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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-II’, NEW DELHI
Before: SMT. DIVA SINGH
The present appeal has been filed by the assessee assailing the correctness of the order dated 20.06.2016 of the CIT(A)-28, New Delhi pertaining to 2010-11 assessment year on various grounds. However, since the assessee remained unrepresented despite issuance of notice, it was considered appropriate to decide the appeal ex-parte qua the assessee’s appeal on merits after hearing the Ld.Sr.DR. The sole issue addressed by the Revenue is addressed in Ground No.3 raised by the assessee. The same is reproduced hereunder :-
“3. For that on the facts and in the circumstances of the case, the Ld commissioner of Income Tax (Appeals) erred in not admitting the additional evidence filed by the appellant which was germane to deciding the issue and the same amounted to violation of principles of natural justice.”
Addressing the defect of 2 days pointed out by the Registry, it is seen that in the petition explaining the delay, the assessee has stated that the delay had arisen on account of a series of death in his family of the assessee as well as medical emergency. The Ld. Sr.DR considering the prayer of the assessee in regard to the condonation of delay had no objection if the delay is condoned. Accordingly, considering the prayer in the condonation of delay petition the affidavit filed on behalf of the assessee and after hearing the Ld.Sr.DR the delay of 2 days in the filing of the appeal is condoned.
A perusal of the record shows that the assessee is stated to be a salaried employee.
The return was picked up for scrutiny since as per the AIR information available, the assessee was found to have sold a property for a sum of Rs.53,25,000/-. The AO require the assessee to explain the same. The assessee in response stated that the specific property was purchased in 1992 for a sum of Rs.4,00,000/- on which the assessee constructed three floors namely ground floor; first floor; and second floor. Second floor was claimed to have been sold for the aforesaid amount. Considering the cost of construction of the second floor taken by an approved value at Rs.15,25,000/- long term capital gain of Rs.32,91,086/- was added to the income of the assessee.
The assessee assailed the addition before the CIT(A). Before him, fresh evidences were sought to be filed. The fresh evidences sought to be raised were not admitted holding that the valuation report relied upon by the Assessing Officer was the evidence of the assessee. Accordingly, it was considered that there was no reason for admitting additional evidence.
Aggrieved by this order, the assessee has filed the present appeal before ITAT. A perusal of the impugned order shows that before the CIT(A), it was submitted that the cost of construction which was taken into consideration by the approved valuer does not factor in the cost of improvement. Thus fresh evidence to address the issue was stated to be necessary.
Apart from that it was submitted that the Approved Values had calculated the value as per CPWD DSR rates which does not include the cost of all the accessories which had been fitted on the site like modern frames on the doors, windows; iron grills, iron doors, hard ware (Handless Locks/ Bolts of Stainless locks steel), modular kitchen; chimney, RO system, bathroom (tiles fixtures) in the two bathrooms, steel railing and toughened glass, rear iron jall, glass work, electrical switch/fans/jhummar/fancy lights and wardrobes etc. It has been submitted that a perusal of the valuation report relied upon before the AO would show that it only refers to plinth area rates and the improvement in the properties have not been taken into consideration. Apart from that cost of maps sanctioning/water/electricity/sewer construction, cost of compounding etc. relatable to the floor sold have also not been considered by the AO. It is seen that it had been argued as per submission recorded in the impugned order that complete details were available and should have been considered by the Assessing Officer, who did not provide any opportunity in regard to the issues considered for making the addition. Had the opportunity been provided the evidences would have been made available to the AO himself. Reliance was placed upon para 1 of the assessment order to state that all “documents asked for” have been filed and on this aspect there was no query.
5.1. Considering the detailed arguments for admission of fresh evidence available on record in the peculiar facts and circumstances and the details available in statement of facts filed, the Ld. Sr. DR was unable to support the following finding of the CIT(A) :-
“2.3 In the case under consideration the assessment has been completed after being given reasonable opportunity to the assessee. Further the Capital gain in question has been duly calculated on the basis of the details and document furnished by the assessee. Moreover the valuation report was prepared by the registered valuer of the assessee, hence there in no reason for admitting additional evidence submitted by the appellant. Further the same is also not cover with the exceptions and explanation specified in rule 46A of the Income Tax Rule. 2.4 Considering the above, I don’t find any infirmity in the Long Term Capital Gain calculated by the A.O. Accordingly the addition of Rs.32,91,086/- made by the assessing officer on account of undisclosed Capital Gain is confirmed.”
5.2. Accordingly, it was his submission that the issue may be remitted back.