Nimmala Raghupathi, Hyderabad V. DCIT-6(1), Hyderabad

ITA 1229/HYD/2013

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3798 (ITAT-HYDERABAD)
• Duration Of Justice: 7 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 27-05-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 28-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M DAYASAGAR; ROHIT MAJUNMDAR
• Keywords: Capital asset; Retrospective amendment; Cost of acquisition; Fair market value; Tax effect; Set aside; Capital Gains
• Section: 143(3); 13; 263; 12; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. & ASST. YEAR APPELLANT RESPONDENT 1. 350/HYD/2011 2007 - 08 SRI NIMMALA SRINIVAS HUF) , 8 - 2 - 293/82/L/51/B/1, ROAD NO.12, BANJARA HILLS, HYDERABAD. PAN BMYPS 8537H ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6(1), HYDERABAD. 2. 4 7 5/HYD/2011 2007 - 08 ACIT, CIRCLE 6(1), HYDERABAD. SHRI NIMMALA SRINIVAS, HYDERABAD. 3. 1229/HYD/2013 2007 - 08 SHRI NIMMALARAGHUPATHI, HYDERABAD. PAN ASLPR 0734P DCIT, CIRCLE 6(1), HYDERABAD. 4. 933/HYD/2015 2007 - 08 DCIT, CIRCLE 14(1), HYDERABAD. SHRI NIMMALA SRINIVAS, HYDERABAD. 5. 1038/HYD /2016 2007 - 08 SMT. NIMMALA SUCHITRA, HYDERABAD. PAN BMYPS 8537H ACIT, CIR. 6(1), HYDERABAD. APPELLANT BY : SHRI P.C. YADAV. RESPONDENT BY : S/ SHRI M. DAYASAGAR & ROHIT MAJUNMDAR (D.R S .) DATE OF HEARING : 27.05.2021 . DATE OF PRONOUNCEMENT : 04. 0 6 . 2021. . O R D E R PER S.S. GODARA, J.M. : THE INSTANT BATCH OF FIVE APPEALS FOR ASSESSMENT YEAR 2007 - 08 PERTAINS TO FOUR ASSESSEES . FIRST ASSESSEE SRI NIMMALA SRINIVAS (HUF)S AND REVENUES CROSS APPEALS ITA NOS.350 & 475/HYD/2011 ARE DIRECTED 2 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 AGAINST THE CIT(A) - IV, HYDERABADS ORDER DT.30.12 .2010 PASSED IN CASE NO.563/ACIT 6(1)/CIT(A) - IV/09 - 10. S ECOND ASSESSEE SRI NI M MAL A RAGHUPATI HAS FILED IT A NO.1229/HYD/2013 AGAINST THE CIT(A) - III, HYDERABADS ORDER DT.21.3.2013 IN CASE NO .263/CIT - III/2012 - 13; REVENUES APPEAL ITA NO.933/HYD/2015 IN CAS E OF THIRD ASSESSEE SRI NIMMALA SRINIVAS (INDIVIDUAL) IS DIRECTED AGAINST THE CIT(APPEALS) - IV, HYDERABADS ORDER DT .13.03.2015 PASSED IN CASE NO. 0456/2014 - 15/DY.CIT, CIR.6(1)/CIT(A)/HYD/2014 - 15 A ND LAST ASSESSEE SMT. NI MMALA SUCHITRA S APPEAL ITA NO.1038/H YD/2016 ARIS ES AGAINST THE CIT(A) - VI, HYDERABA D S ORDER DT.28.4.2016 IN CASE NO .0957/2014 - 15/CIT(A) - 6 INVOLV ING PROCEEDINGS U/S. 143(3) IN FORMER TWO , SEC. 263 IN THIRD AND SEC. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT , IN FOURTH AND FIFTH CASES, RESPECTIVELY. HEARD ASSESSE ES A.R. AS WELL AS DEPARTMENT REPRESENTATIVE (SUPRA)) CASE FILES PERUSED. 