ASHWITHA REDDY BADDAM,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 upon reassessment, the assessee sold two flats and declared capital gains. However, the Assessing Officer (AO) recomputed the cost of acquisition, leading to additions.

Held

The Tribunal held that the cost of acquisition of land, once accepted by the department for a previous assessment year, should be followed due to the principle of consistency, absent any change in facts. The AO's recomputation for the current year was deemed erroneous.

Key Issues

Whether the AO can adopt a different cost of acquisition for computing short-term capital gains when the cost was accepted in a prior year. Whether the CIT(A) was correct in sustaining the AO's additions.