Raghavendra Real Estate, Visakhapatnam, Visakhapatnam V. ITO, Ward-11(3), Hyd, Hyderabad

ITA 1034/HYD/2015

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9007 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 10-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: SUBRAHMANYAM CHIMALAPATI
• Keywords: Search and seizure; Loose papers; Opportunity of being heard
• Section: 133A; 153A; 148; 144; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.1034/HYD/2015 ASSESSMENT YEAR 2003-2004 M/S. RAGHAVENDRA REAL ESTATE, VISAKHAPATNAM. PAN AASFS0825K VS. THE INCOME TAX OFFICER WARD-11(3) HYDERABAD. (APP ELL ANT) (RESPONDENT) FOR ASSESSEE : MR. SUBRAHMANYAM CHIMALAPATI FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 09 .0 2 .2016 DATE OF PRONOUNCEMENT : 09 .0 2 .2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 2003-04. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE OR DER OF THE LD. CIT(A) DATED 18.05.2015 IN NOT FOLLOWING TH E DECISION OF ITAT FOR THE A.YS. 2004-05 AND 2005-06 IN ASSESSEES OWN CASE AS REGARDS THE METHOD OF ESTIMA TION OF SALES VIS--VIS THE IMPOUNDED DOCUMENTS FOUND DU RING THE COURSE OF SURVEY. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM IS ENGAGED IN REAL ESTATE BUSINESS. IT FILED I TS RETURN OF INCOME FOR THE A.Y. 2003-04 ON 01.12.2003 DECLAR ING LOSS OF RS.1,76,661 WHICH WAS INITIALLY PROCESSED U NDER 2 ITA.NO.1034/HYD/2015 M/S. RAGHAVENDRA REAL ESTATE, VISAKHAPATNAM SECTION 143(1) OF THE I.T. ACT ON 25.02.2003. THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED IN THE GROUP CONCERNS OF THE ASSESSEE FIRM ON 27.08.2003 ALONG W ITH A SURVEY UNDER SECTION 133A CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE HEREIN. DURING THE COURSE OF SURVEY PROCEEDINGS IN THE PREMISES OF THE ASSESSEE, CERTAIN INCRIMINATING MATERIAL WAS FOUND AND IMPOUN DED. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED UNDER SECTION 153A READ WITH SECTION 144 OF THE I.T. ACT. THEREAFTER, THE ASSESSEE FIRM CONTESTED THE ASSESSM ENT ORDER BEFORE THE LD. CIT(A) STATING THAT NO SEARCH OPERATIONS WERE CARRIED IN ASSESSEES CASE AND THER EFORE, ASSESSMENT CANNOT BE DONE UNDER SECTION 153A OF THE ACT. THE LD. CIT(A), ALLOWING THE CONTENTION OF THE ASSESSEE HELD THE ENTIRE ASSESSMENT ORDER IS NULL A ND VOID ON THE GROUND THAT PROVISIONS OF SECTION 153A OR 15 3C LEAVES NO SCOPE FOR DOUBT THAT UNLESS THERE IS A SE ARCH UNDER SECTION 132(1) OF THE ACT OR ANY OTHER MATERI AL BELONGING TO THE ASSESSEE IS SEIZED IN THE CASE OF A SEARCH, IN THE CASE OF ANY PERSON, THE A.O. CANNOT ASSUME JURISDICTION UNDER SECTION 153A OR 153C OF THE I.T. ACT. 3. SUBSEQUENTLY, THE A.O. ISSUED NOTICE UNDER SECTION 148 OF THE ACT, IN RESPONSE TO WHICH, THE A SSESSEE FIRM FILED ITS RETURN OF INCOME ADMITTING INCOME OF RS.1,76,661. THE ASSESSEE REQUESTED THE A.O. TO FUR NISH THE REASONS RECORDED FOR ISSUANCE OF NOTICE UNDER S ECTION 148 OF THE ACT. THEREAFTER, DURING THE RE-ASSESSMEN T PROCEEDINGS, THE A.O. PROCEEDED TO ESTIMATE THE SAL E 3 ITA.NO.1034/HYD/2015 M/S. RAGHAVENDRA REAL ESTATE, VISAKHAPATNAM CONSIDERATION RECEIVED ON SALE OF PLOTS AND MADE AD DITION OF RS.18,40,704. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AGAINST THE ORDER OF THE A.O. MEANWHILE, THE ASSESSEES APPEALS FOR THE SUBSEQUEN T ASSESSMENT YEARS I.E., A.YS. 2004-05 AND 2005-06 REACHED THE TRIBUNAL FOR ADJUDICATION WHEREIN THE TRIBUNAL CONFIRMED THE ORDER OF THE A.O. FOR THOSE TWO YEARS THAT THE IMPOUNDED DOCUMENTS CANNOT BE CONSIDERED AS DUMB DOCUMENTS AND HAVE TO BE CONSIDE R FOR DETERMINATION OF AGGREGATE SALE VALUE ON THE SA LE OF PLOTS. AS REGARDS THE ESTIMATION OF THE AGGREGATE S ALE VALUE, THE TRIBUNAL AT PARAS 7 AND 8 OF ITS ORDER D ATED 13.04.2011 IN ITA.NOS.152 & 153/VIZAG/2010 IN ASSESSEES OWN CASE HAS GIVEN CERTAIN METHODOLOGY T O BE FOLLOWED FOR DETERMINATION OF THE SALE VALUE. FOR T HE PURPOSE OF READY REFERENCE, THE SAID PARAGRAPHS 7 A ND 8 IN ASSESSEES OWN CASE (CITED ABOVE) ARE REPRODUCED HEREUNDER : 7. IN THE INSTANT CASE, THE ACTUAL SALES VALUE CA N BE ARRIVED AT ON THE BASIS OF PARTICULARS LIKE TOT AL NUMBER OF PLOTS PROMOTED BY THE ASSESSEE, THE TOTAL EXTENT OF AREA DEVELOPED, THE YEAR WISE SALE OF PLO TS, THE AMOUNT DECLARED IN THE CONVEYANCE DEEDS AND THE AMOUNT SHOWN IN THE IMPOUNDED DOCUMENT. IN OUR VIEW, THE ASSESSING OFFICER COULD HAVE FOLLOWED THE FOLLOWING METHODOLOGY. (A) THE FIRST STEP WOULD BE TO IDENTIFY THE PLOTS SOLD DURING THE YEARS UNDER CONSIDERATION ON THE BASIS OF REGISTERED CONVEYANCE DEEDS. AS STATED EARLIER, 4 ITA.NO.1034/HYD/2015 M/S. RAGHAVENDRA REAL ESTATE, VISAKHAPATNAM THE INCOME PERTAINING TO THOSE PLOTS CAN ONLY BE ASSESSED DURING THE YEARS UNDER CONSIDERATION. (B) THE NEXT STEP WOULD BE TO COMPARE THE SALES VALUE SHOWN IN THE CONVEYANCE DEEDS WITH THE TOTAL AMOUNT SHOWN IN THE IMPOUNDED DOCUMENT. (C) THE NEXT STEP WOULD BE TO IDENTIFY THE VARIATION , IF ANY, IN THE SALES VALUE BETWEEN THE CONVEYANCE DEEDS AND THE IMPOUNDED DOCUMENT. IF THERE IS VARIATION, THE ASSESSING OFFICER SHOULD SEEK EXPLANATIONS FROM THE ASSESSEE IN THAT REGARD. (D) IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE SAID EXPLANATIONS, THEN HE MAY PROCEED TO EXAMINE THE AUTHOR OF THE DOCUMENT AND THE CONCERNED BUYER TO FIND OUT THE TRUTH. (E) BASED ON THE EXAMINATION OF RECORD AND ENQUIRIES, HE MAY TAKE A VIEW IN ACCORDANCE WITH THE LAW. 8. THE FOREGOING DISCUSSIONS WOULD SHOW THAT THE ASSESSING OFFICER DID NOT EXAMINE THE ISSUE UNDER CONSIDERATION IN A PROPER MANNER. THERE IS ALSO FAILURE ON THE PART OF THE ASSESSEE TO PROVIDE ALL THESE INFORMATION TO THE ASSESSING OFFICER. WHEN THESE FACTS WERE PUT FORTH DURING THE COURSE OF HEARING, BOTH THE PARTIES AGREED THAT THE MATTER OF DETERMINATION OF ACTUAL SALES VALUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDERS OF LD CIT(A) FOR BOTH THE YEARS UNDER CONSIDERATION AND RESTORE THE MATTER OF DETERMINATI ON OF SALES VALUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE MATTER AFRESH ON THE BAS IS OF PRINCIPLES DISCUSSED ABOVE AND ALSO IN ACCORDANC E WITH THE LAW. THE ASSESSEE SHOULD BE GIVEN NECESSARY OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO FURNISH THE DETAILS THAT MAY BE CALLED FOR BY THE ASSESSING OFFICER. 3. THE ASSESSEE BROUGHT TO THE NOTICE OF THE LD. CIT(A), THE ORDER OF ITAT FOR THE A.YS. 2004-05 AND 2005- 5 ITA.NO.1034/HYD/2015 M/S. RAGHAVENDRA REAL ESTATE, VISAKHAPATNAM 06 BUT THE LD. CIT(A) INSTEAD OF FOLLOWING THE METH ODOLOGY GIVEN BY THE ITAT, HAS RESORTED TO ESTIMATION OF TH E SALE VALUE. AGAINST THIS ORDER OF THE LD. CIT(A), THE AS SESSEE IS IN SECOND APPEAL BEFORE US. 4. LD. COUNSEL FOR THE ASSESSEE REITERATED THE ABOVE SUBMISSIONS WHILE THE LD. D.R. SUPPORTED THE ORDERS OF THE CIT(A). 5. HAVING REGARD TO THE RIVAL CONTENTIONS, WE FIND THAT THE ISSUE ARISING IN THE PRESENT APPEAL HAS AL READY BEEN CONSIDERED BY THE COORDINATE BENCH OF THIS TRI BUNAL AT VISAKHAPATNAM IN ASSESSEES OWN CASE FOR THE A.Y S. 2004-05 AND 2005-06 AND THE TRIBUNAL HAS GIVEN A METHODOLOGY FOR ESTIMATION OF THE SALE VALUE OF THE PLOTS SOLD. THEREFORE, WE ARE OF THE OPINION THAT THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE SAME FOR ARRIVING AT T HE AGGREGATE SALE RECEIPTS OF THE ASSESSEE. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE ISS UE TO THE FILE OF THE A.O. FOR RE-WORKING OF THE SALE VALUE I N ACCORDANCE WITH THE METHODOLOGY GIVEN BY ITAT IN A. YS. 2004-05 AND 2005-06 IN ASSESSEES OWN CASE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09.02.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 09 TH FEBRUARY, 2016 VBP/- 6 ITA.NO.1034/HYD/2015 M/S. RAGHAVENDRA REAL ESTATE, VISAKHAPATNAM COPY TO 1. M/S. RAGHAVENDRA REAL ESTATE, D.NO.48 - 3 - 6, GOWTHAMI COMPLEX, SRINAGAR, VISAKHAPATNAM. 2. THE INCOME TAX OFFICER, WARD - 11(3), HYDERABAD. 3. CIT(A) - 5, HYDERABAD. 4 . CIT - 5, HYDERABAD. 5 . D.R. ITAT B BENCH, HYDERABAD 6 . GUARD FILE