LAKHAN LAL PATIDAR,BHOPAL vs. ITO-2(4), BHOPAL
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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.
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Lakhan Lal Patidar, Bhopal ITA No. 205/Ind/2023 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.
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Lakhan Lal Patidar, Bhopal ITA No. 205/Ind/2023 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 ITA No. ITA No.
371/Ind/2015 (supra). We also direct the assessee to represent his case
before the AO and do not seek unnecessary adjournments.
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Lakhan Lal Patidar, Bhopal ITA No. 205/Ind/2023 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.
sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Indore िदनांक/Dated : 13.12.2023 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore
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