What did the Tribunal hold?

The Tribunal found no evidence in the CIT(A)'s order to support the 1/15th share claim and noted a violation of natural justice. The issue was restored to the AO for fresh adjudication.

The revenue appealed against the CIT(A)'s order which accepted the assessee's claim of a 1/15th share in enhanced compensation interest. The CIT(A) allegedly accepted additional evidence without giving the AO an opportunity to rebut it.

What were the issues?

Whether the CIT(A) erred by accepting additional evidence without providing the AO an opportunity to rebut it, and whether the assessee's claim of a 1/15th share in enhanced compensation interest is substantiated.

ACIT vs Sandeep Sharma, Noida | ITAT Delhi 2023

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

Before: SH. N. K. BILLAIYA & SH. YOGESH KUMAR US

For Respondent: Ms. Tanya, Advocate

Hearing: 07/08/2023Pronounced: 07/08/2023

This appeal by the revenue is preferred against the order of the CIT(A)-1, Noida dated 29.12.2017 pertaining to A.Y. 2014-15.

2. The grievance of the revenue read as under :- 1. That the CIT(A) has erred in law and on facts by not calling for remand report from the A.O and by accepting additional evidence during appellate proceedings without giving opportunity to the A.O. to rebut on the same as per the provisions of Rule 46A of the Income Tax Rules, 1962.

That the CIT(A) has erred in law and on facts by accepting the contention of the assessee that the share attributable to him in estate of late Shri Harikesh Sharma is l/15th only, by ignoring the fact that New Okhla Industrial Development Authority has paid the Interest on enhanced compensation to only two persons, i.e. the assessee and his brother Shri Kuldeep Sharma(only persons recognized as nominee/ heirs of the estate of Shri Harikesh Sharma.

That the CIT(A) has erred in law and on facts by accepting the contention of the assessee that the share attributable to him in estate of late Shri Harikesh Sharma is l/15th only, by ignoring the fact that the assessee has claimed the credit of TDS deducted on interest on enhanced compensation in his ITR and has thus offered Rs.3,94,30,103/- as his share of interest income for taxation.

That the CIT(A) has erred in law and on facts by accepting the contention of the assessee that the share attributable to him in estate of late Shri Harikesh Sharma is l/15thonly, by ignoring the fact that the assessee has failed to produce any evidence that the interest received was indeed distributed amongst the other share holders in the estate of late Shri Harikesh Sharma as claimed by the assessee.

That the CIT(A) has erred in law and on facts by holding that the total interest income attributable to the estate of late Shri Harikesh Sharma was Rs.3,94,30,103/- when in fact the same was Rs.7,88,60,206/- and the CIT(A) has proceeded to compute assessee's share (1/15 as claimed by. the assessee) as Rs.13,14,337/- when it would have been worked out to Rs.26,28,673/-.

The appellant carves to leave, add, alter and amend any of the grounds of appeal on or before hearing.

7. That the order of the learned CIT(A) deserves to be set-side and the order of the AO be restored.

3. The quarrel is in respect of the taxability of interest on enhanced compensation received in compliance of the order of Hon’ble Allahabad High Court amounting to Rs.39430103/-. The AO proceeded at 50% of this amount on the pretext that the property was jointly owned with the brother by the assessee. The AO made addition of Rs.19715052/- on this account and made further addition of Rs.2,32,682/- being interest on deposits of savings banks account held jointly with brother Kuldeep Sharma total addition of Rs.19947734/- was made.

4. Before the CIT(A) the assessee explained that the grandfather of the assessee died intestate, therefore, the property was succeeded by several successors and share of the assessee was 1/15th, therefore, the addition in respect of enhanced compensation should be only to the extent of 1/15th.

5. The CIT(A) accepted this contention of the assessee and directed the AO to make the addition accordingly.

6. We have carefully perused the order of the CIT(A) we do not find any mention to any document which would establish that the share of the assessee was 1/15th of the enhanced compensation. Even assuming that some document was filed by the assessee before the CIT(A) then it must be some additional evidences and the CIT(A) decided the appeal in-violation of the principle of natural justice as no opportunity was given to the AO.

Therefore, in the interest of justice and fair play we restore this issue to the files of the AO. The assessee is directed to furnish evidences in support of his claim that his share in the enhanced compensation of interest is 1/15th and the AO is directed to examine / verify the same and decide the issue afresh after affording a reasonable and sufficient opportunity of being heard to the assessee.

In the result, the appeal of the revenue is allowed for statistical purpose.

Decision announced in the open court 07.08.2023.

ACIT, CIRCLE-3, NOIDA vs. SANDEEP SHARMA, NOIDA

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