M/s Karnataka State Seeds Corporation Limited , Bangalore V. Principal Commissioner of Income Tax-4, Bangalore

ITA 1070/BANG/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4525 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-09-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 03-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: L BHARATH
• Keywords: Set aside
• Section: 143(3); 142(1); 13; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER IT A NO. 1070/ BANG / 2018 ASSESSMENT YEAR: 2013 - 14 M/S. KARNATAKA STATE SEEDS CORPORATION LTD., BEEJA BHAVAN, BELLARY ROAD, HEBBAL, BANGALORE 560 024. PAN: AACCK 1985D VS. THE PRINCIPAL COMMISSIONER OF INCOME TAX, BENGALURLU-4, BENGALURU. APPELLANT RESPONDENT APPELLANT BY : S HRI L. BHARATH, CA RESPONDENT BY : M S . NEERA MA LHOTRA, C IT (DR)(ITAT ), BENGALURU. DATE OF HEARING : 02 .0 9 .202 1 DATE OF PRONOUNCEMENT : 20 .0 9 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME-TAX, BENGALURU-4, BENGALURU [PCIT] PASSED U/S. 263 OF THE INCOME-TAX ACT, 1961 [THE AC T] DATED 25.01.2018 FOR THE ASSESSMENT YEAR 2013-14. 2. IN THIS CASE, ASSESSMENT ORDER WAS PASSED U/S. 1 43(3) OF THE ACT ON 2.2.2016. THE PCIT AFTER HAVING GONE THROUGH THE R ECORDS INVOKED JURISDICTION U/S. 263 OF THE ACT OBSERVING THAT THE ASSESSEE SOLD 458.10 SQ. MTRS. OF LAND TO THE NATIONAL HIGHWAYS AUTHORITY OF INDIA (NHAI) IN CONNECTION WITH WIDENING OF HEBBAL FLYOVER FOR A SA LE CONSIDERATION OF RS.2,21,85,000 VIDE REGISTERED SALE DEED DATED 11.0 2.2013. THE ASSESSEE ITA NO.1070/BANG/2018 PAGE 2 OF 5 PURCHASED 2 ACRES OF LAND BELONGING TO UNIVERSITY O F AGRICULTURAL SCIENCES [UAS], BENGALURU FOR A CONSIDERATION OF RS.2 CRORES ON 3.2.2012, WHICH WAS ONE YEAR MORE THAN THE DUE DATE OF TRANSFER I.E ., 11.02.2013 AND THE ASSESSEE CLAIMED EXEMPTION U/S. 54D OF THE ACT. TH E PCIT OBSERVED THAT EXEMPTION U/S. 54D IS CLAIMED FOR THE FULL EXTENT O F SALE CONSIDERATION, EVEN THOUGH THE COST OF IMPROVEMENT IN THE NEW ASSET IS ONLY RS.2 CRORES. IN OTHER WORDS, THE ASSESSEE CLAIMED EXEMPTION AT RS.2 ,20,16,415. ACCORDING TO THE PCIT, THE ASSESSEE PURCHASED THE L AND BEFORE ONE YEAR AND NINE DAYS BEFORE THE DATE OF TRANSFER OF ORIGIN AL ASSET, HENCE DEDUCTION U/S. 54D IS NOT ALLOWABLE. HE WAS OF THE VIEW THAT THE AO HAS NOT MADE PROPER ENQUIRY BEFORE PASSING THE ASSESSMENT ORDER U/S. 143(3) DATED 2.2.2016 AND THE ORDER IS ERRONEOUS INSOFAR AS IT I S PREJUDICIAL TO THE INTERESTS OF REVENUE. HE ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO THE AO TO RE-EXAMINE THE ISSUE AND PAS S A FRESH ORDER, AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. AGA INST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE CONTENTION OF THE LD. AR IS THAT THERE WAS A PR OPER ENQUIRY WHILE FRAMING ASSESSMENT U/S. 143(3) OF THE ACT AND THE A O HAD ASKED FOR RELEVANT DETAILS IN THE QUESTIONNAIRE REGARDING COM PUTATION OF CAPITAL GAIN AND DEDUCTION IN THE NOTICE U/S. 142(1) DATED 30.11 .2015. THE ASSESSEE BY ITS LETTER DATED 4.1.2016 PROVIDED NECESSARY INF ORMATION AND IT CANNOT BE SAID THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJ UDICIAL TO THE INTERESTS OF REVENUE. HE RELIED ON THE FOLLOWING CASE LAWS:- 1 JYOTI FOUNDATION [2013] 38 TAXMANN.COM 180 DELHI HIGH COURT 2 SUNBEAM AUTO LIMITED [2010] 189 TAXMAN 436 DELH I HIGH COURT 3 NARAIN SINGLA [2015] 62 TAXMANN.COM 255 CHANDIGARH HIGH COURT 4 ANIL KUMAR SHARMA [2010] 194 TAXMAN 504 DELHI H IGH COURT ITA