DCIT, NEW DELHI vs. SH. DALJIT KAUR MAJITHIA, NEW DELHI

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ITA 5780/DEL/2013Status: DisposedITAT Delhi14 October 2015AY 2004-054 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in admitting the valuer's report as additional evidence without following Rule 46A of the Income Tax Rules, which requires giving the AO an opportunity to examine such evidence. Therefore, the order of the CIT(A) was set aside.

What were the facts?

The assessee sold land and did not include the capital gain in her original return. The AO made an addition for long-term capital gain, estimating the cost of acquisition as on 01.04.1981 at Rs. 15,000/- per canal. The CIT(A) enhanced this to Rs. 24,300/- per canal based on a valuer's report.

What were the issues?

Whether the CIT(A) correctly admitted additional evidence (valuer's report) without providing the AO an opportunity to examine it as per Rule 46A.

Which sections of the Income-tax Act were involved?

Section 148,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: SMT DIVA SINGH, JM & SH. PRASHANT MAHARISHI, AM

For Appellant: Shri Alok Kumar Mittal, CA
For Respondent: Shri Sujit Kumar, Sr. DR
Hearing: 09.10.2015Pronounced: 14.10.2015

ORDER Per Prashant Maharishi, AM:

1.

This appeal is preferred by Revenue against the order of CIT (A) – XXX, New Delhi dated 22.8.2013 raising following grounds . “On the facts and in the circumstances of the case and in law, the ld. CIT (A) has erred in:-

1. Directing the AO to accept indexed cost at Rs. 24,300/- per canal as on 01.04.1981 without following the provision of rule 46A and without allowing the opportunity to A.O. under rule 46A for proper enquiry.

2. Enhancing the Index cost from Rs. 15,000/- to Rs. 24,300/- per canal as on 01.04.1981 whereas so called approved valuer’s report was not before the A.O. during the assessment and the A.O. took the rate of Rs. 15,000/- on the basis of information of ITO Ward 2(3), Batala, Punjab, where the assessment was made in the case of purchaser.”

02. The brief facts of the case are that the assessee has sold some land but it was not included in the return of income filed by her in the original return of income, therefore notice u/s 148 of the Income Tax Act was issued and AO vide assessment order dated 20th December, 2011 passed u/s 144 rws148of the Act madean addition of Rs. 23,62,132/- as long term Daljit Kaur Majithia AY: 2004-05 capital gain. While computing long-term capital gain, AO took the cost of acquisition as on 1.4.1981 @ Rs. 15,000/- per canal based on the information received from ITO Ward 2(3), Batala, Punjab. Based on this out of total sale consideration of Rs.52,22,000/- AO granted deduction of Rs 28,57,868/- as index cost of acquisition after taking rate of land as on 1.4.1981 at Rs. 15,000/- per canal and thereby deriving long term capital gain of Rs. 23,62,132/-. Assessee aggrieved with the order of AO in estimating cost of acquisition preferred an appeal before CIT (A). Ld. CIT (A) based on the report of Authorised valuer has directed AO to take the value of land as on 1.4.1981 at the rate of Rs. 24,300/- per canal against Rs 15000/- per canal adopted by AO. Against this revenue is in appeal before us.

3.

The ld. DR submitted that CIT (A) has erred in admitting the additional evidence of report of authorised valuer without following the provisions of Rule 46A of the Income Tax Rules 1962 and therefore the matter should be set aside to the file of AO. Ld. AR for the assessee could not point out before us that whether the valuation report was sent to AO for remand report or in any other manner AO was granted an opportunity to meet additional evidence filed by the Assessee.

4.

We have carefully considered the issue and from the orders of lower authorities, it is apparent that assessee did not submit any details before the assessing officer. However, beforeCIT (A) assessee has submitted the valuation report of authorised valuer estimating the value of the land as at 1-4-1981 at the rate of Rs. 24,300/- per canal as additional evidence. It is also apparent that CIT (A) has not followed the provisions of Rule 46A (3) wherein he should have allowed a reasonable opportunity to AO to examine the new evidences or documents produced by the appellant. Therefore, we are of the view that in the interest of justice, the order of CIT (A) is set aside and the matter is remanded back to the fileof AO with direction to examine the evidences submitted by assessee and after affording reasonable opportunity of hearing to the assessee decide issueon merit. In the result, the ground no. 1 of the appeal of revenue is allowed.

5.

Ground no. 2 is against the adoption of index cost of Rs. 15,000/- adopted by AO against which CIT (A) has directed to adopt Rs. 24,300/- based on the report of authorised valuer.

Daljit Kaur Majithia AY: 2004-05 However in view of our decision in ground no 1 where in we have set aside the matter back to the file of AO, this ground does not require to be adjudicated.

6.

In the result, appeal of the revenue is allowed for statistical purposes. (Order Pronounced in the Court on 14/10/2015) Sd/- Sd/- (Diva Singh) (Prashant Maharishi) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 14/10/2015 *B. Rukhaiyar* Copy forwarded to: 1.Appellant a 2.Respondent 3.CIT 4.CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR Daljit Kaur Majithia AY: 2004-05

Date Initial 1. Draft dictated on 09/10/2015 2. Draft placed before author 09/10/2015 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.

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