Namit Dayal vs Income Tax Officer, Ward-1

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘the CIT(A)’) dated 03.10.2025 for AY 2018-19.

The facts of case in brief as emanating from records are: Information was received in the assessee’s case on the Insight Portal with respect to sale of immovable property amounting to Rs.62,65,000/-, notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued on 30.03.2022. In response to the said notice, the assessee filed return of income declaring total income of Rs.3,00,010/- on 29.04.2022. In respect of sale of immovable property, the assessee, after reducing indexed cost of acquisition from the total sale consideration and claiming deduction u/s 54F of the Act, determined Long Term Capital Gain at Rs.26,160/-. The same is computed as under:-:-

The Assessing Officer (AO), in absence of any document to substantiate cost of acquisition, determined the Long Term Capital Gain at Rs.51,54,489/-. Aggrieved by the addition made in assessment order dated 31.03.2023 passed u/s 147 of the Act, the assessee filed appeal before the CIT(A). During First Appellate proceedings, the assessee filed valuation report as additional evidence to substantiate the cost of acquisition of immovable property. The CIT(A) rejected the additional evidence filed by the assessee and sustained the addition. Hence, the present appeal by the assessee

Shri Parimalsinh Parmar, appearing on behalf of the assessee submits that during the course of assessment proceedings, the assessee had requested for referring the matter to the DVO, however, the assessee’s request for such reference was not acceded to by the Assessing Officer. The AO rejected cost of acquisition of the immovable property and determined the cost of acquisition as NIL, which cannot be sustained. The ld. Counsel prayed for accepting the additional evidence filed by the assessee to substantiate the cost of acquisition.

Per contra, Shri Manoj Kumar, representing the Department strongly defending the impugned order prayed for confirming the addition made by the AO on account of Long Term Capital Gain and prayed for dismissing appeal of the assessee.

Both sides heard, orders of the authorities below examined. A perusal of the assessment order reveals that during the course of assessment proceedings, the assessee failed to substantiate the cost of acquisition of immovable property. The assessee obtained valuation report from the Approved Valuer after completion of assessment. Thus, the said valuation report was placed for the first time before the CIT(A) as additional evidence. Considering entire facts of the case, we are of the opinion that the additional evidence filed by the assessee in the form of valuation report deserves to be admitted. The matter is restored to the AO. The AO is directed to re-examine the issue in light of the valuation report furnished by the assessee. The AO shall reframe the assessment after affording reasonable opportunity of making submissions to the assessee, in accordance with law.

In the result, appeal of the assessee is allowed for statistical purpose.