Dhulipalla Venkata Naga Pavan Kumar , Hyderabad V. Income Tax Officer, Ward-11(1), Hyderabad

ITA 1090/Hyd/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8057 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2015-2016
• Appeal Filed On: 02-07-2019
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Additional evidence; Capital Gains
• Section: 56(2)(vii)(b); 143(3)

Judgement Text

ITA No.1090/Hyd/2019 1 IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad (Through Video Conferencing) Before Shri A. Mohan Alankamony, Accountant Member AND Shri S.S. Godara, Judicial Member ITA No.1090/Hyd/2019 Assessment Year: 2015-16 Dhulipalla Venkata Naga Pavan Kumar, D.No.9-71, P.R. Nagar, Motinagar, Hyderabad – 500018. PAN : AQYPP5036H. The Income Tax Officer, Ward 11(1), Hyderabad. (Appellant) (Respondent) Assessee by: Shri Y.V. Bhanunarayan Rao Revenue by : Smt. D. Komali Krishna Date of hearing: 28/10/2021 Date of pronouncement: 22/11/2021 O R D E R Per S. S. Godara, J.M. This assessee’s appeal for A.Y 2015-16 arises from the Commissioner of Income Tax (Appeals)-1, Hyderabad’s order dated 08.03.2018, in case No.0393/2017-18/Income Tax Officer, Ward- 11(1), Hyd/CIT(A)-1/Hyd/2019-20 involving proceedings under section 143(3) of Income Tax Act, 1961 (in short, “the Act”). Heard both the parties. Case files perused. ITA No.1090/Hyd/2019 2 2. The assessee has pleaded the following substantive grounds in the instant appeal. 1. On the facts and in the circumstances of the case, the order of the learned Commissioner of Income Tax (Appeals)-1, Hyderabad is erroneous and bad in law. 2. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals)-l, Hyderabad, erred in upholding the addition made by the Learned Assessing Officer on the ground that the assessee along with other buyers i.e Sprint Telefilms Pvt Ltd and Smt P Krishna Priya purchased 2 properties at different places from same seller and the same was executed by single document and out of 2 properties one property purchased by the Assessee and Smt P Krishna Priya and the other property purchased by Sprint Telefilms Pvt Ltd and there is no difference between the purchase price and SRO value of the property purchased by assessee and the other property values are different and the same is belongs to the other buyer i.e Sprint Telefilms Pvt Ltd and hence the provisions of Section 56(2)(vii)(b) is not applicable and as such the addition made by Learned Assessing Officer is invalid. 3. On the facts and in the circumstances of the case, the learned as above Commissioner of Income Tax (Appeals), ought to have considered the fact that the assessee along with P Krishna Priya purchased property situated at Velagaveru Village Venumantra Mandal, WG Dt of 55.925 Sq Yards for Rs 51,000/- and SRO value for the same property is Rs.51,000/- and the provisions of Section 56(2)(vii)(b) are not applicable and hence the addition made by the Learned Assessing Officer is invalid. 4. On the facts and in the circumstances of the case, the order of as above the learned Commissioner of Income Tax (Appeals)-1 Hyderabad, upholding an addition of Rs.1,07,91,826/- made by the Learned Assessing Officer is erroneous as the said property not belongs to the assessee and same belongs to other buyer(Sprint Telefilms Private Limited) and the same was confirmed by the other buyer and the addition made by the Learned Assessing Officer is invalid. 5. On the facts and in the circumstances of the case, the order of as above the learned Commissioner of Income Tax (Appeals)-1 Hyderabad, upholding an addition of Rs.1,07,91,826/- made by the Learned Assessing Officer is erroneous as the addition was made on considering the 1/3 of the both properties SRO values by clubbing both property values and added 1/3 share as income and the same is erroneous as there is no evidence at Assessing Officer to consider 1/3 share. ITA No.1090/Hyd/2019 3 6. On the facts and in the circumstances of the case, the order of as above the learned Commissioner of Income Tax (Appeals)-1 Hyderabad, ought to have considered the fact that all the confirmations from the other buyers are submitted to the Assessing Officer and hence the addition made by the Learned Assessing Officer is invalid. 7. On the facts and in the circumstances of the case, the order of as above the learned Commissioner of Income Tax (Appeals)-1 ought to have considered the fact that the Assessing Officer in his remand report, have agreed the fact that the share of the assessee is only to the extent of 55.928 Sq Yards only for the same property there is no difference between SRO value and purchase price and the other property belongs to the other buyer (ie Sprint Telefilms Private Limited) and hence the addition made by the Learned Assessing Officer is invalid.” 3. Learned counsel next invited our attention to the learned CIT(A)’s detailed discussion affirming the impugned addition as follows : “5.2 During the course of appeal proceedings, with regard to the above ground, the appellant submits as under: "The appellant along with other buyers M/ s. Sprint Techfilms Put Ltd and Ms.P.Krishna Priya purchased two properties at different places from same sellers and the same was executed by single document and out of two properties one property purchased by appellant and Ms.P.Krishna Priya and other property purchased by Sprint Techfilms Put Ltd. Property 1 : Madhurauada Madasariloua, s/isakhapatnam Dist, SY No. 19-366-13/1 1.05 acres 5082 sq. yds for Rs.31,50,000/- belongs to Sprint Techfilnis Put Ltd and the same is confirmed by Sprint Techfilms Put Ltd. Property 2 : Velagaueru Village, Venumantra Mandal, WG Dt. 55,925 sq. yds for Rs.51,000/ - belongs to appellant and Ms. P.Krishna Priya. All the sellers are same for the above said properties and the registration was done in a single document and the same is confirmed by the other part of the buyer i.e., Sprint Techfilms Put Ltd. The SRO value and purchase price of the property by the appellant along with Ms. P. Krishna Priya is same and there is no difference and hence the applicability of provisions of Section 56(2)(vii)(b) is not applicable in the hands of the appellant. Confirmations from other part of the buyer and other details sought by the AO are directly sent to AO after completion of assessment. Without considering the above facts, the AO adopted 1/3 of the both property SRO values by clubbing both. property values and added 1/3 share as income. Further submit that under which head of income, it is covered and under which section applicable in the hands ITA No.1090/Hyd/2019 4 of the appellant added is not mentioned and simply the AO added 1/3 share as income and the same is not correct.” 