ARCHANA PRASHANT DATE,PUNE V. ITO, WARD 11(1), PUNE, PUNE

ITA 190/PUN/2025

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The case involves Archana Prashant, the appellant, contesting an order from the National Faceless Appeal Centre (NFAC), which upheld an assessment order by the Income Tax Officer for the Assessment Year 2013-14. The dispute centered on the computation of capital gains from the sale of an immovable property and the subsequent reinvestment in another property. The primary contention was the incorrect application of the indexed cost of acquisition and the benefits under section 54 of the Income Tax Act, which the CIT(A) failed to apply correctly despite acknowledging the indexed cost of acquisition in principle. The Tribunal, after considering the submissions and the relevant provisions of the Income Tax Act, rectified the CIT(A)'s oversight and allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717192 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 24-01-2025
• Other Referred Cases: Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors., Inder Singh Vs. State of Madhya Pradesh
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P MURKUNDE
• Assessee Lawyers: SARANG GUDHATE
• Keywords: Capital asset; Reasonable cause; Sale consideration of property below Jantri Value; Cost of acquisition; Rectification of order
• Section: 142(1); 54; 50C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND MS.ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.190/PUN/2025 Assessment Year : 2013-14 Archana Prashant Date 293B, Shaniwar Peth, Tambe Lane, Pune 411030 Maharashtra PAN: AGPPD3989G Vs. Income Tax Officer, Ward-11(1), Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2013-14 is directed against the order dated 13.02.2024 of National Faceless Appeal Centre (NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 30.03.2022 passed u/s.147 r.w.s144 r.w.s144B of the Act. 2. Registry has informed that appeal before this Tribunal is time barred by limitation by 269 days. Assessee has filed an affidavit along with application for condonation of delay. After hearing both the sides and perusal of the averments made in the affidavit by the assessee, we find that assessee has filed application u/s.154 of the Act for rectification of mistake apparently appearing in the impugned order and while awaiting the positive response from ld. CIT(A), delay in filing of Appellant by : Shri Sarang Gudhate Respondent by : Shri Ramnath P Murkunde Date of hearing : 22.07.2025 Date of pronouncement : 19.08.2025 Printed from counselvise.com ITA No.190/PUN/2025 Archana Prashant Date 2 the instant appeal has occurred. We find that assessee was prevented from filing the appeal within the stipulated time limit for ‘reasonable cause’. We therefore condone the delay of 269 days in filing the appeal and admit the appeal for adjudication in light of judgments of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382). 3. At the outset, Ld. Counsel for the assessee submitted that ld.CIT(A) on one hand has accepted the assessee’s contention about the indexed cost of purchase of immovable property amounting to Rs.41,44,720/- but then failed to give the deduction against the sale consideration while concluding the appeal proceedings. He submitted that it is apparent mistake and ld.CIT(A) ought to have corrected it in reply to the assessee’s application u/s.154 of the Act. Therefore, he prayed that necessary relief may please be granted. 4. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A). 5. We have heard the rival contentions and perused the record placed before us. We observe that the assessee is an individual and return of income for A.Y. 2013-14 e filed on 24.10.2013 declared income of Rs.8,17,239/-. Case of the assessee selected for re-assessment proceedings. After validly issuing statutory notices u/s.148 and 142(1) of the Act, there was non-compliance on the part of the assessee. Ld. Assessing Officer noticed that there is transaction of sale of immovable property and secondly there is violation of Printed from counselvise.com ITA No.190/PUN/2025 Archana Prashant Date 3 provisions of section 50C of the Act to the tune of Rs.47,29,000/- and he accordingly assessed the income at Rs.1,15,46,239/-. Aggrieved assessee preferred appeal before ld.CIT(A) and filed all the relevant details. Ld. CIT(A) after considering the documents and details has partly allowed the assessee’s appeal observing as follows : “6.9 The section is categorical that where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the \"stamp valuation authority\" for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. In the instant case the appellant had sold a flat whose stamp duty valuation was Rs.10729000/-. Therefore, as per the provision of section 50C of the Act, the sale consideration shall be Rs.10729000/-. Since the appellant has sold the flat and reinvested the same in purchase of a flat at Rs.7504825/-and the indexed cost of acquisition of the said sold plot as computed by the appellant is Rs.4144720/-, the appellant's capital gain shall be computed as (Rs.10729000 - Rs.4144720) = Rs.6584280/-. However, the appellant has purchased a new flat at Rs.7504825/-. The appellant is eligible for the benefit u/s 54 of the Act and the resulting capital gain which shall accrue to the appellant will be (Rs.10729000- Rs.7504825) = Rs.3224175/-. The addition made by the AO of Rs.10729000/- is restricted to Rs.3224175/-. The addition is partly deleted. The ground of appeal is partly allowed.” 6. Now from going through the finding of ld.CIT(A), we notice that ld.CIT(A) has specifically stated that stamp duty valuation of the property is Rs.1,07,29,000/- and has taken the said value as against the sale consideration of Rs.60.00 lakh shown by the assessee. Thereafter, ld.CIT(A) has mentioned that the indexed cost of acquisition of the said flat/immovable property is Rs.41,44,720/-. After reducing the indexed cost of acquisition against the stamp duty valuation, the remaining amount comes to Rs.65,84,280/- (Rs.1,07,29,000/- – Rs.41,44,720/-). Thereafter, ld.CIT(A) also Printed from counselvise.com ITA No.190/PUN/2025 Archana Prashant Date 4 gives the benefit of section 54 of the Act for the investment in another residential house which in this case is of new flat purchased at Rs.75,04,825/-. Since the cost of new flat is more than the net capital gain of Rs.65,84,280/-, resulting Nil capital gain but ld.CIT(A) has inadvertently forgot to give the benefit of indexation on cost of acquisition and directly reduced the cost of new flat of Rs.75,04,825/- against the stamp duty valuation of sale of new flat at Rs.1,07,29,000/- and has confirmed the addition of Rs.32,34,172/-. 7. In view of the above discussion, we find that ld.CIT(A) made an apparent mistake eventhough he was satisfied that the claim of indexed cost of acquisition is Rs.41,44,720/- but failed to give the benefit of deduction for the same while concluding the appeal proceedings. We therefore find merit in the contention of ld. Counsel for the assessee and hold that the capital gain from the transaction in question for sale of house located at Kharadi, Pune is a valid claim in seeking benefit of cost of acquisition and benefit of section 54 of the Act for investment in purchase of new flat and find that the resultant capital gain from this transaction is Nil. Therefore, no addition deserves to be sustained in the hands of assessee. Grounds of appeal raised by the assessee are allowed. 8. In the result, appeal of the assessee is allowed. Order pronounced on this 19th day of August, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 19th August, 2025. Satish Printed from counselvise.com ITA No.190/PUN/2025 Archana Prashant Date 5 आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “A” ब\u0014च, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "