2024 (5) TMI 1081 - AT - Income Tax

Admissibility of additional evidence - LTCG - Deduction u/s 54F - Evidences filled by assessee to establish the fact that agricultural land at the time of sale was not a capital assets and that otherwise the sale consideration was invested in accordance with provisions of section 54F was rejected for the reason that the same were not placed before the AO - HELD THAT - We are of considered view that same certainly would require taking into consideration the evidences which were filed as additional evidences by invoking provisions of Rule 46A. We are of considered view that CIT(A) has fallen in error in not admitting the additional evidence and the additional grounds by relying on the decision of Goetze (India) Ltd. 2006 (3) TMI 75 - SUPREME COURT - There is no justification to deny the additional ground and additional evidences for mere failure to take the same before the AO. The settled proposition of law being that powers of CIT(A) are co-terminus to AO - There is no prohibition under law that as CIT(A) cannot accept additional claim without assessee revising the return. Accordingly we considered it to be an appropriate case to allow the appeal for statistical purposes only.

Summary

Issues Involved:
The judgment involves issues related to reassessment u/s 147/144 of the Income Tax Act, 1961, jurisdiction of the Assessing Officer, calculation of short term capital gain, statutory deductions/exemptions under sections 54B and 54F, admissibility of additional evidence, and powers of the Commissioner of Income Tax (Appeals) u/r 46A.

Reassessment u/s 147/144:
The notice u/s 148 was issued with the approval of the Principal Commissioner of Income Tax, Ghaziabad, based on information that the assessee had sold immovable property. The Assessing Officer added the undisclosed sale amount to the assessee's income under a complete assessment u/s 144 of the Act.

Calculation of Short Term Capital Gain:
The appellant contended that the Assessing Officer erred in calculating the entire sale consideration as short term capital gain without allowing statutory deductions/exemptions under sections 54B and 54F of the Income Tax Act, 1961.

Admissibility of Additional Evidence:
The appellant submitted additional evidence to establish that the agricultural land sold was not a capital asset and that the sale consideration was reinvested in compliance with sections 54B and 54F. The Commissioner of Income Tax (Appeals) rejected these evidences for not being presented before the Assessing Officer, but the Tribunal found this decision to be in error.

Powers of the Commissioner of Income Tax (Appeals) u/r 46A:
The Tribunal held that the Commissioner of Income Tax (Appeals) should have admitted the additional evidence and grounds, as the powers of the Commissioner are co-terminus with the Assessing Officer. The Tribunal allowed the appeal for statistical purposes, directing the Commissioner to reconsider the additional claim and evidence.

In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the Commissioner of Income Tax (Appeals) to admit the additional claim and evidence, and to pass a fresh order after providing an opportunity of hearing to the appellant.