Palla Appala Raju L/R of Late Palla Appa Rao, Visakhapatnam V. THE CIT - 2, Visakhapatnam

ITA 107/VIZ/2014

• Counselvise Citation: 10725314 RSA 2014
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-03-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 04-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV K SINGH
• Keywords: Opportunity of being heard; Fair market value; Difference of opinion; Change of opinion
• Section: 143(3); 54F; 133A; 148; 263

Judgement Text

ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, & SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 107/VIZAG/2014 ASSESSMENT YEAR: 2004-05 SHRI PALLA APPALA RAJU L/R OF LATE PALLA APPA RAO, VISAKHAPATNAM COMMISSIONER OF INCOME TAX-2 VISAKHAPATNAM (APPELLANT) PAN NO:ANSPP 0199 C VS. (RESPONDENT) ASSESSEE BY: SHRI I. KAMA SASTRY, CA DEPARTMENT BY: SHRI RAJEEV .K. SINGH, DR DATE OF HEARING: 2/3/2015 DATE OF PRONOUNCEMENT: 5/3/2015 ORDER PER SAKTIJIT DEY. AFORESAID APPEAL OF THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 12.02.2014 PASSED UNDER SECTION 263 OF TH E ACT FOR THE ASSESSMENT YEAR 2004-05. 2. ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND S: 1. THE LEARNED CIT IS NOT CORRECT IN GIVING DIRECT IONS TO THE AO TO REVISE THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 DATED 16.12.2011 DIRECTING THE ASSESSING OFFICER TO IGNORE THE PARTITION OF PROPER TY AMONGST THE ASSESSEE AND HIS THREE SONS AND ASSESS THE ENTIRE CAPITAL GAINS ARISING FROM THE TRANSFER OF PROPERTY BY WAY OF DEVELOPMENT AGREEMENT IN THE HANDS OF THE ASSESSEE. 2. THE LEARNED CIT HAS NOT CONSIDERED ANY NEW MATERIAL OTHER THAN THE ONE CONSIDERED/TAKEN INTO ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 2 OF 12 ACCOUNT AND DECIDED UPON BY THE AO. THEREFORE, THE DIRECTION OF THE LEARNED CIT AMOUNTS TO CHANGE OF OPINION WHICH IS NOT PERMITTED UNDER LAW. 3. THE LEARNED CIT IS NOT CORRECT IN GIVING DIRECTI ONS TO THE AO TO ADOPT THE MARKET VALUE OF THE PROPERTY RECEIVED IN KIND IN PLACE OF COST OF CONSTRUCTION T O THE BUILDER ADOPTED BY THE ASSESSEE. 4. IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LEARNED CIT IS NOT CORRECT IN DIRECTING THE ASSESSING OFFICER TO GRANT EXEMPTION UNDER SECTION 54F WITH RESPECT TO INVESTMENT IN ONL Y ONE FLAT CONTRARY TO THE JUDICIAL OPINION ON THE SA ME. 5. THE LEARNED CIT IS NOT CORRECT IN GIVING DIRECTI ONS TO REVISE THE ORDER PASSED BY THE ASSESSING OFFICER EVEN THOUGH THERE IS NO LOSS OF REVENUE, CONSEQUENT LY THE ORDER OF THE ASSESSING OFFICER IS NOT PREJUDICI AL TO THE INTERESTS OF THE REVENUE. 3. BRIEFLY THE FACTS ARE, THE DECEASED ASSESSEE WAS AN INDIVIDUAL. INITIALLY ASSESSEE DID NOT FILE ANY RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR. A SURVEY UNDER SECTI ON 133A OF THE ACT WAS CONDUCTED IN CASE OF M/S SRI SIVA RATNA ENGINEERS AND BUILDERS, VISAKHAPATNAM. AS OBSERVED B Y ASSESSING OFFICER, IN COURSE OF SURVEY IT CAME TO THE NOTICE OF THE DEPARTMENT THAT THE ASSESSEE ALONG WITH HIS THREE SON S HAS ENTERED INTO A DEVELOPMENT WITH THE SAID FIRM FOR T RANSFER OF 480 SQ. YARDS OF LAND IN SURVEY NO.54, 55, WARD- 1 MURALINAGAR, VISAKHAPATNAM, IN THE RELEVANT PREVIOUS Y EAR FOR DEVELOPMENT PURPOSE. IN CONSIDERATION FOR SUCH TRANSF ER OF LAND, ASSESSEE AND HIS SONS RECEIVED CASH OF RS.3.0 0 LAKHS AND 10 NUMBERS OF TWO BEDROOM FLATS AND THREE SHOPS IN THE ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 3 OF 12 BUILDING PROPOSED TO BE CONSTRUCTED. THUS, AS PER THE AGREEMENT TO SALE CUM GPA, THE LAND WAS TRANSFERRED FOR A TOTAL CONSIDERATION OF RS.10,56,000 IN KIND (FLATS) AND RS.3.00 LAKHS (IN CASH), OUT OF WHICH ASSESSEES SHARE IS RS .1,50,000 IN CASH AND RS.79,200 IN KIND (1 FLAT). IN RESPONSE TO TH E NOTICE ISSUED, ASSESSEE FILED HIS RETURN OF INCOME COMPUTING CAPITAL GAIN AT RS.1,17,143 AFTER CLAIMING EXEMPTION UNDER SE CTION 54F. ON THE BASIS OF RETURN FILED IN RESPONSE TO NOTICE ISSUED UNDER SECTION 148, ASSESSING OFFICER COMPLETED THE AS SESSMENT VIDE ORDER DATED 16.12.2011 BY ACCEPTING THE INCOME R ETURNED BY THE ASSESSEE. LEARNED CIT, VISAKHAPATNAM IN EXERCI SE OF POWER UNDER SECTION 263 OF THE ACT CALLED FOR THE ASSES SMENT RECORDS FOR THE IMPUGNED ASSESSMENT YEAR AND AFTER EX AMINING THE SAME WAS OF THE VIEW THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REV ENUE DUE TO THE FOLLOWING REASONS: ASSESSEE HAS APPORTIONED THE CAPITAL GAIN AMOUNT AMONGST HIMSELF AND THREE OF HIS SONS BY STATING THERE WAS AN ORAL PARTITION BETWEEN THEM. HOWEVER, ON GOING THROUGH THE REGISTERED POWER OF ATTORNEY CUM GPA AS WE LL AS THE INFORMATION SUBMITTED BY ASSESSEE ALONG WITH HIS RETURN OF INCOME, IT WAS SEEN, A VACANT LAND OF 480 SQ . YARDS WAS RECORDED IN THE NAME OF ASSESSEE ONLY. ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 4 OF 12 THERE WAS NO EVIDENCE TO SHOW THAT THE LAND WAS DIVIDED AMONGST THE ASSESSEE AND HIS THREE SONS. THE SUBSEQUENT CONSTRUCTION AGREEMENT IN RESPECT OF THE REMAINING LAND WHICH WAS EXECUTED ON 20.03.2006 CLEARLY INDICATES THAT THE ASSESSEE IS THE OWNER OF THE PROPERTY AND THE SONS OF THE ASSESSEE SIGNED THE POWER OF ATTORNEY ONLY FOR AVOIDING ANY MISUNDERSTANDING AMONGS T PROSPECTIVE BUYERS IN FUTURE. THEREFORE, TRANSFER WITHI N THE MEANING OF SECTION 2(47)(V) TOOK PLACE ON 28.11.2 003 I.E. ON THE DATE ON WHICH THE DEVELOPMENT AGREEMENT CU M POWER OF ATTORNEY WAS ENTERED INTO BETWEEN THE ASSESSEE AND M/S SIVA RATNA ENGINEERS & BUILDERS. THE CAPITAL GAIN ARISING FROM THE ABOVE TRANSFER IS ASSESSABLE IN THE HANDS OF THE ASSESSEE ALONE. ACCOR DING TO THE CIT, THE APPORTIONING OF THE SALE CONSIDERATION (CASH, BUILT-UP AREA OF FLATS AND SHOPS) AMONGST THE ASSESSEE AND 3 HUFS OF HIS SONS IS ONLY APPLICATION OF INCOME. THE LEARNED CIT OBSERVED THAT THE FAIR MARKET VALUE OF THREE SHOPS AND TEN FLATS TOGETHER WITH THE CASH OF RS.3.00 LAKHS IS REQUIRED TO BE TAKEN AS THE TOTAL FA IR MARKET VALUE FOR COMPUTING THE CAPITALS IN THE HANDS OF THE ASSESSEE. ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 5 OF 12 4. AS THE ASSESSING OFFICER ACCEPTED THE INCOME DECLA RED BY THE ASSESSEE, WITHOUT ASSESSING THE TOTAL CAPITAL GAIN AT THE HANDS OF THE ASSESSEE, LEARNED CIT CONSIDERED THE ASS ESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS O F THE REVENUE AND ISSUED A SHOW CAUSE NOTICE TO EXPLAIN WHY ASSESSMENT ORDER SHALL NOT BE REVISED. 5. IN RESPONSE TO THE SAID NOTICE ASSESSEE SUBMITTED THA T THE LAND GIVEN FOR DEVELOPMENT WAS PURCHASED BY THE A SSESSEE ON 20.03.1970. SUBSEQUENTLY, LAND WAS PARTITIONED LON G BACK AMONGST THE ASSESSEE AND HIS THREE SONS BY VIRTUE OF AN ORAL PARTITION. FOR SUBSTANTIATING SUCH CLAIM, ASSESSEE REFE RRED TO THE SALE CUM GPA WHEREIN THE FACT OF PARTITION WAS MENTIO NED. LEARNED CIT HOWEVER, DID NOT ACCEPT THE CONTENTIONS OF TH E ASSESSEE. REFERRING TO THE AGREEMENT OF SALE CUM GPA A ND CONSTRUCTION AGREEMENT DATED 20.03.2006 LEARNED CIT OBSERVED THAT RECITALS THEREIN CLEARLY SHOWS THAT IT IS T HE ASSESSEE WHO IS THE SOLE OWNER OF THE PROPERTY, IN QUESTION, AND THE NAME OF HIS SONS WERE INCLUDED IN THE AGREEME NT ONLY TO AVOID FUTURE LEGAL PROBLEMS AMONGST THEM AS WELL AS WITH OUTSIDERS. LEARNED CIT OBSERVED THAT ON GOING THROUGH T HE CONSTRUCTION AGREEMENT, IT IS ALSO EVIDENT THAT AS PER ORA L PARTITION THE PROPERTY WAS NOT SPECIFICALLY DIVIDED ME NTIONING SHARE OF EACH PERSON. ACCORDINGLY HE CONCLUDED THAT TH E CLAIM ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 6 OF 12 OF ORAL PARTITION IS ONLY AN AFTER THOUGHT FOR REDUCING TAX LIABILITY. HAVING HELD SO LEARNED CIT SET ASIDE THE I MPUGNED ASSESSMENT ORDER WITH A DIRECTION TO THE ASSESSING OFFI CER TO COMPUTE THE CAPITAL GAIN AT THE HANDS OF THE ASSESSEE BY TAKING INTO ACCOUNT THE ENTIRE SALE CONSIDERATION I.E. VALUE O F THE BUILT UP AREA OF THE FLATS AND THE SHOPS AND THE RECEIPTS UNDE R THE DEVELOPMENT AGREEMENT AS WELL AS THE CASH AMOUNT OF RS. 3.00 LAKHS AS THE FAIR MARKET VALUE. LEARNED CIT ALSO DIR ECTED ASSESSING OFFICER TO ALLOW DEDUCTION UNDER SECTION 54F IN RESPECT OF ONE RESIDENTIAL UNIT AS CLAIMED BY THE ASSES SEE IN THE RETURN OF INCOME. 6. THE LEARNED AUTHORISED REPRESENTATIVE MORE OR LESS REITERATING THE SUBMISSIONS MADE BEFORE THE REVISIONA L AUTHORITY SUBMITTED BEFORE US, AS THERE IS A PARTITION BE TWEEN FATHER AND SONS WITH REGARD TO THE VACANT LAND GIVEN FO R DEVELOPMENT, THE ENTIRE CAPITAL GAIN CANNOT BE ASSESSED AT THE HANDS OF THE ASSESSEE ONLY. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED, SINCE THE FACT OF PARTITION IS R EFERRED TO IN THE AGREEMENT TO SALE CUM GPA WHICH IS A REGISTERE D DOCUMENT, THE CIT CANNOT QUESTION THE GENUINENESS OF SUC H PARTITION, EVEN THOUGH IT IS AN ORAL PARTITION, WITHOUT BR INGING COGENT EVIDENCE TO DISPROVE IT. IN SUPPORT OF SUCH CONT ENTION LEARNED AUTHORISED REPRESENTATIVE RELIED UPON A JUDGM ENT ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 7 OF 12 DATED 14.6.2012 OF HON'BLE KARNATAKA HIGH COURT IN CAS E OF C.B. SOMANNA VS. GOVT. OF KARNATAKA ON 14.06.2012, A COPY OF THE JUDGMENT WAS PLACED ON RECORD. LEARNED AUTHORISE D REPRESENTATIVE SUBMITTED THAT EVEN IN TERMS WITH THE ORAL PARTITION, ASSESSEE AND TWO OF HIS SONS HAVE FILED RE TURN OF INCOME SHOWING CAPITAL GAIN FALLING INTO THEIR RESPECTI VE SHARES. IN VIEW OF SUCH FACTS, THE ORDER PASSED BY THE LEARNED CIT IN DIRECTING ASSESSING OFFICER TO ASSESS THE ENTIRE CAPITAL GAIN AT THE HANDS OF THE ASSESSEE IS NOT JUSTIFIED. LEARNED A UTHORISED REPRESENTATIVE CHALLENGING THE DIRECTIONS OF THE CIT W ITH REGARD TO CONSIDERATION OF FAIR MARKET VALUE FOR COMPUTING CAP ITAL GAIN SUBMITTED BEFORE US THAT THE FMV AS ON THE DATE OF TRANS FER SHOULD BE THE COST OF CONSTRUCTION TO THE BUILDER AND NOT THE VALUE OF THE CONSTRUCTED FLATS. LEARNED AUTHORISED REPRESENTATIVE ALSO SUBMITTED, IF AT ALL, THE ENTIRE CAPITA L GAIN IS TO BE ASSESSED AT THE HANDS OF THE ASSESSEE, THEN THE DEDUCTION UNDER SECTION 54F SHOULD NOT BE RESTRICTED TO ONLY A SINGLE FLAT BUT TO ALL THE 10 FLATS AS THEY ARE IN DIFFER ENT FLOORS OF THE SAME BUILDING HAVING COMMON DOOR NUMBER. LEARNE D AUTHORISED REPRESENTATIVE SUBMITTED IF DEDUCTION UNDER SECTION 54F IS ALLOWED FOR ALL TEN FLATS, THERE WILL BE NEGATIVE INCOME, HENCE THERE IS NO PREJUDICE CAUSED TO THE REVE NUE. IN SUPPORT OF HIS CONTENTION LEARNED AUTHORISED REPRESENTATI VE RELIED UPON FOLLOWING DECISIONS: ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 8 OF 12 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITTED BEFORE US, THERE IS NO DISPUTE TO THE FACT THAT THE LAND IN QUESTION WAS PURCHASED BY THE ASSESSEE AN D IT STOOD RECORDED IN THE NAME OF ASSESSEE TILL ITS TRANSFER TO DEVELOPER. THERE IS NO EVIDENCE THAT EITHER THERE WAS A LARGER HUF OR SMALLER HUF OF THE SONS AS NO RETURN OF INCOME WAS FILED EARLIER IN THE CAPACITY OF HUF. NO RETURN WAS A LSO FILED EITHER BY THE ASSESSEE OR HIS SONS OFFERING CAPITAL G AIN VOLUNTARILY. ONLY AFTER NOTICE UNDER SECTION 148 WAS ISSUED, THE ASSESSEE AND HIS SONS CAME FORWARD TO FILE THE RETURNS OF INCOME OFFERING CAPITAL GAIN IN RESPECTIVE HANDS. LEA RNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE SO CALLED OR AL PARTITION CLAIMED TO HAVE BEEN ENTERED BETWEEN THE PAR TIES IS ONLY WITH AN INTENTION TO APPORTION THE CAPITAL GAIN FOR REDUCING THE TAX BURDEN. 