Income Tax Officer, Ward-6(4), Hyderabad V. K Kishore Kumar (HUF), Hyderabad

CO 51/HYD/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0347 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: S RAMA RAO
• Keywords: Sale consideration of property below Jantri Value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND S HRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO.10 6 9/HYD/14 : ASSESSMENT YEAR 200 9 - 1 0 INCOME TAX OFFICER WARD 6(4), HYDERABAD V/S. M/S. K. KISHORE KUMAR (HUF), HYDERABAD (PAN AAGHK 0147 Q ) (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.51/HYD/14 (IN ITA NO.10 6 9/HYD/14) : ASSESSMENT YEAR 200 9 - 1 0 M/S. K. KISHORE KUMAR (HUF), HYDERABAD (PAN AAGHK 0147 Q ) V/S. INCOME TAX OFFICER WARD 6(4), HYDERABAD (APPELLANT) (RESPONDENT) DEPARTMENT BY : S HRI RAJAT MITRA, DR ASSESSEE BY : SHRI S.RAMA RAO DATE OF HEARING 16.2.2015 DATE OF PRONOUNCEMENT 18.2.2015 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : TH IS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) IV, HYDERABAD DATED 14.3.2014 AND THE SAME IS BEIN G DISPOSED OF ALONGWITH THE CROSS OBJECTION FIL E D BY THE ASSESSEE, BEING CO NO.51/HYD/2014. I TA NO. 1069/H YD/20 14 M/S. K. KISHORE KUMAR (HUF), HYDERABAD 2 2. THE ONLY I S SUE INVO L VED IN THE APPEAL O F THE REVENUE IS WHETHER , FOR THE PURP OS ES OF COMPUTATION OF CAPITAL GAINS ARISING F ROM THE SALE OF THE ASSESSEE S PROPERTY , TH E P ROVISIONS OF S.5 0 C ARE TO BE APPLIED WITH REFEREN C E TO THE SALE CON S I D ERATION AS SHOWN IN TH E SALE AGREEMENT DATED 23.9.2004 OR WITH REFERENCE TO THE D ATE OF REGISTRATION OF TH E SAID AGREEMENT ON 22.12.2008. 3. THE ASSESSEE IN THE PRESENT CA S E IS A HUF, WHICH FILED ITS RETURN OF INCOME FOR TH E Y E AR UN D ER CON S I DE RATION ON 28.9.2009, DECL A RING TOTAL INCO M E OF R S .3,47,910. IN THE SAID RETURN, C A PITAL GAINS ARISING F ROM THE SALE OF ITS SHARE OF COMMERCIAL PROPERTY, NAMELY, ASHOKA HOTEL AND L ODGE LOCATED AT NAGARAJUPALLE VILLA G E, M ADRAS ROAD, CUDDAPAH WAS DECLARED BY THE ASSESSEE AND WHILE COMP U T I N G TH E CAPITAL GA I NS SO DECL A RED, THE SALE CONSIDERATION AS SHOWN IN THE AGREEMENT DATED 23.9.2004 WAS ADOPTED BY THE ASSESSING OFFICER. DURIN G T H E COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE AGRE E M E NT FOR THE SALE O F THE SAID PROPERTY WAS ACTUALLY RE GI S TERED ON 23.12.2008 AND O N THE SAID DATE, TH E VALUE OF THE PROPERTY, AS D E TE R MIN E D BY THE SRO FOR STAMP DUTY PURP OS E WAS RS.1,31,33,000. HE , TH E R E FORE, REQUIRED THE ASSESSEE TO SHOW CAU S E AS TO WHY THE SAID VALUE SHOULD NOT B E TAKEN AS DE E MED CONSID E RATION FOR COMPU T IN G THE LON G TERM CAPITAL GAINS BY I N VOKIN G THE P R OVIS I ON S OF S.50C OF THE A CT . IN REPLY, IT WAS SUBMI T TED BY THE ASSESSEE THAT THE ACTUAL SALE AGREEMENT WITH THE PU R CHA S ER WAS ENTERED INTO ON 23.9.2004 FOR AN AGREED SALE CONSID E RA T ION OF R S .70 LAKH S , WHICH WAS MORE THAN THE VALUE DE TERMINED BY TH E S RO FOR STAMP DUTY PU R PO S E. IT WAS SUBMITTED THAT DUE TO SOME DISPUTE, THE VACANT POSSESSION OF THE PROPERTY , HO WE VER , COULD NO T BE GIVEN AS A RESULT OF WHICH SP E C I AL POWER ATTESTED DEED WAS EX E CUTED AND REGISTERED