2016 (11) TMI 593 - AT - Income Tax

Addition on capital gain by invoking the provisions of Section 50C - Held that - As before the ld. CIT (A) proper representation could not be made by the counsel and assessee being salaried employee could not himself represent its case properly. This is evident from the order of Ld. CIT(A) wherein he has observed that, since assessee s Counsel has not made any request for making reference to the DVO, therefore, the same is not being made. Now, before us, a huge compilation of additional evidences has been filed, which at the fact of it goes to the very root of issue involved. Thus, under the facts and circumstances as narrated above, we are admitting the evidences as well as the additional ground filed by the assessee and the entire matter is restored back to the file of the AO for fresh consideration and adjudication of Long-term-capital-gain after giving due and effective opportunity to the assessee to present his case. Thus, we remand back the entire issue to the file of the AO for fresh adjudication - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Taxing of capital gain under Section 50C without reference to Valuation officer.
3. Admission of additional evidences for fresh adjudication.

Condonation of Delay:
The appeal was filed 39 days beyond the limitation period. The assessee attributed the delay to the negligence of the previous legal consultant. The Tribunal accepted the explanation, noting that there was a reasonable cause for the delay, and thus condoned the delay, allowing the appeal to proceed for hearing on merits.

Taxing of Capital Gain under Section 50C:
The main issue revolved around the taxing of long-term capital gain under deeming provisions of Section 50C without reference to the Valuation officer. The assessee contended that proper representation could not be made before the CIT(A), leading to the denial of reference to the DVO. Subsequently, additional evidences were submitted, shedding light on crucial aspects of the case. The Tribunal admitted the additional evidences and remanded the matter back to the AO for fresh adjudication, emphasizing the need for due opportunity for the assessee to present their case effectively.

Admission of Additional Evidences for Fresh Adjudication:
The assessee submitted a detailed petition along with additional evidences, highlighting various aspects related to property transactions and valuation discrepancies. The AR argued that these evidences were essential to the core issue and could significantly impact the disputed addition. Both the AR and DR agreed to the matter being sent back to the AO for fresh consideration. The Tribunal admitted the additional evidences and grounds, directing a fresh adjudication by the AO after considering the new evidence and relevant legal provisions.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the importance of providing a fair opportunity for the assessee to present their case effectively. The decision to remand the matter back to the AO for fresh adjudication underscored the significance of considering all relevant evidence and legal provisions in determining the tax implications of the capital gain.