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Facts
The assessee sold a property for Rs. 1,25,00,000/- and claimed indexed cost of acquisition and improvement. The AO disallowed the cost of improvement for want of proof, leading to an addition of Rs. 66,50,290/-. The CIT(A) dismissed the assessee's appeal due to non-response.
Held
The Tribunal condoned the 16-day delay in filing the appeal. Considering the facts and the prayer of the assessee, the issue was remitted back to the CIT(A) with a direction for the assessee to cooperate and avoid unnecessary adjournments.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the issue of disallowance of cost of improvement should be remanded to the CIT(A) for fresh adjudication.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARAJAN K
Assessment Year : 2016-17 M/s. Meerams Overseas Pvt. Ltd., Vs. The Income Tax Officer, No.471 Maruthi Nilaya 1st Cross, Ward – 1, Pavagada Road, Challakere, Davanagere. Chitradurga – 577 522. PAN : AADCM 8322 R APPELLANT RESPONDENT Assessee by : Shri. Rattehalli Srikanta Murthy Badari Prasad, AR. Revenue by : Shri. Subramanian, JCIT(DR)(ITAT), Bengaluru. Date of hearing : 25.11.2024 Date of Pronouncement : 06.01.2025 O R D E R
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the ex-parte Order of the National Faceless Appeal Centre (NFAC) [DIN and Order No.ITBA/NFAC/S/250/2024-25/1067240065(1)] dated 01.08.2024 on the ground that addition confirmed by the CIT(A) of Rs.66,50,290/- towards non-furnishing of proof of cost of improvements while calculating capital gains. The assessee on 07.02.2015 sold a property for a total value of Rs.1,25,00,000/- and it was shown as full value of consideration received-. The property was purchased on 21.06.2004 for a total value of Rs.25,97,466/- and claimed indexed cost of acquisition of Rs.58,49,710/- and further cost of improving was claimed at Rs. 68,68,660 in the year of 2008-09 F/Y and indexed cost of improvement at Rs.1,27,57,769/- resultantly arrived loss of Rs.61,07,471/-. The AO disallowed the cost of improvement for want of proof of development cost of building, therefore, it was disallowed and made addition of Rs.66,50,290/- (Rs.1,25,00,000 - Rs.58,49,710)
Aggrieved from the above Order, assessee filed appeal on 08.05.2024. During the appellate proceedings, the CIT(A) gave various opportunities to the assessee to represent his case, but there was no response from the assessee. Accordingly, the CIT(A) dismissed the appeal of the assessee.
Aggrieved from the above Order, assessee filed appeal before the Tribunal with a delay of 16 days.
We note that the appeal filed by the assessee is time barred by 16 days. The date of service of the communication of the Order is 01.08.2024 to the assessee as per Form No.36 and appeal fee paid by the assessee for filing the appeal before the Tribunal on 19.09.2024. However, the assessee filed appeal on 16.10.2024 and Form 36 has been signed by the assessee on 10.10.2024. Having heard both the parties and perused the material on record, we are of the view that there is a reasonable and sufficient cause for the delay in filing the appeal before the Tribunal, however the Filling Fee was paid before the limitation period. Therefore, following the Hon’ble Supreme Court decision in the case of Collector, Land Acquisition Vs. MST. Katiji & Ors., (167 ITR 471) (SC) we condone the delay of 16 days in filing the appeal and admit the appeal for adjudication.
The learned Counsel reiterated the submissions made before the lower authorities and further submitted that the assessment unit sought various documents / information / details and wherever possible the same was submitted / explained by the assessee. He further submitted that the assessee had no one to look into the affairs of the company. Hence, there was no representation before the lower authorities properly and the learned Counsel requested and undertook that if a chance is given to the assessee, assessee shall properly represent its case before the CIT(A).
Learned DR strongly objected to the assessee’s plea stating that assessee was provided several opportunities to represent its case before the lower authorities.
We have considered the rival submissions and perused the material available on record. We notice that the assessee has sold property for a consideration of Rs.1,25,00,000/- and 1% TDS on such sale consideration has been deducted by the purchaser. During the course of assessment proceedings, various opportunities were given by the AO for proving the development cost of building as claimed by the assessee but assessee did not submit any document to support its case.
Therefore, the cost of improvement claimed by the assessee was disallowed and during the course of first appellate proceedings, the assessee has also partly replied. Considering the facts of the case and in the interest of justice, and the prayer made by the learned Counsel for the assessee, we are remitting the issue back to the file of CIT(A) with the direction to the assessee to co-operate with the Revenue and not to take unnecessary adjournment in the matter.
In the result, the appeal by the assessee is allowed for statistical purposes.
Pronounced in the open court on the date mentioned on the caption page.