2020 (4) TMI 109 - AT - Income Tax

Appeal dismissed due to missed indexation claim & no accrued interest addition. Remanded for fresh consideration.

Ashok Kumar Singhal Versus ACIT Circle, Bulandshahr.

The appeal was dismissed as the claim for indexation was deemed not maintainable since the appellant never claimed it initially. The challenge against the ... Rectification u/s 154 - disallowing the claim of indexation of the assessee - HELD THAT:- we set aside the orders of the authorities below and restore the matter in issue to the file of AO with direction to pass the order u/s 154 afresh as per law in the light of directions of the Tribunal dated 29.01.2016 [2016 (1) TMI 1444 - ITAT DELHI]for assessment year under appeal i.e. 2006-07. The AO shall give reasonable sufficient opportunity of being heard to the assessee before passing the order. Issues Involved:Appeal against order u/s 154 disallowing indexation claim and accrued interest addition.Analysis:1. Indexation Claim Disallowance:The appeal was directed against the order of the Ld. CIT(Appeals) sustaining the order u/s 154 disallowing the claim of indexation of the assessee. The appellant contended that indexation of cost of acquisition should have been given while giving appeal effect. However, it was noted that the appellant never claimed the benefit of indexation treating it as a capital asset in the original appeal preferred against the order u/s 143(3). The Ld. CIT(A) found that the appellant admitted to not claiming indexation and that it was never adjudicated by the CIT(A) in the earlier order. Consequently, the claim for indexation was deemed not maintainable and dismissed.2. Accrued Interest Addition:The appellant also challenged the addition of accrued interest of a specific amount by the AO while giving appeal effect. It was observed that the appellant himself declared the interest amount in the returned income, and the AO did not make any addition but accepted the appellant's contention based on the TDS certificate. As no addition on account of accrued interest was made during the original assessment u/s 143(3), the claim under sections 154 to 251/143(3) was considered not maintainable and dismissed by the Ld. CIT(A). The appellant's argument that there was a mistake in giving appeal effect u/s 251 was also dismissed based on the facts presented.3. Judgment and Remand:Upon hearing both parties, it was noted that the Departmental appeal for the assessment year under appeal had been dismissed by ITAT, Delhi 'A' Bench. Both parties suggested remanding the matter to the AO to pass the order u/s 154/251/254 in accordance with the directions of the Tribunal. Consequently, the Tribunal set aside the orders of the authorities below and restored the issue to the file of the AO with directions to pass the order u/s 154 afresh as per law and the directions of the Tribunal. The AO was instructed to provide a reasonable opportunity of being heard to the assessee before passing the order. The appeal of the assessee was allowed for statistical purposes.This detailed analysis covers the issues of the appeal against the disallowance of indexation claim and the addition of accrued interest, along with the subsequent judgment and remand for further proceedings.