Capital Gain addition of ₹1.11 Cr Addition for Sale of Agricultural Land: ITAT Restores Matter for verification [Read Order]
The matter was remanded after the Tribunal noted that the assessee conceded to have made no compliance before the AO or CIT(A).
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) restored the appeal to the file of the Assessing Officer (AO) for verification in the case involving capital gain addition amounting to ₹1.11 Crore for sale of agricultural land.
Chakrapani Nagarajan (assessee) had not filed a return of income for the Assessment Year (AY) 2018-19. Information flagged under the Risk Management Strategy formulated by the CBDT indicated that the assessee had sold an immovable property for ₹1,11,75,000/-. Additionally, the assessee had received contract payments of ₹8,18,640/-.
Based on this information, the case was reopened under Section 148A(d) of the Income Tax Act, 1961, and a notice under Section 148 was subsequently issued. Despite the notices, the assessee did not file a return of income.
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The assessee submitted a partial reply, including a computation of capital gains and other documents, the AO computed the total sale consideration of ₹1,11,75,000/- as capital gains and added it to the total income. The AO also added a sum of ₹65,491/- under Section 44AD by estimating 8% as gross profit on total contract receipts.
Aggrieved by the AO's order, the assessee appealed to the Commissioner of Income Tax (Appeals) CIT(A). The assessee did not furnish any evidence in support of his grounds of appeal before the CIT(A). The CIT(A) confirmed the additions made by the AO.
Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT. The assessee argued that the notice issued under Section 148 was void as it was issued by the Jurisdictional Assessing Officer (JAO) and not the Faceless Assessing Officer (FAO).
The assessee contended that the property sold was agricultural land and therefore exempt from income under Section 2(14) of the Act. The assessee contested the estimation of income under Section 44AD of the Income Tax Act.
The assessee conceded that there was no compliance made by the assessee before both the AO and the CIT(A). The assessee requested that the issue be restored back to the file of the AO for fresh adjudication in the interest of justice.
The two-member bench, comprising SS Viswanethra Ravi (Judicial Member) and Ratnesh Nandan Sahay (Accountant Member), observed the assessee's concession of non-compliance. The Tribunal found it proper to restore the issue back to the file of the Assessing Officer for fresh adjudication.
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The Tribunal directed the assessee to raise all issues before the AO first and provide all documents/evidences to substantiate his claims. The assessee also undertook to make necessary compliance and submit all relevant documents. The appeal filed by the assessee was allowed for statistical purposes.
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