Tribunal Upholds Capital Gains Assessment for Non-Resident Seller

The Tribunal upheld the AO's assessment of capital gains on properties sold by a non-resident assessee, despite the assessee's failure to respond to notices and provide necessary information. The Tribunal found the notice u/s 148 valid and confirmed the additions made under 'short term capital gains' and 'long term capital gains'. The Tribunal determined that the sale agreement coupled with power of attorney constituted a complete transfer, leading to the assessment of capital gains. The appeal was dismissed, and the decision was pronounced on 19th July 2019.

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Issues:
Reopening of assessment and addition of capital gains under 'capital gains'.

Reopening of Assessment:
The assessee did not file the return of income, prompting the AO to issue a notice u/s 148 of the Income Tax Act, 1961, for scrutiny. The AO found that the assessee, a non-resident, had sold properties during the relevant financial year. Despite multiple notices and a show cause notice, the assessee did not respond, leading to the AO assessing the properties under 'long term capital gains' and 'short term capital gains'. The assessment was completed under 'best judgment'.

Appeal Before CIT(A):
The assessee's appeal before the CIT(A) was decided ex-parte as the assessee did not respond to notices issued. The appeal was dismissed in absentia.

Grounds of Appeal Before Tribunal:
The assessee appealed before the Tribunal on five grounds. Grounds 1 and 5 were general and did not require specific adjudication. Ground 2, related to the CIT(A) deciding the appeal ex-parte, was dismissed as the CIT(A) had provided sufficient opportunities which the assessee did not avail.

Validity of Notice u/s 148:
The AO issued a notice u/s 148 as the assessee had not filed returns despite selling properties that attracted capital gains tax. The Tribunal found no merit in the assessee's contention against the validity of the notice u/s 148.

Addition of Capital Gains:
The AO made additions under 'short term capital gains' and 'long term capital gains'. The assessee contended that the additions were not valid, but failed to provide necessary information. The Tribunal upheld the additions as the assessee did not furnish any material regarding the sales, leading to dismissal of the appeal on this ground.

Assessment of Long Term Capital Gains:
The assessee argued that the sale of a property was not complete, as it was only a sale agreement. However, the Tribunal found that the transfer was complete based on the agreement coupled with power of attorney, leading to the assessment of capital gains. The Tribunal upheld the AO's decision, citing a relevant High Court decision.

Conclusion:
The Tribunal dismissed the appeal of the assessee, upholding the assessment of capital gains on the properties sold. The order was pronounced on 19th July 2019.

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