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2023 (2) TMI 1016 - AT - Income TaxEx-parte order - LTCG - application of section 50C - Non appearance by assessee on various occasions/notices issued - adopting the valuation done by the ld. DVO as sale consideration of the agricultural land sold by assessee on one side and also reducing the cost of acquisition claimed by the appellant resulting into an addition - HELD THAT - CIT (A) has confirmed the order of the AO in absence of any submissions from the side of the assessee and also non appearance of the assessee before the ld. CIT (A). From the entire sequence of events and the conduct of the assessee in non compliance of the repeated notices, it appears gross negligence on the part of the assessee and wastage of precious time. In our considered view, non compliance of notice issued by the Authorities and non appearance before the Authorities inspite of repeated notices/summons is dis-regard towards the Authorities. Be that as it may, without going into merits, considering the interest of natural justice, one more opportunity is granted to the assessee, and the file is restored back to the ld. CIT (A) for consideration afresh, subject to cost of Rs. 2,000/- for negligent attitude during income tax proceedings, to be deposited in the Prime Minister s Care Fund - Appeal of the assessee is partly allowed for statistical purposes.
Issues:
1. Valuation of Long Term Capital Gain 2. Application of Section 50C of the Income Tax Act, 1961 Valuation of Long Term Capital Gain: The appeal was filed against the order of the ld. CIT(A) regarding the addition of Rs. 17,19,182 as Long Term Capital Gain. The appellant contested the valuation done by the ld. DVO and the reduction in the cost of acquisition. The appellant also sought to raise an additional ground challenging the application of Section 50C of the IT Act, 1961. The Tribunal admitted the additional ground for adjudication on merits, considering it was not a new issue but arose from the previous orders. Application of Section 50C of the Income Tax Act, 1961: The additional ground raised by the assessee challenged the application of Section 50C, contending that it is not applicable to the transfer of leasehold or tenancy rights. The appellant argued that as a Khatedar, not the owner of the land, the provisions of Section 50C were wrongly applied. The appellant cited Section 54D to differentiate between land and rights in the land, supported by judicial pronouncements. The Tribunal considered various decisions, including one by the Jaipur Bench, to support the appellant's argument. Despite objections from the ld. D/R, the Tribunal analyzed the submissions and material on record. The Tribunal noted the non-compliance of the appellant during the appellate proceedings but granted one more opportunity for the appellant to present their case before the ld. CIT(A). As a result, the appeal was partly allowed for statistical purposes, and the matter was remanded back to the ld. CIT(A) for fresh consideration, subject to a cost of Rs. 2,000 for the negligent attitude of the assessee during the income tax proceedings. The judgment highlights the importance of procedural compliance and the distinction between ownership rights and leasehold rights in the context of tax implications. The Tribunal's decision to grant the appellant another opportunity emphasizes the principles of natural justice, ensuring a fair hearing despite past non-compliance.
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