SUBHADARA BHEEMAVARAPU,HYDERABAD vs. INCOME TAX OFFICER, WARD 4(3) , HYDERABAD

This appeal filed by the assessee is directed against the ex-parte order dated 11/01/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2012-13.

Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the learned CIT (A) NFAC in confirming the proceedings initiated u/s 147 of the I.T. Act and confirming the addition of Rs.1,72,48,042/- made by the Assessing Officer towards Long- Term Capital Gain.

Facts of the case, in brief, are that the assessee along with five others had entered into a Development Agreement with M/s. Legend Estate Pvt Ltd vie Doc No.743/2012 on 19.03.2012 in respect of the land admeasuring 5327 sq. yards M.No.3-6- 784/12 and 13 situated at Narayanaguda, Hyderabad during the A.Y 2012-13 for a total market value of Rs.26,63,50,000/-. The share of the land owners is 55% in the commercial area and 50% in residential areas of the total project. The assessee was entitled to receive six residential flats with an aggregate constructed area of 10,878 sq.ft as per the development agreement and Rs.67.00 lakhs from the developer as interest free advance returnable on completion of the project. The assessee has not filed any return of income for the F.Y 2011-12 relevant to the A.Y 2012-13.

Accordingly, notice u/s 148 of the I.T.Act was served on the assessee on 23.03.2019 after taking necessary approval from the competent authority. In response to the same the assessee filed her return of income on 28.11.2019. The Assessing Officer thereafter issued statutory notices u/s 143(2) and 142(1) of the Act in response to which the assessee filed the requisite details.

The Assessing Officer noted that the assessee has not offered any capital gain in A.Y 2012-13. However, it was stated that the same was offered during the financial year 2015-16 and income from capital loss was calculated at Rs.77,916/- taking the date of sale as 6.6.2014 and after claiming indexation to the tune of Rs.85,96,316/-. A detailed note was also filed by the assessee.

However, the Assessing Officer was not satisfied with the arguments advanced by the assessee. Rejecting the various explanation given by the assessee, the Assessing Officer determined the Long-Term Capital Gain in the hands of the assessee at Rs. 1,72,48,042/-.

Aggrieved with such order of the learned CIT (A) NFAC the assessee is in appeal before the Tribunal.

The learned Counsel for the assessee submitted that the Assessing Officer on wrong appreciation of facts has determined the Long-Term Capital Gain in the hands of the assessee at Rs. 1,72,48,042/- for the impugned A.Y whereas the assessee has already declared Long-Term Capital Gain during the A.Y 2015-16. He submitted that due to health reasons, the assessee was unable to contact his Counsel for which no submission could be filed before the learned CIT (A) NFAC for which the order was passed ex-parte. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate his case before the learned CIT (A) NFAC.

The learned DR, on the other hand, strongly objected to the arguments advanced by the learned Counsel for the assessee. Referring to Para 2 of the order of the learned CIT (A) NFAC, she drew the attention of the Bench to the various notices issued by learned CIT (A) NFAC and the persistent non- compliance of the assessee to such statutory notices. She accordingly submitted that the order of the learned CIT (A) NFAC should be upheld and the grounds raised by the assessee should be dismissed.

We have heard the rival arguments made by both the sides and perused the record. We find the Assessing Officer in the instant case made addition of Rs. 1,72,48,042/- as Long-Term Capital Gain in the hands of the assessee on the ground that the transfer is complete and the consideration mentioned in the agreement for sale has to be taken into consideration for the purpose of determination of income for the impugned A.Y when the agreement was entered into and possession was given. According to him, both the aforesaid aspects took place in the previous year relevant to the A.Y 2012-13 and therefore, the assessee is liable to pay the tax on the capital gain for the impugned A.Y. We find the learned CIT (A) NFAC upheld the action of the Assessing Officer in the ex-parte order passed by him in absence of any submission despite number of opportunities granted. It is the submission of the learned Counsel for the assessee that in the interest of justice, the assessee should be given an opportunity to substantiate her case before the learned CIT (A) NFAC. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the learned CIT (A) NFAC with a direction to grant one last opportunity to the assessee to substantiate her case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to file her submissions on the date of hearing without seeking any adjournment under any pretext failing which the learned CIT (A) NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, appeal filed by the assessee is allowed for statistical purposes.