Asst.C.I.T., Mysore V. Sri. R Krishna, Mysore

ITA 1195/BANG/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6028 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: PADAMCHAND KHINCHA
• Keywords: Capital asset; Gift; Opportunity of being heard; Additional evidence; Cost of acquisition; Fair market value; Capital Gains
• Section: 271(1)(c); 274; 13

Judgement Text

ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENTAND SHRI B.R. BASKARAN, ACCOUTANT MEMBER ITA NO.1195/BANG/2016 ASSESSMENTYEAR:2008-09 ACIT CENTRAL CIRCLE MYSURU VS. SMT. MAMATHA MOHAN NO.123, SITARA, 4 TH CROSS JAYALAKSHMIPURAM MYSURU PAN NO : ACGPM5559A APPELLANT RESPONDENT ITA NO.2706/BANG/2017 ASSESSMENT YEAR: 2008-09 ITO WARD-1(2) MYSURU VS. SMT. MAMATHA MOHAN NO.123, SITARA, 4 TH CROSS JAYALAKSHMIPURAM MYSURU APPELLANT RESPONDENT C.O. NO.33/BANG/2018 (ARISING OUT OF ITA NO.2706/BANG/2017) ASSESSMENT YEAR: 2008-09 SMT. MAMATHA MOHAN NO.123, SITARA, 4 TH CROSS JAYALAKSHMIPURAM MYSURU VS. ITO WARD-1(2) MYSURU APPELLANT RESPONDENT ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 2 OF 14 APPELLANT BY : SHRI PRIYADARSHI MISHRA, D.R. RESPONDENT BY : SHRI PADAM CHAND KHINCHA, A.R. DATE OF HEARING : 03.09.2020 DATE OF PRONOUNCEMENT : 28.09.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE REVENUE HAS FILED TWO APPEALS CHALLENGING THE O RDERS PASSED BY THE LD. CIT(A)-2 PANAJI IN THE QUANTUM ASSESSMEN T PROCEEDINGS AS WELL AS IN PENALTY PROCEEDINGS. THE ASSESSEE HAS F ILED CROSS OBJECTION IN RESPECT OF ORDER PASSED BY LD. CIT(A) IN THE PEN ALTY PROCEEDINGS. ALL THE APPEALS RELATE TO ASSESSMENT YEAR 2008-09. 2. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE REVE NUE IN THE QUANTUM ASSESSMENT PROCEEDINGS. GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: 1. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE CIT(A) ERRED IN ADOPTING THE AREA OF THE LAND T RANSFERRED AT 1,05,850 SFT WHILE THE EVIDENCE ON RECORD SHOW THAT THE AREA OF THE LAND TRANSFERRED IS 1,09,253 SFT. 3. THE CIT(A) ERRED IN ALLOWING THE CLAIM OF DIFFERENC E ON THE MEASUREMENT OF LAND TRANSFERRED AND THE FAIR MARKET VALUE WITHO UT GIVING THE ASSESSING OFFICER AN OPPORTUNITY OF BEING HEARD. T HE CIT(A) HAS ADMITTED ADDITIONAL EVIDENCE IN VIOLATION OF RULE 4 6A OF THE I.T. RULES. 4. THE CIT(A) ERRED IN ADMITTING FRESH EVIDENCE WITH R EGARD TO THE FAIR MARKET VALUE WHILE DETERMINING IT AT RS.350 PER SFT WITHOUT GIVING THE A.O. AN OPPORTUNITY IN VIOLATION OF RULE 46A OF THE I.T. RULES. 5. THE CIT(A) ERRED IN ADOPTING THE FAIR MARKET VALUE AT RS.350 PER SFT WHILE THE AVERAGE RATE PREVAILING IN THE AREA WAS R S.600 PER SFT. THE CIT(A) ERRED IN ADOPTING THE LOWEST RATE OF GUIDANC E VALUE WHILE THE ASSESSEE HAS NOT MADE SUCH PLEA EITHER BEFORE THE A SSESSING OFFICER OR THE CIT(A). 6. THE CIT(A) ERRED IN CONSIDERING HIGHER COST OF ACQU ISITION IN RESPECT OF THE LAND RECEIVED AS GIFT WHILE THE VALUE OF THE LA NDS AS PER THE GIFT DEED SHOULD HAVE BEEN ADOPTED FOR THE PURPOSE OF COMPUTI NG INDEXED COST OF ACQUISITION OF THE LANDS TRANSFERRED. ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 3 OF 14 7. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE A SSESSEE HAD NOT OFFERED TO TAX ANY LTCG FOR THE AY 2008-09 ON ACCOUNT OF TH E JDA. 3. ALL THE GROUNDS RELATE TO DETERMINATION OF LONG TER M CAPITAL GAINS IN RESPECT OF TRANSFER OF LAND BY WAY OF ENT ERING INTO A JOINT DEVELOPMENT AGREEMENT BY THE ASSESSEE WITH M/S. BRI GADE ENTERPRISES LTD. (BEL). THE ASSESSEE ENTERED INTO A JOINT DEVELOPMENT AGREEMENT WITH BEL ON 27.8.2007 FOR DEV ELOPMENT OF A LAND BELONGING TO THE ASSESSEE SITUATED AT INDUSTRI AL LAY OUT, KHILLI MOHALLA, MYSURU. AS PER THE SAID AGREEMENT, THE AS SESSEE HAS TO RELINQUISH 81% OF THE LAND IN FAVOUR OF BEL. THE A SSESSEE WOULD RETAIN 19% OF THE LAND. IN LIEU OF RELINQUISHMENT OF 81% OF THE LAND, THE ASSESSEE WOULD GET 19% OF BUILT UP AREA AS CONS IDERATION. THE ASSESSEE INITIALLY DECLARED CAPITAL GAIN IN ASSESSM ENT YEAR 2010-11. HOWEVER SHE AGREED WITH THE VIEW OF THE A.O. THAT T HE CAPITAL GAIN IS ASSESSABLE IN ASSESSMENT YEAR 2008-09, SINCE THE JO INT DEVELOPMENT AGREEMENT WAS EXECUTED ON 27.8.2007. HENCE THE AO ASSESSED CAPITAL GAIN IN THE YEAR UNDER CONSIDERATION, I.E. , AY 2008-09. 4. THE A.O. DETERMINED THE LONG TERM CAPITAL GAIN AT RS.5,59,85,915/-. THE A.O. ARRIVED AT THE ABOVE SA ID FIGURE BY ADOPTING (A) AREA OF LAND AS 1,09,253 SQ.FT., (B) FAIR MARKET VALUE OF LAND AT RS.600/- PER SQ.F T. AND (C) ADOPTING INDEXED COST OF ACQUISITION AS RS.1,1 8,09,734/-. 5. THE ASSESSEE DID NOT AGREE WITH THE AO ON ALL THE ABOVE SAID THREE POINTS. HENCE, BEFORE LD. CIT(A), THE ASSESS EE DISPUTED ALL THE THREE POINTS. THE LD. CIT(A), AFTER EXAMINING THE CONTENTIONS OF THE ASSESSEE AS WELL AS THE MATERIALS FURNISHED BEFORE HIM, DETERMINED THE LONG TERM CAPITAL GAIN AT RS.2,76,37,846/-. AC CORDINGLY, HE GAVE RELIEF OF RS.2,83,48,069/- TO THE ASSESSEE. THE RE VENUE IS AGGRIEVED ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 4 OF 14 BY THE RELIEF SO GRANTED TO THE ASSESSEE BY LD. CIT (A). THE REVENUE IS ALSO CONTENDING THAT THE LD. CIT(A) HAS VIOLATED PR OVISIONS OF RULE 46A OF I.T. RULES, WHILE ADOPTING THE SALE VALUE AT RS.350/- PER SQ.FT. 6. WE HEARD THE PARTIES AND PERUSED THE RECORD . FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE DECISION RENDERED BY LD. CIT(A). 4.4 I HAVE GONE THROUGH THE SUBMISSIONS OF THE AR OF THE APPELLANT AND THE ORDER OF THE AO. IT IS A FACT THAT THE APPELLAN T ENTERED INTO JOINT DEVELOPMENT AGREEMENT (JDA) WITH BEL ON 27.08.2007 AND HANDED OVER THE POSSESSION OF THE LAND ON THE SAME DAY. THEREFO RE, THE TRANSFER OF THE LAND AS DEFINED IN SEC 2(47) OF I.T. ACT HAS TAKEN PLACE ON 27.08.2007 AND HENCE, CAPITAL GAIN CHARGEABLE TO TAX HAS ACCRU ED TO THE APPELLANT IN A.Y 2008-09. IN THE WRITTEN SUBMISSIONS, THE AR OF THE APPELLANT HAS ALSO AGREED THAT THE CAPITAL GAIN ON TRANSFER OF LAND HA S TO BE BROUGHT TO TAX IN A.Y 2008-09. THUS, TAXING OF CAPITAL GAINS IN A.Y 2008-09 AS DON E BY THE AO AND AS AGREED BY THE AR IS CONFIRMED IN PRINCIPLE. 4.5 NOW, THE AREA OF DISPUTE IS THE QUANTIFICATION OF S ALE CONSIDERATION AND COMPUTATION OF CAPITAL GAINS. THE FIRST ASPECT OF T HIS EXERCISE IS THE AREA ACTUALLY TRANSFERRED BY THE APPELLANT TO BEL. AO H AS TAKEN THE AREA TRANSFERRED IN THE ASSESSMENT ORDER AT 1,09,253 SQU ARE FEET. IN THE ORIGINAL JOINT DEVELOPMENT AGREEMENT (JDA) THE AREA TO BE TRANSFERRED WAS 1,65,000 SQ.FT. THIS AREA INCLUDED THREE SCHEDU LES. IN FIRST TWO SCHEDULES THE LAND AREA WAS OF 63,600 SQ.FT AND 71, 880 SQ.FT RESPECTIVELY, WAS SPECIFIED BUT THE AREA IN THIRD SCHEDULE WAS NO T SPECIFIED AS THE LAND WAS TO BE SUBSEQUENTLY, ALLOTTED TO THE APPELLANT B Y MYSORE URBAN DEVELOPMENT AUTHORITY (MUDA). THUS APPROXIMATELY, T HE LAND WAS TAKEN AT 1,65,000 SQ.FT, CONSIDERING THE LAND TO BE ALLOT TED BY MUDA TO BE 29,600 SQ.FT. .THUS, THE AREA IN SCHEDULE 3 OF JDA THOUGH NOT SPECIFIED WAS TO BE READ AS 29,600 SQ.FT. HOWEVER, THE LAND I N THE POSSESSION OF THE APPELLANT AS ON THE DATE OF JDA WAS 1,35,480 SQ.FT , WHICH IS SHOWN IN SCHEDULE 1 AND SCHEDULE 2 OF JDA. THE LAND WHICH WA S TO BE SUBSEQUENTLY ALLOTTED BY MUDA TO THE APPELLANT AS PER SCHEDULE 3 WAS NEVER ALLOTTED. THE APPELLANT HAD TO EXECUTE A DEED OF RECTIFICATION WITH APPELLANT TO RECTIFY THE AREA IN SECOND SCHEDULE OF THE JDA. THE AR OF THE APPELLANT HAS PRODUCED THE RECTIFICATION DEED DATED 13.08.201 0 BETWEEN THE APPELLANT AND BEL WHICH PROVIDES FOR TRANSFER OF 63,600 SQ.FT AS PER SCHEDULE 1 AND 67,080 SQ.FT AS PER SCHEDULE 2 TOTAL LING TO 1,30,680 SQ.FT. THE RECTIFICATION DEED ALSO PROVIDES FOR THIRD SCHE DULE RELATING TO LAND TO BE ALLOTTED BY MUDA TO THE APPELLANT. BUT AS THE SA ID LAND WAS NEVER ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 5 OF 14 Z ALLOTTED BY MUDA TO THE APPELLANT, HENCE THE LAND T RANSFERRED BY THE APPELLANT TO BEL AS PER JDA IS 1,30,680 SQ.FT. OUT OF THIS LAND, THE APPELLANT HAS RETAINED 19% IN THE FORM OF BUILT UP AREA AFTER THE LAND WAS DEVELOPED BY BEL. THUS, THE NET LAND TRANSFERRE D BY THE APPELLANT TO BEL I; 81% OF 1,30,680 SQ.FT. IE . EQUAL TO 1,05,850.80 SQ.FT. THUS, THE AREA OF THE LAND ACTUALLY TRANSFERRED BY THE APPELL ANT FOR COMPUTATION OF CAPITAL GAINS IS 1,05,850 .80 SQ.FT. 4.6. THE NEXT ASPECT OF DISPUTE IS THE RATE PER SQ. FOOT FOR DETERMINATION OF SALE CONSIDERATION OF LAND TRANSFERRED BY THE APPEL LANT. IN THE JDA THE SALE CONSIDERATION IN TERMS OF VALUE HAS NOT BEEN M ENTIONED. JDA PROVIDES FOR GIVING 19% OF THE BUILT UP AREA IN THE PROJECT TO THE APPELLANT BY BEL. IN THE ASSESSMENT ORDER, AO HAS T AKEN THE SALE CONSIDERATION PER SQ. FOOT OF LAND AT RS.600/- , WH ICH IS AS PER THE PREVAILING RATE FOR THE STAMP DUTY VALUATION APPLIC ABLE TO ASSESSMENT YEAR 2010-11. THE APPELLANT AS STATED EARLIER HAD O FFERED THE CAPITAL GAINS FOR TAXATION IN THE RETURN FILED FOR A.Y 2010 -11. IN THE SAID RETURN, THE APPELLANT HAD TAKEN THE RATE PER SQ. FOOT AT RS .600/- BEING THE RATE FOR STAMP DUTY VALUATION RELEVANT TO A.Y 2010-11. D URING APPELLATE PROCEEDINGS, IT WAS SUBMITTED BY THE AR THAT IF THE CAPITAL GAINS ARE TO BE BROUGHT TO TAX IN AY 2008-09, THE STAMP DUTY VAL UATION RATE APPLICABLE TO A.Y 2008-09 BE TAKEN. THE AR ALSO PRO DUCED THE COPY OF STAMP DUTY VALUATION RATES FOR F.Y 2006-07 TO 2008- 09 ISSUED BY SENIOR SUB-REGISTRAR, MYSORE SOUTH DATED:-09.02.2016. THE APPLICABLE RATE OF THE LAND TRANSFERRED BY THE APPELLANT AS PER THE SA ID CHART FOR INDUSTRIAL LAND USED FOR RESIDENTIAL PURPOSES IS RS.350/- PER SQ.FOOT. THE AR OF THE APPELLANT HAS SUBMITTED THAT THE STAMP DUTY VALUATI ON RATE OF RS.350/- PER SQ.FOOT BE ADOPTED FOR VALUATION OF CAPITAL GAI NS. I HAVE GONE THROUGH THE SAID CHART ISSUED BY THE SENIOR SUB-REG ISTRAR, MYSORE SOUTH AND IT IS FOUND THAT THE APPLICABLE RATE FOR A.Y 2008-09 FOR THE LAND TRANSFERRED IS RS. 350/- PER SQ.FOOT. AO IS DIRECTED TO APPLY THE SAID RATE FOR COMPUTATION OF CAPITAL GAINS. 4.7 THUS THE CAPITAL GAINS ON THE BASIS OF THE ABOV E ANALYSIS AND FINDING IN THE CASE OF THE APPELLANT IS AS UNDER: SALE CONSIDERATION = LAND TRANSFERRED IN SQ.FEET X RATE AS PER STAMP DUTY AUTHORITIES RS.3,70,47,780/ - = 1,05,850.80SQ.FT. RS.350/ - 4.8 NOW I COME TO THE COMPUTATION OF INDEXED COST O F ACQUISITION. THE APPELLANT HAD PURCHASED AND RECEIVED AS GIFT THE EN TIRE STRETCH OF LAND IN FOUR PARTS IN DIFFERENT A.YS. THE AR OF THE APPELLANT HAS FILED A DETAILED COMPUTATION OF THE INDEXED COST WHICH IS REPRODUCED BELOW: ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 6 OF 14 COMPUTATION OF INDEXED COST ACQUISITION OF IN RESPE CT OF PROPERTY AT INDUSTRIAL SUBURB, MYSORE FOR THE YEAR ENDING 31.03.2008 ITEM A: RS. RS. NO.18, INDUSTRIAL SUBURB, 3 RD STAGE, MYSORE (MEASURING: 40,800 SQ.FEET) (I) PURCHASED BY M/S. RANGSONS INDUSTRIES ALIAS M/S. N RANGA RAO & SONS ON 30-04-1986 (F.Y. 1986-1987) (II) GIFTED BY M/S. RANGSONS INDUSTRIES ALIAS M/S. N RANGA RAO & SONS ON 21-09-1995 (III) COST (AS PER BOOKS) 8,58,000 (IV) INDEXED COST OF ACQUISITION: RS. 8,58,000 X 551 140 33,76,843 ITEM B: NO.18/1, INDUSTRIAL SUBURB, 3 RD STAGE, MYSORE (MEASURING: 27,000 SQ.FEET) (I) PURCHASED BY R.MOHAN ON 23-01-2002 (F.Y. 2001-202) (II) GIFTED BY R. MOHAN (HUSBAND) ON 06-08-2002 (III)COST OF ACQUISITION (IV)) INDEXED COST OF ACQUISITION: RS. 3,67,579 X 551 426 ITEM C: NO.16/B, INDUSTRIAL SUBURB, 3 RD STAGE, MYSORE (MEASURING: 45,000 SQ.FEET) (I) PURCHASED ON 06-09-2001(F.Y. 2001-2002) (II)COST OF ACQUISITION (III)INDEXED COST OF ACQUISITION: RS. 24,50,000 X 551 426 ITEM D: NO.16/B, INDUSTRIAL SUBURB, 3' I STAGE, MYSORE (MEASURING :22,080 SQ.FEET) (I) PURCHASED ON 13-03-2003(F.Y. 2002-2003) (II)COST OF ACQUISITION (III)INDEXED COST OF ACQUISITION: RS. 2,88,673 X 551 447 3,67,579 4,75,437 _ 24,50,000 31,68,897 2,88,673 3,55,836 ITEM E: NO.18/1, 18/2 & 16/B, INDUSTRIAL SUBURB, 3 1D STAGE, MYSORE ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 7 OF 14 CONVERSION FEE PAID TO MUDA FOR INDUSTRIAL TO COMME RCIAL PURPOSE: (I) CONVERSION FEE PAID (F.Y. 2007-2008) 42,03,300 (II)REGISTRATION FEE GIFT DEED BY R MOHAN (F.Y. 2 007-2008) 4,10,262 TOTAL 46,13, 562 (III)INDEXED COST OF ACQUISITION: RS_ 46,13,562 X 551 46,13,562 551 TOTAL INDEXED COST OF ACQUISITION 1,19,90,575 4.9. IN THE ABOVE CHART THE INDEXED COST OF ACQUISI TION HAS BEEN WORKED AT RS.1,19,90,575, WHICH IS FOR TOTAL AREA OF 1,34,880 SQ.FT. HOWEVER THE LAND TRANSFERRED BY THE APPELLANT AS DISCUSSED IN P ARA 4.5 IS 1,05,850 .80 SQ.FT. THUS, THE INDEXED COST OF LAND TRANSFERRED IS PROPO RTIONATELY WORKED OUT AT RS.94,09,934/-.( RS.1,19,90,575/- X 1,05,850.80 SQ.FT./ 1,34,880 SQ.FT.) 4.10. THUS, THE CAPITAL GAINS ON SALE OF LAND IS W ORKED OUT AS UNDER: SALECONSIDERATION AS DETERMINED IN PARA 4.7 ABOVE RS.3,70,47,780/- LESS: INDEXED COST OF ACQUISITION AS DETERMINED IN PARA 4.9 ABOVE RS. 94,09,934/- LONG TERM CAPITAL GAIN CHARGEABLE TO TAX RS.2,76,37,8461- 4.11. IN THE ASSESSMENT ORDER, THE AO HAS BROUGHT T O TAX UNDISCLOSED CAPITAL GAIN AT RS.5,59,85,915/-. THE ADDITION MADE BY THE AO ON UNDISCLOSED LONG TERM CAPITAL GAIN AS WORKED IN PAR A 4.10 AMOUNTING TO RS.2,76,37,846/- IS HEREBY CONFIRMED. THE APPELL ANT GETS RELIEF OF RS.2,83,48,069/- . GROUND NO 11 TO 13 TAKEN BY THE APPELLANT ARE PARTLY ALLOWED. 7. WE NOTICE THAT THE CIT(A) HAS ARRIVED AT THE AREA OF LAND TRANSFERRED BY THE ASSESSEE AS 1,05,850.80 SQ.FT. B Y CONSIDERING THE DEED OF RECTIFICATION ENTERED BETWEEN THE PARTIES AND ALSO ON NOTING THE FACT THAT THE AREA OF THE LAND MENTIONED IN SCH EDULE-2 WAS RECTIFIED AND THE LAND MENTIONED IN SCHEDULE 3 WAS NOT AVAILABLE WITH THE ASSESSEE. THE LD. CIT(A) ALSO NOTICED THAT THE FAIR MARKET ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 8 OF 14 VALUE OF THE LAND TAKEN BY THE A.O. AS RS.600/- PER SQ.FT. WAS APPLICABLE TO THE ASSESSMENT YEAR 2010-11, WHILE TH E FAIR MARKET VALUE FIXED BY THE STAMP AUTHORITIES FOR ASSESSMENT YEAR 2008-09 WAS RS.350/- PER SQ.FT. THE LD. CIT(A) HAS ALSO ARR IVED AT THE INDEXED COST OF ACQUISITION BY CONSIDERING THE ACTUAL PURCH ASE VALUE OF THE LAND EITHER PURCHASED BY THE ASSESSEE OR BY THE DO NOR OF THE LAND TO THE ASSESSEE. HE HAS ADOPTED THE PROPORTIONATE VAL UE PERTAINING TO 1,05850.80 SQ.FT. ACCORDINGLY, THE LD. CIT(A) HAS ARRIVED AT THE LONG TERM CAPITAL GAIN AT RS.2,76,37,846/-. EVEN THOUGH THE REVENUE IS CHALLENGING THE WORKINGS MADE BY LD CIT(A), YET NO MATERIAL WAS BROUGHT ON RECORD TO CONTROVERT THE FINDINGS AND WO RKINGS OF LD CIT(A). 8. THE REVENUE HAS RAISED AN ISSUE ON VIOLATION O F RULE 46A. HOWEVER, WE NOTICE THAT THE LD. CIT(A) HAS ADOPTED STAMP DUTY VALUATION FIXED BY THE STAMP AUTHORITY FOR THE YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09 TO DETERMINE THE FAIR MARKE T VALUE OF THE PROPERTY TRANSFERRED BY THE ASSESSEE. THERE SHOULD NOT BE ANY DISPUTE THAT THE DETAILS RELATING TO GUIDELINE VALU E FIXED BY THE STAMP AUTHORITIES ARE AVAILABLE IN THE PUBLIC DOMAIN AND THE LD CIT(A) HAS ADOPTED THE FAIR MARKET VALUE PERTAINING TO THE YEA R UNDER CONSIDERATION, WHILE THE AO HAD ADOPTED THE VALUE P ERTAINING TO AY 2010-11. HENCE, WE DO NOT FIND MERIT IN THE CONTEN TIONS OF REVENUE. FURTHER, THE CONTENTIONS OF THE REVENUE ON THIS ISS UE ARE LIABLE TO BE REJECTED ON ONE MORE GROUND. AT THE TIME OF HEARIN G, THE LD. A.R. ALSO POINTED OUT THAT THE A.O. HAS REOPENED THE VER Y SAME ASSESSMENT YEAR FOR CONSIDERING THE VERY SAME ISSUE AND HE HAS PASSED THE ASSESSMENT ORDER DATED 28.3.2016 U/S 143 (3) R.W.S. 147 OF THE ACT BY DETERMINING THE CAPITAL GAIN AT RS.5, 61,35,743/-., I.E. AT A FIGURE MORE THAN THAT DETERMINED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. WE NOTICE THAT, DURING THE COURSE OF RE-ASSESSMENT ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 9 OF 14 PROCEEDINGS, THE ASSESSEE HAS FURNISHED THE DETAILS OF VALUATION FIXED BY THE STAMP VALUE AUTHORITIES FOR THE YEAR RELEVAN T TO ASSESSMENT YEAR 2008-09 AND ACCORDINGLY, SOUGHT FOR ADOPTION O F FAIR MARKET VALUE OF THE LAND @ RS.350/- PER SQ.FT. THUS, WE N OTICE THAT THE DETAILS OF FAIR MARKET VALUE FIXED BY THE STAMP AUT HORITIES WAS BROUGHT TO THE NOTICE OF THE A.O. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, EVEN THOUGH THE A.O. DID NOT ACCEPT TH E ABOVE SAID VALUE OF RS.350/- PER SQ.FT. IN THE REASSESSMENT PR OCEEDINGS FOR THE REASONS STATED IN THE REASSESSMENT ORDER. HENCE, THE FMV RATE OF RS.350/- PER SQ. FT. HAS ALREADY BEEN BROUGHT TO TH E NOTICE OF THE AO. HENCE WE DO NOT FIND ANY MERIT IN THE GROUND RAISED BY THE REVENUE ON VIOLATION OF RULE 46A BY LD CIT(A). 9. THUS WE NOTICE THAT THE LD. CIT(A) HAS DE TERMINED THE LONG TERM CAPITAL GAIN BY EXAMINING ALL RELEVANT FACTS. HENCE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY LD CIT(A) DOES NO T CALL FOR ANY INTERFERENCE. 10. AT THE TIME OF HEARING, THE LD. A.R. SUBMITT ED THAT THE ASSESSEE HAD CHALLENGED THE RE-ASSESSMENT ORDER BY FILING AP PEAL BEFORE LD CIT(A) AND THE LD CIT(A) HAS AGAIN DETERMINED THE L ONG TERM CAPITAL GAIN AT RS. 2,76,37,846/-. HE SUBMITTED THAT THE O RDER SO PASSED BY LD. CIT(A) HAS SINCE BEEN ACCEPTED BY THE REVENUE B Y NOT FILING APPEAL BEFORE ITAT. THIS FACT ALSO SUPPORTS OUR VI EW THAT THE ORDER PASSED BY LD. CIT(A) DOES NOT CALL FOR ANY INTERFER ENCE. 11. THE LD A.R ALSO RAISED A LEGAL ISSUE, I.E. , THE LD A.R SUBMITTED THAT THE AO HAS PASSED THE REASSESSMENT ORDER BY AS SESSING VERY SAME LONG TERM CAPITAL GAINS, WHICH WAS EARLIER ASS ESSED IN THE ORIGINAL ASSESSMENT ORDER. BY PLACING RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF IT O VS. K.L. ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 10 OF 14 SRIHARI (HUF)(250 ITR 193), THE LD A.R SUBMITTED TH AT THE REASSESSMENT ORDER SHALL EFFACE THE ORIGINAL ASSESS MENT ORDER. IN THAT VIEW OF THE MATTER, THE ORIGINAL ASSESSMENT OR DER SHALL NOT SURVIVE IN THE EYES OF LAW, IN WHICH CASE, THE PRES ENT APPEAL FILED BY THE REVENUE SHALL ALSO NOT SURVIVE. 12. WE DO NOT FIND IT NECESSARY TO ADDRESS TH IS LEGAL ISSUE, SINCE WE HAVE ALREADY CONFIRMED THE ORDER PASSED BY LD CI T(A) BY DISMISSING THE APPEAL OF THE REVENUE. 13. WE SHALL NOW TAKE UP THE APPEAL FILED BY T HE REVENUE IN RESPECT OF PENALTY PROCEEDINGS. WE NOTICE THAT THE LD. CIT(A) HAS QUASHED PENALTY PROCEEDINGS BY FOLLOWING THE DECISI ON RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY LTD. 35 TAXMANN.COM 250, S INCE THE A.O. DID NOT SPECIFY THE LIMB OF SECTION 271(1)(C) OF TH E ACT ON WHICH THE PENALTY WAS PROPOSED TO BE LEVIED AND ALSO DID NOT STRIKE OFF INAPPLICABLE PORTION IN THE PENALTY NOTICE. THE RE VENUE IS AGGRIEVED BY THE SAID DECISION. 14. THE LD. D.R. SUBMITTED THAT THE HONBLE KAR NATAKA HIGH COURT DID NOT CONSIDER PROVISIONS OF SECTION 292B OF THE ACT, WHICH SAVES PROCEEDINGS OF THE REVENUE IN RESPECT OF INADVERTEN T ERRORS. THE LD. D.R. PLACED HIS RELIANCE ON THE DECISION RENDERED B Y THE COORDINATE BENCH IN THE CASE OF P.M. ABDULLAH VS. ITO (ITA NOS .1223 & 1224/BANG/2012 DATED 17.10.2016). HE ALSO PLACED R ELIANCE ON THE DECISION RENDERED BY THE CHENNAI BENCH OF TRIBUNAL IN THE CASE OF ITO VS. SHRI RAJAN KALI MUTHU (ITA NO.2900/CHNY/201 8 DATED 22.5.2019), WHEREIN THE DECISION RENDERED IN THE CA SE OF P.M. ABDULLAH (SUPRA) WAS FOLLOWED. THE LD. A.R. ALSO P LACED RELIANCE ON THE DECISION RENDERED BY HONBLE HIGH COURT OF MADR AS IN THE CASE OF ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 11 OF 14 SUNDARAM FINANCE LTD. (2018) 403 ITR 107, WHEREIN T HE HONBLE HIGH COURT HAS EXPRESSED THE VIEW THAT ALL VIOLATIO NS WILL NOT RESULT IN NULLIFYING THE ORDERS PASSED BY STATUTORY AUTHOR ITIES. ACCORDINGLY, THE LD. D.R. SUBMITTED THAT THE DECISION RENDERED I N THE CASE OF MANJUNATHA COTTON & GINNING MILLS IS DISTINGUISHABL E. 15. ON THE CONTRARY, THE LD. A.R. PLACED HIS RELIANCE ON THE ORDER DATED 11.3.2020 PASSED BY THE JURISDICTIONAL HIGH C OURT OF KARNATAKA IN THE CASE OF ITO VS. RYATARA SAHAKARI K ARKHANE NIYAMITHA (ITA NO.100013/2019 DATED 11.3.2020) AND SUBMITTED THAT THE JURISDICTIONAL HIGH COURT, IN ITS LATEST D ECISION HAS FOLLOWED THE DECISION RENDERED BY IT EARLIER IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA). HE FURTHER SUBMITTED TH AT THE DECISION RENDERED BY HONBLE MADRAS HIGH COURT IN THE CASE O F SUNDARAM FINANCE LTD (SUPRA) WAS QUOTED BEFORE THE HONBLE K ARNATAKA HIGH COURT IN THE ABOVE SAID CASE. ACCORDINGLY, HE SUBM ITTED THAT THE ORDER PASSED BY LD. CIT(A) DOES NOT CALL FOR ANY IN TERFERENCE. 16. WE HEARD THE PARTIES ON THIS ISSUE AND PE RUSED THE RECORD. WE NOTICE THAT THE LD. CIT(A) HAS QUASHED THE PENAL TY ORDER IN VIEW OF THE FACT THAT THE A.O. DID NOT SPECIFY THE LIMB UNDER WHICH PENALTY PROCEEDINGS ARE INITIATED AND ALSO DID NOT STRIKE O FF THE INAPPLICABLE PORTION IN THE PENALTY NOTICE. THE LD. CIT(A) FOLL OWED THE DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT IN THE CA SE OF MANJUNATHA COTTON & GINNING FACTORY LTD. ON PERUSAL OF THE O RDER PASSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF RYA TARA SAHAKARI KARKHANE NIYAMITHA(SUPRA) WE NOTICE THAT THE DECISI ON RENDERED BY THE MADRAS HIGH COURT IN THE CASE OF SUNDARAM FINAN CE LTD. (SUPRA) WAS BROUGHT TO THE NOTICE OF THE KARNATAKA HIGH COU RT IN THE QUESTION FRAMED BEFORE IT, YET THE JURISDICTIONAL HIGH COURT FOLLOWED ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 12 OF 14 THE DECISION RENDERED IN THE CASE OF MANJUNATHA COT TON & GINNING FACTORY LTD. BY OBSERVING AS UNDER: 4. IT IS APPARENT THAT THE SHOW-CAUSE NOTICE ISSUE D UNDER SECTION 274 OF THE ACT DOES NOT SPECIFICALLY DISCLO SE THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEA LMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME, WHICH IS SINE-QUO-NON FOR ISSUANCE OF SHOW- CAUSE NOTICE AND FOR WANT OF SUCH PARTICULARS, THE TRIBUNAL SET- ASIDE THE ORDER OF THE PENALTY LEVIED ON THE ASSESSEE. IN THE CIRCUMS TANCES, THE QUESTIONS OF LAW BEING ANSWERED IN THE CASE OF MANJ UNATHA COTTON AND GINNING FACTORY (SUPRA) CONFIRMED BY THE HONBL E SUPREME COURT, WE DO NOT FIND ANY REASON TO ENTERTAIN THE P RESENT APPEAL TO ANSWER THE QUESTIONS OF LAW RAISED BY THE APPELLANT -REVENUE. HENCE, THE APPEAL STANDS DISMISSED. THUS, WE NOTICE THAT THE JURISDICTIONAL HIGH COURT HAS REITERATED THE PRINCIPLES LAID DOWN BY IT IN THE CASE OF MANJUNATH A COTTON & GINNING FACTORY LTD. WE HAVE ALSO NOTICED THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THE HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FA CTORY LTD. 17. THE LEARNED DR RELIED ON THE ORDER OF THE CIT (A). HE PLACED RELIANCE ON THE DECISION OF THE HON'BLE ITAT BANGAL ORE BENCH IN THE CASE OF SHRI P.M. ABDULLA VS. ITO (SUPRA) TAKING A VIEW THAT ABSENCE OF SPECIFIC MENTION IN THE SHOW CAUSE NOTICE U/S.27 4 OF THE ACT ABOUT THE CHARGE U/S.271(1)(C) OF THE ACT IS NOT FATAL TO LEVY OF PENALTY U/S.271(1)( C) OF THE ACT. IN COMING TO THE AFORESA ID CONCLUSION THE BENCH FOLLOWED DECISION OF HON'BLE KARNATAKA HIGH C OURT IN THE CASE OF CIT VS. SRI DURGA ENTERPRISES (2014) TAXMANN.COM 442 (KARNATAKA). A CO-ORDINATE BENCH IN THE CASE OF SHR I A NAGARAJU (ITA NO.2196/BANG/2016 DATED 6/4/2018), HAS CONSIDERED T HE DECISION CITED BY THE LEARNED DR IN THE CASE OF P.M. ABDULLA H (SUPRA) AND HAS HELD THAT THE SAME IS CONTRARY TO THE DECISION OF H ON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & SPINN ING MILLS LTD., (SUPRA) AND THEREFORE CANNOT BE FOLLOWED. THE DECIS ION RENDERED IN ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 13 OF 14 THE CASE OF SRI DURGA ENTERPRISES (SUPRA) WAS IN A TOTALLY DIFFERENT CONTEXT OF DEFECT IN NOTICE ISSUED U/S.148 OF THE A CT WHEREIN THE AY WAS NOT MENTIONED AND PERIOD WITHIN WHICH THE RETUR N WAS TO BE FILED WAS NOT MENTIONED. THE DEFECT WAS HELD TO BE CURABL E U/S.292B OF THE ACT. THE SAME REASONING CANNOT BE APPLIED IN TH E CONTEXT OF SHOW CAUSE NOTICE U/S.274 OF THE ACT. 18. IN VIEW OF THE FOREGOING DISCUSSIONS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS PASSED BY LD. CIT(A) I N QUASHING THE PENALTY ORDER. 19. SINCE WE HAVE DISMISSED THE APPEAL OF THE REV ENUE IN THE PENALTY PROCEEDINGS, THE CROSS OBJECTION FILED BY T HE ASSESSEE DOES NOT REQUIRE ADJUDICATION, AS IT ONLY SUPPORTS THE O RDER PASSED BY THE LD. CIT(A). 20. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPT, 2020. SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 28 TH SEPT, 2020. VG/SPS ITA NOS.1195/BANG/2016, 2706/BANG/2017 & CO 33/BANG/2018 SMT. MAMATHA MOHAN, MYSORE PAGE 14 OF 14 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.