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Facts
The Assessee filed an appeal against the order of the Ld. CIT(A) which upheld the addition made by the A.O. for the Assessment Year 2017-18. The additions were related to cash deposits and Long Term Capital Gain.
Held
The Tribunal found that the Assessee had produced evidence for cash deposits and cost of improvement which were not considered by the authorities below. Therefore, both issues were remanded to the AO for fresh assessment.
Key Issues
Whether the AO and CIT(A) correctly considered the submissions and evidence provided by the Assessee regarding cash deposits and cost of improvement for capital gains calculation.
Sections Cited
143(3), 68
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Income Tax Appellate Tribunal, DELHI
1. The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 14/08/2024 for the Assessment Year 2017-18.
An assessment order came to be passed on 30/12/2019 u/s 143(3) of the Income Tax Act, 1961 ('Act' for short) by making certain additions. The Assessee preferred an Appeal before the Ld. CIT(A)
which has been dismissed on 14/08/2024 vide order impugned. As against the order of the Ld. CIT(A) dated 14/08/2024 , the Assessee preferred the present Appeal.
The Ld. Counsel for the Assessee addressing on Ground 1 & 3 submitted that the issue of cash deposit has been decided by the A.O. without considering the submissions made by the Assessee, which is in violation of principals of natural justice. Further contended that, the Assessee has produced requisite details and also date-wise and month- wise cash ledger explaining both the source and reconciliation, however, the same has not been considered by the authorities below and made the addition of Rs. 67,06,077/- thus, sought for allowing the Appeal.
Per contra, the Ld. Department's Representative submitted that the Assessee has not produced requisite documents and the authorities below have rightly made addition/upheld the addition which requires no interference at the hands of the Tribunal.
Heard and perused. The addition has been made u/s 68 of the Act on the ground that the Assessee has not filed any reply in regard to cash deposits and the source of cash. It is the specific case of the Assessee that the Assessee has duly produced requisite documents with the reply dated 26/12/2019, uploaded by the Assessee in the income tax portal, however, the same has not been considered by the authorities below. The copy of the reply dated 26/12/2019 found place in the Paper Book filed before us. Considering the above facts and circumstances, we remand the issue regarding the addition made u/s 68 of the Act to the file of the A.O. with a direction to decide the issue afresh in accordance with law after considering the documents produced by the Assessee. Accordingly Ground No. 1 & 3 of the Assessee are partly allowed for statistical purpose.
The Ld. Assessee's Representative addressing on Ground No. 2 contended that, the A.O. made addition of Long Term Capital Gain to the tune of Rs. 23,70,534/- without considering the ‘cost of improvement’ incurred on the property sold while calculating the capital gain and other relevant material and facts. The Ld. Counsel also produced an affidavit of the Assessee before us in support of the claim of cost of improvement. Thus, submitted that the A.O. committed error in making the addition of Long Term Capital Gain which has been erroneously sustained by the Ld. CIT(A). Thus, sought for allowing the Ground No. 2.
Per contra, the Ld. Department's Representative by relying on the orders of the lower authorities submitted that the issue of Long Term Capital Gain has already been restored to the file of the A.O. for re-computing the same by including the stamp duty paid in the cost of acquisition therefore, submitted that the order of the Ld. CIT(A) requires no interference, thus, sought for dismissal of Ground No. 2.
We have heard both the parties and perused the material available on record. The A.O. made addition of Long Term Capital Gain to the tune of Rs. 23, 70,534/-. It is the case of the Assessee that the Assessee has incurred certain ‘cost of improvement’ on the property sold, which has not been considered by the A.O. while calculating the capital gain. The Ld. Counsel also submitted an affidavit of the Assessee in support of the claim of cost of improvement before us.
Considering the above facts and circumstances, we restore the entire issue of Long Term Capital Gain to the file of the A.O. to decide the same afresh after considering the claim and the documents produced by the Assessee. Accordingly, the Ground No. 2 of the Assessee is partly allowed for statistical purpose.
Thus, we remand both the issues involved in the present Appeal to the file of the A.O. to frame the assessment de-novo in accordance with law. The Assessee is at liberty to produce any documents in support of his claim. Needless to say, the Assessee shall heard before passing the assessment order.
In the result, the Appeal of the Appellant is partly allowed for statistical purpose.