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Facts
The assessee, engaged in Kirana business, did not file an ITR, leading to reassessment proceedings under sections 147/148. A cash deposit of Rs. 49,01,000/- in his bank account was identified, for which the assessee claimed the source to be the sale of ancestral property, asserting he owned only 50% and shared proceeds with his brother. The AO calculated long-term capital gain on the full sale consideration, and the CIT(A) rejected the assessee's additional evidence regarding co-ownership without providing specific reasoning.
Held
The Tribunal held that the CIT(A) erred in rejecting the additional evidences without proper reasoning, noting the assessee's individual and agriculturist status who initially hadn't filed a return. It found that the additional evidences presented (sale deed, ownership proof, confirmations) strongly supported co-ownership. Consequently, the Tribunal allowed the additional evidences and remanded the entire issue back to the AO for fresh enquiry and consideration of the new evidence.
Key Issues
Whether the CIT(A) was justified in not admitting additional evidences regarding co-ownership of ancestral property and its sale proceeds; and proper calculation of long-term capital gain based on actual share of ownership.
Sections Cited
Section 147, Section 148, Section 143(3), Rule 46A
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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SHRI G.S. PANNU, VICE- & SHRI ANUBHAV SHARMA
ORDER
PER ANUBHAV SHARMA, JUDICIAL MEMBER:
This appeal is preferred by the assessee against the order dated 21.11.2019 of the Commissioner of Income Tax (Appeals)-15, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal No.245/18-19 arising out of the appeal before it against the order dated 28.12.2018 passed u/s 147 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’), by the ITO, Ward-45(1), New Delhi (hereinafter referred to as the Ld. AO).
Heard and perused the record.
The assessee is engaged in the business of Kirana and had not filed return of income for which assessment was opened u/s 147 of the Act by issuing a notice u/s 148 of the Act on 23.08.2018 for which the assessee filed return of income declaring income at Rs.15,890/- on 17.12.2018. The AO observed deposit of cash of Rs.49,01,000/- in savings bank account of the assessee with State bank of Bikaner & Jaipur and sought explanation of the source from the assessee. The assessee had submitted that the source of cash was deposit from sales consideration received after sale of ancestral property. The AO, however, computed the long-term capital gain on the entire sale consideration of the sale deed for which the assessee claimed before the CIT(A) that the assessee was owner of 50% of the land only, therefore, gross sales consideration should have been taken at Rs.11 lakh instead of Rs.22 lakhs. The assessee also filed additional evidences for which remand report was called from the AO and, after considering the remand report, the additional evidences were rejected and the addition was sustained. The CIT(A) on merits observed as follows:- “Without prejudice to the comments made in para 4.3 above regarding the admission of additional evidence, it is further seen from the report of the AO that the appellant is constantly changing his stand taken during the assessment proceedings. In the assessment proceedings, the appellant had stated that he had himself received an amount of Rs.22,00,000/- on account of sale of ancestor land, while now he is taking the stand that 50% consideration belonged to his brother Sh. Kishori Lai. However, no Shri Kishori Lai Kataria is not found to have filed any Return of income for A.Y. 2011-12 and thus not declared any capital gain on the same. The assessee also stated that amount of Rs. 3,85,000/- towards the construction expense on newly purchased land was not claimed in ITR as the total purchase cost of new land only has been set off against the Long term capital gain. During the course of appellate proceedings, the appellant is also avoiding to file any rejoinder despite the sufficient opportunities provided to him as mentioned in para 3 above. Therefore, considering the facts and circumstances of the case, I do not find any merit in the submissions of the appellant and accordingly the additions of Rs. 6,09,873/- and Rs. 2,50,000/- made by the AO are hereby confirmed.”