Amarsinh Thakor Vs ITO (ITAT Ahmedabad)
Entire Sale Consideration Cannot Be Taxed as STCG: ITAT Ahmedabad Sets Aside Ex-Parte Assessment with Costs
The Ahmedabad Bench of the ITAT allowed the assessee’s appeal for AY 2016-17 for statistical purposes, holding that taxing the entire sale consideration as short-term capital gains without allowing cost of acquisition is legally unsustainable, and that the CIT(A) erred in dismissing the appeal merely on the ground of delay without examining merits.
The assessee, an individual agriculturalist, had not filed a return. On information of sale of immovable property and cash deposits, reassessment was completed ex-parte under sections 147/144, treating ₹1.00 crore as STCG and ₹36.04 lakh as unexplained cash u/s 69A. The CIT(A) dismissed the appeal citing delay of 216 days, without adjudicating substantive grounds.
While the ITAT rejected the assessee’s plea of total ignorance of proceedings (notices were sent by email and AO had given multiple opportunities), it emphasized that substantive justice cannot be defeated by technicalities—particularly when the AO’s approach of taxing gross sale consideration was prima facie flawed.
Balancing equities, the Tribunal imposed a cost of ₹10,000 payable to PMNRF within 15 days, set aside the orders of the CIT(A) and AO, and remanded the matter to the AO to:
