Tribunal partially allows Revenue's appeal, stresses legal procedures for verification and assessee's right to be heard.

The Revenue's appeal was partly allowed by the Tribunal for statistical purposes. The Tribunal addressed the disallowance of interest under section 36(1)(iii) of the Income Tax Act, 1961, and the addition of LTCG short reported by the assessee. It emphasized the need for adherence to legal procedures, allowing the Assessing Officer to verify evidence and providing the assessee with an opportunity to be heard. The matter was remitted to the Assessing Officer for further examination in light of the Tribunal's directions.

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Issues:
1. Disallowance of interest under section 36(1)(iii) of the Income Tax Act, 1961
2. Addition of LTCG short reported by the assessee

Analysis:

Issue 1: Disallowance of interest under section 36(1)(iii) of the Income Tax Act, 1961
The Revenue appealed against the deletion of disallowance of interest claimed under section 36(1)(iii) for the assessment year 2013-14. The Assessing Officer found that the assessee had extended an interest-free loan to its sister concern while debiting interest on secured borrowings. The ld. CIT(A) deleted the disallowance, stating that the transaction arose from a family settlement. The Tribunal noted that the ld. CIT(A) did not allow the Assessing Officer to verify the new evidence presented. Consequently, the Tribunal set aside the ld. CIT(A)'s order and remitted the matter to the Assessing Officer for further examination.

Issue 2: Addition of LTCG short reported by the assessee
The Revenue contested the deletion of the addition of LTCG reported by the assessee without verifying compliance with Proviso 1 and Proviso 2 to section 50C of the Act. The Assessing Officer determined the capital gains based on revised guideline values, as the sale deed was not registered. The ld. CIT(A) deleted the addition, citing various decisions, including one from the Hon'ble Jurisdictional High Court. The Tribunal directed the Assessing Officer to re-examine the issue in light of the High Court's decision and provide the assessee with an opportunity to be heard. The ground raised by the Revenue was allowed for statistical purposes.

In conclusion, the appeal filed by the Revenue was partly allowed for statistical purposes, with the Tribunal addressing the issues related to the disallowance of interest and the addition of LTCG reported by the assessee. The Tribunal emphasized the importance of following legal procedures and providing opportunities for verification and hearings in such matters.

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