THONGAM SHANTI SINGH,IMPHAL vs. ITO W-3, IMPHAL, IMPHAL

ITA 428/GTY/2025Status: DisposedITAT Guwahati14 July 2026AY 2019-207 pages
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What were the facts?

The assessee, Thongam Shanti Singh, filed an appeal before the ITAT challenging the order of the CIT(A)-NFAC, Delhi, for Assessment Year 2019-20. The appeal was filed 115 days late, which the Tribunal condoned due to reasons including administrative backlogs and seeking professional advice. The Assessing Officer (AO) reopened the assessment based on information regarding mutual fund purchases and sale of immovable property. The assessee had sold a parcel of land for ₹1,10,47,949. The AO treated this land as a capital asset, deeming its cost of acquisition as NIL, and added the entire sale consideration as Short-Term Capital Gain, completing the assessment under Section 147 r.w.s. 144B of the Income Tax Act, 1961. The CIT(A) confirmed the AO's action, stating the land was within municipal limits and the cost of acquisition was not established.

What did the Tribunal hold?

The Tribunal held that the AO had not granted the benefit of indexed cost of acquisition, treating the entire sale proceeds of ₹1,10,47,949 as capital gains without any benefit for the cost of acquisition. The order of the AO, confirmed by the CIT(A), was not in accordance with law as the provisions of Sections 48, 49, and 55 were not followed. Consequently, the order of the CIT(A) was set aside, and the issue of the cost of acquisition was remanded to the AO. The AO was directed to recompute the capital gains after considering the cost of acquisition in the hands of the previous owner for the land gifted to the assessee. The assessee was directed to furnish necessary evidence for the cost incurred by the previous owner. Ground Nos. 1 and 2 were allowed, and Ground No. 3 was allowed for statistical purposes. Ground No. 4 was dismissed as the cost of acquisition in the case of gift is now specified in the Act. Ground No. 5 was addressed by the CIT(A), and the Tribunal found no reason to interfere. Other grounds were not adjudicated as they were not seriously argued or were general in nature. The issue of invalid reopening under Section 147 was not explicitly decided but was implicitly addressed by remanding the matter for proper computation.

What were the issues?

1. Whether the Ld. CIT(A) erred in sustaining the Ld. AO's action in computing capital gains by adopting the entire sale consideration as Short-Term Capital Gain without determining the cost of acquisition, nature of asset, or allowing deductions mandated under Section 48. - Assessee's contention: The Ld. CIT(A) erred in confirming the computation without allowing cost, indexation, stamp duty costs, improvement costs, and other deductions mandatory under Section 48. The AO failed to apply Section 49(1) which mandates adoption of cost to the previous owner where property is acquired by gift, and the registered Gift Deed dated 23/12/2014 was on record. The charge under Section 45 fails due to the failure of the computation machinery, citing B.C. Srinivasa Setty (SC). - Revenue's contention: The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same be upheld. 2. Whether the Ld. CIT(A) erred in sustaining the reopening of assessment under Section 147 without valid 'reasons to believe'. - Assessee's contention: The reopening was mechanical and based solely on 26AS entries without independent inquiry or tangible material. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 48,Section 49,Section 55,Section 45,Section 147,Section 144B,Section 2(14),Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GUWAHATI ‘DB’ BENCH AT KOLKATA

Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2019-20 dated 18.06.2025. 1.1 The Registry has informed that the appeal is barred by limitation by 115 days. The assessee has filed a petition for condonation of delay explaining the reasons that the delay of 112 days occurred due to the time taken in collecting mandatory documentary evidence, including land revenue records and certified copies related to the cost of acquisition, facing administr

The order continues below.

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