NARENDER RANGINENI,RANGA REDDY vs. ITO, WARD-1, MAHABOOBNAGAR

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ITA 191/HYD/2026Status: DisposedITAT Hyderabad03 June 2026AY 2020-215 pages
AI SummaryRemanded

What did the Tribunal hold?

The tribunal dismissed ground No. 2 as not pressed. For ground No. 3, regarding short-term capital gains, the tribunal noted that the AO added the entire sale consideration without considering the cost of acquisition and remanded the issue to the AO for re-adjudication.

What were the facts?

The assessee appealed an order from the CIT(A) for AY 2020-21. The appeal raised grounds concerning the jurisdiction of the JAO, addition of Rs. 30,00,000 as short-term capital gains, and Rs. 10,83,713 as unexplained investment.

What were the issues?

Whether the CIT(A) erred in sustaining additions without considering the cost of property sold and whether the AO's assessment was justified without proper adjudication of capital gains.

Which sections of the Income-tax Act were involved?

Section 148A,Section 147,Section 144,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘SMC ‘ Bench, Hyderabad

Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia

Hearing: 06/05/2026

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SMC ‘ Bench, Hyderabad �ी �वजय पाल राव, उपा� य� एवं �ी मधुसूदन साव�डया, लेखा सद� य के सम� । Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.191/Hyd/2026 (िनधा�रण वष�/Assessment Year:2020-21) Shri Narender Rangineni Vs. Income Tax Officer Ranga Reddy Ward – 1 PAN:AIHPR8300B Mahaboobnagar (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: Advocate P. Vinod राज� व �ारा/Revenue by:: Ms. Aditi Goyal, Sr. AR सुनवाई की तारीख/Date of hearing: 06/05/2026 घोषणा की तारीख/Pronouncement: 03/06/2026 आदेश/ORDER Per Vijay Pal Rao, Vice-President:

This appeal by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 03/12/2025 for the A.Y.2020-21. 2. The assessee has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case, the order of the Id. CIT (A) is erroneous both on facts and in law and is passed in gross principles of natural justice. The Id. CIT(A) failed to appreciate that on

couple of occasions the Appellant has sought time to file submissions. 2. Without prejudice to the above, the Ld. CIT (A) erred in not adjudicating the ground with respect to the jurisdiction of JAO in initiating proceedings u/s. 148A of the Act as per amended law. 3. Without prejudice to the above, the Id. CIT(A] erred in sustaining the addition made by the AO of Rs.30,00,000 as income from short term capital gains. The Id. CIT(A) failed to appreciate that the AO has made addition of entire sale consideration as capital gains, without considering the cost of house property sold. 4. The Id. CIT(A) erred in sustaining the addition made by the AO of Rs.10,83,713 as unexplained investment u/s.69 of the Act. (Tax Effect: Rs. 17,73,461) 5. Any other ground that may be urged at the time of hearing.” 3. Ground No.1 is general in nature and does not require any specific adjudication.

4.

Ground No.2 is regarding the validity of notice issued under section 148 of the Act by the Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO). At the time of hearing the Ld. AR of the assessee has submitted that the assessee does not press ground No.2 and the same may be dismissed as not pressed.

5.

The Ld. DR has raised no objection, if ground no.2 of the assessee’s appeal is dismissed as not pressed. Accordingly, ground no.2 of the assessee’s appeal is dismissed being not pressed.

6.

Ground No.3 is regarding the addition made by the A.O on account of Short-term Capital Gain. The Ld. AR

of the assessee has submitted that the A.O has made the addition of the entire sales consideration while assessing the capital gain arising from the sale of the property without considering the cost of acquisition/improvement and indexed cost of acquisition/improvement of the property in question. He has further submitted that the Ld. CIT (A) has also dismissed the appeal of the assessee for non- prosecution without adjudication of the same on merits. Thus, the Ld. AR has submitted that this issue may be remanded to the record of the A.O for re-adjudication after considering the cost of acquisition/improvement of the property in question.

7.

On the other hand, the Ld. DR has relied upon the orders of the authorities below and submitted that since the assessee has not responded to the notices issued by the A.O as well as by the Ld. CIT (A), therefore, the A.O has framed the assessment on the basis of information available with the A.O. Therefore, the A.O was justified in assessing the sale consideration as short-term capital gain in the absence of any details/evidence regarding the purchase.

8.

We have considered the rival submissions as well as the relevant material available on record. At the outset, we note that the A.O has passed the assessment order ex-parte under section 147 r.w.s. 144 of the Act on the basis of the information received from the Sub Registrar’s Office regarding the sale of property by the assessee. Thus, the entire sale consideration has been assessed by the A.O as Short Term Capital Gains. On further appeal, the Ld. CIT (A)

has dismissed the appeal of the assessee for non-prosecution when the assessee did not respond to the 2 notices issued by the Ld. CIT (A) on 29/10/2025 and 12/11/2025. Accordingly, in the facts and circumstances of the case, we are of the considered view that the correct income of the assessee is required to be assessed after considering and allowing the cost of acquisition/improvement, if any brought on record by the assessee. Hence, this issue is set aside to the record of the A.O for re-adjudication after considering the cost of purchase and improvement if any in respect of the property in question. We further note that the assessee has filed the paper book containing the replies filed by the assessee during the assessment proceedings as well as the sale deed and purchase seed of the property in question. Since all these records are not considered either by the A.O or by the Ld. CIT (A), therefore, the A.O is directed to consider these records and then decide the issue as per law.

9.

Ground No.4 is regarding the addition made by the A.O on account of unexplained investment for purchase of shares under section 69 of the Act.

10.

We have heard the Ld. AR as well as the Ld. DR and carefully perused the orders of the authorities below. The A.O has made the addition on account of unexplained investment in purchase of shares when the assessee has failed to explain the details and source of the purchase consideration of Rs.10,83,713/-. It is pertinent to note that when the A.O has assessed the short-term capital gains of Rs.30 lakhs, then the source of the shares acquired after the

sale of the said property ought to have been considered in the light of that transaction of property. Further, the Ld. CIT (A) has also dismissed the appeal of the assessee for non- prosecution without considering the relevant details and even the replies filed by the assessee during the assessment proceedings. Accordingly, in the facts and circumstances of the case and in view of our order on the issue of assessment of short-term capital gains is already set aside to the record of the A.O, this issue is also set aside to the record of the A.O for fresh adjudication after considering the explanation and relevant documentary evidence to be filed by the assessee. Needless to say, the assessee shall be given an opportunity before passing the fresh order.

11.

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

Order pronounced in the Open Court on 3rd June, 2026. Sd/- Sd/- (MADHUSUDAN SAWDIA) (VIJAY PAL RAO) ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, dated 3rd June, 2026. Vinodan/sps Copy to: S.No Addresses 1 Shri Narender Rangineni, Flat No.1011, Block No.6, My Home Mangala, Serilingampally, Ranga Reddy 500084 2 Income Tax Officer Ward-1 Income Tax Office, DEO Office Road, Mahaboobnagar 509001 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.06.03 RAO 16:53:15 +05'30'

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