2013 (2) TMI 876 - AT - Income Tax

Summary

Issues Involved:
The judgment involves issues related to an appeal filed by the assessee against the order passed by Ld. CIT(A)-26, Mumbai for assessment year 2005-6. The issues include challenging the ex-parte assessment order u/s 144 of the Income Tax Act, 1961 and contesting the addition of Long Term Capital Gains.

Issue I - Ex-parte Assessment Order:
The appellant contested the ex-parte assessment order u/s 144, arguing that proper notice was not served due to a change of address, leading to a lack of opportunity to present the case. The appellant highlighted the communication of address change to the AO and the failure to receive notices under section 143(2). The appellant also raised concerns about the comparison of addresses and lack of compliance with natural justice principles. The Ld. CIT(A) rejected these arguments, stating that the new address was not clearly mentioned and notices were sent to the address mentioned in the return of income. The tribunal found merit in the appellant's claim and directed the matter to be restored to the AO for denovo assessment after giving a reasonable opportunity of hearing.

Issue II - Addition of Long Term Capital Gains:
The appellant challenged the addition of Rs. 58,13,728 on account of Long Term Capital Gains, contending that complete details of the property sale were submitted, including cost of acquisition and development, which were ignored by the AO. The appellant argued for exemption u/s 54 for investment in a new property and set-off of carried forward capital loss. The Ld. CIT(A) upheld the addition, stating that the AO correctly ascertained the taxable capital gain. The tribunal, while not expressing an opinion on the additions, directed the AO to conduct a denovo assessment in compliance with the law, providing the appellant with a reasonable opportunity of hearing.

Conclusion:
The appellate tribunal allowed the appeal for statistical purposes, directing the AO to conduct a denovo assessment considering the issues raised by the appellant regarding the ex-parte assessment order and the addition of Long Term Capital Gains. The judgment emphasized the importance of providing a fair opportunity to the assessee and ensuring compliance with legal procedures in assessments.