Income tax on property sale: Gujarat HC quashes reassessment notice over ₹92 lakh land sale; here's why

The Gujarat High Court quashed a reassessment notice by the Income Tax Department in a capital gains dispute involving a ₹92 lakh land sale in Daman.

The court ruled that expanded powers under Section 55A of the Income Tax Act, introduced by the Finance Act 2012, cannot be applied retrospectively to transactions before July 1, 2012.

The case involved Late Padmaben Zinabhai Trivedi, who sold 13,626 sq m of land in Bhimpore village in 2009 and declared long-term capital gains of ₹22.95 lakh based on a registered valuer's report.

The Assessing Officer reopened the assessment under Section 148, claiming the fair market value should have been Re 1 per sq m instead of ₹81 per sq m, which would have increased taxable gains.

The High Court noted that pre-2012 Section 55A only allowed reference to a valuation officer if the taxpayer's declared value was lower than FMV, not higher.