3 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 2. WE PROCEED APPEAL - WISE FOR THE SAKE OF CONVENIENCE AND BREVITY. FIRST ASSESSEE'S APPEAL IT A 350/HYD/2011 RAISE S THE FOLLOWING SUBSTANTIVE GROUNDS : 1. THE IMPUGNED ASSESSMENT ORDER IS PASSED MUCH AGAINST THE WEIGHT OF EVIDENCE AND CONTRARY TO LAW AND AS SUCH, THE SAID ORDER IS LIABLE TO BE SET ASIDE. 2. THE AUTHORITIES BELOW ERRED IN TAXI NG THE SALE TRANSACTION IN RESPECT OF AGRICULTURE LANDS. THEY FAILED TO APPRECIATE THE FACT THAT THE LANDS WHICH WERE SOLD WERE AGRICULTURAL ONE AND IS NOT A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(III) OF THE IT ACT, 1961. 3. THE AUTHORITI ES BELOW ERRED IN NOT DEDUCTING THE AMOUNT OF COMMISSION PAID IN THE SALE TRANSACTION. THEY FAILED TO APPRECIATE THE EVIDENCE ON RECORD WHICH CLINICINGLY PROVED THE FACT OF PAYMENT OF THE COMMISSION AND AS SUCH, THE SAME MAY BE DEDUCTED FROM THE SALE CONS IDERATION WHILE COMPUTING THE CAPITAL GAINS. 4. THE AUTHORITIES BELOW ERRED IN TAKING THE FMV ON THE SOLD PROPERTY AS ON 1.4.1981 AT RS.6,000 PER ACRE AGAINST THE CLAIM OF THE APPELLANT AT RS.70,000 PER ACRE. THE FMV ADOPTED BY THE ASSESSING OFFIC ER IS RIDICULOUSLY 4 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 LOW AND IN UNCERTAIN TERM DOES NOT REFLECT THE ACTUAL VALUE. IT IS INDEED SURPRISING TO NOTE THAT THE SUB - REGISTRAR OFFICE HAS INTIMATED THE MARKET VALUE AT RS.1/ - PER SQ. YD. AND THE LEARNED OFFICER HAS SNOT PROVIDED AN OPPORTUNITY TO SUBSTANTIATE THE FMV ADOPTED BY THE APPELLANT. 5. THE LEARNED ASSESSING OFFICER ERRED IN CHARGING INTEREST U/S. 234C OF THE IT ACT, 1961. UNDER THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, NO INTEREST IS LEVIABLE. IN ANY EVENT, THE CALCULATIO N OF INTEREST IS ALSO NOT CORRECT AND AS SUCH, LIABLE TO BE DELETED. 3. L EARNED AR SUBMITTED AT THE OUTSET THAT THE ASSESSEE IS NOT PRESSING FOR ITS SECOND SUBSTANTIVE GROUND RAISING THE ISSUE OF APPLICATION OF SECTION 2(14)(III) OF THE ACT. THE SAME IS REJECTED AS NOT PRESSED THEREFORE . 4. COMING TO THE ASSESSEE'S THIRD SUBSTANTIVE GRIEVANCE THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING ITS COMMISSION EXPENDITURE CLAIM OF RS.5 LAKHS INVOLVING BROKERAGE SE RVICES , MR. YADAV, INVITED OUR ATTENTION TO PAGE 14 OF PAPER BOOK CONTAINING THE CORRESPONDING BROKERS NAMES/SIGNATURES. 5 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 IT NOWHERE EMERGES FROM A PERUSAL THEREOF AS TO WHETHER THE ASSESSEE/HUF HAD INCURRED THE IMPUGNED COMMISSION EXPENDITURE QUA THE CO RRESPONDING LAND TRANSACTION AS PER THE AGREEMENT AND SALE DEED OR NOT. A ND ALSO THAT ITS EPONYMOUS KARTA; WHO HAD PAID THE IMPUGNED SUM HAS NOT CLARIFIED ALL THESE DETAILS. WE HOLD IN THIS BACKDROP THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE RIGHTLY D ISALLOWED THE ASSESSEE'S IMPUGNED CLAIM OF RS.5 LAKHS. IT FAILS IN THIRD SUBSTANTIVE GROUND THEREFORE. 