Puneet Singhvi Vs ITO (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT), Jaipur, has allowed the appeal of Puneet Singhvi for statistical purposes, setting aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] and restoring the assessment to the Assessing Officer (AO) for a fresh examination. The case pertains to an alleged undisclosed long-term capital gain (LTCG) arising from the transfer of an immovable property (shop) during the assessment year 2013-14.
The AO initiated reassessment proceedings under Section 148 of the Income Tax Act, 1961, alleging that the assessee had not shown income under the head LTCG. The AO noted that the stamp duty valuation of the property was Rs. 30,56,063/-, while the assessee’s return of income did not reflect any capital gain from its transfer. During the assessment proceedings, the assessee claimed to be merely a Special Power of Attorney (SPA) holder for the property, acting on behalf of the original owners. The assessee stated that a sale deed was executed on March 30, 2013, for a consideration of Rs. 5,00,000/-, which was paid to the original owners.
However, the AO rejected the assessee’s submissions, citing discrepancies in the sale deed. The AO pointed out that the assessee was mentioned as a seller in the deed, along with the original owners, and the capacity as an SPA holder was not explicitly stated. Furthermore, the sale deed was signed only by the assessee, and the signatures of the other four sellers were absent, leading the AO to infer that the assessee was the sole owner. The AO also questioned the nature of the SPA, its registration status, and whether any consideration was paid by the assessee for obtaining it. Consequently, the AO added Rs. 30,56,063/- as LTCG to the assessee’s income.
In the first appeal, the CIT(A) passed an ex-parte order as the assessee failed to provide any explanation or supporting documents. While confirming the initiation of reassessment, the CIT(A) directed the AO to verify if the sale consideration of Rs. 5,00,000/- was indeed paid to the original owners. If confirmed, the CIT(A) opined that a deduction of this amount from the deemed sale consideration would be fair in determining the capital gains.
Before the ITAT, the assessee’s representative requested another opportunity to present documents and contest the case, seeking a restoration of the matter to the AO. The ITAT noted that the assessee had remained ex-parte before both the AO and the CIT(A), thus failing to present a proper defense. While acknowledging the assessee’s lack of diligence in pursuing the case, the tribunal emphasized that disputes should ideally be decided on merits, ensuring a fair opportunity of being heard. Consequently, the ITAT restored the matter to the AO for a fresh consideration, granting one more opportunity to the assessee to present their case. However, the tribunal cautioned the assessee against seeking frivolous adjournments and stressed the need for cooperation during the proceedings. The ITAT clarified that its decision to restore the matter should not be interpreted as any opinion on the merits of the case, which the AO will adjudicate independently based on the law and evidence presented.
Assessee was represented by Adv. Mahendra Gargieya and Other Advocates
