SANGEETA,NEW DELHI vs. ITO WARD - 53(5), NEW DELHI

Facts of the case, in brief, are that the assessee is an individual and has not filed her return of income. Information was received by the AO that the assessee has sold two immovable properties during the F.Y. 2009-10. A notice for non- filing was issued to the assessee at her last known address requiring her to file the details of purchase of immovable properties, but, no reply was filed by the assessee. Therefore, the AO, after recording reasons, reopened the assessment u/s 147 of the IT Act, 1961 and issued notice u/s 148 of the Act dated 28th March, 2017 which was issued and served on the assessee. The assessee, in response to the notice u/s 148, filed her return of income on 14th July, 2017 declaring nil income. The AO, thereafter, issued statutory notices u/s 143(2) and 142(1) of the Act. The assessee was asked to explain the sale of the properties. It was submitted that during the year she has sold only one property i.e., 190-A/1, Gautam Nagar, which was inherited by her along with her sister Mrs. Geeta and the consideration has been equally divided between them i.e., Rs.12 lakh each which was further re-invested by them in the purchase of property and building the same. The assessee submitted documents regarding sale/purchase of properties on 17th August, 2017 through dak. The AO observed that the property in question was purchased by the mother of the assessee Late Smt. Usha Rani vide agreement to sell dated 4th September, 1992 for a total consideration of Rs.1,25,000/- and the property was sold by the assessee vide sale deed dated 17th April, 2009 for a total consideration of Rs.24 lakhs. However, there is no document produced before him to substantiate that Rs.12 lakh has been given by the assessee to her sister. He further noted that as per the sale deed dated 17th April, 2009, the assessee and her sister Smt. Geeta have been mentioned to be Class-I legal heirs to the said property though the documents and the sale deed have been found to be signed by the assessee only. According to the AO, Mrs. Geeta had already relinquished her half undivided share in the property. 2

Since the assessee did not appear before the AO despite notice issued u/s 144 of the Act, the AO made addition of Rs.16,29,740/- to the total income of the assessee as long-term capital gain.

In appeal, the assessee filed certain additional evidences before the CIT(A) who forwarded the same to the AO for a remand report. The assessee was confronted with the remand report who filed a rejoinder to the said remand report. After considering the remand report by the AO and the rejoinder of the assessee to such remand report, the ld.CIT(A) upheld the action of the AO. While doing so, he noted that the assessee has not filed the return and subsequently u/s 148 proceedings claimed water expenses for repair and deduction u/s 54 which was elaborately rebutted by the AO in the remand report. Therefore, the addition made by the AO are clearly substantiated and, therefore, the order of the AO was confirmed by the CIT(A).

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- “1A. That the learned CIT (A) has erred in law and on facts in dismissing the appeal by merely confirming the action of the AO without discussing the merits of the case and such an approach of the first appellate authority being against the legislative mandate contained in section 250 (6) of the It Act, vitiates the impugned order and the same is liable to be set aside. B. That the learned CIT (A) has failed to appreciate that it was obligatory for the appellate authority to pass a speaking order deciding the issues raised stating the reasons for the decision taken as mandated by section 250(6) of the IT Act and the impugned order passed without dealing with any of the grounds of appeal raised, is unsustainable and liable to be set aside being non speaking and contrary to the provisions of law. C. That the impugned order of the CIT (A) being suffered from non application of mind in that return filed by the appellant cognisance of which had duly been taken of by the AO, has been considered ‘as no return filed ’ and deduction claimed by the appellant u/s 54 with respect to investment made on the construction of residential property has also been considered as water expenses for repairs by the learned CIT(A), is not tenable and unsustainable. D That the learned CIT(A) has failed to appreciate that valuation report of the Departmental Valuation officer (DVO) obtained by the AO u/s 142A of the IT Act estimating the cost of construction at Rs. 17,28,600/- fully supports and vindicates the stand of the appellant with regard to investment on new construction and the impugned addition of Rs. 16,29,740/- is liable to be deleted on this ground alone. E That on the facts and circumstances of the case, the learned CIT (A) ought to have directed to provide a copy of the valuation report of the DVO to the appellant as per the mandate of section 142A(6) regardless of its not having been used against the assessee.