Sri Shivanna , Mysore V. Income Tax Officer Ward-1(2), Mysore

ITA 1055/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5922 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM M
• Assessee Lawyers: G S PRASHANTH
• Keywords: Fair market value
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER APPEAL NO. APPELLANT VS. RESPONDENT ASSESSMENT YEAR ITA NO. 1050/BANG/2018 SHRI NAGARAJU, S/O. LATE SIDAPPA, VAJAMANGALA VILLAGE, VARUNAHOBLI, MYSORE TALUK. PAN: NO PAN THE INCOME TAX OFFICER, WARD 1 [3], MYSORE. 2007-08 ITA NO. 1053/BANG/2018 SHRI CHINNAIAH [HUF], S/O. LATE MINCHAIAH, VAJAMANGALA VILLAGE, VARUNAHOBLI, MYSORE TALUK. PAN: NO PAN THE INCOME TAX OFFICER, WARD 1 [2], MYSORE. 2008-09 ITA NO. 1054/BANG/2018 SMT. PUTAMMA, W/O. LATE GOWDAIAH, VAJAMANGALA VILLAGE, VARUNAHOBLI, MYSORE TALUK. PAN: NO PAN ITA NO. 1055/BANG/2018 SHRI SHIVANNA, S/O. SRI NANJUNDIAH, VAJAMANGALA VILLAGE, VARUNAHOBLI, MYSORE TALUK. PAN: NO PAN APPELLANT BY : SHRI G.S. PRASHANTH, CA RESPONDENT BY : SHRI ABDUL HAKEEM .M, JCIT (DR) DATE OF HEARING : 2 5 . 0 4 .2018 DATE OF PRONOUNCEMENT : 04 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER ALL THESE FOUR APPEALS ARE FILED BY FOUR DIFFERENT BUT CONNECTED ASSESSEES AND THESE APPEALS ARE DIRECTED AGAINST FOUR SEPARATE OR DERS OF LD. CIT(A), MYSORE DATED 28.09.2017 FOR ASSESSMENT YEAR 2007-08 IN RES PECT OF ITA NO. 1050/BANG/2018 AND DATED 22.09.2017 FOR ASSESSMENT YEAR 2008-09 IN RESPECT OF ITA NOS. 1053 & 1054/BANG/2018 AND DATED 31.10.2017 FOR ASSESSMENT YEAR 2008-09 IN RESPECT OF ITA NO. 1055/ BANG/2018. ALL THESE ITA NOS.1050, 1053 TO 1055/BANG/2018 PAGE 2 OF 5 APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEES IN ALL THESE FOUR APPEALS ARE IDENTICAL EXCEPT THE DIFFERENCE IN AMOUNTS AND HENCE, THE GRO UNDS ARE REPRODUCED FROM ITA NO. 1050/BANG/2018 AND THE GROUNDS ARE AS UNDER . 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT, ARE OPPOSED TO LAW, EQUITY, WEIGHT O F EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER OF ASSESSMENT U/S.147 RWS 144 OF THE A CT, IS BAD IN LAW AND VOID-AB-INITIO FOR WANT OF REQUISITE JURISDICTI ON ESPECIALLY ON THE DATE OF PASSING THE ORDER AND ESPECIALLY, THE MANDA TORY REQUIREMENTS TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT E XIST AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE ASSESSMENT U/S.147 REQUIRES TO BE CANCELLED. 2.1 THE LEARNED CIT [A] HAS ERRED IN HOLDING THAT T HE APPELLANT WHO IS AN AGRICULTURIST AND DERIVING ONLY AGRICULTURE INCO ME, WHICH IS EXEMPT FROM TAX AND HAVING NO OTHER INCOME EXCEEDING THE I NCOME NOT LIABLE TO TAX IS OBLIGED TO OBTAIN A PERMANENT ACCOUNT NUM BER [PAN] IN TERMS OF SECTION 139[A] AND FURTHER ERRED IN HOLDIN G THAT THE APPEAL FILED BY THE APPELLANT BY NOT OBTAINING THE PAN AND NOT CITING THE SAME IN THE MEMO OF APPEAL, THE APPEAL FILED BY THE APPELLANT IS INVALID IN LAW, WHICH IS ON ERRONEOUS APPRECIATION OF THE ADMITTED FACTS AND LAW AND CONSEQUENTLY, THE IMPUGNED ASSESS MENT ORDER REQUIRES TO BE CANCELLED. 