Income Tax Appellate Tribunal - Delhi
Yogendra Kumar Bhardwaj, Ghaziabad vs Ito, New Delhi on 1 February, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'SMC-II', NEW DELHI
BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER
ITA No.4835/Del/2016
Assessment Year : 2010-11
Yogendra Kumar Bhardwaj, ITO, Ward-40(1), New
A-125, Surya Nagar, Vs. Delhi
Ghaziabad - 201 011.
PAN : AFCPB 1543 E
(Appellant) (Respondent)
Appellant by None
Respondent by Shri F.R. Meena, Sr.DR
Date of hearing 10-11-2016
Date of pronouncement 01-02-2017
ORDER
PER DIVA SINGH, J.M. :
The present appeal has been filed by the assessee assailing the correctness of the order dated 20.06.2016 of the CIT(A)-28, New Delhi pertaining to 2010-11 assessment year on various grounds. However, since the assessee remained unrepresented despite issuance of notice, it was considered appropriate to decide the appeal ex-parte qua the assessee's appeal on merits after hearing the Ld.Sr.DR. The sole issue addressed by the Revenue is addressed in Ground No.3 raised by the assessee. The same is reproduced hereunder :-
"3. For that on the facts and in the circumstances of the case, the Ld commissioner of Income Tax (Appeals) erred in not admitting the additional evidence filed by the appellant which was germane to deciding the issue and the same amounted to violation of principles of natural justice."
2. Addressing the defect of 2 days pointed out by the Registry, it is seen that in the petition explaining the delay, the assessee has stated that the delay had arisen on account of a series of death in his family of the assessee as well as medical emergency. The Ld. Sr.DR considering the prayer of the assessee in regard to the condonation of delay had no objection if the delay is condoned. Accordingly, considering the prayer in the condonation of delay petition the affidavit filed on behalf of the assessee and after hearing the Ld.Sr.DR the delay of 2 days in the filing of the appeal is condoned.
3. A perusal of the record shows that the assessee is stated to be a salaried employee. The return was picked up for scrutiny since as per the AIR information available, the 2 ITA No.4835/Del/2016 assessee was found to have sold a property for a sum of Rs.53,25,000/-. The AO require the assessee to explain the same. The assessee in response stated that the specific property was purchased in 1992 for a sum of Rs.4,00,000/- on which the assessee constructed three floors namely ground floor; first floor; and second floor. Second floor was claimed to have been sold for the aforesaid amount. Considering the cost of construction of the second floor taken by an approved value at Rs.15,25,000/- long term capital gain of Rs.32,91,086/- was added to the income of the assessee.
4. The assessee assailed the addition before the CIT(A). Before him, fresh evidences were sought to be filed. The fresh evidences sought to be raised were not admitted holding that the valuation report relied upon by the Assessing Officer was the evidence of the assessee. Accordingly, it was considered that there was no reason for admitting additional evidence.
5. Aggrieved by this order, the assessee has filed the present appeal before ITAT. A perusal of the impugned order shows that before the CIT(A), it was submitted that the cost of construction which was taken into consideration by the approved valuer does not factor in the cost of improvement. Thus fresh evidence to address the issue was stated to be necessary. Apart from that it was submitted that the Approved Values had calculated the value as per CPWD DSR rates which does not include the cost of all the accessories which had been fitted on the site like modern frames on the doors, windows; iron grills, iron doors, hard ware (Handless Locks/ Bolts of Stainless locks steel), modular kitchen; chimney, RO system, bathroom (tiles fixtures) in the two bathrooms, steel railing and toughened glass, rear iron jall, glass work, electrical switch/fans/jhummar/fancy lights and wardrobes etc. It has been submitted that a perusal of the valuation report relied upon before the AO would show that it only refers to plinth area rates and the improvement in the properties have not been taken into consideration. Apart from that cost of maps sanctioning/water/electricity/sewer construction, cost of compounding etc. relatable to the floor sold have also not been considered by the AO. It is seen that it had been argued as per submission recorded in the 3 ITA No.4835/Del/2016 impugned order that complete details were available and should have been considered by the Assessing Officer, who did not provide any opportunity in regard to the issues considered for making the addition. Had the opportunity been provided the evidences would have been made available to the AO himself. Reliance was placed upon para 1 of the assessment order to state that all "documents asked for" have been filed and on this aspect there was no query.
5.1. Considering the detailed arguments for admission of fresh evidence available on record in the peculiar facts and circumstances and the details available in statement of facts filed, the Ld. Sr. DR was unable to support the following finding of the CIT(A) :-
"2.3 In the case under consideration the assessment has been completed after being given reasonable opportunity to the assessee. Further the Capital gain in question has been duly calculated on the basis of the details and document furnished by the assessee. Moreover the valuation report was prepared by the registered valuer of the assessee, hence there in no reason for admitting additional evidence submitted by the appellant. Further the same is also not cover with the exceptions and explanation specified in rule 46A of the Income Tax Rule.
2.4 Considering the above, I don't find any infirmity in the Long Term Capital Gain calculated by the A.O. Accordingly the addition of Rs.32,91,086/- made by the assessing officer on account of undisclosed Capital Gain is confirmed."
5.2. Accordingly, it was his submission that the issue may be remitted back.
6. I have heard the submissions of the Ld.Sr.DR and perused the material available on record. On a consideration of the same, I find that the impugned order cannot be upheld as the arguments and statements of facts filed on behalf of the assessee before the CIT(A) have not been taken into consideration by the CIT(A) while passing the order. Considering the nature of evidence and the documents which the Ld.AR seeks to rely upon, I find no good reason as to why the same cannot be taken note of by the tax authorities without upsetting the argument that these specific details and facts are not available in the valuation report filed as it merely mentions plinth area and rates without addressing the specific improvements carried out in the property before sale. Thus merely because the assessee has filed a Valuation Report before the AO the said fact cannot be made the basis for 4 ITA No.4835/Del/2016 rejecting the claim of improvements carried out on the property. In the present case, the assessee pleaded that evidences were available before the Assessing Officer and since they have not been considered by him an addition has been made again ignoring these documents. The evidences in regard to claim of improvements carried out; evidences pertaining to map sanctioning, water/electrical/sewer work, construction costs, cost of compounding etc. are not only relevant and crucial evidence but are also not the kind of evidences which can be self-created. Thus, non-consideration of the same cannot be countenanced. Accordingly, it is deemed appropriate to set aside the issue directing the Ld.CIT(A) not only to admit the fresh evidences qua the claim of improvements in the property sold but also direct the said authority to grant necessary relief by way of apportioning the costs of map sanctioning costs; water and sewer work costs etc. relatable to the floor sold. Accordingly, the impugned order is set aside to the file of the CIT(A) in the light of the above directions.
7. In the result, the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open court on 01 February, 2017.
Sd/-
Sd/- Sd/- S
(A. N. MISHRA) (DIVA SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Sujeet/Amit
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI