2019 (8) TMI 1272 - HC - Income Tax

High Court upholds ITAT order for A.Y. 2009-2010, directs reassessment

The High Court dismissed the appeals challenging the Income Tax Appellate Tribunal's order for A.Y. 2009-2010, stating no substantial question of law ... Computation of LTCG - transfer of property by way of part performance - on the basis of agreement to sale possession was given - disallowance of claim of the appellant u/s 54EC - ITAT held that the computation of capital gain has to be as per the provisions of the law and when the law has given an option to the assessee to adopt fair market value as on 1/4/1981 as cost of acquisition, the same cannot be denied to the assessee at any stage - HELD THAT:- No error has been committed by the tribunal in allowing the appeals and remanding the matters to the A.O. The tribunal has recorded reasons in para 7, 8 and 9 of the order, as reproduced hereinabove, for remanding the matters to the A.O. So far as the contention raised by the learned counsel for the respective assessee, as noted hereinaboave, is concerned, the same is rightly rejected by the tribunal by holding that the assessee has failed to demonstrate that he was unable to submit the evidence during the assessment proceedings or unable to take a ground before the A.O. on account of some reasonable cause. No such reasonable cost had been shown before the tribunal. The said evidence was rightly not considered by the A.O., Commissioner and the tribunal. The impugned orders passed by the tribunal in remanding the matter does not require any interference at the hands of this Court. No substantial question of law arise in both these appeals for consideration of this Court. Both the appeals are dismissed. Consequently, as held by the tribunal, now the A.O. to decide the issue afresh in the light of the claim of the assessee for substituting the fair market value as on 1/4/1981 as the cost of acquisition and the assessee is directed to furnish necessary details in support of its claim and the A.O. to consider the claim of exemption as per the provisions of the law in light of the relevant CBDT Circular and after giving reasonable opportunity of being heard to the assessee. Issues:1. Appeal challenging order passed by Income Tax Appellate Tribunal for A.Y. 2009-2010.2. Dispute over sale consideration and deduction of brokerage expenses.3. Assessment of long term capital gain and penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961.4. CIT(A)'s directions on fair market value, sale consideration, and brokerage deduction.5. Tribunal's decision on remanding the matters to the A.O.6. Consideration of additional evidence and fair market price as cost of acquisition.Analysis:1. Appeal Challenge: The appeals under section 260A of the Income Tax Act, 1961 were filed by the revenue against the orders passed by the Income Tax Appellate Tribunal for A.Y. 2009-2010. The primary issues revolved around the computation of capital gains, sale consideration, and deduction of brokerage expenses.2. Sale Consideration Dispute: The main contention was regarding the sale consideration adopted by the Assessing Officer versus the consideration offered by the assessee. The CIT(A) directed the A.O. to compute capital gains using the sale consideration offered by the assessee, which was higher than the jantri rate. The tribunal was urged to uphold the A.O.'s decision due to the lack of documentary evidence supporting the assessee's claim.3. Assessment and Penalty Proceedings: The initial assessment by the A.O. resulted in a substantial addition towards long term capital gain, leading to penalty proceedings under section 271(1)(c) of the Act. The CIT(A) partially allowed the appeal, disallowing certain claims and enhancing the assessment.4. CIT(A)'s Directions: The CIT(A) upheld the existence of a transfer as per section 2(47) and directed the A.O. to consider the sale consideration offered by the assessee. Additionally, the CIT(A) allowed deduction on account of brokerage expenses, contrary to the A.O.'s decision.5. Tribunal's Decision: The tribunal remanded the matters to the A.O. for fresh consideration, emphasizing the option for the assessee to substitute fair market value as the cost of acquisition. The tribunal also directed the A.O. to consider the claim of exemption under section 54EC of the Act.6. Additional Evidence and Fair Market Price: The tribunal's decision to remand the matters was supported, rejecting the contention that the assessee was unable to submit additional evidence during assessment proceedings. The tribunal's orders were upheld, emphasizing the need for the A.O. to reevaluate the issues based on the claims made by the assessee.In conclusion, the High Court dismissed the appeals, stating that no substantial question of law arose for consideration. The A.O. was directed to reexamine the issues based on the claims made by the assessee and relevant provisions of the law, with the requirement for necessary details to be furnished and exemption claims to be considered as per the CBDT Circular.