YOGENDRA KUMAR GUPTA,GWALIOR vs. INCOME TAX OFFICER WARD 1(1) GWL, GWALIOR

This appeal in ITA No. 176/Agr/2024 for the assessment year

2017-18 has arisen from the appellate order dated 30.03.2024 [DIN &

Order No. ITBA/NFAC/S/250/2023-24/1063693154(1)], passed by

learned Commissioner of Income-tax (Appeals), NFAC, Delhi, which

appeal before learned CIT(A) in turn has arisen from the assessment

order dated 30.11.2019 passed by Assessing Officer u/s. 143(3) of the

Income-tax Act, 1961(Order No. ITBA/AST/S/143(3)/2019-

20/1021375088(1)).

ITA No.176/Agr/2024

with ITAT, Agra Bench, Agra, including the additional grounds of appeal

raised before the Tribunal ,reads as under :

“1. On the facts & in the circumstances of the case the learned CTT (A) was not justified in not appreciating the fact that the property in question was in possession of tenants, that there was a duress sale & just relied in Assessing Officer's assessment order in which appellants contentions & submission were not considered. The appellant prays that on the basis of additional evidence about improvements/construction made a registered valuer's report as on 1.04.1981 U/R 39 of ITAT Rules, capital gain be determined. 2. The appellant craves leave to add amend any ground at the time or before hearing of appeal.” Ground No. 3 (Additional Legal Ground) "That the appellate order passed by the NFAC dated 30.03.2024 is not in accordance with the provisions of Section 250(6) of the Income Tax Act, they have passed the order without giving therein the points for determination, the decision thereon and the reasons for such decisions, the order passed under Section 250 of the Income Tax Act dated 30.03.2024 is bad in law, liable to be set aside." Ground No. 4 (Additional Legal Ground) "That the NFAC, while passing of the appellate order under Section 250 of the Income Tax Act, has not asked for any remand report from the AO nor has made any enquiry as per Section 250(4) of the Income Tax Act, required for giving of just decision, the order passed by the NFAC is not judicious, liable to be set aside." Ground No. 5 (Additional legal ground)- "That while passing the appellate order, the NFAC has completely ignored the facts that while passing the order, the AO has not even allowed the deduction in respect of the cost of the immovable property, subject matter of capital gain, which is required to be deducted while computing of capital gain, therefore, the orders passed by the authorities below are passed without application of mind, ignoring the facts and the submissions made by the assessee. The order passed by the NFAC is bad in law, liable to be set aside." Ground No. 6 (Additional legal ground)- 2 | P a g e

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"That the AO while computing the long term capital gain has not followed the provisions of sub-Section (2)(b) of Section 50(C) of the Income Tax Act, by which if the value as per circle rate exceeds the actual sale consideration, matter has to be referred to the valuation cell, which the AO has not referred. The long term capital gain computed by the AO is against the provisions of sub-Section (2)(b) of Section 50(C) of the Income Tax Act. The addition made, computing the long term capital gain by the AO, sustained by the NFAC is liable to be deleted."

for the impugned assessment year ,on 02.08.2017 , declaring total

income of Rs. Nil. Return was processed by Revenue u/s. 143(1). Case

of the assessee was selected by Revenue for framing limited scrutiny

assessment under CASS on the reasons “capital gains/loss on sale of

property”. The Assessing Officer issued statutory notices u/s. 143(2) and

142(1) from time to time during the course of assessment proceedings.

The assessee is an individual. The Assessing Officer observed that the

assessee has shown sale of property in the ITR for the assessment year

2017-18 for Rs.22,50,000/- and claimed benefit u/s. 48 amounting to

Rs.30,10,778/-, showing net capital loss of Rs.7,60,778/-. The assessee

did not complied with the several notices issued by the AO during

assessment proceedings. The assesseeentered appearance before the

Assessing Officer at the fag end when the assessment was getting time

barred, and submitted copy of sale deed of property sold, but no

documents were provided by the assessee to substantial its claim for

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deduction u/s. 48. The assessee was asked by the AO to submit the

details alongwith evidences. The assessee submitted reply, which was

not found to be satisfactory by the AO, and the Assessing Officer

completed assessment u/s. 144 of the Act, as the matter was getting time

barred on the basis of material available on record. In absence of any

supporting evidences for claiming deduction u/s 48, the Assessing Officer

computed the income chargeable to tax as under:

a). Full value of consideration of the all properties sold = 49,66,681. (b). Cost of acquisition (assessee has not provided any details in this regard the value of transfer is being taken/mentioned as per sale deeds) = 4,22,170/- (c). Cost of improvement(assessee has not provided any details in this regard) = NIL (d). Capital gain = [(a-b)-c]=[(49,66,681 – 4,22,170)=45,44,511/-

3.2 The Assessing Officer also observed that the value of property sold

(share of assessee) as per Stamp Valuation Authority is Rs.49,66,681/-

,whereas the assessee has adopted Rs.22,50,000/-. The AO made

additions on account of under reported the value of Rs. 27,16,681/-

towards income of the assesee under the head ‘Capital Gains’. The

Assessing Officer also observed that the assessee has not provided any

supporting documents regarding deduction u/s 48 amounting to Rs.

30,10,778/- as claimed by the assessee. The AO made additions to the

income of the assessee to the tune of Rs. 25,88,608/- (Rs. 30,10,778/- -

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Rs. 4,22,170/-) . Since, the assessee has reported loss under the head

capital gains to the tune of Rs. 7,60,778/- , the AO made additions to the

tune of Rs. 45,44,511/- to the income of the assessee under the head

‘capital gains’ , and loss of Rs. 7,60,778/- was disallowed/rejected by the

AO.

The CIT(Appeals) dismissed the appeal of the assessee ex-parte, as

there was no compliance by the assessee to the notices issued by the

CIT(Appeals), and ld. CIT(A) observed that the assessee has not

discharged its onus. The additions made by the AO were sustained/

upheld by ld. CIT(A).

and the ld. Counsel for the assessee at the outset submitted that both

the orders viz. assessment order as appellate order passed by learned

CIT(A) were passed ex-parte by the authorities below and the assessee

was not given proper opportunity. It was submitted that the authorities

below have even not allowed the benefit of deduction of cost of

acquisition. It was submitted that the assessee sold as many as three

properties(in which the assessee was having share), but all the

properties sold were not considered by the AO for computing income

chargeable to tax. Ld. Counsel for the assessee submitted that the 5 | P a g e

ITA No.176/Agr/2024

assessee has now filed evidences for purchase of property as well for

sale of properties, which could not be filed before the authorities below.

These are additional evidences filed for the first time before the Tribunal

,and the prayers were made to admit the same. It was submitted that in

this case proper enquiry/verifications are required as even the properties

sold (share of the assessee in the properties sold) were not considered

by the AO in proper perspective, and it requires proper

enquiry/verification by the AO. The prayers were also made to set aside

the matter back to the file of Assessing Officer for framing denovo

assessment after makingproper enquiry/verification, to compute the

income chargeable to tax under the provisions of 1961 Act. It was also

submitted that the Assessing Officer has adopted the value of the

property sold as adopted for payment of stamp duty by stamp valuation

authority , as full value of consideration, keeping in view the provisions of

section 50C of the Act. The assesseeis challenging the adoption of such

value as adopted by the AO as full value of consideration, and the matter

should be referred to the Departmental Valuation Officer(DVO) for

valuation of the property sold to identify full value of consideration. The

assessee will also file its own valuation report. Further, it was submitted

that the ld. CIT(Appeals) has passed an ex-parte order, which is not in

consonance with the provisions of section 250(6) of the Act, as the 6 | P a g e

ITA No.176/Agr/2024

appeal has not been decided on merits by the ld. CIT(Appeals), and the

assessment order was simply upheld by ld. CIT(A).

are ex-parte, but it is assessee who is at fault, as the assessee did not

participated in the assessment proceedings as well as appellate

proceedings before the ld. CIT(Appeals).

record. I have observed that the assessee filed its return of income on

02.08.2017 ,declaring total income of Rs. Nil. The assessee is an

individual. The case of the assessee was selected by Revenue for

framing limited scrutiny under CASS on the reason “capital gains/loss on

sale of property”. Statutory notices u/s. 143(2) and 142(1) were issued

by the Assessing Officer to the assessee during the course of

assessment proceedings. The assessee participated in the assessment

proceedings at the fag end when the assessment was getting time

barred. The assessee has shown sale of property in the ITR for the

assessment year 2017-18 for Rs.22,50,000/- and claimed benefit u/s. 48

amounting to Rs.30,10,778/-, showing net capital loss of Rs.7,60,778/-.

The assessee submitted sale deed of property sold, but could not file

documents in support of claim for deduction u/s. 48. Since the matter

was getting time barred, the Assessing Officer made best judgment 7 | P a g e

ITA No.176/Agr/2024

assessment based on material on record by computing the income of the

assessee as under :

a). Full value of consideration of the all properties sold = 49,66,681. (b). Cost of acquisition (assessee has not provided any details in this regard the value of transfer is being taken/mentioned as per sale deeds) = 4,22,170/- (c). Cost of improvement(assessee has not provided any details in this regard) = NIL (d). Capital gain = [(a-b)-c]=[(49,66,681 – 4,22,170)=45,44,511/- The assessee filed first appeal with ld. CIT(Appeals), but there was no

compliance by the assessee to the notices issued by ld. CIT(A) during

appellate proceedings, which led to dismissal of appeal by the ld.

CIT(Appeals) ex-parte in limine without deciding the issues arising in

appeal on merits, and assessment order passed by the AO was upheld .

The assessee has now filed copies of purchase deed for purchase of

property, which is placed on record in file. The assessee has also

claimed that it sold three properties(share in properties), and copies of

sale deed are enclosed. It is claimed that the AO has not even

considered the same. Further, the AO has adopted higher stamp duty

valuation as adopted by stamp valuation authorities as full value of

consideration as against the contractual sale value as reflected in the

sale deed, keeping in view provisions of Section 50C. The assessee

has also contested the invocation of section 50C and has prayed that

higher stamp duty valuation as adopted by stamp valuation authority as

full value of consideration is not justified and matter may be referred to 8 | P a g e

ITA No.176/Agr/2024

DVO for valuing the property. I have observed that the additional

evidences have been filed by the assessee by way of purchase deeds of

the properties claimed to be sold by the assessee as also sale deed

copies. These evidences could not be filed before the authorities below

as the ld. Counsel stated that these being old purchase and sale deeds

were not available at the time of assessment, but now the assessee has

produced these evidences and prayers are made to set aside the matter

back to the Assessing Officer for framing denovo assessment after due

verification/enquiry. These additional evidences require

verification/enquiry by the authorities below. The assessee has also

prayed for referring the matter to the DVO to compute full value of

consideration, keeping in view provisions of Section 50C as the value

adopted by stamp valuation authorities by the AO is now challenged by

the assessee. Under the facts and circumstances of the case and in the

interest of justice, I set aside both the orders of the authorities below and

restore the matter back to the file of Assessing Officer for framing de

novo assessment after providing proper opportunity to the assessee. The

assessee is also directed to comply with the directions of Assessing

Officer ,otherwise the Assessing Officer shall be at liberty to

framedenovo assessment in accordance with law on merits. I clarify that I

have not commented on merits of the issue arising in this appeal. The 9 | P a g e

ITA No.176/Agr/2024

evidences filed by the assessee indenovo assessment proceedings shall

be admitted by the AO , and adjudicated on merits in accordance with

law. I order accordingly.

purposes.

Order pronounced in the open court on 12/02/2025

Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated: 12/02/2025 *aks/- *Kavita Arora Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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