Addition made u/s 143(3) and deleted by ITAT cannot be again made u/s 153A

Addition made in original assessment proceedings u/s 143(3) and deleted by ITAT cannot be made again in assessment proceedings u/s 153A

ABCAUS Case Law Citation:
ABCAUS 3261 (2020) (02) ITAT

In the instant case, appeal had been filed by the Assessee against the impugned order passed by Commissioner of Income Tax (Appeals) for the quantum of assessment passed u/s 143(3)/153A in enhancing Long Term Capital Gain on account of investment made in purchase of new residential house as provided u/s 54F(1)(a).

The assessee contended that in this case, original assessment was completed u/s 143(3) by making disallowance inter alia on account of claim u/s 54F.

The assessee submitted that against the said addition, in the first appeal, the CIT (A) had not only dismissed the appeal but had further enhanced the disallowance. Thereafter, assessee had filed further appeal before the ITAT; and the ITAT had deleted the said addition as well as enhancement made by the CIT (A).

It was pointed out that exactly the similar addition had been made in the impugned proceedings passed u/s 153A, therefore, the impugned addition could not be sustained as same stood deleted by the Tribunal.

The Tribunal noted that in the original assessment proceedings against the appellate order passed by the CIT(A) the Tribunal had considered the issue in detail and has deleted the addition. The Tribunal concurred that the deeming fiction created by virtue of Section 50C in determining the capital gain cannot be extended to Section 54F and the capital gains arising from the transfer of any long term capital assets for the purposes of Section 54F has to be worked out the applying section 48 without imposing Section 50C into it. Further the Tribunal had noted that the CIT(A) while enhancement had not given any reasons as to why the enhancement was necessary and why the assessee was not justified in adopting the figure of the actual sale consideration received.

In view of the fact that similar enhancement of addition had been deleted in original assessment proceedings, the Tribunal opined that the same addition could not be roped in the assessment proceedings u/s.153A and hence same was deleted.

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