DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), CHANDIGARH, CHANDIGARH V. RAJBIR SINGH WALIA, CHANDIGARH

ITA 1338/CHANDI/2025

AI Insights

The case involves an appeal by the revenue against the order of the Learned Commissioner of Income Tax (Appeals)-2, Vadodara, which pertained to the assessment year 2017-18. The primary issue was the denial of the cost of improvement in the computation of Long Term Capital Gains by the Assessing Officer under section 143(3) of the Income Tax Act. The CIT(A) found that the complete disallowance of the cost of improvement was not justified and remanded the matter back to the Assessing Officer for a detailed examination of the documents provided by the assessee. The revenue challenged the CIT(A)'s decision, arguing that the CIT(A) did not have the power to remand the case. However, the Tribunal upheld the CIT(A)'s decision, agreeing that the documents needed a thorough examination which had not been done by the Assessing Officer.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841248 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 22-10-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE
• Assessee Lawyers: MEENAKSHI VOHRA LD. VIRTUAL; DENYING COST
• Keywords: Capital Gains

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.1338/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2017-18) DCIT Circle-1(1) Room No. 214, Second Floor, Aaykar Bhawan, Sector -17 E, Chandigarh - 160017 बनाम/ Vs. Shri Rajbir Singh Walia House No. 345, Sector – 9D Chandigarh - 160017 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AAAPW-8792-P (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : None ŮȑथŎकीओरसे/Respondent by : Smt. Meenakshi Vohra (CIT) – Ld. DR (Virtual) सुनवाईकीतारीख/Date of Hearing : 23-02-2026 घोषणाकीतारीख /Date of Pronouncement : 23-02-2026 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2017-18 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-2, Vadodara [CIT(A)] dated 25-08-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143 (3) of the Act on 27-11-2019. In the assessment order, Ld. AO re-computed Long Term Capital Gains as earned by the assessee by denying cost of improvement. The Ld. CIT(A), after due consideration of assessee’s Printed from counselvise.com 2 submissions, observed that complete disallowance of cost of improvement was not justified. The matter would require thorough and objective examination of documentary evidences as furnished by the assessee. The Ld. AO was accordingly directed to verify the quantum of expenses based on bills / vouchers, ledgers accounts and bank statement as submitted by the assessee. Accordingly, the ground was allowed for statistical purposes. Aggrieved, the revenue is in further appeal before us on the ground that Ld. Addl. / Joint CIT was not vested with the power of remand. At the time of hearing, none appeared for assessee. 2. We are of the considered opinion that the assessee had submitted various documents in support of claim of cost of improvement which were not examined by Ld. AO. The Ld. CIT(A) rightly noted that these documents, though submitted to AO, were not examined thoroughly and the claim was denied merely on the ground that no documentary evidences were submitted by the assessee. On these facts, the action of Ld. CIT(A) in remanding back the matter back to the file of Ld. AO could not be faulted with. We endorse the action of Ld. CIT(A). 3. The appeal stand dismissed. Order pronounced on 23rd February, 2026. -Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Printed from counselvise.com 3 Dated: 23-02-2026 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 "