BALJIT SINGH GAMBHIR,MUMBAI V. INCOME TAX OFFICER, INTERNATIONAL TAXATION, WARD-2(3)(1), MUMBAI , MUMBAI

ITA 912/MUM/2025

AI Insights

The case involves an appeal by Baljit Singh Gambhir against the order of the CIT(DRP-1), Mumbai-2, which was passed under section 144C(5) of the Income-tax Act, 1961 for the Assessment Year 2019-20. The primary contention was regarding the legality of the notice issued under section 148 and the subsequent reassessment proceedings initiated by the Jurisdictional Assessing Officer instead of the National Faceless Assessment Centre as mandated by recent notifications. The assessee also challenged the computation of long-term capital gains (LTCG) on the sale of two properties, arguing that the cost of acquisition and the date of acquisition were incorrectly assessed. The Tribunal, after considering the submissions and relevant judicial precedents, directed a recomputation of the LTCG and addressed the issues related to TDS and carry forward of losses.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781421 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2019-2020
• Appeal Filed On: 10-02-2025
• Other Referred Cases: Smt. Lata G. Rohra Vs. DCIT Central -39 Mumbai [2008]21 SOT 541 (Mumbai), PCIT-3 Mumbai V. Vembu Vaidyanathan [2019] 101 taxmann.com 436 (Bombay)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: KRISHNA KUMAR
• Assessee Lawyers: TEJOMOHAN SINGH
• Keywords: Reassessment proceedings; Sale consideration of property below Jantri Value; Cost of acquisition; Capital Gains; TDS
• Section: 148; 143(3); 54; 50C

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.912/MUM/2025 (निर्धारण वर्ा/Assessment Year: 2019-20) Baljit Singh Gambhir C/o Tejmohan Singh, Advocate 527, Sector 10-D, Chandigarh 160011 v/s. बिधम Income Tax Officer, International Taxation, Ward 2(3)(1), Mumbai Income Tax Officer, International Taxation, Ward 2(3)(1), Mumbai 400076 स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No: AMGPG9637H Appellant/अपीलधथी .. Respondent/प्रनिवधदी निर्धाररिी की ओर से /Assessee by: Shri. Tejomohan Singh, Adv. रधजस्व की ओर से /Revenue by: Shri. Krishna Kumar (SR DR) सुिवधई की िधरीख / Date of Hearing 29.07.2025 घोर्णध की िधरीख/Date of Pronouncement 30.09.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.]:- This appeal is filed by the assessee against the order of the CIT(DRP-1), Mumbai-2 [hereinafter referred to as “CIT(A)”] dated 17.12.2024 passed directions of Dispute Resolution Panel u/s. 144C(5) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2019-20. 2. The assessee has raised the following grounds of appeal: “1. That the ld. Assessing Officer being the Jurisdictional Assessing Officer has erred in law in issuing notice u/s 148 dated 31.03.2023 which is illegal in view of the notifications dated 28.03.2022 and 29.03.2022 which states that the notice under section 148 of the Act shall be issued through automated allocation only and the Ld. Jurisdictional Assessing Officer is not legally competent to issue notice under section 148 of the Act as the same was required to be issued by National Faceless Assessment Centre and as such the proceedings initiated are illegal, arbitrary and unjustified. Printed from counselvise.com P a g e | 2 ITA No. 912/Mum/2025 AY 2019-20 Baljit Singh Gambhir 2. That the Ld. Assessing Officer has further erred in issuing notice u/s 148 in as much as there is no escapement of income and further, no addition remains on the reason for which proceedings u/s 148A were initiated and as such the proceedings initiated are illegal, arbitrary and unjustified. 3. Without prejudice to the above, the Ld. Assessing Officer has erred in making an addition of Rs.1,71,92,247/- by enhancing the Capital gains to Rs.3,10,60,978/- as against Rs.1,38,68,731/- declared by the assessee in utter disregard of the explanations rendered which is arbitrary and unjustified. 4. That the Ld. Assessing Officer has arbitrarily reduced the cost of acquisition and cost of improvement as well as the date of acquisition of the property for the purpose of calculation indexation in utter disregard of the evidence placed on record which is arbitrary and unjustified. 5. That the Ld. Assessing Officer has further erred in not giving the benefit of the brought forward LTCG losses which is arbitrary and unjustified. 6. That the Learned Assessing Officer has further erred in calculating tax on total income of Rs.3,00,87,007/- against total income of Rs.1,92,33,930/- as per assessment order which is arbitrary and unjustified. 7. That the Ld. Assessing Officer has further erred in not giving benefit of TDS deducted which is arbitrary and unjustified. 8. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 9. That the order of the Ld. Assessing Officer is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.” Ground No 3 & 4: Computation of Capital Gains 3. Sole substantive issue involved on merits relates to computation of long term capital gains (LTCG). Brief facts of the case are that the assessee had filed his return declaring income of Rs. 20,41,680/- for A.Y. 2019-20. Subsequently, on the basis of information available on Insight Portal of the department, reassessment proceedings were initiated. Vide order u/s. 148 A(d) dated 31.03.2023, the case was found fit for issuance of notice u/s. 148 which was also issued on 31.03.2022. The assessee filed return declaring income of Rs. Printed from counselvise.com P a g e | 3 ITA No. 912/Mum/2025 AY 2019-20 Baljit Singh Gambhir 20,41,680/- in response to notice u/s. 148 and declared his status therein as a NRI. 3.2 Ld. AO observed that the assessee had sold one property for Rs. 2,30,00,000/- on 30.03.2019 and another for Rs. 2,65,00,000/- on 17.10.2018. on these transactions, LTCG was declared at Rs. 138,69,272 after reducing indexed cost of acquisition and indexed cost of improvement. After giving opportunity to the assessee to submit complete details alongwith supporting documentary evidences, which the assessee could not fully comply with, ld. AO computed the capital gains as per the following chart: 1. FLAT NO. 1701 Sr. No Financial Year of Payments Nature and mode of payment Amount in Rs. Amount in Rs. Indexed Value as on 17.10.2018 (date of sale) Indexed value (Amount in Rs.) 1 FY 2006-07 (as per sale deed and allotment letter) Part payment towards Purchase cost 2,40,000 280/122 5,50,820 2 FY 2006-07 as per receipt dated (17.03.2007) Stamp Duty 2,40,100 280/122 5,51,049 3 FY 2006-07 as per receipt dated (17.03.2007) Registration fee 30,000 280/122 68,852 4 FY 2006-07 as per receipt dated (17.03.2007) Handling charges 880 280/122 2,020 5 FY 2010-11 (As per possession letter dated 01.07.2010 submitted on record) Balance Purchase Price (4286000=4526000- 240000) 4,28,600 280/167 71,86,108 A Total Indexed Cost (*cost of improvement will be taken separately) 83,58,849 B Sale consideration on sale of the flat No. 701 at Shimmering Heights 2,65,00,000 C Long Term Gain (B-A) 1,81,41,151 1. FLAT NO. 1702 Sr. No Financial Year of Payments Nature and mode of payment Amount in Rs. Amount in Rs. Indexed Value as on Indexed value (Amount in Rs.) Printed from counselvise.com P a g e | 4 ITA No. 912/Mum/2025 AY 2019-20 Baljit Singh Gambhir 17.10.2018 (date of sale) 1 FY 2005-06 (as per sale deed and allotment letter/receipts) Part payment towards Purchase cost 8,00,000 280/117 18,36,066 2 FY 2006-07 as per receipt dated (17.03.2007) Stamp Duty 2,40,100 280/122 5,51,049 3 FY 2006-07 as per receipt dated (17.03.2007) Registration fee 30,000 280/122 68,852 4 FY 2006-07 as per receipt dated (17.03.2007) Handling charges 880 280/122 2,020 5 FY 2010-11 (As per possession letter dated 01.07.2010 submitted on record) Balance Purchase Price (3726000=4526000- 800000) 37,26,000 280/167 62,47,186 A Total Indexed Cost (*cost of improvement will be taken separately) 87,05,173 B Sale consideration on sale of the flat No. 702 at Shimmering Heights 2,30,00,000 C Long Term Gain (E-D) 1,42,94,827 G. Total Long Term capital gain On sale of two properties as calculated above (C+F) = Rs. 3,24,35,978/-(1,81,41,151+1,42,94,827) H. Total Cost of improvement allowable (as discussed above) in respect of the two flats= Rs. 13,75,000/- (4,00,000+ 9,75,000), no indexation applicable as the payments made in FY 2019-20, year of sale. I. In view of the above working, the total long term capital g term capital gain for the year on sale of two flats (G-H): Rs. 3,10,60,978/-(3,24,35,978-13,75,000) Accordingly, difference of Rs. 1,71,92,247 [3,10,60,978-1,38,68,731] was proposed to be added to the assessee’s income vide the draft assessment order. 3.3 Aggrieved, the assessee filed objections before the ld. DRP. On the basis of directions received from the DRP vide order dated 17.12.2024, the ld. AO recomputed the LTCG and assessed the income as under: (Amount in Rs.) Total Income as per ITR 20,41,680/- Delete: Addition as per para 6.3 u/s. 50C (-)22,24,948 Add: Addition LTCG as per para 7.3 1,71,92,247 1,71,92,247/- Printed from counselvise.com P a g e | 5 ITA No. 912/Mum/2025 AY 2019-20 Baljit Singh Gambhir Total Assessed Income 1,92,33,927/- Rounded off to 1,92,33,930 Accordingly, order u/s. 143(3) r.w.s 144C(13) r.w.s 147 was passed at an income of Rs. 1,92,33,930/-. Aggrieved, the assessee has filed an appeal before the Tribunal. 4. Before us, ld. AR has pointed out that the computation made by ld. AO is incorrect due to several reasons. At the outset, he submitted that flat no. 1702 was purchased during F.Y. 2005-06 and flat no. 1701 was subsequently allotted to the assessee in F.Y. 2006-07. Possession of the properties was taken by the assessee in F.Y. 2010. While the indexed cost of acquisition has been computed by the Ld. AO/ DRP from the date of possession, the assessee has claimed that the same needs to be computed from the date of allotment. Further ld. AO has applied indexation on actual payments made in different years while the assessee seeks to apply the indexation on total cost and from the year of allotment. In this regard, Ld. AR has placed reliance on the decision of the coordinate bench in the case of Smt. Lata G. Rohra Vs. DCIT Central -39 Mumbai [2008]21 SOT 541 (Mumbai) wherein it has been held that under section 48, benefit of indexation should be given on the basis of date of cost of acquisition of asset and not on the basis of date of actual payment. 4.2 With regard to the date of acquisition, ld. AR has further placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of PCIT-3 Printed from counselvise.com P a g e | 6 ITA No. 912/Mum/2025 AY 2019-20 Baljit Singh Gambhir Mumbai V. Vembu Vaidyanathan [2019] 101 taxmann.com 436 (Bombay) wherein it has been held that the CBDT in its circular no. 471 dated 15.10.1986 has clarified that when an assessee purchases a flat to be constructed by Delhi Development Authority (DDA) for which allotment letter is issued, date of such allotment would be relevant date for purpose of capital gains tax as the date of acquisition. Further it has been clarified by circular No. 672 dated 16.12.1993 that if terms of scheme of allotment and construction of flats/houses by the cooperative societies or other institutions are similar to those mentioned in Board’s Circular No. 471 dated 15.10.1986, such cases may also be treated as cases of construction for purposes of section 54 & 54 F and thus for computation of capital Gains tax, date of allotment would be the date on which purchaser of a residential unit can be stated to have acquired property. Ld. DR on the other hand relied on the orders of lower authorities. 5. We have considered the rival submissions and perused the decisions cited by the ld. AR. We are of the considered opinion that, in view of CBDT circulars & judicial pronouncements discussed hereinbefore, the date of allotment is to be taken as the date of acquisition and indexation should be computed accordingly. Further indexation has to be computed on the entire cost of acquisition from the date of allotment and not for the years of actual payments made towards cost of acquisition. Thus the assessee’s contention on both these issues is allowed and the matter is restored to ld. AO for the limited purpose of recomputing the long term capital gains on sale of two flats in view of above directions. Printed from counselvise.com P a g e | 7 ITA No. 912/Mum/2025 AY 2019-20 Baljit Singh Gambhir Accordingly, assessee’s grounds of appeal no. 2 & 3 are hereby allowed. Ground no. 5 relates to claim of Brought Forward Long Term Capital Loss. On this issue also, ld. AO is directed to allow the claim after verifying the earlier years LTCL and grant the benefit of carry forward as per applicable provisions. Ground No. 6,8 &9 are general and need no separate adjudication. Ground No. 7 pertains to credit of TDS not given by the assessee. The ld. AO is directed to verify and allow the credit of TDS claimed by the assessee as admissible. Ground no. 1 & 2 are legal grounds challenging the validity of notice issued by JAO while the same was required to be issued by FAO and initiation of reassessment proceedings on the ground that no addition remains on the reason for which proceedings u/s. 148A were initiated. Since the assessee’s grounds on merit have been allowed, the legal issues are not being adjudicated and are left open. 6. In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on 30.09.2025. Sd/- Sd/- BEENA PILLAI RENU JAUHRI (न्यधनयक सदस्य/JUDICIAL MEMBER) (लेखधकधर सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 30.09.2025 Printed from counselvise.com P a g e | 8 ITA No. 912/Mum/2025 AY 2019-20 Baljit Singh Gambhir दिव्य रमेश न ुंिग वकर/ स्टेनो आदेश की प्रनिनलनप अग्रेनर्ि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त / CIT 4. दवभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण DR, ITAT, Mumbai 5. ग र्ड फ ईल / Guard file. सत्यधनपि प्रनि //True Copy// आदेशधिुसधर/ BY ORDER, सहधयक पंजीकधर (Asstt. Registrar) आयकर अपीलीय अनर्करण/ ITAT, Bench, Printed from counselvise.com "