5.3 The appellant filed additional evidence which were not submitted before the Assessing Officer, hence the remand report was called for from the Assessing Officer on 18.06.2018 with regard to the above ground. The Assessing Officer has submitted his remand report on 05.04.2019 which is as follows: "The appellant purchased property along with Ms. P. Krishria Priya and Sprint Techfilms Pvt Ltd for a value of Rs.32,01,000/-. However, the value adopted for the stamp duty purpose was of RS.3,05,43,000/ - and total stamp duty and registration charges was paid on the same was of Rs.18,32,480/ -. Accordingly, the value of the property was arrived at Rs.3,23, 75,480/- and assessment completed by taking l/3rd value i.e., Rs.1,07,91,826/- in the hands of the assessee Sri Dhulipala Venkata Naga Pavan Kumar and assessment completed. Assessee has claimed that he and Smt. P. Krishna Priya owns only nominal share in the same property and M/ s. Sprint Telefilms Pvt Ltd is the actual owner of the same. It is stated that Sri Dhulipala Venkata Naga Pavan Kumar and Smt. P. Krishna Priya owns only 55. 928 sq. yds whereas M/ s. Sprint Techfilms Pvt Ltd owns the remaining part of the property. Letter issued to M/ s. Sprint Techfilms Pvt Ltd for the confirmation of the claim made by the assessee. However, the same could not be received at the time of assessment. Later on, a confirmation letter is received from M/ s. Sprint Techfilms Pvt Ltd confirming the claim made by the assessee Sri Dhulipala Venkata Naga Pavan Kumar. The assessee along with two others paid stamp duty and registration fee on the SRO value. Hence SRO value has been taken as sale consideration. Section 56(2)(vii)(b) is applicable to Individual or HUF and accordingly, claimed that as Sri Dhulipala Venkata Naga Pavan Kumar and Smt. P.Krishna Priya are owner of merely 55.928 sq. yds and the remaining pertains to M/ s. Sprint Techfilms Pvt Ltd and accordingly, the same is not applicable to the assessee i.e., Sri Dhulipala Venkata Naga Pavan Kumar. However, the same can be taken to the extent of ownership. Since the confirmation was not received from the company at the time of assessment and accordingly, 1/3 share of the both property as per SRO value was taken as assessee share and assessment completed.” 5.4 In response to the remand report, the appellant submitted letter dated 03.05.2019 that the sale consideration was paid by way of cash only as all the sellers are farmers and majority of them are not having bank accounts. ITA No.1090/Hyd/2019 5 5.5 With regard to the above ground, I have carefully considered the facts of the case, assessment order, remand report and submissions of the appellant. As per remand report, the Assessing Officer submitted in para no.5 that "Since the confirmation was not received from the company at the time of assessment and accordingly, 1/3 share of the both property as per SRO value was taken as assessee share and assessment completed". This contention of the Assessing officer is not accepted. After verifying the sale deed dated 12.08.2014, It Is noticed the appellant along with two others and paid an amount of Rs.32,01,000/- as sale consideration for two properties. As per the sale deed, the registered value was of Rs.3,05,43,000/- which was adopted by the Assessing Officer in the same sale deed, the company M/s. Sprint Techfilms Pvt Ltd was not figured in the document either as purchaser or purchase amount paid. Therefore, the observation of the Assessing Officer after considering the same confirmation and balance sheet of the company is not correct. Here, the property was purchased by the appellant and the payment were also mentioned as paid by him as per sale deed. Therefore, the submissions of the appellant regarding the above company has purchased this property is not accepted. Since there is no document proof furnished by the appellant, the submissions of the Assessing Officer in the remand report and the submissions of the appellant were rejected. The addition made by the Assessing officer in the original assessment order is stands goods. Hence the addition made by the Assessing officer is confirmed.” 4. Learned counsel’s sole substantive argument during the course of hearing is that both the lower authorities have erred in law and on facts in making the impugned long term capital gains addition of Rs.10,791,826/- despite the fact that the assessee’s share was very much a nominal one only. The fact however remains that neither the Assessing Officer nor the learned CIT(A) refer to the corresponding clauses in the sale deed in issue dated 23.08.2014 for the purpose of determining this tax payees’ share therein. We accordingly deem it appropriate to restore the assessee’s instant sole substantive grievance back to the Assessing Officer for his appropriate adjudication for the purpose of making the impugned addition in assessee’s hands as per his specified share only. Ordered accordingly. ITA No.1090/Hyd/2019 6 5. This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the Open Court on 22 nd November, 2021. Sd/- Sd/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER Hyderabad, dated 22 nd November, 2021. TYNM/sps Copy to: S.No Addresses 1 Dhulipalla Venkata Naga Pavan Kumar, D.No.9-71, P.R. Nagar, Motinagar, Hyderabad – 500018. 2 The Income Tax Officer, Ward 11(1), Hyderabad. 3 CIT (A) – 1, Hyderabad. 4 Pr. CIT – 5, Hyderabad. 5 DR, ITAT Hyderabad Benches 6 Guard File By Order