Udaya Kumar Chillakuru Vs ITO (ITAT Bangalore)
The Bangalore ITAT held that while the assessee was entitled to deduction of the purchase cost of TDR rights under Section 48, the assessee’s repeated non-cooperation before the AO and CIT(A) justified restoration of the matter back to the AO subject to payment of costs. The Tribunal observed that once documents evidencing purchase of TDR rights were produced, the entire sale consideration could not be blindly taxed as capital gains without allowing the acquisition cost.
The assessee had sold TDR rights for ₹72.90 lakh but failed to respond to notices issued during reassessment proceedings initiated u/s 147/148. Since no supporting documents were furnished before the AO, the entire sale consideration was treated as short-term capital gains without granting deduction u/s 48. The CIT(A) also confirmed the addition after granting only one hearing opportunity and passed a non-speaking order merely reproducing the AO’s findings.
Before the ITAT, the assessee produced the purchase deed showing acquisition of TDR rights for ₹68.61 lakh and contended that the cost of acquisition ought to have been deducted while computing capital gains. The Tribunal accepted that the documents now produced prima facie established the purchase cost and therefore the capital gain had to be recomputed after examining those documents.
At the same time, the ITAT criticised the assessee for not cooperating with the tax authorities despite repeated notices and noted that the assessee himself contributed to the situation. The Tribunal therefore restored the matter to the AO for fresh adjudication, directed the assessee to furnish all relevant documents, and imposed a cost of ₹10,000 payable to the Prime Minister’s National Relief Fund, failing which the assessee would not get the benefit of the remand order.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 22/09/2025 in respect of A.Y. 2015-16.