ON 23.12.2008. IT WAS CONTENDED T H A T ALTHOUGH THE CAPITAL GAINS WAS DECLARED ON I TA NO. 1069/H YD/20 14 M/S. K. KISHORE KUMAR (HUF), HYDERABAD 3 THE BASIS O F THE SAID SP E CIAL POWER ATTESTED DEED, THE SALE CONSID E RATION HAVING BEEN AGREED ON 23.9.2004 ITSELF, WHICH WAS MORE THAN THE V ALUE DETERMINED BY TH E S RO ON THAT DATE FOR THE PURPO SE OF STAMP DUTY, S.50C COULD NO T BE INVOKED, TO ADOPT THE SALE CONSI D E R ATION AT RS.1,31,33,000, B E ING THE VALUE DETERMINED BY THE SRO ON 23.12.2008 FOR THE PU R PO SE S OF COMPUTING THE C API T AL GAIN. THIS CONTENTION OF THE ASSESSEE W AS NO T FOUND ACCEPTABL E BY THE ASSESSING OFFICER IN TH E AB S ENCE OF ANY SUCH E X CEPTION P ROVIDED I N S.50C OF THE ACT. ACCOR D ING TO HIM, THE ASSESSEE HAVING EXECUTED THE REGISTERED SALE AGREE ME NT - CUM - IRREVOCABLE GPA AND HAVING RECEIVED THE FULL CONSI D ERA T ION, THE TRANSFER OF PROPERTY HAD TAKEN PLACE ON 23.12.2008, AND TH E R E F O R E , CAPITAL GAIN ARISING FR OM THE SAID TRANSFER WAS LIABLE TO BE COMPUTED ON THE BASIS OF THE VALUE DETERMINED BY THE SRO FOR STAMP DUTY PURPOSE ON 23.12.2008, AS PER THE P R O VI SION S OF S.50C . ACCOR D INGLY, HE INVOKED THE P R OV I SION S OF S.50C AND WORKED OUT THE CAPITAL GAINS AT RS .45,05,381 BY TAKING RS. 65,05,381 , AS DE E ME D SALE CON S I DE RATION OF THE ASSESSEES SHARE IN TH E PROP E R T Y IN THE ASSESSMENT COMPLETED UNDER S .1 43(3) VIDE ORD E R DATED 25.3.2011. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UN DE R S.143(3), AN AP PE A L WAS PREFER R E D BY THE LEARNED CIT(A) DISPUTING INTER ALIA THE SALE CON S I D ERATION ADOPTED BY TH E ASSESSING OFFICER BY APP L YIN G THE P R OVISION S OF S.50C, TAKING THE VALUE D E TE R MINED BY TH E S RO FOR STAMP DUTY PURPOSE AS ON 23.12.2008. A F TER CON S I DE RING T HE SUBMIS S IONS MADE BY THE ASSESSEE ON THIS ISSUE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LEARNED CIT(A) FOUND THAT THIS ISSUE WAS SQUARELY COVERED BY SEVERAL DECI S ION S O F THE TRIBUNAL IN F A VOUR O F THE ASSESSEE, WHEREIN IT WAS REPEATEDLY HELD T H A T THE RATES PREVAILING AS ON THE DATE OF AGR E EMENT ARE TO BE ADOPTED INSTEAD OF THE RATE PREVAILING ON THE DATE OF REGISTRATION OF I TA NO. 1069/H YD/20 14 M/S. K. KISHORE KUMAR (HUF), HYDERABAD 4 THE PR O P E R T Y. HE TH E R EF ORE, HELD THAT S.50C HAD NO APPLI C ATION T O THE FACTS OF THE C ASE OF THE ASSESSEE AND AC C OR D INGLY DIR ECT E D THE ASSESSING OFFICER TO ADOPT THE SALE CON S ID E RATION OF R S .70 LAKHS ( RS. 35 LA K H S CO M ING TO ASSESSEE S HALF SHARE IN THE PROPERTY) TO COM P UTE THE CAPITAL GAINS. AGGRIEVED BY THE O R DER O F THE LEARNED CIT(A) , REVENUE HAS PREFERRED THIS APPEAL BEFORE T HE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY LEARNED REPRESENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLVED IN THIS APPEAL O F T H E REVENUE IS SQU A RELY COVERED IN FA VO UR O F TH E ASSESSEE BY SEVERAL DECI S ION S OF TH E TRIBUNAL . IN ONE OF THE DECISION S RENDERED IN THE C A S E OF MOOLE RAMI REDDY, VISAKHAPATNAM V/S. ITO WARD 1(1) VISAKHAPATNAM (ITA NO.311/V/2010 DATED 10.12.2010), IT W A S HELD BY TH E TRIBUNAL THAT SIN C E THE VALUE OF TH E PROPERTY D E CL A RED BY T H E ASSESSEE AS ON TH E DATE OF SALE AGREEMENT WAS HIGHER THAN THE V A LUE SHOWN IN TH E VALUATION CERTIFICATE, THE VALUE DECL A RED BY THE ASSESSEE W A S REQUIRED TO BE ADOPTED FOR COMPUTING THE L ONG TERM CAPITAL GAINS. RESPE C TFULLY FOLLO W I N G THE DECISION S O F TH E TRIBUNAL , WE UPHOLD THE IMPU G N E D ORD E R O F THE LEARNED CIT(A), GIVING RELIEF TO TH E ASSESSEE ON THIS ISSUE AND DISMISS THE APPEAL OF THE REVENUE. 