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Facts
The assessee, an NRI, sold an immovable property for Rs. 21,40,000/-. The Assessing Officer treated the entire sale consideration as short-term capital gain without considering the cost of improvement and made additions on fixed deposits made from sale proceeds. The CIT(A) dismissed the appeal in-limine without deciding on merits.
Held
The Tribunal found that the sale value, purchase cost, and cost of improvement of the property were not in dispute. The fixed deposits made out of the sale consideration were also not disputed. The Tribunal decided to adjudicate the issue on merits to serve the interest of justice.
Key Issues
Whether the CIT(A) erred in dismissing the appeal in-limine and rejecting the condonation of delay without deciding on merits, and whether the capital gains were rightly computed by the AO.
Sections Cited
144
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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- Delay Condoned This appeal is filed by the Assessee against the appellate order dated 10.10.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2018-19. 2. The assessee has raised the following grounds of appeal:
1. That, in law, the impugned appellate order passed by the Id CIT(A) National Faceless Appellate Centre (NFAC), New Delhi is against natural justice, bad in law and therefore, deserves to be annulled. Asst. Year : 2018-19 - 2– 2. That the Ld. CIT(A) has erred in dismissing the appeal appeal in-limine without deciding the appeal on merits even though various documents filed on record 3. That the Id CIT(A) erred in rejecting the request of the appellant for condonation of the delay in filing of the appeal despite the fact that the appellant is an NRI and was out of country at the relevant time which is a genuine and bonafide reason for condonation of delay.
The appellant craves leave to add, alter, amend or withdraw any ground's of appeal on or before hearing of the appeal.
Heard the argument of both the parties and perused the material available on record.
4. The assessee has sold an immovable property for a consideration of Rs. 21,40,000/-, which was originally purchased in the year 2005 for Rs. 1,94,500/-. After applying the indexation benefit, the indexed cost of acquisition works out to Rs. 4,52,171/-. The assessee has also incurred cost of improvement which is supported by the contractor’s bill. After applying indexation, the indexed cost of improvement works out to Rs. 8,87,225/-, leaving a “Long Term Capital Gain” of Rs. 8,00,164/-. The assessee, being an NRI, could not reply to the notices issued by the Assessing Officer as well as by the Ld. CIT(A), which resulted in a summary assessment under section 144 of the Income- tax Act, 1961. On going through the records, we find that the Assessing Officer has not considered the cost of improvement and treated the entire sale consideration as “Short Term Capital Gain”. The Assessing Officer has also made additions in respect of fixed deposits made out of the sale proceeds. After considering the material placed before us, we are of the view that the interest of justice would be served by adjudicating the issue on merits. The sale Asst. Year : 2018-19 - 3– value, purchase cost, and cost of improvement of the property are not in dispute. Further, the fixed deposits made out of the sale consideration of the property are also not in dispute. In view of the above facts, we determine the “Long Term Capital Gain” at Rs. 8,00,164/-.
In the result, the appeal of the assessee is allowed.