The Income Tax Appellate Tribunal (ITAT), Delhi ‘D’ Bench, made a significant decision in the case of Vijay Mitera vs. Assistant Commissioner of Income Tax (ACIT), Circle (Int. Tax.)-2(2)(1), New Delhi. With case number ITA No.1675/Del/2022 for the assessment year 2019-20, the appeal raised important questions on the computation of capital gains, the cost of acquisition, and the expenses connected with the transfer of property in the context of income tax assessments.
The appellant, Vijay Mitera, contested the final assessment order passed by the Assessing Officer (AO) under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 (the Act), dated 28.06.2022. The grounds for appeal primarily contested the AO’s approach towards adopting the cost of acquisition as NIL and ignoring expenses incurred in connection with the transfer of the property, leading to an inflated addition under the head ‘capital gain’.
The case was heard before Shri N.K.Billaiya, Accountant Member, and Shri Kul Bharat, Judicial Member. The appellant, represented by Shri Atul Ninawal, CA, argued against the final assessment’s disregard for the actual costs and expenses related to the property’s sale. On the other side, the respondent, represented by Shri Gangadhar Panda, CIT DR, defended the AO’s assessment.
The tribunal’s decision focused on several critical areas:
After thorough consideration, the tribunal found merit in the appellant’s challenges and recognized the failure to comply with the DRP’s directions. Consequently, the tribunal set aside the impugned order and restored the matter to the AO for re-evaluation.
This case reiterates the importance of accurate computation of capital gains for tax assessment purposes. By directing a reassessment, the ITAT has underscored the necessity for adherence to due process and fair consideration of evidence in tax proceedings. The decision in Vijay Mitera vs. ACIT represents a crucial reference point for future cases involving capital gains taxation and the process for challenging assessment orders that deviate from established legal principles.
In this landmark decision, the ITAT directed that the AO recompute the long-term capital gain (LTCG) after considering the cost of acquisition and relevant expenses, acknowledging the discrepancies in the assessment order. The ultimate allowance of the appeal for statistical purposes not only highlights the appellate tribunal’s role in ensuring justice but also serves as a cautionary reminder of the complexities in capital gains tax computation.
This case, ITA No.1675/Del/2022, concluded with the tribunal allowing the appeal for statistical purposes, marking a significant moment in tax jurisprudence related to capital gains assessment.
Vijay Mitera vs. ACIT on Capital Gains Assessment, ITA No.1675/Del/2022
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