6. IN ITS CROSS OBJ E CTION S , THE ASSESSEE HAS RAISED THE FOLLO W IN G GROUNDS - 1. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO EXCLUDE THE MARKET VALUE OF THE CONSTRUCTED AREA FROM THE SALE CONSIDERATION OF THE PROPERTY OF RS.70 LAKHS PARTICULARLY WHEN THE SALE CONSIDERATION IS INCLUSIVE OF THE CONSTRUCTED AREA ALSO. I TA NO. 1069/H YD/20 14 M/S. K. KISHORE KUMAR (HUF), HYDERABAD 5 2. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO CONSIDER THE MARKET VALUE OF THE LAND AS ON 1.4.1981AT RS.600/ - PER SQ. YARD. 3. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS ) OUGHT TO HAVE DIRECTED DEDUCTION OF THE MARKET VALUE OF THE BUILDING AS ON 1.4.1981 ALSO AS THE BUILDING WAS EXISTING AS ON 1.4.1981. 7. AS REGARDS GROUND NOS. 1 AND 3 OF THE ASSESSEES CROSS OBJ E CTION S , IT I S O BSER VE D THAT THE ISSUE S RAISED THEREIN HAVE BECOME INFRUCTUOUS , AS A RESULT OF OUR DECISION REND E RED HEREINABOVE DISMISSING THE APPEAL OF THE REVENUE, AND THIS POSITION IS ACCEPTED EVEN BY THE LEARNED COUNSEL F O R TH E ASSESSEE . THESE G R OUN D S A R E ACCORDINGLY DISMISSED AS INFRU C TOUS. 8. AS REGAR DS THE ISSUE INVO L VED IN GR O UN D NO.2 OF THE ASSESSEE S CROSS OBJ EC TION RELATING TO THE DETERMINATION OF MARKET VALUE OF THE LAND AS ON 1.4.1981, IT IS OBSERVED T H A T THE SAME WAS ADOPTED BY TH E LEARNED CIT(A) AS R S . 560 PER SQ. YARD ON THE BA S IS OF THE VALU A TION DETERMIN E D BY THE S RO INSTEAD OF R S .600 PER SQ. YARD CLAIMED BY TH E ASSESSEE . THE VALUATION ADOPTED BY THE LEARNED CIT(A), AS ON1.4.1981 THUS WAS BASED ON THE LETTER OF THE SRO, WHERE AS TH E RE WAS NO BASIS WHATSOEVER GIVEN BY TH E ASSESSEE FOR CLAIMI NG THE V A LU A TION AS ON 1.4.1981 AT RS.600 PER SQ. YARD. EVEN AT THE TIME O F H E ARING BEFORE US, THE LEARNED COUN S EL FOR TH E ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN ANY BASIS FOR THE VALUATION OF R S .600 PE R SQ. YARD CLAIMED BY TH E ASSESSEE . W E, THEREFORE , FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE OR DE R OF THE LEARNED CIT(A) ON THIS ISSUE, AND DI S MI S S GROUND NO.2 OF THE ASSESSEE IN ITS CROSS OBJECTION. I TA NO. 1069/H YD/20 14 M/S. K. KISHORE KUMAR (HUF), HYDERABAD 6 9. IN THE RESULT, APPEAL OF THE REVENUE AS WELL AS THE CROSS - OBJECTION OF THE ASSESSEE , ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 18 TH FEBRUARY, 2015 SD/ - SD/ - ( SAKTIJIT DEY ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER D T/ - 18 TH FEBRUARY, 201 5 COPY FORWARDED TO: 1. M/S. K. KISHORE KUMAR (HUF), 6 - 3 - 563/63, SRI NILAYA TOWERS, ERRAMANZIL, HYDERABAD 6 2 . INCOME TAX OFFICER WARD 6 ( 4), HYDERABAD 3. COMMIS SIONER OF INCOME - TAX(APPEALS) IV HYDERABAD 4. COMMISSIONER OF INCOME - TAX II I, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S