2.2 THE LEARNED CIT[A] FAILED TO APPRECIATE THAT TH E LEARNED A.O. HIMSELF HAS NOT CITED THE PAN NUMBER IN THE ASSESSM ENT ORDER IN COLUMN [4] AS REQUIRED BY LAW AND THE LEARNED CIT[A ] FURTHER FAILED TO APPRECIATE THAT THE A.O. COULD HAVE ON HIS OWN S ECURED THE APPELLANT A PAN NUMBER SOON AFTER SERVING THE NOTIC E TO MAKE THE IMPUGNED ASSESSMENT ORDER. 2.3 THE LEARNED CIT[A] IS NOT JUSTIFIED IN DISPOSIN G OFF THE APPEAL WITHOUT ALLOWING SUFFICIENT AND REAL OPPORTUNITY TO THE APPELLANT TO REPRESENT THE CASE AND HENCE, THE IMPUGNED ORDER PA SSED REQUIRES TO BE CANCELLED. 3. THE LEARNED A.O. IS NOT JUSTIFIED IN COMPLETING THE ASSESSMENT U/S.144 OF THE ACT, UNDER THE FACTS AND IN THE CIRC UMSTANCES OF THE APPELLANT'S CASE ESPECIALLY, THE INCOME RECEIVED FO R GRANTING DEVELOPMENT RIGHTS IS REVENUE OUT OF AGRICULTURAL L AND AND IS AGRICULTURAL INCOME, WHICH IS EXEMPT FROM TAX. ITA NOS.1050, 1053 TO 1055/BANG/2018 PAGE 3 OF 5 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[ A] IS NOT JUSTIFIED IN SUSTAINING THE ASSESSMENT OF A SUM OF RS.15,62,2 22/- MADE BY THE LEARNED A.O. AS LONG TERM CAPITAL GAINS ON ERRONEOU S IMPRESSION OF LAW AND FACTS THAT THE PHYSICAL POSSESSION IS GIVEN ATTRACTING THE PROVISIONS OF SECTION 2[47][V] OF THE ACT, UNDER TH E FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 5. WITHOUT PREJUDICE TO THE ABOVE, THE FAIR MARKET VALUE ADOPTED BY THE LEARNED A.O. IS VERY LOW AND REQUIRES TO BE ENH ANCED SUBSTANTIALLY. 6. WITHOUT PREJUDICE TO THE ABOVE, THE CAPITAL GAIN S ASSESSED IS EXCESSIVE AND LIABLE TO BE REDUCED SUBSTANTIALLY. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S. 234-A AND 234-B OF THE ACT, WHICH UNDER THE FA CTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO B E CANCELLED. 8. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT IN ALL THESE FOUR CASES, THE APPEAL WAS DISMISSED BY CIT(A) IN LIMINE WITHOUT DECIDING THE ISSUE ON MERIT FOR THIS REASON THAT THE ASSESSEE HAS NOT MENTIONED THE PAN IN THE RESPECTIVE FORM NO. 35 FILED BY THE ASSESSEE BEFORE THE LD. CIT(A). HE ALSO SUBMITTED THAT THIS IS ALSO AN OBJECTION OF THE LD. CIT(A) THAT ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 249(4)(B) OF IT ACT. BUT HE SUBMITTED THAT ASSESSEE IS AN AGRICULTURIST AND THE ONLY INCOME IN THE PRESENT YEAR IS IN RESPECT OF THE SALE OF AGRICULTURAL LAND AND IN EAR LIER YEARS ALSO, THE ASSESSEE HAD ONLY AGRICULTURAL INCOME AND THEREFORE, THE ASS ESSEE IS NOT LIABLE TO TAX AS PER THE ASSESSEE IN THE PRESENT OR ANY EARLIER YEAR AND THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO OBTAIN PAN OR PAY ANY ADVANCE T AX AND HENCE, THERE IS NO VIOLATION OF SECTION 249(4)(B) OF IT ACT. HE SUBMI