Incorrect Cost of Acquisition considered while computing LTCG: ITAT directs Re-computation [Read Order]

The Income Tax Appellate Tribunal (ITAT), Jabalpur Bench, held that the incorrect cost of acquisition was considered while computing LTCG and directed for re-computation.

The facts of the case are that the assessee, Chaitram Alonkar, identified as non-filer and on the basis of proceedings conducted under Section 132A of the Income Tax Act, 1961, the Assessing Officer(AO) through notice under Section 142 called upon the assessee to furnish return of income. The return was subjected to scrutiny assessment, during which a solitary addition was made towards the difference of LTCG by making reference to violation of Section 269SS.

The assessee was aggrieved by the addition and preferred an appeal under Section 246A read with 249 which was partly allowed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The present appeal was filed by the assessee under Section 253(1).

ITAT observed that a statement of the assessee was recorded wherein he admitted the ownership and source thereof as sale proceeds received on transfer/selling of certain immovable properties owned by him. It was noticed by the AO that the stamp duty valuation (SDV) of such four plots sold was INR 85,97,712/-, which was later rectified by the CIT(A).

The Tribunal noted that cost of acquisition cannot be reduced on the premise that such area had never been sold but reserved for utilities. The bench of Kul Bharat (Vice President) and G.D. Padmahshali (Accountant Member) directed the AO to re-compute LTCG with reference to full cost of acquisition and allowed the ground in appeal.

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