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Facts
For AY 2017-18, the AO re-computed Long Term Capital Gains by denying the cost of improvement. The CIT(A) found the complete disallowance unjustified and remanded the matter back to the AO for verification of documentary evidence. The Revenue appealed, contending that the CIT(A) lacked the power of remand.
Held
The Tribunal upheld the CIT(A)'s decision, finding that the assessee's documents regarding cost of improvement were not thoroughly examined by the AO, and therefore, the CIT(A)'s action of remanding the case for proper verification was justified.
Key Issues
Whether the CIT(A) has the power to remand a case to the AO for fresh examination of documents for cost of improvement, and whether the AO's denial of cost of improvement without thorough examination was justified.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2017-18 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-2, Vadodara [CIT(A)] dated 25-08-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143 (3) of the Act on 27-11-2019. In the assessment order, Ld. AO re-computed Long Term Capital Gains as earned by the assessee by denying cost of improvement. The Ld. CIT(A), after due consideration of assessee’s submissions, observed that complete disallowance of cost of improvement was not justified. The matter would require thorough and objective examination of documentary evidences as furnished by the assessee. The Ld. AO was accordingly directed to verify the quantum of expenses based on bills / vouchers, ledgers accounts and bank statement as submitted by the assessee. Accordingly, the ground was allowed for statistical purposes. Aggrieved, the revenue is in further appeal before us on the ground that Ld. Addl. / Joint CIT was not vested with the power of remand. At the time of hearing, none appeared for assessee.
We are of the considered opinion that the assessee had submitted various documents in support of claim of cost of improvement which were not examined by Ld. AO. The Ld. CIT(A) rightly noted that these documents, though submitted to AO, were not examined thoroughly and the claim was denied merely on the ground that no documentary evidences were submitted by the assessee. On these facts, the action of Ld. CIT(A) in remanding back the matter back to the file of Ld. AO could not be faulted with. We endorse the action of Ld. CIT(A).
The appeal stand dismissed. Order pronounced on 23rd February, 2026.
-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 23-02-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR
ITAT CHANDIGARH