SH. VIKAS JAIN,NEW DELHI vs. ITO, NEW DELHI

The only grievance of the assessee in this appeal relates to the confirmation of addition of Rs.7,15,825/- made by the AO on account of disallowance of cost of improvement claimed by the assessee.

Facts of the case in brief are that the assessee filed the return of income in ITR SAHAJ on 20.06.2012 declaring an income of Rs.1,89,610/-. The AO observed that the assessee did not file the return u/s 139(1) of the Income Tax Act, 1961 (hereinafter referred to as the 2 Vikas Jain Act) before the end of the relevant assessment year as such rendered himself for the penalty to be imposed u/s 271F of the Act. The case was selected for scrutiny for the reason that the assessee entered into certain high value transaction during the financial year relevant to the assessment year under consideration. The AO observed that the assessee had shown Long Term Capital Gain of Rs.1,60,051/- in the computation of income as under:

Being aggrieved the assessee carried the matter to the ld. CIT(A) who observed that the assessee furnished an affidavit on 21.01.2014 stating that the cost of improvement was spread over 4 years as per following details:

Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that in the year 1995, the parents of the assessee were murdered alongwith his two brothers, the assessee was only three years old at that time, he was the sole survivor of unfortunate incident and had to be hospitalized for a long time. It was also submitted that the parents 5 Vikas Jain of the assessee died in very unfortunate and sudden circumstances without handing over any record to any person and that the house was constructed house, as the family was living in the said house since 1986. It was stated that the assessee had to fight a legal battle with his paternal grandparents and paternal uncle as they were trying to grab his properties. He further submitted that as per the information provided to the assessee by his maternal grandmother, the said house was further constructed in 1985-86, 1986-87, 1989-90 and 1991-92 and that his mother had spent money on further expansion of the said house. Therefore, the assessee filed an additional evidence under Rule 46A before the ld. CIT(A), as the assessee was not granted adequate opportunity at the time of assessment proceedings. However, the ld. CIT(A) rejected the additional evidences without any basis with preconceived mind. It was stated that the assessee had furnished valuation report of the said property by the Government Registered Valuer dated 31.03.1992 showing that the value of the said property as on 31.03.1992 was 15,00,000/- and that the property belongs to Smt. Bilas Jain (Mother of assessee) which the ld. CIT(A) had not taken any cognizance in his order and treated the submissions of the assessee as dubious, therefore, the order of the ld. CIT(A) was a non-speaking order and as such the addition sustained by the ld. CIT(A) was not justified. A reliance was placed on the decision of the ITAT Delhi Bench in the case of ACIT VS Sh. Laxman Singh Rawat in order 6 Vikas Jain dated 22.08.2014. The ld. Counsel for the assessee also submitted copy of the FIR in support of his submission that the parents and brothers of the assessee were murdered.

In his rival submissions the ld. Senior DR strongly supported the orders of the authorities below and further submitted that no evidence was furnished in support of the claim of improvement, therefore, the ld. CIT(A) rightly sustained the addition made by the AO.

I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it appears that the additional evidences were furnished by the assessee first time before the ld. CIT(A), however, the same were not admitted by the ld. CIT(A) who considered the submissions of the assessee as dubious. The claim of the ld. Counsel for the assessee was that the assessee furnished the valuation report from the Government Registered Valuer dated 31.03.1992. However, no cognizance was taken by the ld. CIT(A) to the said document. I, therefore, considering the totality of the facts and the submissions of the assessee that no cognizance was taken by the ld. CIT(A) to the additional evidences which were not available to the AO, deem it appropriate to set aside the impugned order and remand the issue back to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being here to the assessee.