2021 (7) TMI 610 - AT - Income Tax

Capital gain computation - specific rate applicable qua the stamp duty paid and levied - correct valuation on account of which the specific rate applicable to the undeveloped rural area - rejection of the fresh evidence sought to be raised before the CIT(A) - HELD THAT - Assessee confined his arguments only to the issue being remanded back to the AO for determining whether the specific property sold was to be governed by the DLC Rates applicable to rural undeveloped area or the DLC rates applicable to an urban area. It is seen that no objection has been posed by the Revenue for enquiry and verification on facts, accordingly, in the light of the submissions of the parties before the Bench and on considering the facts, the request for verification of facts appears to be reasonable and thus, in the interests of substantial justice, the impugned order is set aside and the issue is restored back to the file of the AO with a direction to pass a speaking order in accordance with law after carrying out the necessary verification on facts. The assessee in its own interests is directed to ensure full and proper verification before the authorities.

Summary

Issues:
1. Delay in filing the appeal and condonation of delay.
2. Substitution of original grounds with revised grounds.
3. Dispute regarding the application of DLC rates for long term capital gain calculation.

Issue 1: Delay in filing the appeal and condonation of delay
The appeal was filed by the assessee challenging the order dated 07.08.2018 of CIT(A) Rohtak for the 2012-13 assessment year. The Registry pointed out a delay of 210 days in filing the appeal. The assessee explained that the delay was due to ignorance and incorrect advice, leading them to file a Civil Writ Petition instead of approaching the ITAT. The Hon'ble High Court disposed of the writ petition on 25.03.2019, allowing the assessee to appeal before the ITAT. The delay was condoned based on the bonafide reasons provided by the assessee, acknowledging the mistake made due to incorrect advice. The delay condonation was granted considering the peculiar facts and circumstances of the case.

Issue 2: Substitution of original grounds with revised grounds
The revised grounds filed before the ITAT sought substitution of the original grounds raised by the assessee. The department had no objection to the substitution as the revised grounds did not introduce any new arguments. The Co-ordinate Bench directed the revision of the original grounds due to being argumentative. The revised grounds were permitted for substitution as per the department's no objection.

Issue 3: Dispute regarding the application of DLC rates for long term capital gain calculation
The assessee raised concerns regarding the application of DLC rates for long term capital gain calculation. The dispute arose from confusion about the exact location of the property sold, impacting the stamp duty rates applied. The assessee argued that the property was in an undeveloped rural area, affecting the calculation of long term capital gain. The request was made for a physical verification of the property's location to determine the correct rate applicable. The issue was remanded back to the AO for verification and determination of the applicable DLC rates based on the property's specific location at the relevant time. The Revenue had no objection to the remand, and the impugned order was set aside for proper verification of facts.

In conclusion, the appeal was allowed to the extent of remanding the issue back to the AO for proper verification and determination of the DLC rates applicable to the property sold in the undeveloped rural area, ensuring substantial justice and correctness in the assessment process.