2021 (1) TMI 465 - AT - Income Tax

Capital gain computation - request for admission of additional evidence - HELD THAT - We deem it fit and proper to admit the additional evidence submitted by the assessee and allow the cost of acquisition while computing the capital gain. The issue is set aside to the file of the AO for denovo re-consideration. Needless to mention that the Assessee shall be given a fair opportunity of hearing. Assessee's appeal is treated as allowed for statistical purposes.

Summary

Issues:
- Appeal against CIT (A)'s order for A.Y. 2011-12
- Application of Section 50C and computation of capital gain
- Admissibility of additional evidence and cost of acquisition

Appeal against CIT (A)'s order for A.Y. 2011-12:
The appellant, an NRI individual, appealed against the order of the CIT (A) for the A.Y. 2011-12. The appellant, co-owner of a property sold to Shri Rajesh Nahata, was involved in a transaction where the sale consideration was considered lower than the market value. The AO invoked Section 50C and treated the sale consideration higher than declared, bringing the share to tax. The CIT (A) did not admit additional evidence and disallowed the cost of acquisition for computing capital gain. The appellant challenged this order before the Tribunal.

Application of Section 50C and computation of capital gain:
The AO invoked Section 50C due to the variance between declared sale consideration and market value, resulting in tax implications for the appellant. The CIT (A) confirmed the capital gain determination without allowing the cost of acquisition, leading to the appellant's appeal. The appellant requested the Tribunal to direct the AO to consider the cost of acquisition while computing capital gain. After considering the submissions and material on record, the Tribunal admitted the additional evidence and directed the AO for denovo re-consideration, ensuring a fair opportunity of hearing for the appellant.

Admissibility of additional evidence and cost of acquisition:
The appellant submitted relevant papers before the CIT (A) seeking allowance of the cost of acquisition in computing capital gain. The Tribunal, after hearing both parties, admitted the additional evidence and allowed the cost of acquisition for computing capital gain. The issue was set aside for the AO's re-consideration, with the appellant's appeal treated as allowed for statistical purposes. The order was pronounced in the Open Court on 31st December 2020.