KASHMIRI LAL,KANPUR vs. ITO WARD-2(2), KANPUR

The brief facts of the case are that the assessee filed his return of income on 20.8.2013, declaring a total income of Rs.6,72,560/- which was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter called ‘the Act’) on the returned income. Subsequently, the case was selected for scrutiny and the assessment was completed under section 143(3) of the Act on a total income of Rs.21,15,680/- by making an addition of Rs.14,43,120/- on account of capital gains.

Aggrieved, the assessee preferred an appeal before the ld. CIT(A). The Addl./JCIT(A)-2, Coimbatore partly allowed the appeal of the assessee, observing that “…..1/4th of the expenses (appellant’s share in the property) is allowed for the purpose of deduction under section 54F. The Assessing Officer is directed to allow a sum of Rs.3,99,950/- (being one fourth share of the appellant). From the capital gain of Rs.14,43,120/- and assess the balance of Rs.10,49,170/- as capital gains, chargeable to tax.”

Now, the assessee has approached this Tribunal, challenging the action of the Addl./JCIT(A)-2, Coimbatore by raising the following grounds of appeal:

THAT the AO as well as CIT(A)/NFAC has failed to appreciate that the assessee has incurred the constructions on new purchased property bearing H.No. 127/W-1/32, Saket Nagar, Kanpur jointly purchased measuring 358.08 Sq.Mtr. on which, assessee constructed his share i.e. 147.54 sq. mtr only, the CIT(A)/NFAC accepted the constructions cost u/s. 54F but an oversight divided into 4 shares of co- owners, which action of the CIT(A)/NFAC are not lawful, illegal, be quashed. 02. THAT the CIT(A)/NFAC has failed to consider that the constructions are jointly and divided into 1/4th which comes to Rs.3,99,950/- allowed u/s.54F and balance Rs.10,49,170/- chargeable as capital gains, which addition are liable to be deleted. 03. THAT the CIT(A)/NFAC has failed to consider that the Valuation Report submitted by the assessee is only assessee's partition i.e. 147.54 sq.mtr., whereas the CIT(A)/NFAC has treated the entire cost of constructions Rs.14,75,800/- which divided into 4 shares and allow 1/4th share Rs.3,99,950/ only, which action of the CIT(A)/NFAC is arbitrary, bad in law. 04. THAT the CIT(A)/NFAC has failed to consider entire cost of construction amounting to Rs.14,75,800/- which are only incurred by the assessee in his own share, liable to be deleted. 05. THAT the AO without appreciation of fact has added the amount of Rs.14,75,800/- being constructions of new residential-cum-commercial house u/s.54F, but the CIT(A)/NFAC has allowed 1/4th being jointly and also upheld Rs.10,49,170/-, which are liable to be deleted. 06. THAT the appellant craves leaves to add or amend the grounds of appeal before the appeal is finally heard or disposed off.

None was present for the assessee when the appeal was called out for hearing. However, an application dated Nil, seeking adjournment was placed before me citing the reason that due to personal unavoidable circumstances, the Counsel could not prepare the necessary submission. However, looking into facts of the case, I reject the adjournment application and proceed to adjudicate the appeal.

At the outset, it was noted that the appeal filed by the assessee is barred by limitation by 16 days. The assessee has submitted an application for condonation of delay in filing the appeal stating therein that the assessee handed over the order of the first Appellate Authority to the Counsel’s office for filing the appeal before the Tribunal. However, the Office Assistant kept the order in a folder which got tied up with other set of files and got bundled with other records and only after a prolonged effort, the folder could be traced. Under these circumstances, the appeal was filed belatedly by 16 days. It has been prayed that the delay caused in filing the appeal is not deliberate and is beyond the control of the assessee which may please be condoned and the appeal be heard on merits.

Per contra, the ld. Senior Departmental Representative had no objection to the condonation of delay. 8. I have duly considered the issue of condonation of delay and looking into the facts and circumstances of the case and Page 4 of 5 specially noting that the bona fide of the assessee in this regard is beyond doubt, I condone the delay of 16 days and admit the appeal for the purpose of regular hearing.

The ld. Senior D.R. had no objection to the restoration of appeal to the file of the Assessing Officer.

I have heard Senior Departmental Representative and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the assessee to present his case and produce necessary evidence in support of expenses incurred by him for renovation and construction of residential property. I also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer shall be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.

In the result, the appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open Court on 30/08/2024.