2019 (6) TMI 97 - AT - Income Tax

Appellate Tribunal remands case for re-examination of capital gains and income sources

The Appellate Tribunal remanded the case to the Assessing Officer for re-examination after considering fresh evidence regarding the addition of long term ... Long term capital gain - assessee has filed suit for declaring the impugned sale as null and void - transfer has taken place or not - HELD THAT:- Although the sale deed states that the sale consideration has been paid to the assessee, it is the assessee’s contention that the cheques have been dishonoured and that the cash component of the sale consideration has also not been received. Sale deed mentions that the seller i.e. the assessee has received the sale consideration prior to the execution of the sale deed. It is further noted that the sale deed also mentions that the sale deed will be deemed to have been cancelled in the event of the cheques being dishonoured. All these facts would necessarily have to be examined by the AO before the impugned proceeds can be brought to tax. During the course of hearing, AR also could not apprise the Bench on the outcome of the civil suit which had been filed by the assessee for declaring the sale as non-est. Accordingly, it will be in the fitness of things if the AO re-examines the issue after duly considering whatever evidence the assessee may deem appropriate to file before the AO in support of his claim and thereafter pass the assessment order as per law. AO will afford proper opportunity to the assessee to present his case and the assessee will also fully cooperate in the assessment proceedings in this regard whenever he is called upon to do so failing which the AO shall be at liberty to proceed ex parte qua the assessee in accordance with law. Accordingly, in light of our above observations, we restore the entire appeal to the file of the Assessing Officer. The appeal stands allowed for statistical purposes. Issues involved:1. Addition of long term capital gain on the sale of property2. Addition of income from other sources3. Allowance of TDS credit4. Recalculation of tax and interest u/s 234B5. Legality of the order passed by the Commissioner of Income Tax (Appeals)Issue 1: Addition of long term capital gain on the sale of propertyThe assessee, engaged in the trading business, sold properties but did not declare long term capital gain. The Assessing Officer proposed an addition based on the sale details. The assessee claimed the sale was not completed due to dishonored cheques and pending court cases. The Commissioner of Income Tax (Appeals) upheld the addition. The ITAT noted the sale deed terms and pending court cases. The matter was restored to the Assessing Officer for re-examination after considering fresh evidence.Issue 2: Addition of income from other sourcesApart from the capital gain addition, the Assessing Officer made an additional income inclusion from other sources. The Commissioner of Income Tax (Appeals) did not alter this addition. However, the ITAT's decision to restore the case to the Assessing Officer for re-examination encompassed this issue as well.Issue 3: Allowance of TDS creditThe assessee argued for the allowance of TDS credit received from a specific entity. This was not considered by the Commissioner of Income Tax (Appeals). The ITAT did not provide a specific ruling on this issue as the case was remanded to the Assessing Officer for a comprehensive re-evaluation.Issue 4: Recalculation of tax and interest u/s 234BThe assessee contended that tax and interest calculations were incorrect and sought a re-computation after allowing TDS credit. This issue was not directly addressed by the ITAT as the case was remanded to the Assessing Officer for a fresh assessment, which would include a re-calculation of tax and interest.Issue 5: Legality of the order passed by the Commissioner of Income Tax (Appeals)The assessee raised concerns about the legality of the order passed by the Commissioner of Income Tax (Appeals), alleging insufficient opportunity and errors in considering case laws. The ITAT did not delve into the specifics of this issue but allowed the appeal for statistical purposes and remanded the case to the Assessing Officer for a fresh assessment, indicating a procedural flaw in the previous decision.This detailed analysis covers the key issues involved in the legal judgment delivered by the Appellate Tribunal ITAT DELHI.