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Facts
The assessee sold a house, and the AO reopened the case under Section 147. The assessee claimed the sale price was Rs.48,00,000/-, not Rs.63,59,700/-, and no Long Term Capital Gain arose. The AO calculated LTCG based on Rs.63,59,700/-.
Held
The CIT(A) partly allowed the appeal and restored the issue of LTCG to the AO for de novo assessment, directing reference to DVO for fair market value. The Tribunal found no justification to interfere with this order.
Key Issues
Whether the CIT(A) was justified in restoring the issue of Long Term Capital Gain to the file of the AO for de novo assessment, directing reference to the DVO for fair market value.
Sections Cited
147, 148, 142(1), 50C(1), 143(3), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, LUCKNOW BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER Assessment Year: 2012-13 Saket Murarka v. The Income Tax Officer Prop. M/s Murarka Brothers Sitapur Jail Road Sitapur TAN/PAN:AAYPM4558P (Appellant) (Respondent) Appellant by: None Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 18 03 2025 Date of pronouncement: 20 03 2025 O R D E R
This appeal has been preferred by the Assessee against the order dated 04.11.2024, passed by the Addl/JCIT(A)- 10, Mumbai for Assessment Year 2020-21.
The brief facts of the case are that the Income Tax Department was in possession of information that the assessee had sold a house, amounting to Rs.63,59,700/- during the year under consideration. The Assessing Officer (AO) issued statutory notice to the assessee. However, the assessee neither appeared before the AO nor filed any reply. The AO, thereafter, reopened the case of the assessee under section 147 of the Income Tax Act, 1961 (hereinafter called “the Act’) and issued notice under section 148 of the Act to the assessee. In response to the said notice, the assessee electronically filed his return of income on 11.05.2019, declaring a total income of Rs.8,06,880/-. The AO issued notice under section 142(1) of the Act, calling upon the assessee to furnish the details of sale of property by the assessee. The assessee furnished a detailed reply, stating therein that the assessee had purchased a house in Nirala Nagar, Lucknow on 27.08.2004 for a total consideration of Rs.14,00,000/- in which the assessee had half share, that the actual sale price of the property was Rs.48,00,000/- and not Rs.63,59,700/- and that there was no Long Term Capital Gain in the case of the assessee. After considering the reply so furnished by the assessee, the AO held that by taking full value of consideration at Rs.48,00,000/- instead of Rs.63,59,700/-, the assessee had not calculated the Long Term Capital Gain as per the provisions of section 50C(1) of the Act. The AO, accordingly, calculated the Long Term Capital Gain in the case of the assessee as under:
Sale Price (Circle Value) :Rs.63,59,700/- Purchase cost (27.08.2004) – Rs.14,00,000/- Stamp - Rs.02,03,300/- Total - Rs.16,03,300/- Cost index – (16,03,300X785/480) Indexed Cost :Rs.26,22,063/- L.T.C.G. :Rs.37,37,637/-
Invested (in residential house on 23.12.2011) :Rs.29,33,992/- Difference :Rs.8,03,645/- ½ share of the assessee :Rs.4,01,822/- Long Term Capital Gain in the hands of the assessee:Rs.4,01,822/- 2.1 The AO completed the assessment under section 143(3)/147 of the Act, computing the income of the assessee for the year under consideration as under:
Total income declared : Rs.8,06,880/- Addition u/s 50C(1) of the Act : Rs.4,01,822/- Total : Rs.12,08,702/- Rounded off : Rs.12,08,700/- 2.2 The AO also initiated penalty proceedings under section 271(1)(c) of the Act, separately.
3. Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority. Subsequently, the case of the assessee was migrated to NFAC and thereafter the appeal was transferred to Addl. CIT(A)-10, Mumbai, who partly allowed the appeal of the assessee.
4. Now, the assessee has approached this Tribunal challenging the order of the Addl/JCIT(A)-10, Mumbai by raising the following grounds of appeal:
1. That the Learned Courts Below are not justified in deciding the appeal on legal grounds.
2. That the Order passed by the Assessing Officer is erroneous in the eyes of law.
That the Learned Commissioner of Income Tax (Appeals) also erred in not deciding the appeal within the framework of law.
That the order passed by the Assessing Officer and Learned Commissioner of Income Tax (Appeals) being not legally decided (legal aspect) may please be cancelled. 5. That the Income Return may please be accepted after deleting the addition.
None was present for the assessee when the appeal was called out for hearing nor was any adjournment application moved in this regard. However, looking into the facts of the case, I proceed to adjudicate the appeal ex-parte qua the assessee.
The Ld. Sr. D.R., relying upon the order of the Addl/JCIT(A)-10, Mumbai, submitted that the Addl/JCIT(A)-10, Mumbai, after considering the request of the assessee, had rightly restored the issue relating to the Long Term Capital Gain to the file of the AO with a direction to refer the matter of fair market value of the impugned property to the DVO and to take necessary action on receipt of the Report. Therefore, no interference is called for in the order of the Addl/JCIT(A)-10, Mumbai.
I have heard the Ld. Sr. D.R. and perused the material on record. I find that the assessee had taken a specific ground before the Addl/JCIT(A)-10, Mumbai, viz., ground No.3 that ‘That the Learned Income Tax Officer did not care to refer the matter to his Departmental Valuer, which was a legal necessity’. The Addl/JCIT(A)-10, Mumbai, after considering the request of the assessee during the appellate proceedings, restored the issue relating to Long Term Capital Gain to the file of the AO for making de novo assessment after calling for Report from the DVO and after duly considering it. Since the Addl/JCIT(A)-10, Mumbai had restored the issue involved in the appeal of the assessee as per the request of the assessee, there should not have been any further grievance to the assessee, in this regard. In this view of the matter, I find no justification to interfere with the order of the Addl/JCIT(A)-10, Mumbai, who has rightly restored the issue in dispute to the file of the AO.
In the result, the appeal of the assessee stands dismissed.
Order pronounced in the open Court on 20/03/2025.