The Tax Publishers2020 TaxPub(DT) 5136 (Mum-Trib)

INCOME TAX ACT, 1961

Section 50

Appellate authority has power and jurisdiction to entertain a fresh claim of the assessee if the relevant facts for deciding such issue are available on record. Therefore, in instant case, the CIT(A) was not justified in agreeing with the decision of the AO rejecting the fresh claim of assessee, and thereby, not deciding the said claim on merits and accordingly, the order of the CIT(A) was set aside and the issue was remanded to AO for deciding the assessee's claim on merits.

Capital gains - Depreciable asset - Sale of industrial gala -

In return of income filed, assessee offered short-term capital gain in respect of sale of industrial gala by treating it as depreciable asset under section 50. During the assessment proceedings, the assessee made a fresh claim that since the asset sold was held for more than three years, the rate of tax applicable would be that of long-term capital gain as per section 112. However, AO did not accept the said claim of assessee by observing that such claim had not been made in the original return of income or through a revised return of income and hence, the same could not be entertained. Further, CIT(A) also agreed with the said reasoning of the AO and did not examine the assessee's claim on merits. Held: Undisputedly, in the course of assessment proceedings, the assessee did make a claim that since the asset sold was held for more than three years, the rate of tax as applicable in case of long-term capital gain would apply in terms of section 112. Further, both AO and CIT(A) rejected the said claim on the ground that the assessee had not made such claim either in the original return of income or through a revised return of income. It is settled position that the appellate authority has power and jurisdiction to entertain a fresh claim of the assessee if the relevant facts for deciding such issue are available on record. Therefore, the CIT(A) was not justified in agreeing with the decision of the AO, and thereby, not deciding the assessee's claim on merits and accordingly, the order of CIT(A) was set aside and the issue was remanded to the AO for deciding the assessee's claim on merits.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2015-16



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