GADDAM MOHAN REDDY,NIZAMABAD vs. INCOME TAX OFFICER, WARD-2, NIZAMABAD

Facts

The assessee failed to file an income tax return for AY 2015-16. A survey revealed a development agreement and subsequent sale of flats. The Assessing Officer (AO) reopened the assessment and made additions to the capital gains, which were upheld by the CIT(A).

Held

The Tribunal held that the cost of acquisition of land, once accepted by the department in a prior assessment year and not changed in subsequent proceedings, should be followed due to the principle of consistency. The AO's re-computation of capital gains using a different cost of acquisition was deemed erroneous.

Key Issues

Whether the Assessing Officer can adopt a different cost of acquisition for capital gains when the cost was accepted in a previous assessment year without any change in facts.