VASAGAR,THENI vs. ITO, WARD-1(2), THENI

When the appeal was taken up for hearing, none appeared on behalf of the assessee. Accordingly, the hearing was proceeded with the able assistance of Ld. D.R, Mr. M.P. Guruprasad, Addl. CIT.

The assessee has filed return of income declaring total income of Rs. 5,71,430/-. The assessee in the return of income originally filled had shown consideration on sale of property at Rs. 23 Lakhs and claimed deduction of Rs.18,20,472/- towards the cost of improvement while computing Long Term Capital Gains. The A.O in the ex-parte assessment order passed u/s. 147 of the Act, has disallowed the claim of cost of improvement and added Rs.18,20,472/- to the long-term capital gain. On appeal, Ld. CIT(A) has dismissed the appeal ex-parte, stating that the assessee failed to submit any documentary evidence in support of the claimed cost of improvement of Rs.18,20,472/-.

We find that the A.O and Ld. CIT(A) have passed orders ex- parte by disallowing the claim of cost of improvement of Rs.18,20,472/-. We are of opinion that assessee should be given with another opportunity of hearing to substantiate his claim before the A.O in support of the claim of cost of improvement in the interest of justice.

CIT(A) and remit the matter to the file of A.O to decide the issue denovo, after affording the assessee due opportunity of being heard, in accordance with law. We also direct the assessee to appear before the A.O on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.

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