Devanur Thimmasetty Srinivasa Vs ITO (Karnataka High Court)
Assessment order taking entirety of the sale consideration without taking note of the indexed cost of acquisition. is liable to set-aside- Karnataka HC
In a recent ruling, the Karnataka High Court quashed an income tax reassessment order and notice issued to the petitioner where the full sale consideration was considered in calculating capital gains without applying an indexed cost adjustment.
Petitioner submitted that he did not participate in the proceedings as he was not informed by his accountant regarding the proceedings initiated by the
Department perhaps because the petitioner had income only from salary. It is further submitted that reassessment is sought to be made on the basis of capital gain for AY 2015-16 though the sale deed itself is dated 20.07.2015 and hence, would relate to transaction to be taken note of for the AY 2016-17. It is further submitted that the entirety of the sale consideration is taken as capital gains as is evidenced from the assessment order without taking the indexed cost of acquisition and accordingly, it is submitted that an opportunity may be granted to make out reply to the notice under Section 148-A(b).
Taking into consideration the above submissions, Hon’ble HC set-aside the order under Section 148-A(d) and notice under Section 148 and the penalty orders and petitioner was directed to appear before concerned authority.
