous order dated 20.09.2025 u/s. 250 of the Income-tax Act, 1961 ("the Act") has erred in upholding the assessment order u/s. 143(3) of the Act passed by the Ld. Assessing Officer ("Ld. AO") dated 23.10.2018 for AY 2016-17 ("Subject AY") making an addition of Rs. 1,86,30,097/- u/s. 56 of the Act after blatant violation of principles of natural justice and failing to allow/appreciate additional evidence on record and is hence bad and untenable in law.
2.That the Ld. CIT(A) grossly erred on law in not admitting the additional evidence filed under Rule 46A of the Income-tax Rules, 1962 ("the Rules"), being materially relevant and crucial to the issue in dispute, thereby rendering the decision perverse vide CIT v. Virgin Securities and Credits P. Ltd, (2011) 332ITR 396 (Del).
3.That the Ld. CIT(A) erred in law in not calling for remand report as per prescribed procedure laid down under Rule 46A(3) of the Rules, thereby grossly violating the principles of natural justice vide DCIT (Exemptions), Vijayawada v. M/s. Sri Saraswathi Educational Society, ITA Nos. 87 & 288/Viz/2018 (dated 30.04.2024).
4.That the Ld. CIT(A)/ AO failed to appreciate the submissions and documentary evidences filed by the Appellant vide response dated 25.10.2018 disclosing vital facts, and the hence, same are liable to be set aside vide Aphv India Investco. Private Limited v. ACIT, 2023 LiveLaw (Del) 813.
5.That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the exempt income derived by the Appellant was primarily on account of transfer of rights in rural agricultural land and hence agricultural income, being exempt in terms of Section 10(1) of the Act.
6.That the Ld. CIT(A) erred on facts and in law, in ignoring the Declaration Letter dated 06.03.2019 issued by the Tehsildar notifying the Appellant's land qualifies as rural agricultural land (situated over 8 km from any Municipal bodies) and therefore proceeds from sale of said land are exempt income in terms of Section 2(14) r.w.s 10(1) of the Act vide CIT vs. Lal Singh 228 CTR 575 (Punjab & Haryana) and CIT vs. K. Kumaran [2025] 173 taxmann.com 838 (Madras).
7.That the CIT(A)/ AO erred in facts and circumstances in doubting the existence of a valid transfer merely because Agreement to Sale is placed on record, disregarding the direct evidence of conduct of parties/factum of payment/acknowledgment thereof vide Anbhao Parkash vs. ITO, [2025] 176 taxmann.com 374 (Amritsar - Trib.).
8.That the Ld. CIT(A)/ AO failed to appreciate that payments for purchase of agricultural land were made through banking channels as demonstrated via Agreement to sell dated 09.10.2014, hence existence of said transactions ought not to be doubted without contrary evidence on record vide Principal Commissioner Of Income Tax v. M/S Pnc Infratech Ltd. 2023 LiveLaw (AB) 499 and Smt. Kundan Singh v. ACIT, Central Cirlce-25, Delhi, ITA.No.2061/Del./2015 (dated 29.04.2019)."
Brief facts are that the assessee filed his return for A.Y. 2016-17 on 01.08.2016 declaring income of Rs.24,12,390/-. The case was selected for scrutiny to verify the claim of large exempt income. In response to notices issued by the Id. AO, the assessee simply filed a General Power of Attorney with regard to his properties in favour of Sh. Neeraj P. Maurya. No other supporting document such as sale deed etc. was filed. Therefore Id. AO completed the assessment at assessed income of Rs.1,86,30,097/- after disallowing the claim of exempt income from sale of agricultural land.
Aggrieved, the assessee preferred an appeal before Id. CIT(A). The appeal of the assessee was dismissed by Id. CIT(A) as the claim of exempt income on a/c of sale of agricultural land by the assessee could not be established conclusively as no registered sale deed etc. was filed. Further aggrieved, the assessee is in appeal before the Tribunal.
Before us, Id. AR has requested that the assessee may be allowed one more opportunity to furnish requisite evidences before the lower authorities to establish that agriculture land had been sold to earn the impugned exempt income. Ld. DR has not objected to the said proposition.
After hearing both the parties, in the interest of justice, we deem it appropriate to restore the matter to Id. AO for de-novo consideration after giving due opportunity to the assessee. The assessee is also directed to be vigilant and make requisite compliance before the AO.
In the result, appeal of the assessee allowed for statistical purposes.