This case involves a dispute between Gayatri Kapur Chadda and the Assistant Commissioner of Income Tax (International Taxation), New Delhi, regarding deductions claimed for the cost of acquisition and improvement while computing long term capital gains for the assessment year 2018-19.
The appellant, Gayatri Kapur Chadda, a non-resident Indian, declared income from long term capital gains arising from the sale of an immovable property. However, discrepancies arose when deductions for the cost of acquisition and improvement were disallowed by the Assessing Officer, leading to an escalated assessment of income.
The proceedings highlighted issues with the response to statutory notices and the absence of substantiating documents during the initial assessment. Despite these claims, similar deductions were accepted in the assessment of Chadda’s husband for the same property, leading to questions about the equitable treatment under the law.
The tribunal, led by Judicial Member Shaktijit Dey, noted inconsistencies in the treatment of similar deductions between Chadda and her husband. The tribunal critiqued the lack of justification for differential treatment and directed the Assessing Officer to allow the disputed deductions, emphasizing the need for consistency in judicial reasoning.
This case underscores the importance of equitable treatment in tax assessments and the necessity for tax authorities to adhere to principles of natural justice and consistency. It also highlights the challenges that non-resident Indians face in proving tax-related claims, suggesting a need for clearer guidelines on documentation and response requirements.
The tribunal’s decision to allow the appeal and direct the inclusion of deductions for cost of acquisition and improvement establishes a precedent for similar cases, ensuring fair treatment and uniform application of the law.
The appeal by Gayatri Kapur Chadda was allowed, rectifying the initial assessment and aligning it with the treatment received by her husband, thereby reinforcing the principles of fairness in tax law.
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