Ms. Indira Unninayar vs Income Tax Officer

Per Mahavir Singh, Vice President:

This appeal by the assessee is directed against the order of learned CIT(Appeals), NFAC, Delhi dated 28^th January, 2026 in appeal No.CIT(A), Gurgaon-1/11478/2019-20. Assessment in this case was made by the Income Tax Officer, Ward-2(2), Gurgaon vide order dated 10^th December, 2019 passed under Section 144 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') for the assessment year 2012-13.

The first issue in this appeal of the assessee is as regards the order of learned CIT(A) in confirming the action of the Assessing Officer in making addition of entire sale consideration of ₹47 lakhs as long term capital gains without allowing benefit of cost of acquisition and indexation including other transfer expenses.

Brief facts of the case are that during the year under consideration, assessee transferred a flat for a total consideration of ₹47 lakhs. The flat was acquired by the assessee in inheritance from her husband viz., Late Shri M.S. Unninayar. The Assessing Officer, while completing assessment under Section 144 of the Act, added the entire sale consideration of ₹47 lakhs as long term capital gain without allowing cost of acquisition, indexation and other expenses. Copy of sale deed dated 15th September, 2011 is enclosed in the assessee's paper book at pages 41 to 55. The flat is situated in Bangalore and the address is A-9/1, Vijay Kiran Apartments, 32 Victoria Road, Bangalore, Karnataka. This flat was allotted to the assessee on 5th May, 1982 at a cost of ₹75,100/-, for which, indexed cost of acquisition becomes at ₹5,08,220/-. Assessee carried out transfer expenses at ₹59,118/- and the cost of improvement incurred was ₹1,83,340/- in the year 1982. The indexed cost of improvement is ₹11,21,229/-. Hence, the cost of acquisition after indexation becomes ₹30,11,433/-. The assessee filed before us complete evidences i.e., allotment letter indicating the cost of acquisition, cost of construction, cost of improvement and transfer expenses details. Assessee has enclosed complete evidences from pages 56 to 94 of the paper book. That means, the net capital gain becomes ₹16,88,567/-.

When these facts were confronted to the learned Senior DR, she could not controvert the above fact situation as the assessee has filed complete details in her paper book.

After going through the entire facts and the computation submitted by the assessee, we are of the view that the long term capital gain comes at ₹16,88,567/-. The Assessing Officer will recompute the income accordingly.

The next issue in this appeal is as regards the order of learned CIT(A) in confirming the action of the Assessing Officer in making an addition of ₹24,10,026/- on account of unexplained term deposit and interest income earned at ₹5,61,991/-.

The facts related to these issues are that the assessee in its return of income filed for the assessment year 2010-11 and 2009-10 reflected the fixed deposits of ₹30 lakhs approximately and disclosed interest income in assessment year 2010-11 at ₹2,75,203/- and in assessment year 2009-10 at ₹2,33,281/-. Learned Counsel for the assessee before us explained that the assessee has earned interest income on these fixed deposits to the tune of ₹2,85,779/- from Canara Bank and Indian Overseas Bank. Learned Counsel for the assessee explained that owing to the merger of banks i.e., Indian Overseas Bank with the Canara Bank, in Canara Bank, the assessee's fixed deposits became at ₹32.50 lakhs approximately. He explained that as per Form 26-AS, interest income earned by the assessee is at ₹2,80,996/- in the relevant assessment year but assessee on estimate basis has declared higher interest at ₹2,85,779/-. The learned Counsel explained that in this year, there is no new FDR, rather the FDR maintained with Indian Overseas Bank has become FDR in Canara Bank of the alleged amount of ₹24,10,026/-. Accordingly, the learned Counsel stated that the addition of FDRs of ₹24,10,026/- and consequential interest of ₹2,82,779/- is without any basis and added by the Assessing Officer on the basis of just conjectures and surmises.

When these facts were confronted to the learned Senior DR, he could not controvert the above fact situation and in view of the given evidences in assessee's paper book from pages 95 to 108.

We have heard the rival submissions and perused the material placed before us. We noted that the assessee has properly explained the FDRs and filed evidences before us that the FDR of ₹24,10,026/- is coming out of the old FDRs or due to merger of Indian Overseas Bank with Canara Bank and hence, it is not a new FDR as it is coming from the earlier years. The consequent interest is also wrongly added by the Assessing Officer as assessee has already disclosed this interest income. Hence, the interest added at ₹5,61,991/- is also deleted. Consequently, the Assessing Officer is directed to delete the addition of term deposit of ₹24,10,026/- and interest received of ₹5,61,991/- for the reason that the assessee has already disclosed income of 5,27,673/-. The appeal of the assessee is allowed in the above terms.

In the result, the appeal of the assessee is allowed in the above terms.