Assessee gets another chance to present indexed cost acquisition evidence under Section 48 due to Covid circumstances

ITAT Mumbai allowed assessee's appeal regarding disallowance of indexed cost of acquisition deduction u/s 48. AO denied deduction due to lack of documentary evidence, while CIT(A) refused to admit additional evidence. ITAT noted notices were issued during Covid period, providing reasonable cause for non-appearance before AO. Assessee had submitted relevant documents including seller's affidavit, receipt, society transfer documents, MHADA transfer letter, and share certificate to CIT(A). Considering Covid circumstances and availability of substantiating documents, ITAT granted assessee another opportunity to present evidence before AO. Appeal allowed for statistical purposes.

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Issues:
1. Denial of deduction under section 48 of the Income Tax Act by the Assessing Officer.
2. Rejection of additional evidence by the CIT(A) in support of the claim of cost of acquisition.
3. Appeal against the CIT(A)'s decision and request for admission of additional evidence.
4. Consideration of documentary evidence and remittance of the issue back to the Assessing Officer by the Tribunal.

Issue 1: Denial of deduction under section 48:
The appellant, an individual, filed the return for AY 2018-19 declaring a total income with Long Term Capital Gain (LTCG). The Assessing Officer (AO) denied the deduction claimed as index cost of acquisition under section 48 due to lack of documentary evidence supporting the claim. The AO concluded the assessment without the deduction, amounting to Rs. 31,29,204.

Issue 2: Rejection of additional evidence by CIT(A):
The appellant appealed before the CIT(A) submitting documentary evidence in support of the cost of acquisition and applied for admission of additional evidence under section 46A of the Income Tax Rules. However, the CIT(A) upheld the AO's decision, stating that the additional evidence could have been submitted during the assessment stage and did not meet the conditions for admission under rule 46A.

Issue 3: Appeal and request for admission of additional evidence:
The appellant, aggrieved by the CIT(A)'s decision, approached the Tribunal. The appellant's representative argued that the appellant couldn't appear before the AO due to Covid-19 related issues. Relevant documents supporting the cost of acquisition were submitted before the CIT(A) but were not admitted as additional evidence. The appellant contended that the claim was genuine and supported by documentary evidence.

Issue 4: Consideration of documentary evidence and remittance to AO:
The Tribunal reviewed the case and observed that the notices from the AO were issued during the Covid period, providing a reasonable cause for the appellant's non-appearance. The Tribunal examined the documents submitted before the CIT(A) and found them sufficient to substantiate the claim of indexed cost of acquisition. In the interest of natural justice, the Tribunal remitted the issue back to the AO to verify the documentary evidence and allow the claim in accordance with the law, ensuring the appellant is given a reasonable opportunity to be heard.

This judgment highlights the importance of providing documentary evidence to support claims, the discretion of authorities in admitting additional evidence, and the consideration of circumstances such as the Covid-19 pandemic in assessing non-compliance. The decision of the Tribunal emphasizes the principles of natural justice and fair play by granting the appellant another opportunity to substantiate their claim before the Assessing Officer.

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