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Facts
The assessee declared long-term capital gain from immovable property after claiming indexed cost of acquisition and improvement. The Assessing Officer found insufficient documentary evidence for substantial cost of improvement claims, recomputed the LTCG, and added Rs. 1,56,43,601/- as undisclosed LTCG. The Ld. CIT(A) upheld this addition.
Held
The Tribunal set aside the matter to the Ld. CIT(A) for de novo adjudication, granting the assessee an opportunity to furnish complete details, clarifications, and evidences. The assessee is directed to comply with notices without seeking unnecessary adjournments.
Key Issues
Whether the addition to long-term capital gain due to unsubstantiated claims of indexed cost of improvement was justified and if the lower authorities conducted a proper examination of evidence.
Sections Cited
Section 250, Section 143(3), Section 144B
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KMBLE
(Assessment Year: 2022-2023) Ranvirsinh Amarsinh Dodiya, The Income Tax Officer, Vs. Darbnarvas, Ward 3(2)(1), Daskrol, Ahmedabad. Ahmedabd-382418. [PAN :BIUPD5462 J] (Appellant) .. (Respondent) Appellant by : Shri Nimesh R Hariya, AR Respondent by: Shri Abhijit, Sr. DR Date of Hearing 02.03.2026 Date of Pronouncement 09.03.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 15.01.2026 passed by the Commissioner of Income Tax(Appeal)/National Faceless Appeal Centre(NFAC) Delhi, relating to the Assessment Year 2022-2023. 2. The assessee has raised the following grounds of appeal:
1. The grounds of appeal arising out of Order passed under section 250 of the Income-tax Act, 1961 dated 15.01.2026 by the National Appeal Centre 9NFAC), New Delhi against the assessment framed under section 143(3) read with section 144B of the Income-tax Act, 1961. The present appeal is preferred by the appellant against the impugned appellate order passed by the National Faceless Appeal Centre, whereby the learned Commissioner of Income Tax (Appeals) has summarily affirmed the additions made by the Assessing Officer. The impugned order suffers from Asst. Year : 2022-23 - 2– serious legal and factual infirmities, inasmuch as it has been passed without independent application of mind, without proper appreciation of the evidences on record, and in disregard of settled principles of law governing appellate adjudication by a quasi-judicial authority.
3. The brief facts of the case are that the assessee is an individual who filed the return of income for the relevant assessment year declaring income as per his computation, wherein long-term capital gain arising from sale of immovable property was shown after claiming indexed cost of acquisition, indexed cost of improvement over several financial years, and transfer expenses. The case was selected for scrutiny through CASS on the issue of capital gains/income on sale of immovable property. During the assessment proceedings conducted under section 143(3) r.w.s 1448 of the Income-tax Act, the Assessing Officer examined the sale deed, computation of income, Form 26AS, bank statements and the evidences furnished by the appellant in support of the claim of cost of improvement and other deductions. On such examination, it was noticed that while the appellant had claimed substantial amounts towards cost of improvement for different years, authenticated documentary evidence was either partially available or completely absent for earlier years, and the explanations furnished were not supported by contemporaneous records establishing actual incurrence of expenditure. Accordingly, the Assessing Officer recomputed the long-term capital gain by restricting the cost of improvement to the extent substantiated and treated the balance amount of Rs. 1,56,43,601/- as undisclosed long-term capital gain, which was added to the total income.
4. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld.CIT(A), who dismissed the appeal of the assessee on the basis of material available on record. Asst. Year : 2022-23 - 3–
5. Aggrieved by the order of the Ld.CIT(A), the assessee is in further appeal before us.
The Ld. Counsel for the assessee submitted that the issues involved in the present appeal have not been examined in accordance with law, either at the assessment stage or at the appellate stage. Before us, the Ld. Counsel prayed that, given an opportunity through Audio Conferencing, the assessee would be able to furnish/explain complete details, clarifications, and evidences before the Revenue authorities. Hence, in the interest of justice, we set aside the matter to the file of the Ld.CIT(A) for de novo adjudication following the procedure laid down by the NFAC. The assessee shall submit all the relevant bank statement/submission/document before the Ld.CIT(A) and comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 09.03.2026. (SUCHITRA KAMBLE) VICE-PRESIDENT () Ahmedabad; Dated 09.03.2026 MV Asst. Year : 2022-23 - 4–