Asheesh Kumar Sharma Vs ITO (ITAT Delhi)
Conclusion: CIT(Appeals) failed to admit the additional evidences which went to the root of the matter for determining the issue of taxability of long term capital gains as was made by AO ignoring the submissions of assessee. Therefore, the case was remanded to AO for fresh assessment, with liberty to assessee to furnish evidence.
Held: Assessee filed his return of income for Assessment Year (AY) 2012-13, declaring Rs. 10,20,000. Assessment was reopened based on ITS details indicating the sale of two immovable properties. AO completed the reassessment at Rs. 2,53,62,000, treating the transaction as LTCG from the sale, relying on registered sale deeds obtained from the sub-registrar. Assessee contended that no sale occurred in AY 2012-13, as the properties agricultural land in the Khadar area were sold in FY 2007-08 to Hari Om Aggarwal via a General Power of Attorney (GPA). Assessee argued that the land did not qualify as a capital asset under Section 2(14)(iii), no consideration was received in the relevant year, and AO failed to issue a final show-cause notice or allow cross-examination of evidence collected under Section 133(6). Assessee appealed to CIT(A). Assessee submitted additional evidence under Rule 46A, including the GPA, agreement to sell, affidavits, bank statements, Khasra-Khatauni records, and a notarized document confirming the land’s agricultural nature and distance from municipal limits. CIT(A) rejected the evidence without reasoning or hearing, upheld the addition, and dismissed the appeal ex parte. Aggrieved by CIT(A)’s order, assessee appealed to ITAT. Assessee contended that CIT(A)’s order was cryptic, ignored submissions, and violated natural justice by not admitting evidence that addressed the core issues, including the land’s non-capital asset status and absence of any transaction in AY 2012-13. It was held that CIT(A) neither adjudicated the submissions nor provided independent findings, rendering the order unsustainable. The additional evidence went to the root of the matter and warranted admission for just resolution. CIT(A)’s failure to consider the evidence and submissions justified remanding the case to the AO for fresh assessment, with liberty to the assessee to furnish evidence. Tribunal had restored the matter for de-novo adjudication.
