ITAT remands Case Back to AO for Re-Assessment, due to Lack of Proper Procedure in Capital Gains Adjustment [Read Order]

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case of the assessee to the Assessing Officer ( AO ) for reassessment of the capital gain, highlighting the failure to follow the prescribed procedure under section 143(1)(a) of the Income Tax Act,1961.

Divya Dugar, the appellant-assessee, had filed a return of income for the Assessment Year 2018-19, which was processed by the Assessing Officer ( AO ) under Section 143(1).

Know How to Investigate Books of Accounts and Other Documents, Click Here

The AO made adjustments under Section 143(1) of the Income Tax Act, adding Rs. 2,52,31,516 for capital gains and Rs. 14,65,957 for income under Other Sources, which led to an enhanced gross total income.

The assessee appealed against the CIT(A)'s decision, claiming that the addition of Rs. 2,52,31,516 as Capital Gains was incorrect, as it had already been accounted for in the profit and loss account. The assessee argued that this resulted in a double addition and submitted supporting documents to justify the claim. However, the CIT(A) upheld the addition, prompting the assessee to appeal before the ITAT.

The assessee approached the Tribunal, contending that the AO had made adjustments under Section 143(1) without following the prescribed procedure, and that the Ld. CIT(A) had failed to adequately address this issue, leading to a double addition of Rs. 2,52,31,516 as Capital Gains.

The tribunal found that the CIT(A) had erred by not adequately addressing the issue of theAO's adjustment under Section 143(1) and by not considering the assessee's submissions regarding the double addition of Rs. 2,52,31,516 under the head "Capital Gains".

Know How to Investigate Books of Accounts and Other Documents, Click Here

The two-member bench comprising Shri Sonjoy Sarma ( Judicial Member ) and Shri Sanjay Awasthi ( Accountant Member ) remanded the matter back to the AO for fresh adjudication, directing the AO to evaluate the evidence and re-assess the capital gain, considering the assessee's submissions regarding the double addition of Rs. 2,52,31,516 under the head "Capital Gains".

In conclusion, the appeal was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates