Shri Rajesh Manubhai Shah, Ahmedabad V. The ITO, Ward-5(2)(4), Ahmedabad

ITA 221/AHD/2022

AI Insights

The case involves Rajesh Manubhai Shah, the appellant, who appealed against the order of the Learned Commissioner of Income Tax (Appeals), Ahmedabad NFAC, Delhi, which confirmed the addition of Rs. 44,78,140 under the head 'capital gain' for the Assessment Year 2017-18. The dispute centered on the valuation of a property co-owned by the appellant, which significantly affected the calculated capital gains. The Assessing Officer (AO) had revised the property valuation downward after referring it to the Valuation Officer, leading to a higher assessed capital gain. The CIT(A) upheld the AO's decision without adequately addressing the appellant's detailed submissions. The Tribunal found the CIT(A)'s order to be non-speaking and set aside the matter for fresh consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135614 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-12-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 30-05-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SURENDRA SHA
• Keywords: Principle of natural justice; Non passing of speaking order; Set aside
• Section: 143(3); 55A

Judgement Text

आयकर आयकरआयकर आयकर अपी अपीअपी अपीलीय लीयलीय लीय अिधकरण अिधकरणअिधकरण अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद यायपीठ यायपीठ यायपीठ यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ SMC” BENCH, AHMEDABAD SHRI WASEEM AHMED, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 221/AHD/2022 िनधा रण िनधा रणिनधा रण िनधा रण वष वष वष वष /Asstt. Year: 2017-2018 Rajesh Manubhai Shah, 201, kailash-1, Behind Navrangpura Post Office, Navrangpura, Ahmedabad-380009. PAN: ADIPS1213N Vs. I.T.O, Ward-5(2)(4), Ahmedabad. (Applicant) (Respondent) Assessee by : Shri Surendra Sha, A.R Revenue by : Shri Purushottam Kumar, Sr. D.R सुनवाई क तारीख/Date of Hearing : 27/12/2022 घोषणा क तारीख /Date of Pronouncement: 15/03/2023 आदेश आदेशआदेश आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeals), Ahmedabad NFAC, Delhi, dated 13/04/2022 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2017-18. 2. The only issue raised by the assessee is that the Ld. CIT(A), erred in confirming the order of the AO by sustaining the addition of Rs. 44,78,140/- only under the head ‘’capital gain’’. ITA no.221/AHD/2022 A.Y. 2017-18 2 3. The facts in brief are that the assessee in the present case is an individual and filed his return of income declaring income of Rs. 17,180/- under the head ‘’capital gain’’. The assessee was the co-owner in the property located at Ellis Bridge along with two other persons. The share of property of the assessee in the property was 83.80 percent only whereas the share of the co-owners in the property was 8.09 percent each only. The assessee while calculating the capital gain has considered value of the property at Rs. 23,32,802/- as on 01/04/1981 as the cost of acquisition which was indexed to Rs. 2,62,44,022/- and the share of the assessee in such indexed cost of acquisition was at Rs. 2,19,50,235/- only. The assessee in support of the valuation of the property as on 01/04/1981 has furnished report of the registered valuer. 4. However, the AO during the assessment proceedings referred valuation of the property u/s 55A of the Act to the Valuation Officer who determined the property at Rs. 18,55,000/- as on 01/04/1981 and accordingly indexed cost was determined at Rs. 2,08,68,750/- and the share of the assessee was worked out at Rs. 1,74,92,186/- only. In this process, the capital gain income of the assessee has been revised in the upward direction by Rs. 44,75,224/- and reduced by the amount of long term capital gain already offered to tax at Rs. 17,175/- only. Thus, the AO finally has made the addition of Rs. 44,58,049/- (4475224 – income already offered Rs. 17,175/-). Hence, the AO made the addition of Rs. 44,58,049/- to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to the Ld.CIT(A), who made detailed representation before him running from pages 6 to 23 of the CIT(A) Order. However, the Ld.CIT(A), rejected the contention of the assessee and confirmed the order of the AO by observing as under: I have carefully considered the action of the Assessing Officer and the submission of the appellant. I have noted that the Assessing Officer has made the addition after obtaining the report of District valuation Officer, Valuation Cell for Income tax Department, Ahmedabad and after giving a show cause notice to the appellant. I find no infirmity in the order of the Assessing Officer and do not find any need to interfere with the same. With the above remarks, the appeal is dismissed. ITA no.221/AHD/2022 A.Y. 2017-18 3 6. Being aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before me. 7. The Ld. AR before me filed a paper book running from pages 1 to 320 and contended that the Ld. CIT(A), without pointing out any infirmity in the submission filed by the assessee has confirmed the order of the AO which is against the principles of Natural Justice. 8. On the other hand, the Ld. DR, fairly conceded that the Ld.CIT(A) has passed non speaking order and further requested to set aside the issue to the file of the AO for fresh adjudication as per the provision of law. 9. The Ld. AR in his rejoinder did not raise any objection if the matter is set aside to the file of the Ld. CIT(A), for fresh adjudication in the line of submission made by the assessee and as per the provision of law. 10. I have heard the rival contentions of both the parties and perused the materials available on record. The provisions of section 250(6) of the Act mandates to the CIT(A) to dispose off the matter by way of speaking order and with reasoning on the issue raised in the appeal. In case on hand, there is no ambiguity to the fact that detailed submission along with the paper books were filed by the assessee before the Ld.CIT(A), which has not been considered at all by the Ld. CIT(A). In my considered opinion, the Ld.CIT(A), before reaching to any conclusion is expected to deal with the contention raised by him by way of speaking order with reasoning. Thus, in the absence of speaking order by the Ld.CIT(A), I am inclined to set aside the issue to the file of the Ld.CIT(A), for fresh adjudication as per the provision of law. Hence, the ground of appeal of the assessee is allowed for the statistical purposes. ITA no.221/AHD/2022 A.Y. 2017-18 4 11. In the result, the appeal filed by the assessee is allowed for the statistical purposes. Order pronounced in the Court on 15/03/2023 at Ahmedabad. Sd/- Sd/- (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 15/03/2023 Manish