2023 (5) TMI 1064 - AT - Income Tax

Assessment of income - residential status - assessment by treating the assessee as Resident as against the return of income filed in the status of Non-Resident - plea of the assessee that the assessee is a non-resident for the past 10 years and has been filing its return of income in the status as non-resident‟ -as per the assessee, he was in India, during the year under consideration, only for 65 days - HELD THAT - From the perusal of the impugned order, it is evident that the learned CIT(A) neither sought any remand report from the AO nor considered any of the aforesaid documents while dismissing the assessee s appeal in respect of the computation of long-term capital gains. There is no examination of the correct residential status of the assessee by any of the lower authorities. Therefore, in view of the above and in the interest of justice, we deem it appropriate to restore both issues to the file of the AO for de novo adjudication after considering the details filed by the assessee pertaining to his residential status as well as the documents/information furnished before the learned CIT(A) as additional evidence. Grounds raised by the assessee are allowed for statistical purposes.

Issues:
The judgment involves the following Issues:
1. Assessment of the assessee under the status of Resident instead of Non-Resident
2. Acceptance of cost value of shares at Rs. Nil
3. Determination of long-term capital gain at Rs. 1,78,60,000 instead of Rs. 97.55,788
4. Non-acceptance of balance sheet and capital accounts for financial years 2005-06 to 2010-11
5. Passing the Order without considering the application under Rule 46A of Income tax Rules, 1962
6. Absence of mention of any Remand Report in the Order
7. Alleged non-attendance to notices by the Appellant

Assessment of Residential Status:
The assessee, an individual, challenged the assessment as a Resident instead of Non-Resident. The assessee provided evidence supporting non-resident status, including a return of income acknowledging non-resident status and a US passport. The AO did not investigate this claim and passed the assessment order without due process. The Tribunal found it appropriate to restore this issue to the AO for further examination based on the evidence provided by the assessee.

Cost Value of Shares:
The assessee contested the acceptance of the cost value of shares at Rs. Nil, providing various documents including declarations, ledgers, balance sheets, and other financial records to substantiate the cost of acquisition at Rs. 81,04,212. These documents were not considered by the lower authorities. The Tribunal directed a fresh adjudication by the AO, considering the additional evidence presented by the assessee.

Determination of Long-Term Capital Gain:
The dispute arose from the computation of long-term capital gains at Rs. 1,78,60,000 instead of Rs. 97.55,788 declared by the assessee. The Tribunal observed that the lower authorities did not consider the additional documents submitted by the assessee during the appellate proceedings. Consequently, the Tribunal remanded this issue to the AO for a fresh assessment, instructing the assessee to cooperate fully.

Non-Acceptance of Financial Documents:
The assessee's submission of balance sheets and capital accounts for the relevant financial years was not acknowledged by the AO. The Tribunal noted the failure of the lower authorities to consider these documents and directed the AO to re-examine this aspect after the assessee's cooperation.

Application Under Rule 46A:
The Tribunal highlighted the dismissal of the assessee's appeal without due consideration of the application filed under Rule 46A of the Income Tax Rules, 1962. The Tribunal directed the AO to review this application along with the additional evidence provided by the assessee during the appellate proceedings.

Absence of Remand Report and Alleged Non-Attendance:
The Tribunal noted the absence of a Remand Report and discrepancies in mentioning the appellant's non-attendance to notices. These issues were highlighted for further examination by the AO to ensure a fair assessment process.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing a fresh assessment by the AO considering all the evidence and documents submitted by the assessee. The decision aimed to ensure a thorough examination of the issues raised and proper compliance with procedural requirements.

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