2015 (8) TMI 1093 - AT - Income Tax

Appellate tribunal remands case for fresh decision after finding Assessing Officer's lack of opportunity.

The appellate tribunal allowed the Revenue's appeal for statistical purposes and remanded the case back to the Assessing Officer for a fresh decision. The ... Computation of capital gain - CIT(A) accepting the assessee’s plea that the plot in question was purchased in the year 1980 by making part payment and taking possession and consequently adopting the fair market value of the property as on 1-04-1981 and allowing indexed cost of acquisition at ₹ 31,19,050/- - Held that:- As find from the records that the assessee has not produced the original sale agreements entered between the parties before the AO. The assessee has also not disclosed the capital gains in the return as well as in revised return. The AO got information through AIR that it was an immovable property sold by the assessee and on that basis, the AO asked the assessee to give particulars of property sold and capital gains earned on it. The assessee submitted partial evidences before the AO and claimed the capital gains in case of these immovable property transactions showing income at nil. However, the AO was not supposed to entertain the assessee's claim by relying on decision of Hon'ble Apex Court in the case of Goetze India Ltd. vs. CIT (2006 (3) TMI 75 - SUPREME Court). The ld. CIT(A) has coterminous power and whatever additional evidences submitted by the assessee before him had not been adjudicated proper perspective and in legal framework as no application for filing of additional evidence had been referred by him and no finding had been given by the ld. CIT(A) that these evidences are required to decide the basic cause of the assessee. Therefore, in the interest of justice, we set aside the issue to the file of the AO to decide it de novo by providing reasonable opportunity of being heard to the assessee. - Decided in favour of revenue for statistical purposes. Issues Involved:1. Acceptance of the assessee's plea regarding the purchase and possession of the plot in 1980.2. Rejection of the AO's plea regarding the claim of deduction under Section 48 without filing a revised return.Detailed Analysis:Issue 1: Acceptance of the Assessee's Plea Regarding the Purchase and Possession of the Plot in 1980The Revenue contested the CIT(A)'s decision to accept the assessee's claim that the plot was purchased in 1980, with part payment and possession taken in that year. The Revenue pointed out several discrepancies:- The sale agreement submitted by the assessee was undated, unregistered, and unwitnessed, rendering it legally unenforceable.- The registered sale deed dated 2-11-1997 indicated that the actual physical possession was handed over only on 28-1-1997 after full consideration was received.- The sale deed specified that the amount paid in 1980 was considered a loan, adjusted in 1997 towards the sale consideration.- Under the Transfer of Property Act and the Indian Registration Act, the transfer of immovable property requires actual delivery of possession and registration of the agreement.The AO observed that the assessee failed to produce the original sale agreement and relied on an undated, unregistered, and unwitnessed document. The AO concluded that the property was effectively transferred in 1997, not 1980. The AO calculated the long-term capital gain based on this conclusion.The CIT(A), however, accepted the assessee's claim, noting that the advance payment in 1980 was not disputed and that the sale deed corroborated the facts of the agreement to sale. The CIT(A) directed the AO to delete the addition of Rs. 37,86,495/- made on account of long-term capital gain.Issue 2: Rejection of the AO's Plea Regarding the Claim of Deduction Under Section 48 Without Filing a Revised ReturnThe AO rejected the assessee's claim for indexed cost of acquisition and improvement, citing the Supreme Court decision in Goetze India Ltd. vs. CIT, which held that claims not made in the original or revised return cannot be entertained. The AO noted that the assessee did not disclose the capital gains in the return and only made the claim after the transaction was detected through AIR information.The CIT(A) disagreed with the AO, stating that the appellate authorities have the power to entertain such claims even if not made in the original or revised return. The CIT(A) accepted the assessee's claim for deduction under Section 48, leading to the deletion of the addition made by the AO.Conclusion:The appellate tribunal found that the CIT(A) accepted the assessee's evidences without allowing the AO an opportunity to examine them. The tribunal noted that the assessee did not produce the original sale agreement before the AO and did not disclose the capital gains in the return. The tribunal set aside the CIT(A)'s order and remanded the case back to the AO for a fresh decision, providing the assessee a reasonable opportunity to present their case.Final Decision:The appeal of the Revenue was allowed for statistical purposes, and the case was remanded back to the AO for a de novo decision.Order Pronounced:The order was pronounced in the open court on 11/08/2015.