TTED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECIS ION BECAUSE THE ASSESSEE HAS NOW OBTAINED THE PAN AND IT SHOULD BE HELD THAT THE RE IS NO VIOLATION OF SECTION 249(4)(B) OF IT ACT. THE LD. DR OF REVENUE SUPPORT ED THE ORDER OF CIT(A). ITA NOS.1050, 1053 TO 1055/BANG/2018 PAGE 4 OF 5 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT AS PER THE ORDER OF CIT(A), HE HAS HELD THAT THE ASSESSEE HAS NOT OBTAINED AND FURNISHED THE PAN IN FORM NO. 35. REGARDING THIS OBJECTION OF CIT(A), I FIND THAT NOW THE ASSESSEE HAS OBTAINED PAN AND THEREFORE, THIS OBJECTION OF LD. C IT(A) DOES NOT SURVIVE ANYMORE AND HENCE, IN THE INTEREST OF JUSTICE, THE APPEAL OF THE ASSESSEE SHOULD BE ADMITTED AND DECIDED ON MERIT. 5. THE SECOND OBJECTION OF LD. CIT(A) IS THIS THAT THE ASSESSEE HAS FAILED TO MAKE PAYMENT OF ADVANCE TAX WHICH WAS PAYABLE BY ASSESSE E AS REQUIRED UNDER CLAUSE (B) OF SUB-SECTION (4) OF SECTION 249 OF IT ACT. IN THIS REGARD, I FIND THAT EVEN AS PER THE ASSESSMENT ORDER, THERE IS NO OTHER INCOME OF THE ASSESSEE EXCEPT PROFIT ON SALE OF AGRICULTURAL LAND. AS PER THE STATEMENT OF FACTS AVAILABLE ON RECORD, IT IS SEEN THAT IT IS THE STAND OF THE A SSESSEE THAT THE AGREEMENT BETWEEN THE ASSESSEE AND DEVELOPER WAS MADE ON 25.0 4.2006 AND AS PER THE ASSESSEE, IN FACT, NO POSSESSION WAS GIVEN. WITHOU T HANDING OVER OF POSSESSION AND WITHOUT REGISTRATION OF THE JDA, NO INCOME CAN BE BROUGHT TO TAX ON THIS ACCOUNT BUT THIS IS NOT THE MANDATE OF THE LAW THAT FOR DECIDING THIS ASPECT ON MERIT AFTER HEARING BOTH SIDES, THE ASSES SEE SHOULD BE ASKED TO PAY ADVANCE TAX FIRST ON SUCH TRANSACTION AND THEN FILE THE APPEAL ON THIS ASPECT AND THEN THE CIT (A) WILL DECIDE THIS ISSUE. IN MY CONSIDERED OPINION, IN THE FACTS OF THE PRESENT CASE, THERE IS NO VIOLATION OF SECTION 249(4)(B) OF IT ACT BECAUSE IT HAS NOT BEEN ESTABLISHED THAT THE ASSESS EE WAS LIABLE TO PAY ADVANCE TAX BECAUSE THE ONLY INCOME BROUGHT TO TAX BY THE AO IS IN RESPECT OF SALE ALLEGED OF AGRICULTURAL LAND AND THE ASSESSEE CLAIMS THAT NO POSSESSION WAS HANDED OVER AND THE JDA WAS NOT REGISTERED. HE NCE I FEEL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF CIT (A) FOR DECISION ON MERIT AFTER ADMITTING THE APPEAL OF THE ASSESSEE. IN VIEW OF THIS, NO AD JUDICATION IS CALLED FOR REGARDING THE MERIT OF THE CASE AT THE PRESENT STAG E AND I DO NOT MAKE ANY COMMENT ON THE MERIT OF THE CASE AND MY DECISION RE GARDING THIS ASPECT THAT ADVANCE TAX WAS NOT PAYABLE BY ASSESSEE SHOULD NOT BE CONSIDERED AS A COMMENT ON MERIT OF THE CASE. THIS DECISION IS ONL Y ON THE LIMITED ASPECT OF ADMISSION OF APPEAL BY REJECTING THE ALLEGED VIOLAT ION OF SECTION 249(4)(B) OF IT ACT. ITA NOS.1050, 1053 TO 1055/BANG/2018 PAGE 5 OF 5 6. IN THE RESULT, ALL THE FOUR APPEALS FILED BY THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 04 TH MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.