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2022 (1) TMI 934 - AT - Income TaxAdmission of additional evidence - AO objected to the admission of additional evidences and CIT(A) confirmed the addition of short term capital gain - Despite accepting that assesses claim should be accepted as long term capital gain, in the concluding portion Ld.CIT(A) has confirmed the addition as short term capital gain. - HELD THAT - AO has not commented upon the additional evidences. Ld. CIT(A) is taking cognizance of the addition evidences and has observed assessee s claim should be accepted as long term capital gain. However, he has concluded that assessment as short term capital gain is confirmed. Hence, the order of Ld.CIT(A) is contradictory. Furthermore, assessee has submitted a valuers report regarding the valuation and cost of improvement, which have been rejected by the Ld.CIT(A) without AO s comment or any cogent reasoning. Hence, on the facts and circumstances of the case, in the interest of justice, the issues raised in the appeal are remitted to the file of AO. The AO shall consider the issue afresh after giving the assessee proper opportunity of being heard. The Ld. Counsel of the assessee has undertaken to cooperate before the AO in the assessment. Appeal by the assessee stands allowed statistical purposes.
Issues:
1. Assessment of Income from Business 2. Taxation of Interest Income under different heads 3. Treatment of Long-term Capital Gains as Short-term Capital Gains 4. Consideration of Sale Proceeds as Short-term Capital Gains without Cost Deduction 5. Acquisition of Property under Will and Cost of Acquisition 6. Disallowance of Deduction under Chapter VIA 7. Levy of Interest under Sections 234A, 234B, and 234C Issue 1: Assessment of Income from Business The appellant contested the assessment of Income from Business at ?70,000 on an adhoc basis, arguing it was contrary to the law. The AO estimated the business income at ?70,000 instead of the declared ?38,640 due to lack of supporting documents. The Ld.CIT(A) confirmed the increased income amount, rejecting the appellant's contentions. Issue 2: Taxation of Interest Income under different heads The appellant objected to the taxation of interest income of ?38,640 under the head Income from Other Sources instead of Business Income. The Ld.CIT(A) upheld the AO's decision, treating the interest income as income from business. Issue 3: Treatment of Long-term Capital Gains as Short-term Capital Gains The AO treated the Long-term Capital Gains as Short-term Capital Gains due to lack of evidence regarding the cost of acquisition and repairs. The Ld.CIT(A) confirmed the AO's decision, disregarding the appellant's valuation report and additional evidence. Issue 4: Consideration of Sale Proceeds as Short-term Capital Gains without Cost Deduction The AO adopted the entire sale consideration of ?45,00,000 as taxable short-term capital gain, rejecting the appellant's claim for deduction of the cost of acquisition. The Ld.CIT(A) confirmed this decision, denying the cost deduction. Issue 5: Acquisition of Property under Will and Cost of Acquisition The appellant acquired the property through a will from the father. The Ld.CIT(A) acknowledged this acquisition but disagreed with the valuation provided by the appellant, rejecting the valuation report and additional evidence submitted. Issue 6: Disallowance of Deduction under Chapter VIA The AO disallowed the deduction claimed under Chapter VIA due to lack of documentary evidence. The Ld.CIT(A) confirmed this disallowance, emphasizing the absence of proof to support the claim. Issue 7: Levy of Interest under Sections 234A, 234B, and 234C The AO levied interest under Sections 234A, 234B, and 234C, justifying the levy as mandatory. The Ld.CIT(A) upheld the interest levy, dismissing the appellant's appeal on this ground. In the final judgment, the ITAT remitted all issues back to the AO for fresh consideration, emphasizing the need for proper opportunity for the appellant to present evidence and cooperate. The contradictory conclusions and lack of detailed reasoning in the previous assessments led to the decision to allow the appeal for statistical purposes and grant the appellant a fair chance to address the issues before the AO.
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