ASHWANI KUMRA,CHANDIGARH V. ASSISTANT COMMISSIONER OF INCOME TAX, CHANDIGARH

ITA 718/CHANDI/2024

AI Insights

The case involves Shri Ashwani Kumra, the appellant, who contested the assessment of long-term capital gains on the sale of a plot of land in Panchkula. The Assessing Officer had reopened the case based on information that the property sale was not declared in the regular return of income. The Tribunal considered the appellant's claims of indexed cost of acquisition and deductions under sections 54 and 54F, which were initially denied by the Assessing Officer. The Tribunal found that the matter required further examination regarding the cost of improvement and the applicability of section 54F, leading to the decision to set aside the previous order and remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780495 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 19-06-2024
• Other Referred Cases: Smt. Meenu Bansal vs. ITA No.627/Chd/2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN LD.
• Assessee Lawyers: DEEPAK AGGARWAL LD
• Keywords: Set aside; Cost of acquisition; Capital Gains; Principle of natural justice; Revision of order
• Section: 148; 144; 263; 54; 54F

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No. 718/CHANDI/2024 (िनधाŊरण वषŊ / Assessment Year: 2013-14) Shri Ashwani Kumra SCO 338, Motor Market Manimajra – 160101 बनाम/ Vs. ACIT-Ward 2(1) Aaykar Bhawan, Sector-17 Chandigarh – 160017 ˕ायीलेखासं /. जीआइआरसं /. PAN/GIR No. ADPPK-2516-H (अपीलाथŎ/Appellant) : (ŮȑथŎ /Respondent) अपीलाथŎकीओरसे/Appellant by : Sh. Deepak Aggarwal (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Shri Vivek Vardhan (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 22-09-2025 घोषणाकीतारीख /Date of Pronouncement : 07/10/2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013- 14 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 15-05-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s. 147 of the Act on 29-03-2022. The sole issue that arises for our consideration is computation of capital gains. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The assessee has also filed written submissions which have duly been considered while adjudicating the appeal. Printed from counselvise.com 2 Proceedings before lower authorities 2.1 The assessee’s case was reopened and notice u/s 148 was issued on 31-03-2021. It was noted by Ld. AO that regular return of income as filed by the assessee was processed u/s 143(1). However, pursuant to receipt of information that the assessee sold certain immovable property for Rs.58.81 Lacs which was not declared in the regular return of income, the opinion of escapement of income was formed by Ld. AO and the case was reopened. The assessee furnished same return of income but failed to respond to various hearing notices as issued by Ld. AO. The assessee merely furnished copy of bank statement, capital gains computation, sale and purchase deed etc. On the basis of these documents, Ld. AO framed the impugned assessment against the assessee. 2.2 It transpired that the assessee sold a plot of land situated at Panchkula on 19-03-2013 for Rs.58.81 Lacs. The assessee claimed indexed cost of acquisition from the year 2009 onwards for Rs.11.63 Lacs. On remaining Long Term CapitalGains (LTCG) of Rs.47.17 Lacs, the assessee claimed deduction u/s 54 for Rs.26 Lacs towards purchase of another propertywhichwas situated at SCF No.333, Motor Market and Commercial Complex, Manimajra, Chandigarh. The net LTCG were thus computed at Rs.21.11 Lacs. However, in another statement, the assessee claimed cost of improvement for Rs.20.28 Lacs for which no supporting documents were furnished by the assessee. The assessee furnished 6 receipts, out of which 5 receipts pertained to installment payment, enhanced compensation Printed from counselvise.com 3 payment and extension fees payment which, by no stretch of imagination, could be considered as cost of improvement and accordingly, the same was denied to the assessee. 2.3 Towards claim of deduction u/s 54, the assessee pleaded that it purchased a property situated at SCF No.333, Motor Market and Commercial Complex, Manimajra, Chandigarh for Rs.130 Lacs. Against the same, the assessee claimed deduction for 20% for residential element in the said property. However, field enquiries by Ld. AO revealed that Motor Market and Commercial Complex at Manimajra, Chandigarh did not have any residential house. The properties termed as Shop-cum-flat were predominantly commercial in nature and therefore, impugned deduction u/s 54 was inadmissible. In support of its claim of deduction u/s 54, the assessee quoted the decision of Chandigarh Tribunal in the case of Smt. Meenu Bansal (ITA No.627/Chd/2017 dated 08-10-2018) which was held to be distinguishable and in the context of revisionary jurisdiction u/s 263 which was not the case here. Therefore, deduction u/s 54 was denied to the assessee. 2.4 Finally, Ld. AO computed Long Term Capital Gains of Rs.47.17 Lacs and re-computed the total income of the assessee. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. Our findings and Adjudication 3. It emerges that the assessee has sold certain property at Panchkula on 19-03-2013 for Rs.58.81 Lacs. The said plot was purchased by the assessee on 02-01-2009 for Rs.7.95 Lacs. The indexed cost of the property has already been allowed by Ld. AO. Printed from counselvise.com 4 However, it also emerges that the assessee has paid enhancements of Rs.2.20 Lacs and Rs.9.51 Lacs to HUDA on 27-07-2010 & 01-02- 2013. The benefit of the same has not been allowed to the assessee for want of sufficient documentary evidences. So far as the deduction u/s 54 is concerned, the same is clearly not available to the assessee since the assessee has merely sold a plot of land and not a residential property. However, the assessee’s claim u/s 54F could be entertained. It could be seen that the assessee has purchased 50% share of freehold property i.e., shop-cum-flat (SCF) for Rs.130 Lacs. The assessee claims a deduction of Rs.52 Lacs for residential element in the same. However, this claim could not be substantiated before lower authorities. It is the contention of Ld. AR that such SCF properties have commercial activity on the ground floor and residential units on above floors. It has also been contended that the assessee has purchased residential portions also for which proportionate deduction should be granted to the assessee. However, this fact could not be demonstrated / established before us. Keeping in mind the principles of natural justice and considering the fact that cost of acquisition has not been granted to the assessee in full for want of documentary evidences, we set aside the impugned order and restore the matter back to the file of Ld. AO for fresh assessment with a direction to the assessee to plead and prove its case qua cost of improvement and claim of deduction u/s 54F. The Ld. AO shall verify the cost of acquisition as claimed by the assessee and thereafter, examine the claim of the assessee u/s 54F in the light of submissions made by Ld.AR before us. Printed from counselvise.com 5 4. The appeal stand allowed for statistical purposes. Order pronounced on 07/10/2025 Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07/10/2025 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "