Dr.Veena Giriyapur, Bangalore V. Income Tax Officer, Bangalore

ITA 1/BANG/2017

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8430 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 01-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRASHANTH G S
• Keywords: Fair market value
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - A BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 01/BANG/2017 ASSESSMENT YEAR : 2006-07 DR. VEENA GIRIYAPUR, 240/202, 17 TH CROSS, 12 TH MAIN, 5 TH PHASE, J.P. NAGAR, BANGALORE 560 078. PAN: AGBPG 2989D VS. THE INCOME TAX OFFICER, WARD-4(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI PRASHANTH G S, CA RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT (DR) DATE OF HEARING : 27.02.2017 DATE OF PRONOUNCEMENT : 17.03.2017 O R D E R PER VIJAY PAL RAO, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED: 31.08.2016 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-0 7. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. ITA NO. 01/BANG/2017 PAGE 2 OF 8 ITA NO. 01/BANG/2017 PAGE 3 OF 8 ITA NO. 01/BANG/2017 PAGE 4 OF 8 2. THE ASSESSEE IS AN INDIVIDUAL AND DID NOT FILE ANY RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND CLAIMED THAT NO TA XABLE INCOME EXCEEDING THE MAXIMUM LIMIT PRESCRIBED UNDER INCOME TAX ACT. THE AO ISSUED A NOTICE U/S. 148 ON 27.03.2013. SINCE T HERE WAS NO RESPONSE FROM THE ASSESSEE TO THE NOTICE ISSUED BY THE AO, T HE AO HAS COMPLETED THE ASSESSMENT U/S. 144 R.W.S. 147. THE AO HAS ASS ESSED THE CAPITAL GAIN TO TAX IN RESPECT OF THE PROPERTY DEVELOPED UNDER J OINT DEVELOPMENT ARGUMENT (JDA). THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE CIT(A) AND RAISED VARIOUS GROUNDS REGARDING THE TAXABILITY OF CAPITAL GAIN IN THE YEAR UNDER CONSIDERATION AND FURTHER TH E ACTUAL AREA RECEIVED BY THE ASSESSEE IN THE PROJECT AS WELL AS THE RATE ADOPTED BY THE AO FOR COMPUTING THE CAPITAL GAIN. THE CIT(A) ISSUED A RE MAND ORDER DIRECTING THE AO TO SUBMIT A REMAND REPORT. AFTER CONSIDERIN G THE REMAND REPORT THE CIT(A) CONFIRMED THE ACTION OF THE AO IN ASSESS ING THE CAPITAL GAIN. 3. BEFORE THE TRIBUNAL, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE AO HAS COMPUTED THE CAPITAL GAIN BY TAKING THE AREA RECEIVED BY THE ITA NO. 01/BANG/2017 PAGE 5 OF 8 ASSESSEE OF 2,221.66 SQ.FT. INSTEAD OF 1,785 SQ.FT. OF FLAT NO. FF010 AND FURTHER THE FLAT NO. TF005 WHICH WERE ACTUALLY SOLD . HE HAS FURTHER SUBMITTED THAT THE FLAT BEARING NO. TF005 WAS OWNED BY THE ASSESSEE ALONG WITH SMT. PUSHPALATHA RUDRAMUNI AND SHRI SATI SH BALEEKAI. THEREFORE, THE ASSESSEES SHARE IN THIS FLAT WAS 1/ 3 RD OF TOTAL AREA OF 1,310 SQ.FT. WHICH COMES TO 436.66 SQ.FT. THE LD. AR OF THE ASSESSEE HAS FURTHER SUBMITTED THAT THE AO HAS APPLIED THE RATE AT RS. 900/- PER SQ.FT. WITHOUT TAKING INTO ACCOUNT THE FAIR MARKET VALUE ( FMV) AS ON THE RATE OF JDA. FURTHER, THE LD. AR HAS CONTENTED THAT THE AO DID NOT SUPPLY THE REASONS RECORDED FOR ISSUING NOTICE U/S. 148 AND ON LY DURING THE REMAND PROCEEDINGS THE REASONS WERE SUPPLIED TO THE ASSESS EE. THOUGH THE ASSESSEE RAISED THE ISSUE AND OBJECTIONS AGAINST VA LIDITY OF NOTICE ISSUED U/S. 148, THE CIT(A) HAS NOT ADJUDICATED THAT ISSUE . THUS, THE LD. AR HAS CONTENTED THAT THE MATTER MAY BE REMANDED TO THE RE CORD OF THE AO FOR DECIDING THE OBJECTIONS AGAINST THE NOTICE ISSUED U /S. 148 AS WELL AS CONSIDERING THE OTHER ASPECT OF APPLYING THE CORREC T RATE OF PRICE FOR COMPUTATION OF CAPITAL GAIN AS WELL AS THE AREA REC EIVED BY THE ASSESSEE. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT I T IS NOT MANDATORY FOR AO TO SUPPLY SUOMOTO THE REASONS RECORDED FOR REOPE NING OF THE ASSESSMENT TO THE ASSESSEE. IT IS FOR THE ASSESSEE TO REQUEST FOR THE ITA NO. 01/BANG/2017 PAGE 6 OF 8 REASONS IF THE ASSESSEE CHOOSES TO FILE OBJECTION T HERETO. HE HAS RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CA SE OF SAFETAG INTERNATIONAL INDIA (P.) LTD (332 ITR 622) . ON MERITS THE LD. DR HAS SUBMITTED THAT WHEN THE AUTHORITIES BELOW HAVE EXAM INED THIS ISSUE AND ASSESSEE WAS GIVEN OPPORTUNITY IN THE REMAND PROCEE DINGS THEN NO GRIEVANCE IS LEFT REGARDING NON PROVIDING OPPORTUNI TY TO ASSESSEE. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND RELEVAN T MATERIAL ON RECORD, IT IS NOTED THAT THE ASSESSMENT WAS FRAMED U/S. 144 R.W.S. 147 AS THE ASSESSEE DID NOT APPEAR IN THE ASSESSMENT PROCEEDIN GS. THUS, IT IS CLEAR THAT THERE WAS NO OCCASION DURING THE ASSESSMENT PR OCEEDINGS FOR MAKING REQUEST FOR SUPPLY OF REASONS RECORDED BY THE AO. BEFORE THE CIT(A) THE ASSESSEE HAS REQUESTED FOR THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WHICH WERE SUPPLIED TO THE ASSESSEE DURI NG THE REMAND PROCEEDINGS. IT IS MANIFEST FROM THE OBJECTIONS RA ISED BY THE ASSESSEE BEFORE THE CIT(A) THAT THE ASSESSEE RAISED THE OBJE CTIONS AGAINST THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AN D VALIDITY OF SECTION 148 OF THE ACT. HOWEVER, THERE IS NO FINDING ON TH IS ISSUE BY THE CIT(A). THUS, IN VIEW OF THE DECISION OF THE HONB LE SUPREME COURT IN CASE OF G.K.N DRIVESHAFTS (INIDA) LTD. VS ITO (259 ITR 19) AS WELL AS DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF CI T VS VIDESH ITA NO. 01/BANG/2017 PAGE 7 OF 8 SANCHAR NIGAM LTD (340 ITR 66) OBJECTIONS OF THE ASSESSEE AGAINST THE NOTICE U/S. 148 ARE REQUIRED TO BE DECIDED BY THE A O OR BY THE CIT(A) AS CASE MAY BE. IN THIS CASE SINCE NONE OF THE AUTHOR ITIES BELOW HAVE DEALT WITH THIS ISSUE, THEREFORE IN THE FACTS AND CIRCUMS TANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, THE MATTER IS REMANDED TO THE RECORD OF THE AO FOR DECIDING THE OBJECTIONS OF THE ASSESSEE AGAINST THE NOTICE U/S. 148 AND FURTHER THE OTHER OBJECTIONS OF THE ASSESSEE REGARD ING THE RATE APPLIED BY THE AO AS WELL AS THE AREA CONSIDERED BY THE AO TO BE CONSIDERED WHILE ADJUDICATING THE MATTER AFRESH. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF MARCH, 2017 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER BANGALORE, DATED, THE 17 TH MARCH, 2017. / MS/ ITA NO. 01/BANG/2017 PAGE 8 OF 8 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.