5 . N EXT COMES ASSESSEE'S THIRD SUBSTANTIVE GRIEVANCE REGARDING FMV OF THE PROPERTY IN QUESTION AS ON 1.4.1981 CLAIMED @ RS.70,000 PER ACRE AS AGA INST THAT GRANTED @ RS.6,000 / - PER ACRE ONLY . SUFFICE TO SAY, WE NOTICE FROM PAGE 52 IN ASSESSEE'S PAPER BOOK THAT THE LEARNED LOWER AUTHORITIES H A VE ALREADY ACCEPTED SRI NIM MAL A ANJAIAHS (INDIVIDUAL/BROTHER)S CLAIM OF RS.70,000 FOR THE VERY ASSET(S) . THESE CLINCHING FACTS HAVE GOT UNREBUTTED FROM THE REVENUES SIDE. WE THUS ISSUE NECESSARY DIRECTION S TO THE ASSESSING OFFICER TO ADOPT THE IMPUGNED FMV/ASSESSEE'S LAND COST OF ACQUISITION @ RS.70,000 PER 6 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 ACRE A S ON 1.4.1981 TO BE FOLLOWED BY NECESSARY CONSEQUENTIAL COMPUTATION. THIS THIRD SUBSTANTIVE GROUND IS ACCEPTED IN ASSESSEE'S FAVOUR. NO OTHER GROUND HAS BEEN PRESSED BEFORE US. THIS FIRST AND FOREMOST APPEAL 350/HYD/2011 IS PARTLY ACCEPTED IN ABO VE TERMS. 6. WE NEXT TAKE UP REVENUES CROSS APPEAL 475/HYD/2011. IT TRANSPIRES AT T HE OUTSET THAT THE DEPARTMENT HAS SOUGHT TO RAISE TWO SUBSTANTIVE GROUNDS INVOLVING CORRESPONDING SUM (SUPRA)) OF RS.80 LAKHS AND RS.20.50 LAKHS I.E. LESS THAN HA VING THE PRESCRIBED TAX EFFECT OF RS.50 LAKHS AS PER CBDT CIRCULAR D T .08.08.2019 HAVING RETROSPECTIVE EFFECT QUA PENDING APPEALS AS WELL. THIS APPEAL ITA 475/HYD/2011 IS DISMISSED FOR INVOLVING LOWER TAX EFFECT OF LESS THAN RS.50 LAKHS THEREFORE . 7. WE NOW TAKE UP SECOND ASSESSEE SRI NIM MAL A RAGHUPATI S APPEAL ITA NO.1229/HYD/2013 HE HAS SOUGHT TO REVERSE THE CIT(A)S ORDER PASSED IN SECTI O N 263 REVISION PROCEEDINGS THEREBY FORMING THE CORRESPONDING ASSESSMENT /REASSESSMENT DT.18.11.2010 AS 7 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 AN ERRONEOUS ON CAUSING PREJUDICE TO INTEREST OF THE REVENUE . WE NOTICE AT THE OUTSET FROM A PERUSAL OF THE CITS ORDER THAT HE HAS NOWHERE HELD THE SAID ASSESSMENT AS BOTH ERRONEOUS AS WELL AS CAUSING PREJUDICE TO THE INTEREST OF R EVENUE ; SIMULTANEOUSLY, AS IT IS HELD MANDATORY IN MALABAR INDUSTRIAL CO , VS. CIT 243 ITR 83 (SC) AND OTHER JUDICIAL PRECEDENTS . WE THUS REVERSE THE LEARNED CITS IMPUGNED ORDER FOR THIS PRECISE REASON ALONE. ALL OTHER PLEADINGS ARE RENDERED INFRUCTUOUS. THE SECOND ASSESSEE'S APPEAL ITA 1229/HYD/2013 IS ACCEPTED. 