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Income Tax Appellate Tribunal, DELHI BENCH : A : NEW DELHI
Before: SHRI BHAVNESH SAINI & SHRI R.K. PANDA
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER Assessment Year: 2011-12 Surinder Pratap Singh, Vs ITO, Chamber No.472, Ward-61(3), Western Wing, Tis Hazari Court, New Delhi. New Delhi. PAN: AOBPS1927F (Appellant) (Respondent) Assessee by : Shri K. Sampath, Advocate & Shri V. Raja Kumar, Advocate Revenue by : Shri S.L. Anuragi, Sr. DR Date of Hearing : 04.02.2020 Date of Pronouncement : 14.02.2020 ORDER
PER R.K. PANDA, AM:
This appeal filed by the assessee is directed against the order dated 21st January, 2016 of the CIT(A)-20 New Delhi, relating to assessment year 2011-12.
This appeal was earlier dismissed by the Tribunal for non-prosecution. Subsequently, the Tribunal, vide MA No.185/Del/2018, order dated 26th April, 2019, recalled its earlier order, hence, this is a recalled matter.
Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 20th July, 2011 declaring the total income at Rs.2,32,550/-. The AO completed the assessment u/s 144 of the IT Act wherein he made an addition of Rs.50,35,803/- on account of long-term capital gain on sale of his residential house which was sold for an amount of Rs.60 lakhs. In appeal, the ld.CIT(A) allowed an amount of Rs.25,65,000/- being invested by the assessee till the date of filing of the return towards purchase of a residential plot from Supertech Ltd. He, however, did not allow any expenditure made towards construction on the said plot utilized by the assessee for residential purposes.
Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:-
“ On the facts and in the circumstances of the case and in law the Ld.CIT(A) erred in confirming the following actions of the Assessing Officer: 1. Denying benefit of indexed improvement cost of the property sold to the extent of Rs.1,02,746/- while computing long term capital gain; 2. In making addition to the extent of Rs.25,65,000/- by denying exemption claimed u/s 54 of the Act on investment made in construction of property. Both the above actions being arbitrary, erroneous, unwarranted and unjust must be quashed with directions for relief.”.
The ld. Counsel for the assessee submitted that the ld.CIT(A) has not properly adjudicated the issue of denying the benefit of indexed cost of improvement to the extent of Rs.1,02,746/- while computing the long-term capital gain and denying the claim of exemption u/s 54 of the Act on investment made in construction of property. He submitted that without constructing the basic amenities such as kitchen, etc., the assessee cannot live in a house. He submitted that given an opportunity, the assessee is in a position to substantiate its case and, therefore, he has no objection if the matter is restored to the file of the CIT(A).
The ld. DR, on the other hand, heavily relied on the order of the CIT(A).
After hearing both the sides, we find the AO, in the order passed u/s 144 of the Act, determined the total long-term capital gain at Rs.50,35,803/-. We find, the ld.CIT(A) gave part relief to the assessee by sustaining an addition of Rs.25,65,000/- on account of long-term capital gain. It is the submission of the ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate further construction on the plot purchased by him for the purpose of residence so as to get higher deduction u/s 54 of the Act. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the CIT(A) with a direction to grant one more opportunity to the assessee to substantiate his case and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.