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Facts
The assessee, a teacher, along with her husband, sold a residential house for Rs. 10 Lacs. The AO estimated the cost of acquisition at Rs. 8 Lacs, computing capital gains of Rs. 2 Lacs, and added the assessee's share of Rs. 1 Lacs to her income. The assessee appealed, claiming a capital loss by including land purchase and construction costs, but the CIT(A) disallowed the construction cost of Rs. 3.50 Lacs due to lack of evidence.
Held
The Tribunal condoned the 298-day delay in filing the appeal. It held that even if a conservative construction cost of Rs. 2.50 Lacs was considered, the capital gains would be Nil. Consequently, the Tribunal deleted the impugned addition of Rs. 1 Lacs to the assessee's income and allowed the appeal.
Key Issues
The key issues were the condonation of a 298-day delay in filing the appeal and the justification of the addition of Rs. 1 Lacs to the assessee's income as capital gains, specifically regarding the acceptance of construction costs for capital gains computation.
Sections Cited
Section 144, Section 147, Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘DB’, AMRITSAR BENCH, AMRITSAR
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI UDAYAN DAS GUPTA, JM
(िनधा�रण वष� / Assessment Year: 2012-13) Smt. Anita Rani ITO Pathankot Ward बनाम/ C/o Shri J.S.Bedi Pathankot 638-A, Gandhi Nagar Punjab - 145001 Vs. Jammu – 180004 �ायी लेखा सं./PAN. AARPR-0843-D (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/Appellant by : None ��थ�कीओरसे/Respondent by : Shri Charan Dass (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 12-11-2025 घोषणाकीतारीख /Date of Pronouncement : 17/11/2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) Aforesaid appeal by assessee for Assessment Year (AY) 1. 2012-13 arises out of an order of Ld. Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 07-03-2024 in the matter of an assessment framed by Ld. AO on best judgment basis u/s 144 r.w.s. 147 of the Act on 06-12-2019. The registry has noted delay of 298 days in the appeal, the condonation of which has been sought by the assessee on the strength of condonation petition along with supporting documentary evidences which is placed on record. Considering the same, we condone the delay and proceed with adjudication of appeal on merits. At the time of hearing, none appeared for assessee. The Ld. Sr. DR pleaded for dismissal of the appeal.
Upon perusal of assessment order, it could be seen that the assessee is a teacher. Due to adverse medical conditions, the assessee and her husband sold a residential house for Rs.10 Lacs. The Ld. AO estimated cost of acquisition of Rs.8 Lacs and computed capital gains of Rs.2 Lacs. The assessee’s share of Rs.1 Lacs was finally added to her income. During first appeal, the assessee furnished actual computations and arrived at capital loss of Rs.1 Lacs. The computations have been extracted at Page No.5 of the impugned order. The Ld. CIT(A) did not accept the same on the ground that no evidence was produced by the assessee towards construction cost of Rs.3.50 Lacs. Aggrieved, the assessee is in further appeal before us.
From assessee’s computation, it could be seen that the assessee has purchased the land for Rs.2.40 Lacs and incurred expenses of Rs.0.10 Lacs. The assessee spent Rs.3.50 Lacs on the construction and thus, arrived at loss of Rs.1 Lacs. However, the assessee could not furnish sufficient documents in support of construction cost. However, even if construction cost is taken to be Rs.2.50 Lacs, still the capital gains would be ‘Nil’. Therefore, we delete the impugned addition of Rs.1 Lacs and allow the appeal of the assessee.
The appeal stand allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.