Rupal Devang Naik Vs ITO (ITAT Surat)
The appeal before the ITAT Surat arose from an order passed by the Commissioner of Income-tax (Appeals), NFAC, Delhi, for assessment year 2012–13, confirming an ex parte reassessment framed under sections 144 read with 147 of the Income-tax Act, 1961. The assessee challenged the reopening of assessment, the ex parte nature of the order, the addition of long-term capital gains, invocation of section 50C without reference to the Departmental Valuation Officer (DVO), and denial of indexed cost of acquisition.
The case was reopened based on information that the assessee had jointly sold an immovable property during FY 2011–12 for ₹94,08,150 and had not filed a return of income for the relevant assessment year. Notice under section 148 was issued on 28.03.2019. During reassessment proceedings, several notices were issued, but no response was received from the assessee. The Assessing Officer invoked section 50C and adopted the stamp valuation authority’s value for computing capital gains. In the absence of supporting documents, the indexed cost of acquisition was taken as nil, and long-term capital gains of ₹11,76,020 were added to income. The assessment was completed ex parte under section 144 read with section 147.
Before the Tribunal, the assessee contended that mere sale of immovable property could not justify reopening, particularly when her share was only 12.5% and the income did not exceed the basic exemption limit after considering cost of acquisition. It was argued that the assessee was not well conversant with tax matters, leading to non-compliance with notices. The assessee further asserted that the actual sale and transfer of possession had occurred in 2002, and therefore capital gains could not be taxed in assessment year 2012–13 merely because the sale deed was executed later. It was also claimed that the property was ancestral, warranting computation of indexed cost of acquisition based on fair market value as on 01.04.1981, and that the Assessing Officer ought to have referred the valuation to the DVO under section 50C(2) instead of relying solely on stamp duty value.
