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2024 (5) TMI 394 - AT - Income TaxLTCG - deduction u/s 54 - entire amount of long-term capital gains earned from the sale of original assets was not invested - CIT(A) granted partial relief to the assessee by observing that the assessee has made only partial investment in the new house property and therefore is entitled to relief u/s 54 of the Act only limited to the payment made for the new flat as per the purchase deed - HELD THAT - There is no material available on record to show that the assessee was put to notice or was granted the opportunity of hearing by the learned CIT(A) before arriving at the aforesaid conclusion. Accordingly we deem it appropriate to restore this issue to the file of the jurisdictional AO for de novo adjudication after consideration of the details as may be furnished by the assessee. The assessee is directed to file her submission along with all the necessary supporting documents in respect of her claim u/s 54 of the Act before the AO. Accordingly the impugned order passed by the learned CIT(A) is set aside and the grounds raised by the assessee are allowed for statistical purposes.
Issues:
The judgment involves challenges to an order passed under section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals) regarding the disallowance of a deduction under section 54 for the assessment year 2013-14. Grounds Raised by Assessee: 1. The assessee contested the disallowance of a deduction under section 54, arguing that the capital gain was invested in a residential house within the stipulated time. 2. The assessee challenged the order for lack of in-depth inquiry and violation of principles of Natural Justice. Facts of the Case: The assessee, an individual, did not file her income tax return for the relevant year. Upon discovering the sale of an immovable property, the Assessing Officer initiated proceedings under section 147 of the Act. Despite various notices, the assessee did not respond, leading to the assessment being completed under section 144. The AO computed long-term capital gains on the sale of the property, as the assessee failed to provide necessary information. Assessee's Submissions: The assessee, a housewife, claimed no taxable income for the year and stated she did not receive notices as they were sent to the address of the sold property. The assessee detailed the purchase and sale of the property, claiming exemption under section 54 for reinvestment in a new residential property. Appellate Proceedings: The assessee submitted evidence during the appellate proceedings. The CIT(A) sought a remand report from the AO, which was not provided. The CIT(A) determined that the entire capital gains were not reinvested in the new property as claimed by the assessee, limiting the benefit under section 54 to 50% of the investment. The CIT(A) held a portion of the gains as taxable. Appellate Tribunal Decision: The Tribunal observed the lack of response from the assessee during the assessment and appellate proceedings. It noted the partial relief granted by the CIT(A) without proper notice or hearing to the assessee. The issue was remanded to the AO for fresh adjudication, directing the assessee to submit necessary documents for the claim under section 54. The impugned order was set aside, and the assessee's grounds were allowed for statistical purposes. Conclusion: The appeal by the assessee was allowed for statistical purposes, with the Tribunal remanding the issue to the Assessing Officer for a fresh decision after considering the submissions and supporting documents from the assessee.
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