2018 (5) TMI 629 - AT - Income Tax

Computation of long term capital gain - acceptance of sale consideration - addition u/s 69 - Held that - The assessee declared long term capital gain of Rs. 2, 54, 25, 861/- and claimed exemption u/s. 54 of the Act in his return of income. According to AO no compliance was made in response to notices issued u/s. 143(2) and 142(1) of the Act 1961. The assessee declared capital gain of Rs. 95, 38, 120/- in the revised return of income. AO found capital gain is under valued capital gain. The AO made addition on account of unexplained cash credit u/s. 69A of the Act. CIT(A) has on an examination of facts at para 4.3 of his order come to conclusion that the sale consideration of the property is Rs. 3, 20, 000/-. This could not be contradicted by the ld.DR. Hence we uphold this finding. In our view the ld. CIT(A) rightly deleted the addition u/s. 69 of the Act. Hence these grounds of the revenue are dismissed. CIT-A justification in directing the AO to consider the assessee s claim of exemption u/s. 54 - Held that - We find that the assessee sold land & building bearing new plot No. 2960 new Khata No. 145 measuring an area of 9.96 dcml. ( approx 6 kathas) situated at Kasidih P.S Sakchi Jamshedpur to Shri Jai Prakash Singh for a total consideration of Rs. 3, 20, 00, 000/- which was accepted by the CIT-A. There is no dispute with regard to sale consideration and receipt of above sale consideration by the assessee from the orders of AO and CIT-A. We are inclined to uphold the finding of the CIT-A in remanding the issue to the file of AO for verification of claim u/s. 54 of the Act. - Decided against revenue

Summary

Issues:
Deletion of addition of Rs. 1,34,00,000 and acceptance of sale consideration at Rs. 3,20,00,000 by CIT-A; Calculation of long term capital gain and deduction under sections 48 and 54 of the Act; Power of CIT-A to delete additions made by AO without seeking comments or remand report.

Analysis:
1. The appeal concerned the deletion of an addition of Rs. 1,34,00,000 and acceptance of sale consideration at Rs. 3,20,00,000 by the CIT-A for the assessment year 2013-14. The AO initially found discrepancies in the sale consideration for a land transaction, leading to the addition. The assessee provided detailed explanations and evidence, including cheque payments and cash receipts, to support the claimed sale consideration.

2. The AO, however, treated a portion of the sale consideration as unexplained cash credit under section 69A of the Act due to lack of proof. The CIT-A, after considering the submissions and case laws, directed the AO to accept the sale consideration at Rs. 3,20,00,000 and calculate the capital gain accordingly, leading to the deletion of the addition made by the AO.

3. The issue of deduction under section 54 of the Act was also raised. The CIT-A justified directing the AO to consider the assessee's claim of exemption under section 54. The property sale details were confirmed, and the CIT-A's decision to remand the issue to the AO for verification of the deduction was upheld, as per the provisions of the Act.

4. The power of the CIT-A to delete additions without seeking comments or a remand report from the AO was challenged. The CIT-A's decision was supported by the detailed examination of available evidence and explanations provided by the assessee. The Tribunal upheld the CIT-A's findings and dismissed the appeal of the revenue for the assessment year 2013-14.

In conclusion, the judgment addressed the issues related to sale consideration, capital gain calculation, and deduction under relevant sections of the Act, highlighting the importance of providing substantial evidence and complying with legal requirements. The decision emphasized the CIT-A's authority to make decisions based on the evidence before them, ensuring fair treatment and adherence to the law.