Navinchandra C. Patel, Kheda V. The DCIT (INT. TAX), Baroda

ITA 788/AHD/2018

AI Insights

The case involves Navinchandra C. Patel, a Non-Resident Individual, who appealed against the order of the Commissioner of Income-tax (Appeals)-13, Ahmedabad, for the Assessment Year 2014-15. The primary contention was the disallowance of deductions claimed under Section 54F of the Income Tax Act, 1961, from the computation of long-term capital gains. The Assessing Officer had initially made additions to the sale consideration of a property transaction, which was contested. The CIT(A) partly allowed the appeal but upheld some disallowances, leading to the current appeal before the Tribunal. The Tribunal found merit in remanding the matter back to the Assessing Officer due to the absence of a crucial Building Completion Certificate during earlier proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300026 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 01-04-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence; Capital Gains
• Section: 143(3); 54F; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD \ BEFORE Ms. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No. 788/Ahd/2018 Assessment Years : 2014-15 Navinchandra C. Patel, 1, Navrang Society, Station Road, Uttarsanda, Kheda-387370 PAN : CFAPP 7330 F Vs The DCIT, (Int. Tax.), Baroda. अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸/ (Appellant) 灹瀄 灹瀄 灹瀄 灹瀄 यथ牸 यथ牸यथ牸 यथ牸/ (Respondent) Assessee by : Shri M.K. Patel, Advocate Revenue by : Shri Suraj Bhan Garwal, Sr. DR सुनवाई क琉 तारीख/Date of Hearing : 14/06/2023 घोषणा क琉 तारीख /Date of Pronouncement : 28/06/2023 आदेश आदेशआदेश आदेश/O R D E R This appeal is filed by the assessee against the order dated 30.01.2018 passed by the Commissioner of Income-tax (Appeals)-13, Ahmedabad [“CIT(A)” in short] for Assessment Year 2014-15. 2. The Grounds of appeal are as under :- “1. That the learned CIT(A) has grievously erred in law, and on facts, in confirming the disallowance of deduction of Rs.23,41,229/- claimed u/s 54F of the Act from the computation of long term capital gains. 2. That on facts, evidence on record, and as per law, the entire addition ought to have been deleted and the deduction claimed u/s 54F of the Act, ought to have been allowed, as prayed for. 3. That the learned CIT(A) has grievously erred in law, and on facts, in confirming the disallowance of deduction of Rs.50,000/- claimed as expenses from the computation of long term capital gains.” 3. The assessee is a Non Resident Individual and filed original return of income on 21.10.2015 declaring total income at Rs.3,23,630/-. Notice u/s 143(2) of the Income-tax Act, 1961 [“the ITA No. 788/Ahd/2018 Navinchandra C Patel Vs. DCIT AY : 2014-15 2 Act” in short] dated 20.09.2016 was issued and served upon the assessee. The assessee has shown Long Term Capital Gain of Rs.3,23,630/-, with sale consideration of Rs.30,09,400/- (though as per stamp valuation authority the value of property is given as Rs.73,18,500/-) and cost of acquisition claimed at Rs.2,94,541/-. Despite giving notices, the assessee did not comply with the same and, therefore, the Assessing Officer passed assessment order u/s 144 r.w.s. 143(3) of the Act and made addition of Rs.30,09,400/- as sale consideration in respect of unexplained cash credit. 4. Being aggrieved by the assessment order, assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The learned AR submitted that the CIT(A) is not justified in confirming the disallowance of deduction of Rs.23,41,229/- claimed u/s 54F of the Act from the computation of Long Term Capital Gain. The learned AR further submitted that, as per the records, the entire addition should be deleted and deduction under Section 54F of the Act should have been allowed by the Assessing Officer as well as the CIT(A). The learned AR further submitted that the valuation of the property is as per the rates published by the Superintendent of Stamps, Gandhinagar, Gujarat State and is less than the document value. The matter of valuation of the adjoining plot owned by Shri Dilipbhai Chandubhai Patel was referred to the Departmental Valuation Officer (DVO) and the same has been evaluated value considering the SRO rate and as per the admitted document value. The assessment of Shri Dilipbhai Chandubhai Patel holding adjoining plot was finalized considering report of DVO, i.e. as per SRO rate. The learned AR submitted that the copy of valuation ITA No. 788/Ahd/2018 Navinchandra C Patel Vs. DCIT AY : 2014-15 3 report given by the DVO and the copy of assessment order in case of Shri Dilipbhai Chandubhai Patel were filed before the CIT(A) as additional evidences. The learned AR further submitted that due to circumstantial difficulties the assessee could not file the relevant documents before the Assessing Officer, but the same was filed before the CIT(A). The addition made of Rs.30,09,400/- to the returned income was not justifiable and treating the deposits in bank account which is in fact receipt of consideration for sale of plot of land, resultant Long Term Capital Gain, was not justifiable as per records. The learned AR further submitted that the CIT(A), after taking into account the cognizance of all the relevant material, should have granted the claim of deduction u/s 54F of the Act as the assessee has given the Building Completion Certificate after the order passed by the CIT(A). Therefore, learned AR submitted that the matter may be remanded back to the file of the Assessing Officer to verify the same. The learned AR further submitted that the remand report was not called for by the CIT(A) and these documents were before the CIT(A). 6. The learned DR submitted that since the Building Completion Certificate was not before the Revenue Authorities as well as before the CIT(A), the Assessing Officer as well as the CIT(A) was right in confirming the addition. The learned DR relied upon the assessment order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. Since the Building Completion Certificate was not available during the appellate proceedings before the CIT(A), it will be appropriate to remand back this matter to the file of the Assessing Officer for taking cognizance of the relevant documents ITA No. 788/Ahd/2018 Navinchandra C Patel Vs. DCIT AY : 2014-15 4 and adjudicate the same on merits in consonance with the claim of deduction under Section 54F of the Act in respect of computation of Long Term Capital Gain as per the submissions made by the assessee before the authorities. Needless to say the assessee be given opportunity of hearing by following principles of natural justice. Thus, Ground Nos. 1 & 2 are partly allowed for statistical purposes. 8. As regards Ground No.3 related to disallowance of deduction of Rs.50,000/- claimed as expenses from the computation of Long Term Capital Gain, the CIT(A) was right in confirming the said disallowance as the learned AR could not point out the actual expenses from the records. Hence, Ground No.3 is dismissed. 9. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 28/06/2023 at Ahmedabad. Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER Ahmedabad, Dated 28/06/2023 *Bt आदेश क琉 灹ितिलिप अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴)अपील (/ The CIT(A)- 5. िवभागीय 灹ितिनिध ,आयकर अपीलीय अिधकरण/DR,ITAT, Ahmedabad, 6. गाड榁 फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Ahmedabad