2024 (6) TMI 1208 - AT - Income Tax

Calculation of capital gain on the sale of property against the claimed capital loss - recalculation of LCG on cost of acquisition in FY 2008-09 - assessee argued that the property was purchased in FY 2005-06 and that the AO erroneously considered the date of the sale deed (16.07.2008) as the date of purchase - HELD THAT - AO had accepted the contentions of the assessee partly in the remand proceedings and the ld CIT(A) had relied on the same remand report and granted relief to the assessee. Once, relief is granted based on the remand report of the ld AO, revenue would be precluded from filing any further appeal before this Tribunal. This view of ours is further fortified by the decision of Smt B Jayalakshmi Vs. ACIT 2018 (8) TMI 208 - MADRAS HIGH COURT . Hence, we do not find any infirmity in the order of the ld CIT(A) granting relief to the assessee qua the assessee under first issue. Addition u/s 68 - Unexplained Unsecured Loans - HELD THAT - As submission of the appellant was verified and having gone through the additional submission as submitted by the appellant as well as examination of additional evidences, the contention of the assessee seems to be acceptable. Additional evidences which were not submitted during the course of assessment proceedings i.e. bank account no, confirmed copy of account, ITR, bank statement and bank statement of assessee, it has been found that there was opening credit balance and during the year under consideration, assessee had received unsecured loans through banking channels and amount was credited in the bank account - No infirmity in the order of the ld CIT(A) granting relief to the assessee. Revenue appeal dismissed.

Summary

Issues Involved:
1. Calculation of Long-Term Capital Gain (LTCG) on the sale of property.
2. Addition under Section 68 of the Income Tax Act for unexplained unsecured loans.

Detailed Analysis:

1. Calculation of Long-Term Capital Gain (LTCG) on the Sale of Property:

Background:
A search and seizure operation under Section 132 of the Income Tax Act was conducted on 28.06.2018. The assessee filed a return of income declaring a total loss of Rs. 2,99,869/-. The Assessing Officer (AO) made an addition of Rs. 6,16,730/- as LTCG on the sale of property.

Assessee's Argument:
The assessee argued that the property was purchased in FY 2005-06 and that the AO erroneously considered the date of the sale deed (16.07.2008) as the date of purchase, recalculating the LTCG based on the cost inflation index of FY 2008-09.

CIT(A) Findings:
The CIT(A) accepted the additional evidence provided by the assessee, confirming that payments for the property were made in FY 2005-06. The CIT(A) recalculated the capital loss as Rs. 1,22,569/- instead of the claimed loss of Rs. 2,99,869/- or the AO's computed gain of Rs. 6,16,730/-.

Tribunal's Decision:
The Tribunal upheld the CIT(A)'s decision, noting that the AO had accepted the assessee's contentions in the remand proceedings. The Tribunal cited the decision of the Hon'ble Madras High Court in the case of Smt. B Jayalakshmi Vs. ACIT, which precludes the revenue from filing an appeal when relief is granted based on the AO's remand report.

2. Addition under Section 68 of the Income Tax Act for Unexplained Unsecured Loans:

Background:
The AO made an addition of Rs. 87,02,837/- under Section 68 for unsecured loans taken from various entities, stating that the assessee failed to prove the identity, genuineness, and creditworthiness of the creditors.

Assessee's Argument:
The assessee submitted detailed evidence during the appellate proceedings, including confirmed copies of accounts, PAN, ITR, audited balance sheets, and bank statements.

CIT(A) Findings:
The CIT(A) accepted the additional evidence and found the assessee's contentions to be acceptable. The CIT(A) deleted the addition of Rs. 87,02,837/- made by the AO.

Tribunal's Decision:
The Tribunal upheld the CIT(A)'s decision, noting that the relief was granted based on the AO's remand report. Therefore, the revenue is precluded from filing an appeal before the Tribunal.

Conclusion:
The Tribunal dismissed the revenue's appeal and the assessee's cross-objection, upholding the CIT(A)'s decisions on both issues. The order was pronounced in the open court on 19/01/2024.