High Court of Judicature for Rajasthan · Judgments and reasoned final orders
Superb Infotech Private Limited v. Deputy Commissioner of Income Tax, Central Circle, Faridabad
D.B. Income Tax Appeal No. 43/2019 ·
Jurisdictional invalidity of Section 153C assessment for unabated AY 2007-08 without incriminating material and outside the strict six-year block prior to the date of handing over seized documents; rural agricultural land situated beyond 8 km from Gurgaon municipal limits exempt under Section 2(14)(iii).
1. FACTS OF THE CASE
The assessee purchased 53 Kanal 9 Marla of agricultural land in Village Lakhnaula, Tehsil Manesar, District Gurgaon on 06.03.2006 for Rs. 4,58,86,025/- and sold it on 01.12.2006 (AY 2007-08) to M/s Commander Realtors Pvt. Ltd. for Rs. 23,22,20,990/-, claiming capital gains exemption on the ground that the land was rural agricultural land situated beyond 8 km from Gurgaon municipal limits under Section 2(14)(iii). Following a search on 06.11.2012 on the 'Realtech Group' where the sale deed dated 01.12.2006 was found, proceedings under Section 153C were initiated on 19.11.2014 and an addition of Rs. 18,63,34,965/- was made on 26.03.2015 and sustained by CIT(A) and ITAT.
2. DISCUSSION BY THE COURT
The Division Bench held: (1) Under PCIT v. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) and Misty Meadows Pvt. Ltd. v. UOI (2025) 177 taxmann.com 407 (SC), where the AO of the searched person recorded satisfaction and handed over documents to the assessee's AO in AY 2014-15 (satisfaction dated 19.11.2014), the six preceding assessment years under Section 153C had to be reckoned from the date of handing over material (covering AYs 2008-09 to 2013-14), rendering AY 2007-08 barred by limitation; (2) A registered sale deed already disclosed in the regular books and balance sheet filed with the RoC does not constitute 'incriminating material' unearthed during search; and (3) On merits, certificates from the Tehsildar Manesar and Municipal Corporation Gurugram confirmed that Village Lakhnaula was situated beyond 8 km of Gurgaon municipal limits in FY 2006-07 (prior to notification of Municipal Corporation Gurugram on 02.06.2008) and the land was recorded as cultivated 'Chahi' agricultural land in the Khasra Girdawari.
3. JUDICIAL DECISION
Allowing the assessee's appeal and answering the substantial questions of law in favour of the assessee, the High Court quashed and set aside the ITAT order dated 31.10.2018, the CIT(A) order dated 31.08.2016, and the assessment order dated 26.03.2015.
4. OUTCOME
Assessee - Appeal allowed; Section 153C assessment order and addition of Rs. 18,63,34,965/- quashed on both jurisdiction and merits.
5. AKHB REVIEW POINT
Double protection in pre-2017 Section 153C cases: first, the six-year lookback runs from the year of handing over seized documents to the other person's AO (not the date of search); second, a registered sale deed already reflected in audited financial statements is not incriminating material under Abhisar Buildwell.
Source and verification
21-page official High Court of Judicature for Rajasthan judgment PDF (20260413_RJHC020327292019.pdf, 257,326 bytes).
Original PDF: 21 pages · SHA-256: 8bafc1011638e00724adee0e9298e2379810dfb09db267082db8805b8cd9629b
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies Sections 2(14)(iii), 153A, and 153C of the Income-tax Act, 1961 as applicable to search dated 06.11.2012. Income-tax Act, 2025 equivalence is not verified.
Full 21-page primary judgment PDF text read and verified page-by-page. Follows PCIT v. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) and Misty Meadows Pvt. Ltd. v. UOI (2025) 177 taxmann.com 407 (SC).
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