Gavini Giridhara Murari Vs ITO (ITAT Hyderabad)
Sale Value ≠ Capital Gains: Gross Sale Proceeds Taxed as Income? Tribunal Orders Fresh Assessment Despite Assessee’s Absence
Assessee did not respond to notice u/s 148 issued on 20.03.2023 nor to subsequent notices. AO, therefore, completed reassessment u/s 147 r.w.s.144/144B on 29.12.2023 treating entire sale proceeds of Rs.3,18,000 from one capital asset & Rs.58,83,000 from two immovable properties as taxable income without allowing cost of acquisition or examining computation of capital gains. Assessee also remained non-compliant before CIT(A), who dismissed appeal ex-parte on 27.02.2025.
Even before Tribunal there was no appearance. Tribunal, however, after examining assessment order, noted that AO had mechanically taxed gross sale consideration instead of determining capital gains, which is contrary to law. Tribunal held that despite Assessee’s repeated non-compliance, computation must be made strictly in accordance with law & correct tax liability cannot be determined without verifying property details & cost of acquisition. In the interest of substantial justice, Tribunal set aside orders of AO & CIT(A) & restored matter to AO for de-novo adjudication after giving Assessee one final opportunity. Appeal allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by Shri Gavini Giridhara Murari (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated 27.02.2025 for the A.Y. 2016-17.