NO.1070/BANG/2018 PAGE 3 OF 5 5 HEMA KRISHNAMURTHY [ITA NO. 51 L/BANG/2013] ITA T BANGALORE 6 GRAHAM DEV GUPTA [2017] 88 TAXMANN.COM 831 ITAT DELHI 7 IBM INDIA PRIVATE LIMITED [ITA NO. 1028/BANG/2013 ] ITAT BANGALORE 8 CROMPTON GREAVES LIMITED [2017] 82 TAXMANN.COM 246 9 P. ALIKUNJU [1987] 34 TAXMAN 169 KERALA HIGH CO URT 10 HEMSONS INDUSTRIES [2001] 118 TAXMAN 903 - ANDHRA P RADESH HIGH COURT 11 SARAVANA DEVELOPERS (ITA. NO. 68/2014) KARNATAKA HIGH COURT 12 GABRIEL INDIA LTD. [19931 71 TAXMAN 585 BOMBAY HI GH COURT 13 SPECTRA SHARES & SCRIPS (P) LTD [2013] 36 TAXMANN.C OM 348 ANDHRA PRADESH HIGH COURT 14 MALABAR INDUSTRIAL CO. LTD. V. CIT (243 ITR 83) 4. THE LD. DR SUPPORTED THE ORDER OF THE PCIT AND R ELIED ON THE FOLLOWING DECISIONS WHEREIN IT WAS HELD THAT ASSESS MENT ORDER PASSED BY THE AO WITHOUT MAKING ANY ENQUIRY ON THE ISSUE REND ERED THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. THE STATE BANK EMPLOYEES CO-OPERATIVE CREDIT SOCIET Y LTD ITA NO 1203 & 1204/BANG/19 (BANG TRIB) SMT MALINI SUBRAMANIAN ITA NO 935/BANG/16 (BANG TRI B) M/S MYSORE MINERALS LTD ITA NO 464/BANG/14 (BANG TR IB.) 5. IN THE PRESENT CASE, ADMITTEDLY, THE AO PASSED T HE ASSESSMENT ORDER U/S. 143(3) ON 2.2.2016 WITHOUT ANY PROPER EN QUIRY ALLOWING THE CLAIM OF ASSESSEE U/S. 54D OF THE ACT. THERE WAS NO DISC USSION WHATSOEVER ON THE ISSUES RAISED BY THE PCIT IN HIS IMPUGNED ORDER AND THE ASSESSMENT ORDER IS SILENT ON THOSE ISSUES. AS PER SECTION 26 3 OF THE ACT, THE CIT COULD EXERCISE JURISDICTION UNDER THIS PROVISION IF THE O RDER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FURTHER AN INCORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW WILL SATISFY THE ITA NO.1070/BANG/2018 PAGE 4 OF 5 REQUIREMENT OF ORDER BEING ERRONEOUS. IN THE SAME CATEGORY, FALLS ORDERS PASSED WITHOUT APPLYING PRINCIPLES OF NATURAL JUSTI CE OR WITHOUT APPLICATION OF MIND. IF THERE IS ESCAPEMENT OF INCOME BY THE A CTION OF THE AO, THAT ORDER IS SAID TO BE PREJUDICIAL TO THE INTERESTS OF REVENUE. IN THE PRESENT CASE, THE AO HAS NOT MADE ANY ENQUIRY ON THE IMPUGN ED ISSUE WHICH SHOULD BE TREATED AS ERRONEOUS ORDER AND IT IS PREJ UDICIAL TO THE INTERESTS OF REVENUE AS THERE WAS REVENUE LOSS TO THE GOVERNMENT . ON THIS COUNT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE PCIT IN INVOKING JURISDICTION U/S. 263 OF THE ACT AND REMITTING THE ISSUE BACK TO THE FILE OF AO FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW. HENCE WE AR E OF THE VIEW THAT THE AO PASSED THE ORDER WITHOUT MAKING ANY ENQUIRY ON T HE IMPUGNED ISSUE AND THE SAME WOULD RENDER THE ORDER ERRONEOUS AND I N VIEW OF THE TAX IMPLICATIONS, THE SAME WOULD CAUSE PREJUDICE TO THE INTERESTS OF REVENUE. 6. WE THEREFORE UPHOLD THE IMPUGNED ORDER OF THE P CIT. WE REFRAIN FROM GOING INTO THE MERITS OF THE ISSUE SINCE THE P CIT HAS NOT GIVEN ANY FINDINGS ON THE ALLOWABILITY OF THE EXPENDITURE AND HE HAS ONLY REMANDED THE ISSUE BACK TO THE AO FOR FRESH CONSIDERATION. WE FURTHER MAKE IT CLEAR THAT THE AO/CIT(A) SHALL NOT BE INFLUENCED BY THE F INDINGS OF THE PCIT IN THE IMPUGNED ORDER WHILE DECIDING THE ISSUE IN ACCORDAN CE WITH LAW. WITH THESE OBSERVATIONS, WE REJECT THE GROUNDS OF THE AS SESSEE. 7. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF SEPTEMBER, 2021. SD/- SD/- ( GEORGE GEORGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH SEPTEMBER, 2021. / DESAI S MURTHY / ITA NO.1070/BANG/2018 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.