KASTURY KOSARAJU,MANCHERIAL vs. ITO, WARD - 1, MANCHERIAL

The Assessee has raised the following grounds of appeal:

At the time of hearing, the learned Authorised Representative of the Assessee has submitted that the Assessing Officer has disallowed the claim of deduction u/sec.54 as well as indexed cost of improvement of the property while passing the assessment order ex-parte. He has further submitted that the learned CIT(A) has also dismissed the appeal of the assessee summarily when there was no response on behalf of the assessee to the notice issued by the learned CIT(A). Thus, the learned Authorised Representative of the Assessee has pleaded that the assessee may be granted one more opportunity to furnish the relevant details as well as evidence in respect of claim of deduction u/sec.54 as well as indexed cost of improvement of the property.

On the other hand, the learned DR has submitted that despite various opportunities given by the Assessing Officer as well as learned CIT(A) the assessee has not produced the supporting evidence to substantiate the claim of deduction u/sec.54 as well as indexed cost of improvement of the property. She has relied upon the Orders of the authorities below.

We have considered the rival submissions as well as carefully perused the Orders of the authorities below. In the return of income the assessee has declared the long term capital gains of Rs.3,74,650/- after claiming the deduction u/sec.54 as well as indexed cost of acquisition and improvement of the property. The Assessing Officer allowed the indexed cost of acquisition however, the claim of deduction u/sec.54 and indexed cost of improvement was disallowed by the Assessing Officer for want of necessary supporting evidence. The Assessing Officer has recorded in the assessment order that in response to the notice u/sec.142(1) of the Act the assessee filed reply giving partial details and copy of purchase deed, bank account and computation but the assessee did not provide any documentary evidence regarding claim of cost of improvement and claim of deduction u/sec.54 of the Act. Thus, due to incomplete details and documentary evidence the Assessing Officer has denied the claim of deduction u/sec.54 as well as indexed cost of improvement of the property and consequently, made an addition of Rs.44,36,872/-. On appeal, the learned CIT(A) has dismissed the appeal of the assessee when there was no compliance on behalf of the assessee to the notice issued by the learned CIT(A). Now the learned Authorised Representative of the Assessee has submitted that the assessee undertakes to file the relevant details and documentary evidence in respect of the claim of deduction u/sec.54 as well as indexed cost of improvement of the property and therefore, pleaded that the assessee may be granted one more opportunity. We have considered the facts and circumstances where the Assessing Officer has denied these claims of the assessee for want of complete details and documentary evidence as the assessee filed only partial details and evidence. The learned CIT(A) has dismissed the appeal of the assessee due to non-compliance of the notice issued by it. Hence, by taking a lenient view, we allow one more opportunity to the assessee to furnish relevant details and supporting documentary evidence for the claim of deduction u/sec.54 as well as indexed cost of improvement of the property subject to cost of Rs.5000/- [Rs. Five Thousand Only] to be paid to Income Tax Appellate Tribunal Bar Association, Hyderabad within a period of one month from the date of this order. Accordingly, the impugned order of the learned CIT(A) is set aside and the matter is remanded to the record of the Assessing Officer for re- adjudication of this issue after considering the details and evidence to be filed by the assessee in respect of the claim of u/sec.54 as well as indexed cost of improvement of the property. We Order accordingly.

In the result, appeal filed by the Assessee is allowed for statistical purposes.