Ashok Kumar Jain Vs NFAC (ITAT Jaipur)
Income Tax Appellate Tribunal (ITAT), Jaipur Bench, recently heard an appeal filed by Ashok Kumar Jain challenging the findings of the lower tax authorities regarding the cost of acquisition of a property for which capital gains were being reassessed. The assessee had claimed the benefit of the cost of acquisition for the same property that was subject to reassessment proceedings.
The assessee presented bills and letters amounting to ₹6,44,603/- as evidence for the cost of construction. However, the Commissioner of Income-tax (Appeals) [CIT(A)] upon perusal of these documents, concluded that the work carried out was not related to the existing structure and could not be considered as expenditure on account of ‘cost of construction’. The CIT(A) categorized the expenditure as being in the nature of current repairs and maintenance, as well as furniture and fixtures, which are not treated as cost of improvement to the capital asset sold. Consequently, the CIT(A) upheld the Assessing Officer’s (AO) decision to deny the assessee’s claim of indexed cost of acquisition of ₹9,31,742/-.
Before the ITAT, the assessee’s learned Authorised Representative (AR) specifically argued for an opportunity to present the facts of the claim before the AO, citing the principles of natural justice. The ITAT Bench acknowledged that the principles of natural justice are fundamental to the administration of justice and must be adhered to ensure fairness. The Tribunal expressed the view that the matter between the parties should be decided on its merits, ensuring that no one’s rights are curtailed without a proper opportunity to be heard.
Considering the overall facts of the case, the ITAT deemed it appropriate, on humanitarian grounds, to grant the assessee one more chance to represent their claim before the AO. The Tribunal decided to remand the matter back to the AO. The AO is now directed to consider the factual aspects of the matter as raised by the assessee, after duly verifying the facts. The AO is instructed to charge the correct income in the hands of the assessee, if taxable, in accordance with the law, after providing a due opportunity of being heard to the assessee. The Tribunal cautioned the assessee against seeking frivolous adjournments and emphasized the need for cooperation during the proceedings before the AO. Based on these observations, the ITAT allowed grounds number 2 and 3 of the assessee’s appeal for statistical purposes, effectively sending the issue back for a fresh hearing at the AO level.
Assessee was represented by :Sh. Mahendra Gargieya, Adv.& Sh. Devang Gargieya, Adv.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
