ARAYAKANY THAYAMBALI DHANALAKSHMII,KANNUR V. INCOME TAX OFFICER , KOZHIKODE

ITA 140/COCH/2025

AI Insights

The case involves Arayakany Thayamali Dhanalakshmi, a Non-Resident Indian, who appealed against the assessment order passed by the Income Tax Officer, Ward-Int. Tax, Kozhikode, for the Assessment Year 2015-16. The appellant had not filed a regular return of income for the said year, but was later assessed for Long Term Capital Gains (LTCG) amounting to Rs. 56,80,271 from the sale of immovable property. The appellant contested the re-assessment proceedings, arguing that they were barred by limitation and that the Fair Market Value (FMV) adopted was unsupported by evidence. The Dispute Resolution Panel (DRP) rejected the objections, leading to the current appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711821 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURESH SIVANANDAN
• Assessee Lawyers: R. KRISHNAN
• Keywords: Fair market value; Capital Gains
• Section: 147; 148

Judgement Text

"1 ITA No. 140/Coch/2025 Arayakany Thayambali Dhanalakshmi vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SONJOY SARMA, JM ITA No.140/Coch/2025 Assessment Year: 2015-16 Arayakany Thayamali Dhanalakshmi .......... Appellant Sree Villa House, PO Chovva, Pervoor, Kannur-670006, Kerala. PAN: BIGPD7058A vs. Income Tax Officer .......... Respondent Ward-Int. Tax, Kozhikode-673001 Appellant by: Shri R. Krishnan, CA Respondent by: Shri Suresh Sivanandan, CIT-DR Date of Hearing: 03.06.2025 Date of Pronouncement: 22.07.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the assessment order of the Income Tax Officer, Ward-Int. Tax, Kozhikode (hereinafter referred to as “AO), dated 24/01/2025 passed U/s.147 r.w.s. 144C(13) of the Income Tax Act, 1961 (in short “the Act”) for the Assessment Year (AY) 2015-16. Printed from counselvise.com 2 ITA No. 140/Coch/2025 Arayakany Thayambali Dhanalakshmi vs. ITO 2. Briefly the facts of the case are that the appellant is an individual, Non- Resident Indian. No regular Return of Income for the AY 2015-16 was filed by the appellant. Based on the information that the appellant had sold an immovable property for a consideration of Rs. 1,64,07,500/-, the AO issued notice U/s.148 of the Act on 06/05/2022 calling upon the appellant to file the return of income. In response to the notice U/s. 148 of the Act, the appellant filed the Return of Income on 20/05/2022 declaring NIL income. Against the said Return of Income, the AO passed the Draft Assessment Order U/s. 144C(1) of the Act vide order dated 12/07/2023 making an addition on account of Long Term Capital Gains (in short “LTCG”) on sale of property of Rs. 56,80,271/-. 3. On receipt of the Draft Assessment Order, the appellant had filed the objections before the Dispute Resolution Panel (in short “DRP”) raising several objections. The DRP vide order dated 26/12/2024 rejected the objections. 4. After receipt of the DRP order, the AO had passed the Final Assessment Order, dated 24/01/2025 passed U/s. 147 r.w.s 144C(13) of the Act after making addition under LTCG of Rs. 56,80,271/-. 5. Being aggrieved, the appellant is in appeal before us in the present appeal. 6. It is submitted that the initiation of re-assessment proceedings was barred by limitation. He further submitted that the adoption of Fair Market Value (in short “FMV”) is not supported by any evidence. It was further Printed from counselvise.com 3 ITA No. 140/Coch/2025 Arayakany Thayambali Dhanalakshmi vs. ITO submitted that the AO / DRP ought not to have rejected the FMV of the property as on 01/04/2001 as adopted by the assessee. 7. On the other hand, the Ld. Sr. DR supported the orders of the AO / DRP. 8. We heard the rival submissions and perused the material available on record. Since the appellant has raised the issue of limitation, which goes to the root of the matter, we shall take up the Grounds of Appeal raised by the appellant relating to the issue of assessment proceedings are barred by limitation and also the issue of validity of issue of notice U/s. 148(d) of the Act. It is the contention of the appellant that by virtue of the provisions of section 149 of the Act, the issue of notice U/s. 148 on 6/5/2022 is barred by limitation. This issue had not been considered by the DRP by passing a speaking order. Therefore, we are of the considered opinion, the interest of justice would be met if the matter is restored to the file of the AO / DRP for fresh adjudication in accordance with law. 9. In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open court on 22nd July, 2025. Sd/- Sd/ (SONJOY SARMA) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 22nd July, 2025 okk sps Printed from counselvise.com 4 ITA No. 140/Coch/2025 Arayakany Thayambali Dhanalakshmi vs. ITO Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin Printed from counselvise.com "