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Facts
For AY 2017-18, the Assessing Officer disallowed ₹3,35,013 (₹2,20,000 for transfer expenses and ₹1,15,013 for cost of improvement) from capital gains for lack of evidence under Section 143(3). On appeal, the CIT(A) partly allowed, deleting the disallowance for cost of improvement but confirming ₹2,20,000 for transfer expenses due to lack of documentary evidence.
Held
The ITAT observed that the Assessing Officer had already granted relief for the transfer expenses of ₹2,20,000 via a rectification order under Section 154 dated 26.11.2019, based on evidence submitted by the assessee before the original assessment. Therefore, the CIT(A)'s confirmation of this disallowance was found unjustified and was quashed.
Key Issues
Whether the CIT(A) was justified in confirming the disallowance of property transfer expenses when the Assessing Officer had already rectified the assessment, granting relief for the same issue.
Sections Cited
143(3), 154
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Before: Shri S.S. Viswanethra Ravi & Shri Jagadish
आयकर अपीलीय अिधकरण, ’डी’ "ायपीठ, चे"ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI "ी एस.एस. िव"ने" रिव, "ाियक सद" एवं "ी जगदीश, लेखा सद" के सम" । Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Jagadish, Accountant Member आयकर अपील सं./ Year: 2017-18 Girish Parakh, Vs. The Assistant Commissioner of Old 9, New 11, 1st Floor, Income Tax, Vivekananda Street, Chetpet, Non Corporate Circle 10(1), Chennai 600 031. Chennai. [PAN:AACPP7199P] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant by : Shri D. Anand, Advocate ""थ" की ओर से/Respondent by : Shri Vijay Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 18.06.2025 घोषणा की तारीख /Date of Pronouncement : 25.06.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 13.02.2025 Addl./JCIT(A)-6, Mumbai for the assessment year 2017-18. 2. The assessee raised 3 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the disallowance of expenses on transfer towards sale of property in the facts and circumstances of the case.
Brief facts relating to the case are that the assessee is an individual and filed return of income for AY 2017-18 admitting total income of ₹.99,89,277/-. The case was selected for scrutiny to verify deduction/ exemption from capital gains. On perusal of the computation of capital gains, the Assessing Officer noted that the assessee claimed expenses on transfer towards sale of property at ₹.2,20,000/- and cost of improvement at ₹.1,15,013/-. Since the assessee has not produced any details, the Assessing Officer disallowed the expenses of ₹.3,35,013/- (₹.2,20,000 + ₹.1,15,013/-) and added to the total income of the assessee and completed the assessment under section 143(3) of the Income Tax Act, 1961 [“Act” in short] dated 05.09.2019. On appeal, by considering the documentary evidence furnished by the assessee in respect of improvement made, the ld. CIT(A) deleted the indexed cost of improvement disallowed at ₹.1,15,013/-. Since the assessee could not furnish the documentary evidence for expenses on transfer towards sale of property, the ld. CIT(A) confirmed the disallowance and partly allowed the appeal of the assessee.
The ld. AR Shri Anand, Advocate drew our attention to rectification order passed by the Assessing Officer under section 154 of the Act dated 26.11.2019 along with computation sheet, placed at page 3 to 8 of the 3 paper book and submits that relief was granted for expenses claimed on transfer towards sale of property and confirming an impugned addition on an issue for which relief was already granted to the assessee is bad in law and prayed to set aside the impugned appellate order dated 13.02.2025.
The ld. DR Shri Vijay Kumar, JCIT fairly conceded the submissions of the ld. AR.
Heard both the parties and perused the material available on record. The assessee claimed expenses towards transfer of sale of property at ₹.2,20,000/- and cost of improvement at ₹.1,15,013/-. We note that the Assessing Officer disallowed the expenses since the assessee could not furnish documentary evidences. Against the assessment order, the assessee preferred further appeal before the ld. CIT(A) on 14.10.2019 as stated in the first paragraph of the impugned order. Thereafter, before the Assessing Officer, the assessee filed rectification petition stating that evidence of brokerage and confirmation from broker who had facilitated the sale of immovable property was already submitted online on 23.08.2019, much before passing assessment order and prayed for granting relief after cross verification. We note that, after verification of the same, by passing rectification order under section 154 of the Act dated 26.11.2019, the Assessing Officer granted relief for claiming expenses on transfer of sale of property. Further, we note that during the course of appellate proceedings, by filing detailed written submissions, the assessee prayed for withdrawal of the ground towards disallowance of ₹.2,20,000/- which is reproduced at page 4 of the impugned order. Without permitting the assessee to withdraw the above ground raised in the grounds of appeal, the first appellate order adjudicated the ground and dismissed for want of evidence is not justified and thus, the confirmation of addition on the above issue is liable to be quashed and ordered accordingly. Considering the documentary evidences by the first appellate authority and allowing cost of improvement in the impugned order hold good. Thus, the ground raised by the assessee is allowed.
In the result, the appeal filed by the assessee is allowed.