Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश/O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 29.04.2023, passed by the Commissioner of Income-tax (Appeals), NFAC, Delhi [“CIT(A)”] arising out of assessment-order dated 07.12.2018 passed by the ITO, 2(4), Bhopal [“AO”] u/s 147 read with section 144 of the Income-tax Act, 1961 for the assessment-year [“AY”] 2011-12, the assessee has filed this appeal.
Heard the learned Representatives of both sides at length and case- records perused.
Lakhan Lal Patidar, Bhopal Assessment year 2011-12 3. Although the assessee has raised several grounds of appeal in Form No. 36 relating to legality as well as merits of the case, Ld. AR for assessee did not argue all those grounds. Ld. AR only carried us to the orders of lower-authorities and pointed out that both of the lower- authorities, namely the AO as well as CIT(A) have passed their respective orders ex-parte assessee as the assessee could not make representation before them which has in fact occurred due to non-receipt of notices from authorities. Then, carrying us to the assessment-order, Ld. AR submitted that the AO has framed assessment u/s 144 and while doing so, he assessed an income of Rs. 2,29,24,000/- on account of ‘capital gain’ in respect of a property sold by assessee situated at Gram Misrod, Tahsil Huzur, Bhopal for Rs. 1,75,55,840/- having market value at Rs. 2,29,24,000/-. Ld. AR submitted that the AO has taxed the entire sale- consideration of property as ‘capital gain’ without giving any deduction for cost of acquisition and without giving any exemption u/s 54B as allowable to the assessee, therefore the income assessed by AO is against the provisions of section 45(1) read with section 48, 55(2) and 54B of the act.
Therefore, the income assessed by AO has to be in accordance with the provisions of act and same can only be done by AO. Ld. AR further pointed out that the impugned property was an ancestral property, part of which was sold by assessee and part of which was sold by assessee’s brother, Shri Rajaram Patidar and in the case of assessee’s brother also, the AO did not allow deduction of cost of acquisition but on further appeal in ITA No.
Lakhan Lal Patidar, Bhopal Assessment year 2011-12 371/Ind/2015 order dated 28.09.2018, the ITAT Indore Bench has, in para no. 30 of order, directed the AO to allow deduction of cost of acquisition. Therefore, Ld. AR contended and prayed, to remand the present case of assessee also to the file of AO for adjudication afresh with suitable directions.
Ld. DR for Revenue did not have any objection to the prayer of the assessee but only requested to direct the assessee to ensure participation before AO and do not seek unnecessary adjournments.
After careful consideration, we find that there is a merit in the submission of the assessee that the entire sale consideration of Rs. 2,29,24,000/- cannot be taxed by way of capital gain, the same has to be worked out after giving requisites deductions and exemptions as per provisions of section 45(1) read with section 48, section 55 and 54B to the extent allowable to assessee. Since the AO’s action of taxing entire sale consideration as capital gain is against the scheme of act, we find it proper to remand this case back to the file of AO who shall assess the correct amount of capital gain in accordance with law after giving opportunity to the assessee. While doing so, the AO shall also give due regard to the direction given in identical case of assessee’s brother in No. 371/Ind/2015 (supra). We also direct the assessee to represent his case before the AO and do not seek unnecessary adjournments.
Lakhan Lal Patidar, Bhopal Assessment year 2011-12 6. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 13.12.2023.