8. AS FAR AS THE FMV IS CONCERNED, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED, THE MARKET VALUE AS ON THE DATE OF GPF DATED 28.11.2003 IS TO BE TAKEN. A S FAR AS THE CLAIM OF DEDUCTION UNDER SECTION 54F IS CONCERNED LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED, WHEN THE ASSESSEE HIMSELF HAS CLAIMED DEDUCTION FOR ONE FLAT, FURTHER CL AIM OF THE ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 9 OF 12 ASSESSEE FOR ENHANCING THE DEDUCTION TO ALL FLATS IS NOT ACCEPTABLE. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES A ND PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY ASSESSE E HAS PURCHASED THE LAND IN QUESTION IN THE YEAR 1970 IN HIS INDIVIDUAL CAPACITY. HOWEVER, IT IS THE CLAIM OF THE ASSESSEE THAT BY VIRTUE OF AN ORAL PARTITION ENTERED INTO IN THE YE AR 1980, THE PROPERTY HAS BEEN DIVIDED AMONGST THE ASSESSEE AND HIS THREE SONS. THEREFORE, THE CAPITAL GAIN ARISING OUT OF THE TRANSFER OF SUCH LAND IN PURSUANCE TO THE AGREEMENT TO SALE CUM GPA ENTERED INTO WITH THE DEVELOPER IN NOV. 2003 I S TO BE ASSESSED PROPORTIONATELY AT THE HANDS OF THE ASSESSEE AN D HIS THREE SONS. AS CAN BE SEEN, APART FROM REFERENCE MADE IN THE AGREEMENT OF SALE CUM GPA, THERE IS NO OTHER DOCUMENTA RY EVIDENCE SUBMITTED BY THE ASSESSEE TO ESTABLISH THE FACT THAT THE SO CALLED ORAL PARTITION BETWEEN THE ASSESSEE AND H IS SONS WAS ACTUALLY ACTED UPON SINCE THE PROPERTY IN QUESTIO N CONTINUED TO BE RECORDED IN THE NAME OF THE ASSESSEE TIL L IT WAS TRANSFERRED TO DEVELOPER. FURTHER ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN AS TO WHETHER THE PARTITION IS ONLY RESTRICTED TO THE AFORESAID PROPERTY OR TO ALL THE PROPERTIES OF THE ASS ESSEE. THEREFORE, WHEN THE FACTS ON RECORD CLEARLY SHOW THAT TH E PROPERTY GIVEN UNDER DEVELOPMENT WAS A SELF ACQUIRED PROPERTY ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 10 OF 12 OF THE ASSESSEE STANDING IN HIS OWN NAME WITHOUT ANY OTHER EVIDENCE TO CORROBORATE THE CLAIM OF ORAL PARTITION OF TH E PROPERTY BETWEEN ASSESSEE AND HIS SONS, SUCH CLAIM IS NOT ACCEPTABLE MERELY BECAUSE A REFERENCE TO SUCH ORAL PA RTITION HAS BEEN MADE IN THE REGISTERED AGREEMENT TO SALE CUM GPA. THE REFERENCE MADE TO THE DECISION OF THE HON'BLE KARN ATA HIGH COURT IN CASE OF K. PONNAPPA VS. GOVT. OF KARNATAKA, ( SUPRA) IN OUR VIEW, IS MISPLACED AS THE FACTS IN THAT CASE ARE TO TALLY DIFFERENT. AS CAN BE SEEN FROM THE FACTS OF THE CASE RE LIED UPON BY THE ASSESSEE, IT WAS THE CLAIM OF THE PETITIONER THAT THE PROPERTY IN QUESTION IS A JOINT FAMILY PROPERTY WHER EAS THE RESPONDENT DISPUTED SUCH CLAIM. IN FACT, RESPONDENT DEMONSTRATED THAT THERE WAS PARTITION OF THE JOINT PROPERTY IN PURSUANCE TO A PALUPATTI EXECUTED AMONGST THE MEMBERS OF JOINT FAMILY ON 10.2.1974. FURTHER, THE PARTY WHO CLAI MED TO HAVE PURCHASED THE PROPERTY ON PARTITION TOOK STEPS FOR