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Facts
The assessee filed an appeal against the CIT(A)'s order for AY 2008-09. The assessee sought to introduce additional evidence related to the purchase of an immovable property, which was sold for Rs. 8,82,000/-. The AO treated the entire sale amount as unexplained long-term capital gain due to the absence of purchase documents.
Held
The Tribunal admitted the additional evidence, finding it relevant for a fair adjudication. The Tribunal restored the matter to the AO for fresh adjudication, directing the AO to provide an opportunity to the assessee to contest the case with the new evidence.
Key Issues
Whether the assessee is entitled to the benefit of indexed cost of acquisition for an immovable property when purchase documents were not filed before the AO, and if additional evidence can be admitted at the appellate stage.
Sections Cited
148, 50C
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Income Tax Appellate Tribunal, JAIPUR BENCHES,’’SMC” JAIPUR
fu/kZkj.ko"kZ@AssessmentYear : 2008-09 Shri Narayan Lal Khandaka cuke The ITO Vs. Thru: L/h Shri Shyam Bihari Khandaka Ward- 4(1) 3150, Govind Bhawan, Jai Lal Munshi Ji Ka Jaipur Rasta, Chandpole Bazar, Jaipur-302 001 LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AXNPK 1135 C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :ShriSaurav Harsh Advocate Ms. Satwika Jha, Advocate jktLo dh vksjls@Revenue by: Shri Gautam Singh Choudhary, Addl. CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 06/08/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: : 08 /09/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of ld. CIT(A) dated 11-02-2025, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2008-09 wherein the assessee has raised the following grounds of appeal.
‘’That the AO as well as ld.CIT(A) has grosslyerred in law as well as in facts while not allowing benefit of indexation of cost of acquisition of Rs.6,60,098/- as taken by the assessee in his return of income while calculating long term capital gain without reason and basis.’ NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR 2.1 It is pertinent to mention that the assessee has filed two applications under Rule 29 of Income (Appellate Tribunal) Rules, 1963 seeking leave to produce additional evidence at the stage of appeal. The narration as made by the assessee in his application is reproduced as under:-
23 JULY 2025 Shri Narayan Lal Khandaka vs ITO Thru: L/h Shri Shyam Bihari Khandaka Ward 4(1) , Jaipur APPLICATION UNDER RULE 29 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 SEEKING LEAVE TO PRODUCE ADDITIONAL EVIDENCE AT THE STAGE OF APPEAL 1. The Appellant above-named respectfully submits this application under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, seeking leave of the Hon'ble Tribunal to produce additional evidence in the captioned appeal. The additional evidence comprises the following documents, copies of which are annexed hereto: Copy of Receipt of House Tax, Copy of Survey Report of Ownership of immovable property situated at 3150, Jai Munshi Ji Ka Rasta, Amer Road, Jaipur issued by the Municipal Corporation of Jaipur.
That assessee appellant filed the instant appeal against the order passed by the Id. Assessing officer made addition of Rs 8,82,000/- invoking section 50C of the Act vide order dated 25.03.2016. That Id. CIT(A) against the order passed by the Id. Assessing officer delete the addition of Rs 4,81,304 and adopted the actual sale consideration on which the assessee sold the immovable property i.e. Rs. 400691/- but refused to give the benefit of cost of acquisition in absence of purchase deed.
That it is humbly submitting that ancestors of the deceased assessee appellant was in the possession of the immovable property which was sold by the deceased assessee prior to the independence when there was rule of the King in the city and therefore the deceased assessee was not in possession of any documents which proofs the Purchase of the said Immovable property.
That subsequent to the independence there was a survey report conducted by the Municipal corporation which gives ownership right to ancestors of the deceased assessee appellant. That we are submitting the Copy of City Survey Report which was obtain by the deceased assessee on 03.10.2006 NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR Reasons for Earlier Non-Submission 5. The Appellant humbly submits that the aforesaid documents could not be filed before the lower authority during the original proceedings due to an inadvertent oversight and practical difficulties, and not due to any mala fide intent. Relevance to the Appeal and Interest of Justice 6. It is respectfully submitted that admitting these documents now is essential for a fair and complete adjudication of the appeal. These documents thus directly address evidence of the purchase or allotment of the immovable property.
In view of the above, the Appellant submits that the conditions for invoking Rule 29 of the ITAT Rules are fulfilled in the present case. The documents in question are necessary to enable the Tribunal to pass orders" on a fully informed basis and constitute evidence of critical Importance in other words, a substantial cause exists for their admission. Additionally, to the extent that the lower authority's decision may have been rendered without the benefit of these Dated: 05 Aug.2025 Shri Narayan Lal Khandaka vs ITO Thru: L/h Shri Shyam Bihari Khandaka Ward 4(1) , Jaipur APPLICATION UNDER RULE 29 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 SEEKING LEAVE TO PRODUCE ADDITIONAL EVIDENCE AT THE STAGE OF APPEAL 1. The Appellant above-named respectfully submits this application under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, seeking leave of the Hon'ble Tribunal to produce additional evidence in the captioned appeal. The additional evidence comprises the following documents, copies of which are annexed hereto: * Copy e-registration fee receipt for obtaining certified copy of DLC Rate Sheet as on 18-12-1991 issued by the SRO,Jaipur-II,Jaipur 2. That assessee appellant filed the instant appeal against the order passed by the Id. Assessing officer made addition of Rs 8,82,000/- invoking section 50C of the Act vide order dated 25.03.2016. That Id. CIT(A) against the order passed by the Id. Assessing officer delete the addition of Rs 4,81,304 and adopted the actual sale consideration on which the assessee sold the immovable property i.e. Rs. 400691/- but refused to give the benefit of cost of acquisition in absence of purchase deed. Reasons for earlier non-submission NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR 3. The Appellant humbly submits that the aforesaid documents could not be filed before the lower authority during the original proceedings due to an inadvertent oversight and practical difficulties, and not due to any mala fide intent. Relevance to the Appeal and Interest of Justice 4. It is respectfully submitted that admitting these documents now is essential for a fair and complete adjudication of the appeal.
In view of the above, the Appellant submits that the conditions for invoking Rule 29 of the ITAT Rules are fulfilled in the present case. The documents in question are necessary to enable the Tribunal to pass orders" on a fully informed basis and constitute evidence of critical Importance in other words, a substantial cause exists for their admission. Additionally, to the extent that the lower authority's decision may have been rendered without the benefit of these materials, the Appellant pleads that it be given sufficient opportunity at this appellate stage to bring them on record. No prejudice will be caused to the Respondent by the admission of this evidence; on the contrary, receiving these documents into the record will assist in arriving at the truth and serve the ends of justice. The appellant humbly requests the Hon’ble Bench to exercise its discretion in favour of admitting the above documents, given their fundamental relevance to the issues in dispute. Such indulgence will not only advance the cause for justice but also ensure that the Tribunal has before it all vital facts necessary to render a proper, fair decision in this case. The Bench has no objection to accept it as it has connection with the issue of appeal of the assessee. Hence, both the applications (supra) are admitted.
3.1 Apropos to the solitary ground of appeal of the assessee, it is noticed that the ld. CIT(A) has taken the sale value of the property at Rs.4,00,696/- as per Section 50C of the Act in place of Rs.8.82,000/- as long term capital gain taken by the AO in his assessment order and thus he partly allowed the appeal of the assessee. The narration so made by ld. CIT(A) in his order at para 6 to 6.1.1. is reproduced as under:-
NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR 6. Decision:I have considered the facts of the case, written submission and case laws relied upon by the appellant as against the observations and findings of the AO in the assessment order. The submissions and contentions of the appellant are discussed and decided as under: 6.1 Ground No.1: In this ground the appellant has challenged the addition worth Rs.8,82,000/- treated as unexplained Long Term Capital Gain. The AO received the information regarding the sale of immovable property worth Rs. 8,82,000/- by the appellant from the office of sub registrar. Notice u/s 148 of the Income Tax Act was issued by the AO as the appellant was a non-filer. No documentary evidence of the purchase and sale of the property was filed by the appellant before the AO, hence the AO treated the cost of acquisition of property as NIL and made the addition of Rs. 8,82,000/- treated as unexplained Long Term Capital Gain. 6.1.1 Now before me in the appellate proceedings, the appellant has filed written submission. The appellant has stated that the property was sold on 24.10.2007 at Rs. 4,00,000. The appellant has filed the bank statement also for the same. The appellant has also filed the registered sale deed of the property. I have gone through the various documents filed by the appellant. The purchase deed has not been filed before me. As per the sale deed, the stamp duty has been paid on Rs. 400691. The benefit of cost of acquisition cannot be given to the appellant in absence of the purchase deed. The AO is directed to take the sale value as per sec. 50C of the Income Tax Act at Rs. 400696 only in place of Rs. 8,82,000/- as long term capital gain.’’ 3.2 During the course of hearing, the ld.AR of the assessee prayed that this appeal may kindly be restored to the file of the AO for afresh adjudication as he could not submit the documentary evidence in support of purchase of the property and sale of land situated at 3150, Jai Munshi Ji Ka Rasta, Amer Road, Jaipur issued by the Municipal Corporation of Jaipur and in this situation the indexed cost of acquisition could not be given by the AO. He further submitted that he is submitting the additional evidences in support of his case wherein following these documents will support him to avail of the benefit of indexed cost of acquisition.
NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR ‘’1. Copy of Receipt of House Tax, Copy of Survey Report of Ownership of immovable property situated at 3150, Jai Munshi Ji Ka Rasta, Amer Road, Jaipur issued by the Municipal Corporation of Jaipur. 2. Copy e-registration fee receipt for obtaining certified copy of DLC Rate Sheet as on 18-12-1991 issued by the SRO,Jaipur-II,Jaipur 3.3 On the other hand, the ld.DR supported the order of the ld.CIT(A).
3.4 We have heard both the parties and perused the materials available on record. In this case, it is noted that the AO made an addition of Rs.8,82,000/- in the hands of the assessee treating it as unexplained long term capital gain as the assessee could not submit any documentary evidence in respect of purchase of this property and sale of this land and thus the AO observed as under:-
‘’During the course of hearing, it is revealed that the copy of sale deed has not been received from the office of the Sub-Registrar, Amer, Jaipur but on the basis of information available with this office, the assessee sold immovable property to Smt. Munni Devi to the tune of Rs. 8,82,000/-. Further, the purchase deed of the said property is not available so that the indexed cost of acquisition can be given to him. Also, the property to whom it was sold, her case was also taken up for scrutiny u/s 148 of the IT Act, 1961 but her husband late Shri Indra Kumar Sharma was not available to explain the source of this investment in purchase of the property. On perusal of the records of this office, Cases are also pending in respect of Smt. Munni Devi and late Shri Indra Kumar Sharma. The Chartered Accountant Shri Mukesh Gupta of Smt. Munni Devi and Late Shri Indra Kumar Sharma also helpless to complete the assessment proceedings in their cases. Further, the A/R of the assessee Smt. Munni Devi, has furnished the prescriptions in connection with insanity and depression of her claint, during the course of assessment proceedings. In such a situation, I had left with no other NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR alternative but to complete the assessment proceedings in the case of the deceased assessee. As far as my experience in these cases in which no reply has been received from the buyer as well as the seller and the concerned offices where document to be received outside agencies, the seller has not made clear cut sale but it is in a form of Power of Attorney sale and not direct sale from the seller to buyer. In one of the case pending with the undersigned, the buyer has replied that the said property was purchased by him and the relevant documents have been submitted during the course of hearing before the undersigned. Further, when the Power of Attorney has been registered with the Sub-Registrar, Jaipur, then it is understood that the sale was done through Power of Attorney and not through direct sale. In this case also, the sale of the property was done through Power of Attorney and when the Power of Attorney was got registered with the Sub-Registrar, then it is understood that the sale has been materialized and the assessee is ready to pay taxes thereon, if he has not purchased anything against the sale of this property In this case, the A/R of the assessee finally turnup but he has not submitted any documentary evidence in respect of purchase of this property and the sale of this land and in this situation, the indexed cost of acquisition cannot be given. However, the case covers under the head "Long Term Capital Gain" so the cost of indexation is not known and the whole amount is treated as Long Term Capital Gain which comes to Rs. 8,82,000/- (This value was adopted by the Sub-Registrar at the time of registering the Mukhtayanama). Thus, I had left with no other alternative but to complete the case on a total income of Rs. 8,82,000/- treated as unexplained Long Term Capital Gain in the hands of the assessee. In view of the above, the value of the property taken by the undersigned at Rs. 8,82,000/-‘’ In first appeal, the ld. CIT(A) treated the sale of value of the property u/s 50C of the Act at Rs.4,00,696/- in place of Rs.8,82,000/- as long term capital gain taken by theAO. The grievance of the assessee is that the documents relating to property NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR could not be filed before the AO during original assessment proceedings and some practical difficulties and thus he may be allowed to adduce the documents before the AO so that the assessee may be able to gain benefit of cost of acquisition from the Department. The Bench considers the submissions of the ld.AR of the assessee and restore the matter to the file of the AO for afresh adjudication with the direction to the AO to provide one more opportunity to contest the case. Hence, the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus, the appeal of the assessee is allowed for statistical purposes.
3.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law.
NARAYAN LAL KHANDAKA THRU: L/H SHYAM BIHARI KHANDAKA VS ITO, WARD 4(1), JAIPUR 4.0 In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on 08 /09/2025. Sd/- Sd/- (jkBkSM+ deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08/09/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant-Shri Narayan Lal Khandaka Thru: L/h Shyam Bihari Khandaka, Jaipur 2. izR;FkhZ@ The Respondent- The ITO, Ward 4(1), Jaipur 3. vk;djvk;qDr@Theld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File ( By order,
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