Chamakura Raja Reddy, Nizamabad, Hyderabad V. ITO, Ward-2, Nizamabad, Nizamabad

ITA 1147/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6225 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-09-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO

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 I.T.A. NO. 1147/HYD/2016 ASSESSMENT YEAR: 2006-07 CHAMAKURA RAJA REDDY, BORGAON (P) NIZAMABAD [PAN: AMHPC9756E] VS THE INCOME TAX OFFICER, WARD-2 NIZAMABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI K.J. RAO, DR DATE OF HEARING : 18-01-2017 DATE OF PRONOUNCEMENT : 25-01-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDERABAD D ATED 30-06-2016 FOR THE AY. 2006-07. 2. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL AND DERI VES SALARY AND AGRICULTURAL INCOME. DURING THE FINANCIAL YEAR R ELEVANT TO THE AY. 2006-07, ASSESSEE HAS ENTERED INTO AGREEMENT FOR SALE OF LAND SITUATED AT BARDIPUR VILLAGE SIVAR, DICHPALLY MANDAL, NIZAMABAD DIST., TO M/S. SLN REAL ESTATES, NIZAMABAD. THE SAID LAND WAS SOLD DURING THE YEAR FOR RS. 56,000/- TO M/S. SLN RE AL ESTATES, NIZAMABAD. SINCE THE AMOUNT RECEIVED AS PER REGISTERE D I.T.A. NO. 1147/HYD/2016 CHAMAKURA RAJA REDDY :- 2 - : DOCUMENTS WAS VERY SMALL, NO RETURNS WERE FILED, COMP UTING THE CAPITAL GAINS. 2.1. A SURVEY WAS CONDUCTED IN THE CASE OF M/S. LAXMI PRIYA BUILDERS & DEVELOPERS, NIZAMABAD ON 20-02-2008, DUR ING WHICH CERTAIN DOCUMENTS WERE NOTICED AND IMPOUNDED INDICATING THE RECEIPT OF THE AMOUNTS MORE THAN THE REGISTERED AMOUNT S AND IN THIS CASE SUCH CONSIDERATION WAS INDICATED AT RS. 10,08 ,000/- PER ACRE. MEANWHILE, STATEMENTS WERE ALSO RECORDED FROM S HRI K. NARENDER REDDY, WHO IS A PARTNER IN M/S. LAXMI PRIYA BUILDERS & DEVELOPERS, M/S. SLN REAL ESTATES, M/S. J.B. PROJECTS AND CONSTRUCTIONS, WHO CONFIRMED TO HAVE PAID ADDITIONAL CONSIDERATIONS TO ALL THE LANDHOLDERS. BASED ON THE S AME, ASSESSMENTS WERE REOPENED AND FINALIZED, DETERMINING THE TAXABLE CAPITAL GAINS AT RS. 13,87,545/-, AS AGAINST THE RETURN ED INCOME OF RS. 27,600/-. FOLLOWING THE ORDER IN LATER YEAR, THE LD. CIT(A) CONFIRMED THE SAME. 3. AT THE OUTSET, LD. COUNSEL SUBMITTED THAT ITAT IN ITA NOS. 1161 TO 1168/HYD/15 & 1171 TO 1173/HYD/15, IN THE C ASES OF CH. GANGADHAR AND OTHERS, INCLUDING ASSESSEES OWN CASE IN AY. 2007-08 IN ITA NO. 116/HYD/15, VIDE ORDER DT. 28-09 -2016 HAS SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR FRESH CONS IDERATION AND LD.DR FAIRLY ADMITTED THAT THE ISSUE IN LATER YEAR IN AS SESSEES CASE ON SIMILAR FACTS HAS BEEN SET ASIDE. 4. ITAT IN THE ABOVE REFERRED ORDER HAS CONSIDERED SIMILAR FACTS IN THE GROUP OF CASES AND HELD AS UNDER: I.T.A. NO. 1147/HYD/2016 CHAMAKURA RAJA REDDY :- 3 - : 9. CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSELS AND MATERIAL FACTS ON RECORD. THE ASSESSEE DID NOT HAVE THE STATEMENT RECORDED DURING THE CROSS EXAMINATION WITH THE LAND OWNERS AND MR. K. NARENDER REDDY ON 12/11/09 AND 19/11/09. THE RE WERE OTHER DEPOSITIONS RECORDED BY AO WITH THE CO-OWNERS AND MEMBERS OF AOP ON 02/12/09, 09/12/09 AND 15/12/09. SINCE THEY DID NOT HAVE COPIES OF STATEMENTS ON WHICH AO RELIED AND COMPLETED THE ASSESSMENT, THEY FILED A PETITION UND ER RTI ACT WITH THE DEPARTMENT. THE PETITION WAS FILED ONLY AF TER FILING THE APPEAL BEFORE ITAT. WE ARE CONCERNED WITH THE ATTIT UDE OF THE ASSESSEE AS WELL SINCE THE RIGHT TO MAKE APPEAL BEF ORE ITAT WILL NOT BE AUTOMATIC UNLESS THE APPEAL IS FILED WITH PR OPER INFORMATION AS PER RULES SET BY THE STATUTE. THE AS SESSEE SUBMITTED BEFORE US THAT THEY COULD NOT GET THE REQ UIRED INFORMATION FROM THE DEPARTMENT WHICH WAS USED TO C OMPLETE THE ASSESSMENT. IT IS WORTH TO NOTE THAT THEY FILED THE PETITION BEFORE DEPARTMENT UNDER RTI ACT BUT EVEN THEN THE AO CHOSE NOT TO SHARE THE INFORMATION WITH THE ASSESSEE. HE HAD SUPPLIED THE STATEMENT RECORDED BY MR. K. NARENDER REDDY ON 02/12/09 AND S OME LOOSE SHEETS WHICH ARE FOUND DURING THE SURVEY. 9.1 THE FACTS ARE VERY CLEAR THAT THE AO COMPLETED THE ASSESSMENT BASED ON THE STATEMENT RECORDED BY MR. K . NARENDER REDDY ON 02/12/09 EVEN THOUGH HE DENIED MAKING SUCH PAYMENTS AT THE TIME OF CROSS EXAMINATION BY THE FA RMERS/OWNERS OF THE LAND. EVEN IN THE STATEMENT RECORDED BY MR. K. NARENDER REDDY ON 02/12/2009, HE ACCEPTS THAT HE MAKES PAYME NTS TO THE CO-OWNERS AND NOT TO THE FARMERS DIRECTLY. WE ARE N OT SURE WHETHER THE PAYMENTS MADE THROUGH THE CO-OWNERS HAD REACHED THE FARMERS, CONSIDERING THE ILLITERATE BACK GROUND OF THE FARMERS. 9.2 CONSIDERING THE OVERALL FACTS OF THE CASE AND T HE CRUCIAL STATEMENTS ON WHICH AO COMPLETED THE ASSESSMENT WER E NOT SHARED WITH THE FARMERS. EVEN AFTER FILING OF RTI P ETITION TO SEEK THOSE STATEMENTS BY THE ASSESSEE, THE AO CHOSE NOT TO SHARE THOSE INFORMATION, LEAD US TO INFER THAT THE AO HAS COMPLETED THE ASSESSMENT RELYING MAINLY ON THE STATEMENTS OF MR. K. NARENDER REDDY AND WITHOUT ANY COGENT MATERIAL ON RECORD. 9.3 IN VIEW OF THE ABOVE DISCUSSION, FOR THE SAKE O F JUSTICE AND FAIR TRIAL TO THE ASSESSEE AND OTHERS, WE REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO SHARE ALL TH E STATEMENTS COMPLETELY WITH THE FARMERS AND DO THE ASSESSMENT D E NOVO. NEEDLESS TO MENTION THAT PROPER OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE AND OTHERS IN THE MATTER. I.T.A. NO. 1147/HYD/2016 CHAMAKURA RAJA REDDY :- 4 - : 5. AS THE ISSUE IS MATERIALLY IDENTICAL WITH THE FACTS IN OTHER CASES AND IN ASSESSEES OWN CASE THE MATTER WAS RESTOR ED FOR AY. 2007-08 ON SIMILAR REASONS, WE SET ASIDE THE ORDER OF THE AO AND CIT(A) ON THIS ISSUE AND RESTORE THE ASSESSMENT PROC EDURE TO THE FILE OF THE AO WITH IDENTICAL DIRECTIONS. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2017 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEM BER HYDERABAD, DATED 25 TH JANUARY, 2017 TNMM COPY TO : 1. CHAMAKURA RAJA REDDY, BORGAON (P), NIZAMABAD. C/ O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-2, NIZAMABAD. 3. CIT (APPEALS)-5, HYDERABAD. 4. THE PR.CIT-5, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.