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Facts
The assessee, a soldier, sold an immovable property and claimed capital gains. The assessment was framed ex-parte, and the lower authorities dismissed the assessee's appeals due to non-appearance and lack of evidence. The assessee contended his share was 1/6 and the land was agricultural, thus not a capital asset.
Held
The Tribunal noted that the orders of both lower authorities were passed ex-parte. In the interest of justice, the Tribunal restored the appeal to the Assessing Officer for de novo adjudication. The Assessing Officer was directed to consider all evidence, including the correct share of the assessee and determine the capital gains tax liability.
Key Issues
Whether the land sold by the assessee qualifies as a capital asset, and whether capital gains tax is leviable in the absence of proper adjudication by the lower authorities due to ex-parte orders.
Sections Cited
147, 144, 2(14)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2011-12, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024-25/1071458269(1) dated 23.12.2024 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 22.12.2016 by the Assessing Officer, ITO, Ward-2(2), Ghaziabad (hereinafter referred to as ‘ld. AO’).
The only effective issue to be decided in this appeal is as to whether the assessee would be liable to long term capital gains on sale of land in the facts and circumstances of the instant case.
We have heard the rival submissions and perused the material available on record. It was submitted that the assessee was a soldier in Air Force and was Page | 1 posted in Nasik where he shifted in 2004. The residential address of the assessee was at Ghaziabad and the notices sent by the Income Tax Department were at Ghaziabad address which stood un-complied thereby resulting in framing of an ex parte assessment by the ld AO. There is no challenge to the validity of reopening of assessment for AY 2011-12 before us. Hence, we do not deal with the same. Based on the AIR information received by the AO, it was noticed that the assessee had sold immovable property for Rs. 4,25,25,000/- during the year under consideration and that share of the assessee was considered by the ld AO at 1/4th and long term capital gains worked out at Rs. 1,06,31,250/- in the assessment framed u/s 144 r.w.s. 147 of the Act on 11.12.2018. In the said ex parte assessment, no deduction towards cost of acquisition was granted to the assessee for want of evidence. Before the ld CIT(A) in the statement of facts, the assessee pleaded in the statement of affairs that his share is 1/6 and not ¼. It was also pleaded that the land sold is outside the definition of capital asset in terms of Section 2(14) of the Act and accordingly, the assessee is not liable for capital gains tax at all. Further, there was no appearance before the ld CIT(A) which lead to dismissal of appeal of the assessee by the ld CIT(A).
Before us, the ld AR vide letter dated 07.01.2025 submitted that share of the assessee in the ancestral property was only 1/6th and that the land sold was agricultural land wherein, agricultural produce was cultivated. It was submitted that the land is situated at a distance of 12 to 15 kms from the boundary of Ghaziabad. The ld AR before us filed additional evidence including copy of Bhulekh, copy of khasra khatoni and calculation of fasli year from pages 1 to 7 of the Paper Book. It was submitted by him that these additional evidences are very crucial for adjudication of the issue in dispute as to whether subject mentioned land that was sold is a capital asset within the meaning of Section 2(14) of the Act or not. It was also submitted that in any event the ld AO ought to have granted deduction for the cost of land by determining fair market value on 01.04.1981. This claim of deduction for cost of land was made on without prejudice basis by the ld AR.
Considering the totality of the facts and circumstances of the instant case and considering the fact that orders of both the lower authorities were passed ex parte, in the interest of justice and fairplay, we deem it fit and appropriate to restore this appeal to the file of the ld AO for de novo adjudication in accordance with law qua the issue in dispute. The assessee is at liberty to furnish fresh evidences, if any, in support of his contention apart from the additional evidences submitted before this Tribunal. The ld AO is directed to consider all these evidences including the correct share of the assessee in the property sold and determine the capital gain tax liability, if any, in accordance with law. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 10/12/2025.