2017 (3) TMI 252 - AT - Income Tax

Assessee offered capital gain from Sale of land and not from building - joint property - assessee submitted that he is the owner of the land and not of the building. The entire investment in the construction of the building was made only by other person - Held that - On examination of the order of lower authorities we find that the argument of the assessee that he has no connection with the building either directly or indirectly has not been adjudicated in the absence of documentary evidence. However in our view the lower authorities before reaching to the conclusion should have cross verified the contention of the assessee from Mr. Samar Roy Chowdhury which they failed to do so. Therefore in the interest of Justice and fair play we re inclined to give one more opportunity to the assessee to submit his arguments with documentary evidence to justify his claim. Hence we restore this ground of appeal of the assessee to the AO for fresh adjudication in accordance with the law and in the light of above is stated discussion. - Decided n favor of assessee for statistical purposes.

Summary

Issues involved:
1. Valuation of the assessee's share in a property for income tax assessment.
2. Working of indexed cost of acquisition of the land/property under section 48 of the Income Tax Act.

Issue 1: Valuation of the assessee's share in the property:

The appeal was against the order of the Commissioner of Income Tax (Appeals) confirming the assessment framed by J.C.I.T. for the assessment year 2008-09. The primary issue raised was the valuation of the assessee's share in a property sold along with other joint owners. The property was initially registered as vacant land, but it was later discovered to have a building consisting of 25 flats and 20 shops. The assessee claimed ownership of the land only, while the assessing officer determined the share of the assessee in the sale consideration based on the property's stamp duty valuation. The assessee contended that the building was constructed by another co-owner and that the valuation did not consider his limited ownership of the land. The Commissioner of Income Tax (Appeals) upheld the assessing officer's decision, citing fraudulent practices by the assessee and family members to evade stamp duty and taxes. However, the ITAT Kolkata allowed the appeal, directing the matter to be sent back to the assessing officer for fresh adjudication. The ITAT emphasized the need for proper verification and consideration of the assessee's claims and documentary evidence regarding the ownership of the building.

Issue 2: Working of indexed cost of acquisition:

The second issue raised by the assessee was related to the indexed cost of acquisition of the land/property sold. The ITAT Kolkata decided to restore this issue to the assessing officer for fresh adjudication along with the first issue. The assessee's representative requested the bench to send the matter back to the assessing officer, and the Departmental Representative did not object to this request. Therefore, the ITAT Kolkata allowed this ground of appeal for statistical purposes, indicating that the issue of the indexed cost of acquisition would be re-examined by the assessing officer in accordance with the law.

In conclusion, the ITAT Kolkata's judgment addressed the valuation of the assessee's share in a property and the working of the indexed cost of acquisition. The decision highlighted the importance of proper verification and consideration of documentary evidence in tax assessments, emphasizing fairness and adherence to legal procedures.