Loading judgment…
Facts
The assessee sold a flat for Rs. 55,00,000/- and claimed a long-term capital loss of Rs. 2,72,448/- after indexation. The AO, however, computed a long-term capital gain of Rs. 25,16,943/-. The CIT(A) confirmed the AO's action. The appeal was filed with a delay of 308 days.
Held
The Tribunal noted that the appeal was filed with a significant delay, which was condoned with a cost of Rs. 5,000/-. The Tribunal set aside the orders of the CIT(A) and AO and remanded the matter back to the AO.
Key Issues
Whether the delay in filing the appeal can be condoned and re-computation of long-term capital gain by the AO after examining the cost of construction paid to the developer.
Sections Cited
143(3), 147, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI S.R. RAGHUNATHA
आयकर अपील सं./ITA No.:376/CHNY/2024 िनधा�रण वष�/Assessment Year: 2012-13 Shri Aathur Karthik, The Income Tax Officer, No.25-A, D.B. Road, Vs. Non-Corporate Ward 2(3), R.S. Puram, Coimbatore. Coimbatore – 641 002. PAN: AQNPK 5560A (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri Y. Sridhar, F.C.A ��यथ� क� ओर से/Respondent by : Smt. M.S. Deeptha, JCIT सुनवाई क� तारीख/Date of Hearing : 08.08.2024 घोषणा क� तारीख/Date of Pronouncement : 14.08.2024 आदेश /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, in ITBA/NFAC/S/250/2022-23/1049631335(1) dated 10.02.2023. The assessment was framed by the Income Tax Officer, Non-Corporate Ward 2(3), Coimbatore for the assessment
At the outset, it is noticed that this appeal is barred by limitation by 308 days. The facts of the case are that the order by CIT(A)-NFAC is dated 10.02.2023. As per Form 36, the assessee has received this order on 10.02.2023 and appeal should have been filed on or before 11.04.2023 but appeal was actually filed on 13.02.2024 and thereby, there is a delay of 308 days. The assessee filed condonation petition along with affidavit for condoning the delay of 309 days stating the following reason:- “2. It is submitted that the appellant was made aware of this conundrum only when a reminder show cause notice for penalty U/s.271(1)(c) was served on 18.01.2024 by the National Faceless Penalty Centre. Only then the appellant was notified about the appellate order already passed which was omitted to be noticed by inadvertence. The appellant is not tech savvy and while the adverse appellant order had been passed after a long duration of time, the appellant was unable to tract the same immediately at the time of passing the said order..”
2.1 When this was confronted to ld. Senior DR, she opposed condonation of delay.
2.2 After hearing rival contentions and going through the facts of the case, we are of the view that delay can be condoned with a cost of Rs.5000/- to be paid to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras by the assessee within a month’s time from the date of receipt of this order. The assessee will pay this cost and produce the receipt before the AO. In term of above, we condone the delay and admit the appeal for adjudication.
The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in assessing and adding long term capital gain at Rs.21,47,425/-.
We have heard rival contentions and gone through facts and circumstances of the case. We have perused the case records including the assessment order and the order of CIT(A) and also paper-book filed by the assessee. Brief facts are that the assessee sold a flat at R.S. Puram, Coimbatore for a total consideration of Rs.55,00,000/- on 07.03.2012. The assessee after taking date of purchase as 16.05.2008 for a consideration of Rs.42,79,700/- and after indexing the same estimated long term capital loss at Rs.2,72,448/- as under:- Sale consideration of R.S.Puram Flat Rs.55,00,000 on 07.03.2012 Less: Cost of Indexation Date of Purchase 16-05-2008 Rs.42,79,700/- Indexation – (42,79,700/582*785) Rs.57,72,448/- Rs.57,72,448/- -2,72,448/- The AO during the course of scrutiny assessment proceedings noted that the value of land is Rs.8,75,150/- and the value of Sub-Registrar and also a Memorandum of Assistant Executive Engineer, Madurai wherein the report of field inspection estimated the value of building at Rs.13,36,494/-. He computed the total value at Rs.22,11,643/- and after allowing indexation computed long term capital gain at Rs.25,16,943/- as under:- Indexed cost of acquisition is (2211643 x 785/582) = 2983057 Long term capital gains = 5500000-2983057 = Rs.25,16,943/- The assessee furnished the purchase deed for a sum of Rs.11,49,110/- and thereby revised capital gain arrived at Rs.21,47,425/- and added to the returned income of the assessee. Aggrieved, assessee preferred appeal before CIT(A).
4.1 Before CIT(A), the assessee claimed purchase of property on 16.05.2008 at Rs.42,79,700/- for the reason that as per sale deed dated 16.05.2008, the UDS was purchased for a sum of Rs.11,41,500/- plus stamp duty of Rs.80,000/- thereby total cost of Rs.12,21,500/-. It was claimed that the assessee has paid a sum of Rs.42,29,700/- to the developer Marutham Developers on various dates by cheque and this includes the value of sale deed of UDS. The ld.counsel for the assessee stated that payments made to Marutham Developers by cheque have not been considered neither AO nor by the CIT(A), whereas they have valued the value of building at Rs.13,36,493/-. We noted that the assessee before AO as well as before CIT(A) made this claim of payment made for purchase of property to M/s.Marutham Developers and these payments prima facie seems to be made to the developer. Hence, as agreed by the ld.counsel for the assessee, we set aside the order of CIT(A) and that of the AO and remand the matter back to the file of the AO to recomputed the long term capital gain in term of the following:- i) The UDS was purchased by assessee by paying a sum of Rs.12,21,500/- and it is paid before the Registrar through sale deed. ii) As regards to cost of construction paid to M/s. Marutham Developers or the value of building is in dispute, the AO will examine the payments made to M/s. Marutham Developers which are given by assessee in its chart as under:- Date Bank Cheque No. Amount in Rs. 17.09.2007 KVB 400241 Rs.4,00,000/- 18.01.2008 KVB 400245 Rs.10,00,000/- 08.02.2008 KVB 400246 Rs.2,72,000/- 11.03.2008 KVB 400250 Rs.1,00,000/- 12.01.2007 HDFC 341062 Rs.2,50,000/- 05.04.2007 HDFC 341092 Rs.2,50,000/- 03.10.2007 HDFC 341097 Rs.6,00,000/- 30.11.2007 HDFC 341099 Rs.10,00,000/- 06.09.2008 HDFC 558854 Rs.1,25,000/- 20.05.2008 HDFC 558857 Rs.2,00,000/- 28.05.2008 HDFC 558858 Rs.29,700/- Total Rs.42,29,700/- The assessee will produce the details of these payments and will get verified to the AO so as the AO will verify and then decide the claim of assessee, what is the cost of the building and accordingly re- compute the capital gain. In term of the above, the matter is restored back to the file of the AO and appeal of the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 14th August, 2024 at Chennai.