MRS.N.MANJULA, W/O.DR.SHIVARUDRASWAMY,BANGALORE vs. INCOME-TAX OFFICER, BANGALORE

This appeal by the assessee is directed against the order dated 15.09.2016 of CIT(A) for the assessment year 2005-06. The assessee has raised the following grounds:

2. I have heard the learned DR as well as the learned AR and considered the relevant material on record. The assessment was framed under section 144 as none appeared before the AO. Though the assessee challenged the assessment order before the CIT(A) but the appeal of the assessee was again dismissed by the CIT(A) ex-parte due to the reason that despite notice issued none has appeared even before the CIT(A). The limited grievance of the assessee in the present appeal is that the authorities have not given a reasonable opportunity to the assessee to present its case. Further, the AO while making the addition has not given the deduction towards the cost of acquisition as well as benefit of index cost of acquisition. It is noted that the AO has mentioned in the order that there is no time available for further investigation in the case as the assessment is barred by limitation.

Therefore, the assessment was concluded by computing the share received by the assessee on the sale of property as income from other sources. Hence, it is apparent that the gain if any arising from the sale of the property has to be computed as capital gain after allowing the cost of acquisition as well as benefit of indexation. Hence, I find that the AO has not considered the allowable deductions while framing the assessment and bringing the capital gain in the hands of the assessee to tax. In the facts and circumstances of the case as well as in the interest of justice, the matter is set aside to the record of the AO for adjudication of the same afresh after allowing an opportunity of hearing to the assessee as well as considering the cost of acquisition and benefit of index cost of acquisition while computing the capital gain.

Pronounced in the open court on this 31st day of May, 2017.