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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 503/Asr/2017 Assessment Year: 2011-12
Sh. Neeraj Mittal Vs. Income Tax Officer S/o Sadhu Ram Mittal Kathua SICOP Industrial Estate, Kathua [PAN: ACJPM 5707B] (Appellant) (Respondent)
I.T.A. No. 504/Asr/2017 Assessment Year: 2011-12
Sh. Sarju Mittal Vs. Income Tax Officer S/o Sadhu Ram Mittal Kathua 100 SICOP Industrial Estate, Kathua [PAN: AASPM 7651H] (Appellant) (Respondent)
Appellant by : Sh. Raghav Arora, CA Respondent by: Sh. S. M. Surendranath Sr. DR
Date of Hearing: 27.04.2022 Date of Pronouncement: 17.05.2022
2 ITA Nos. 503 & 504/Asr/2017 Neeraj Mittal v. ITO & Ors ORDER Per Dr. M. L. Meena, AM:
Both the appeals have been filed by the assessees against the impugned orders even dated 31.03.2017 passed by the Ld. Commissioner of Income Tax (Appeals), J&K, Jammu in respect of the Assessment Year 2011-12.
In both the appeals the assesse has raised commons grounds of appeals on identical facts except small variation in the quantum of the addition. Hence, these two appeals are heard together and decided by this common order for the sake of brevity. The facts are taken from the appeal in ITA No. 503/Asr/2017 as a lead case, wherein the grounds raised by the assessee are reproduced below:
“1. The worthy CIT (Appeals) erred in confirming the Order of the Ld. A.O. against the facts & circumstances of the case.
The worthy CIT (Appeals) erred in accepting the Stamp Duty Value Rs. 81 Lakhs against the actual Sale consideration of Rs. 57 Lakhs, half share of Assessee being Stamp Duty Value taken by A.O. at Rs. 40,50,000/- as against Actual Sale Consideration Rs. 28,50, 000/-.
The worthy CIT (Appeals) erred in accepting the addition made by the Ld. A.O.in accepting the cost of acquisition as half share of the property to Rs.87500/- against the actual consideration of Rs.175000/- as per Sale Deed which was duly submitted before the A.O.
The worthy CIT (Appeals) erred in confirming the addition made by the Ld. A.O. on account of non-acceptance of the Cost of improvement of Rs. 700000/- made by the Assessee in the Financial year 1997-98 while computing the Long term Capital Gains.
3 ITA Nos. 503 & 504/Asr/2017 Neeraj Mittal v. ITO & Ors 5. The worthy CIT (Appeals) erred in confirming the order on account of claim of deduction u/s 54F as claimed by the Assessee during the Assessment proceedings as well as Appellate proceedings. 6. The Assessee reserves the right to add, amend or withdraw any grounds of appeal before the hearing.”
At the time of hearing, the learned counsel for the assessee has not pressed the ground 1 and 2 on the issue of adopting the Stamp Duty Value Rs. 81 Lakhs against the actual Sale consideration of Rs. 57 Lakhs, and thereby assessee’s half share of Rs. 40,50,000/- as against Actual Sale Consideration claimed at Rs. 28,50, 000/- by applicability of provisions of section 50 C of the act. Accordingly, these grounds no 1 and 2 are are dismissed as not pressed. 4. Briefly the facts of the case are that during the course of assessment proceedings, the AO has noticed that the assessee has shown the sale value of the capital asset at ₹ 57 lakhs and has adopted the value at ₹ 2,850,000 being is half share in this property, as against the value of the shop being adopted at ₹ 80 lakhs by the stumble authority for the purposes of payment of stamp duty as per copy of the registration deed dated 31.08.2010. Since assessee has no objection to adopting the stamp duty Value of the property in the section 50 C of the act, hence the AO has adopted ₹ 4,050,000 as deemed to be the value of consideration as the assessee was being co-owner, having half share in the said property for the purpose of Computing capital gains and accordingly computed long- term capital gains where the AO has rejected the assessee’s claim of ₹ 175,000 as cost of acquisition as against ₹ 87,500 adopted by the AO and
4 ITA Nos. 503 & 504/Asr/2017 Neeraj Mittal v. ITO & Ors claim of the cost of improvement made in the financial 1997 – 98 at ₹ 7 lakhs. 5. In appeal, the learned CIT appeal has confirmed the addition by endorsing the finding of the AO as regards to rejecting the assessee’s claim of ₹ 175,000 towards cost of acquisition as against ₹ 87,500 adopted by the AO and claim of the cost of improvement made in the financial 1997 – 98 at ₹ 7 lakhs.
The Ld. Counsel submitted that the Ld. CIT (A) erred in confirming the addition made by the Ld. A.O. by adopting the cost of acquisition as half share of the property at Rs.87500/- as against the actual consideration of Rs.175000/- as per the registered Sale Deed which was duly submitted before the A.O. and the CIT(A). He further submitted that the CIT (Appeals) erred in confirming the addition made by the Ld. A.O. on account of non- acceptance of the Cost of improvement of Rs. 700000/- made by the assessee in the financial year 1997-98 in computing the Long Term Capital Gains. Thus, the CIT (Appeals) was not justified in confirming the assessment order on account of rejecting the assessee’s claim of deduction u/s 54F during the Assessment proceedings as well as Appellate proceedings. 6.1 The learned counsel for the appellant assessee has filed additional evidence vide letter dated 14.02.2020, in the case of one of the appellant Shri Sarju Mittal S/o Shri Shadu Ram Mittal with the support of an affidavit along with paper book in support of the claim of the assessee with request to restore the matter back to the AO on the limited issue to decide the cost of acquisition of the capital asset after considering the additional evidences
5 ITA Nos. 503 & 504/Asr/2017 Neeraj Mittal v. ITO & Ors so filed. He contended that certain documents regarding the cost of improvement to the subject property could not be furnished during the course of the assessment proceedings and the appellate proceedings as well in support of the claim of the actual cost of acquisition. After going through the documents filed as additional evidence equally applicable in the case of both the assessees, we hold that these are vital documents required to be gone through by the assessing authority to decide the claim of the appellant assessees as regards to the cost of application of the capital asset in the computation of the long-term capital gains. Accordingly, the additional evidence filed by the assessee is admitted and the same is enumerated hereunder: 1. The copy of the valuation report along with map of the property, made in the year 2003 – 04 by M/s AR TECH, 3rd floor, Shastri market, Jalandhar (APB, Pg. 139 to 149). 2. Copy of the declaration made under the VDIS scheme, 1997 (APB page 149 to 157). 3. Calculation of long-term capital gains on the basis of valuation report of 2003 – 04 (APB page 161). 7. Per contra, the Ld. DR stands by the impugned order, however, he has no objection to the request of the assessee to restore the matter back to the Ld. AO, on the limited issue of determination of the cost of acquisition of capital asset in the light of the additional evidence filed by the assessee.
Having heard both the sides and perusal of the record, we observe that the documents filed in the additional evidence regarding the cost of
6 ITA Nos. 503 & 504/Asr/2017 Neeraj Mittal v. ITO & Ors improvement to the subject property could not be filed before during the course of the assessment proceedings and the appellate proceedings as per affidavit of the appellant. In our view, the documents filed in the additional evidence were vital evidence which are required to be gone through by the assessing authority to determine the cost of acquisition of the capital asset as claimed by the appellant assessees for deduction of exemption U/s 54F of the Act, in the computation of the long-term capital gains. Merely observation based on presumption, the Ld. A.O. adopted the cost of acquisition as half share of the property at Rs.87500/- as against the actual consideration of Rs.175000/- as per the registered Sale Deed as per reply filed by the assessee before the AO. And that non-acceptance of the Cost of improvement of Rs. 700000/- made by the assessee in the financial year 1997-98 in capital Asset as per additional evidence is required to be considered in the computation of the long-term capital gains by the authorities below. Thus, the AO and the CIT (Appeals) was not justified in confirming the assessment order on account of rejecting the assessee’s claim of deduction u/s 54F without bringing cogent documentary evidence on record before arriving at such conclusions.
Considering the facts in totality, we are of the considered view that this a fit case required to be restore to the file of the AO, on the limited issue to decide the cost of acquisition of the capital asset afresh on merits after considering the submission of the assessee and affording adequate opportunity of being heard to present its claim, in the light of the aforesaid factual additional evidences, in the case of both the subject appeals being exactly similar on issues in mutatis mutandis. Accordingly, these two
7 ITA Nos. 503 & 504/Asr/2017 Neeraj Mittal v. ITO & Ors appeals are remanded back to the AO. No doubt, that the assessee shall cooperate in the fresh proceedings before the AO.
In the result, these appeals of the assessees are allowed for statistical purpose.
Order pronounced in the open court on 17.05.2022.
Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member Date: 17.05.2022 Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T True Copy By Order