MUTATING HIS NAME. CONSIDERING THESE FACTS THE HON'BLE C OURT HELD THAT RECITAL IN THE REGISTERED SALE DEED WILL PREV AIL OVER ALL OTHER PLEA. HOWEVER, IN ASSESSEES CASE, APART FROM A PASSING REFERENCE IN THE AGREEMENT TO SALE CUM GPA ABOUT ORAL PARTITION LONG BACK, WITHOUT DISCLOSING THE DATE OF SUC H PARTITION, THERE IS NO OTHER EVIDENCE TO PROVE THE PARTI TION. IF AT ALL THERE WAS A PARTITION LONG BACK, THERE IS NO REAS ON WHY THE ORAL PARTITION WAS NOT ACTED UPON IN LETTER AND SPIRIT AL L THESE ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 11 OF 12 YEARS BY GETTING THE LAND REGISTERED IN THE NAMES OF A LL THE PARTIES. ON THE CONTRARY, ASSESSEE CONTINUED TO BE THE AB SOLUTE OWNER OF THE PROPERTY TILL IT WAS TRANSFERRED TO DEVELOP ER. ASSESSING OFFICER HAS NOT AT ALL EXAMINED THIS ISSUE D URING THE ASSESSMENT PROCEEDINGS BY MAKING ANY ENQUIRY OR APPL YING HIS MIND. AT LEAST NOTHING OF THE SORT IS EVIDENT EITHER FROM THE ASSESSMENT ORDER OR ANY MATERIAL BROUGHT BEFORE US. CONSIDERED IN THE AFORESAID PERSPECTIVE, EXERCISE OF JURISDICTION UNDER SECTION 263 IS VALID. HOWEVER, IN OUR VIEW THE LEARNED CIT WAS NOT JUSTIFIED IN STRAIGHT AWAY DIRECTING THE ASSE SSING OFFICER TO CONSIDER THE ENTIRE CAPITAL GAINS AT THE HAND S OF THE ASSESSEE. IN OUR VIEW THE ENTIRE ISSUE REQUIRES RE-EX AMINATION BY THE ASSESSING OFFICER. IF THE ASSESSEE CAN PROVE BY FURNISHING NECESSARY AND COGENT EVIDENCE THAT THE PROPE RTY IN QUESTION WAS ACTUALLY PARTITIONED, THEN ASSESSEES CLAIM CAN BE CONSIDERED. IN THAT VIEW OF THE MATTER, WE DIRECT THE AS SESSING OFFICER TO CONSIDER ASSESSEES CLAIM AFRESH AND TAKE DECISION AFTER AFFORDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN VIEW OF OUR AFORESAID DIRECTION, OTHER ISSUES RELA TING TO ADOPTION OF FAIR MARKET VALUE AND CLAIM OF EXEMPTION UNDER SECTION 54F ARE LEFT OPEN TO BE DECIDED AFRESH DEPENDI NG UPON THE DECISION TO BE TAKEN ON ASSESSEES CLAIM OF PARTITIO N. WE MAKE IT CLEAR THAT THE ASSESSING OFFICER MUST AFFORD REA SONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND CONSIDE R ITA NO.107 OF 2014 PALLA APPALA RAJU VIZAG PAGE 12 OF 12 SUBMISSIONS ON ALL THE ISSUES RAISED BY THE ASSESSEE AND DECIDE THEM INDEPENDENTLY AND IN ACCORDANCE WITH LAW W ITHOUT BEING INFLUENCED BY ANY OF THE OBSERVATIONS MADE BY L EARNED CIT. THE ORDER OF THE LEARNED CIT IS MODIFIED TO THE E XTENT INDICATED HEREINBEFORE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 5 TH MARCH, 2015. SD/- SD/- (J. SUDHAKAR REDDY) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 5 TH MARCH,2015 PVV/SPS CAMP: VISAKHAPATNAM, COPY TO 1 SHRI PALLA APPALA RAJU L/R OF LATE PALLA APPA RAO, H. NO.2-53 SUJATHANAGAR, VISAKHAPATNAM 2 THE CIT-2 VISAKHAPATNAM 3 DEPARTMENTAL REPRESENTATIVE ITAT VISAKHAPATNAM 4 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM