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Facts
The assessee's belated return for AY 2014-15 was treated as invalid. The AO reopened assessment u/s 148, but without response, passed an ex-parte order treating the entire sale consideration of an immovable property (Rs. 80 lakhs) as capital gains. The CIT(A) also dismissed the assessee's appeal ex-parte.
Held
The Tribunal held that the AO erred in treating the entire sale consideration as capital gains without considering the cost of acquisition and indexation. Since the assessee did not produce these details before the lower authorities, the matter was set aside to the AO for fresh consideration.
Key Issues
Whether the entire sale consideration of property should be treated as capital gains without considering indexed cost of acquisition, and whether Section 54/54F deductions are allowable.
Sections Cited
144, 147, 148, 54, 54F
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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinha
Assessment Year: 2014-15 Vidhi Pragnesh Modi The ITO, C/o. Divyang Shah & Co., Ward-4(2)(5), Chartered Accountants, Vs Ahmedabad 201, Devashish Complex, Nr. Regenta Central Antarim Hotel, Off C.G. Road, Ahmedabad-380015 (Respondent) Gujarat PAN: AKZPM0327R (Appellant) Assessee Represented: Shri Divyang Shah, A.R. Revenue Represented: Shri Abhijit, Sr.D.R. Date of hearing : 05-08-2025 Date of pronouncement : 07 -08-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against exparte appellate order dated 17.10.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the exparte reassessment order passed under section 144 r.w.s. 147 of the A.Y. 2014-15 Page No 2 Vidhi Pragnesh Modi vs. ITO Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2014-15.
Brief facts of the case is that the assessee is an individual and filed her Return of Income for the Asst. Year 2014-15 belatedly on 08-02-2016 declaring total income of Rs.2,77,500/-. However the return was not e-verified properly and therefore treated as invalid return by the Department. The assessee is a co-owner of an immovable property sold during the year for a consideration of Rs.1.6 crores and received Rs. 80 Lakhs as her share of income. The assessment was reopened by issuing notice u/s 148 of the Act to the old address of the assessee which was not responded and resulting in passing an exparte reassessment order whereby charging the entire sale consideration of Rs.80 lakhs under capital gains.
Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A) who has given personal hearings on 19-01- 2021, 09-09-2024 and 20-09-2024. Since there was no response from the assessee, Ld. CIT(A) dismissed the appeal filed by the assessee.
Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal:
1. Whether on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in not allowing the deduction of "indexed cost of acquisition" against addition of Rs.80,00,000/-?
A.Y. 2014-15 Page No 3 Vidhi Pragnesh Modi vs. ITO
2. Whether on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in not allowing deduction u/s.54 or 54F against addition of Rs.80,00,000/-? 3. Whether, on facts and in circumstances of the case and in law, Ld. Assessing officer has erred in treating the Income-tax return as invalid? 4. Whether, on facts and in circumstances of the case and in law, Ld. Assessing officer has erred in issuing notice u/s.148 of the act? Further, appellant craves leave to add, amend, alter or withdraw all or any ground of appeal
5. Ld. Counsel submitted a Paper Book containing the Returns of Income and other details and application made to condone the delay in e-verification forms. The Ld. Counsel filed before us copies of the Sale Deed and Purchase of another property claiming deduction u/s 54F of the Act by the assessee. Thus pleaded the matter be set aside back to the file of Jurisdictional Assessing Officer for verification and pass order on merits of the case.
6. Ld. Sr. D.R. appearing for the Revenue strongly objected that the assessee had never participated both the assessment proceedings as well as the appellate proceedings. Therefore the additions made thereon are liable to be confirmed.
7. We have given our thoughtful consideration and perused the materials available on record. In the exparte reassessment order, the Assessing Officer made addition of Rs. 80 lakhs as the capital gain of the assessee without taking into consideration the cost of acquisition, indexation etc. Now, for the first time assessee produce before us copies of the sale deed as well as purchase deed of a new property and other details. Whereas the assessing officer made the A.Y. 2014-15 Page No 4 Vidhi Pragnesh Modi vs. ITO entire sale consideration as the addition under capital gain, which is against the provisions of law. Since the assessee has not produced all these details before the lower authorities, we deem it fit to impose a cost of Rs.5,000/- payable by the assessee to the Income Tax Department within two weeks of receipt of copy of this order. On production of receipt for the above payment of cost, we direct the Jurisdictional Assessing Officer to give one more opportunity of hearing to the assessee and pass orders in accordance with the provisions of law. Needless to say, the assessee should make use of this final opportunity and produce all necessary details and documents before the JAO to pass fresh assessment order.
In the result, the appeal filed by the Assessee is allowed for statistical purpose.