8. WE NOW TAKE UP REVENUES APPEAL IN ITA 933/HYD/2015 IN CA SE OF THIRD ASSESSEE SRI NI M MAL A SRINIVAS ( INDIVIDUAL ) . IT S IS ONLY THE CASE THAT THE ASSESSING OFFICER HAD RIGHTLY ASSESSED THE IMPUGNED LONG TERM CAPITAL GAINS (LTCG) IN THE INDIVIDUAL S HANDS. THE SAME HOWEVER GOES CONTRARY TO THE ADMITTED FACTUAL P OSITION THAT THE DEPARTMENT HAS ITSELF ASSESSED THE EPONYMOUS HUF (SUPRA) FOR THE VERY SAME INCOME. THE CIT(A)S DETAILED DISCUSSION TO THIS EFFECT READ AS UNDER : 8 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 2. SRI NIRMALA SRINIVAS FILED RETURN OF INCOME FOR THE A.Y. 2007 - 08 ON 21/09/2007 IN THE STATUS OF HUF BY ADMITTING AN INCOME AT RS.1.61,34,340/ - WHICH INCLUDES THE LONG TERM CAPITAL GAIN OF RS.1,57,05,993/ - . THE A.O. NOTICED THAT THE ASSESSEE HUF FILED THE .. 9 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 10 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 11 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 IT IS SUFFICIENTLY CLEAR FROM THE PERUSAL OF THE FOREGOING DETAILED DISCUSSION THAT ONCE THE IMPUGNED LTCG HAS BEEN ASSESSED IN HUF S HANDS, THE SAME HAS NOLEGS TO STAND QUA THE IN DI VIDUAL ASSESSEEHEREIN SO AS TO AVOID DOUBLE TAXAT ION. WE THUS FIND NO MERIT IN REVENUES INSTANT GRIEVANCE . T HIS APPEAL IT A 933/HYD/2015 IS REJECTED THEREFORE. 9. LASTLY COMES FOURTH ASSESSEE SMT. NIRMALA SUCHITRA IN ITA NO.1038/HYD/2016 . HER SOLE SUBSTANTIVE GROUND CHALLENG ES CORRECTNESS OF BOTH THE LEARNED LOWER AUTHORITIES ACTION ASSESSING HER FOR AN AMOUNT OF RS.20LAKHS RECEIVED IN THE TRANSFER AGREEMENT/SALE DEED. HER ONLY CASE BEFORE US IS THAT HER HUSBAND SRI NI M MAL A 12 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 SRINIVAS (SUPRA) ALREADY STANDS ASSESSED FOR THE VERY INCOME AND THEREFORE, THE IMPUGNED ADDITION DESERVES TO BE DELETED. WE MAKE IT CLEAR THAT THE ASSESSEE HAS NOT EVEN FILED COPY OF THE AGREEMENT OR THE SALE DEED THAT THE IMPUGNED SUM DOES NOT PERTAIN TO HER SHARE IN THE PROPERTY. BE THAT AS IT MAY, HON'BLE APEX COURTS LAND MARK DECISION IN ITO VS. C.S. ATCHAIAH 218 ITR 239 (SC) HAS SETTLED THE LAW LONG BACK THAT THE ASSESSI NG OFFICER CAN AND HE MUST TAX THE RIGHT PERSON AND THE RIGHT PERSON ALONE QUA THE INCOME IN ISSUE . WE CONCLUDE IN THIS FACTUAL AND LEGAL BACKDROP THAT IT IS THE ASSESSEE ONLY WHO IS LIABLE TO BE AS SESSED QUA THE IMPUGNED SUM OF RS.20 LAKHS RECEIVED BY HER IN HER INDIVIDUAL CAPACITY AND NOT HER HUSBAND IN FOREGOING TERMS. HER SOLE SUBSTANTIVE GROUND AS WELL AS THE MAIN APPEAL IN ITA 1038/HYD/2015 IS DECLINED. 10. TO SUM UP, FIRST ASSESSEE 'S ITA 350/HYD/2011 IS PARTLY ALLOWED; REVENUES TWIN APPEALS ITA 475/HYD/2011 AND 933/HYD/2015 ARE DISMISSED; SECOND ASSESSEE'S APPEAL ITA 1229/HYD/2013 IS ` ALLOWED AND 13 ITA NO S . 350 & 475/HYD/2011; 1229/HYD/2013; 933/HYD/2015 & 1038/HYD/2016 LAST ASSESSEE'S APPEAL ITA 1038/HYD/201 6 IS DISMISSED IN ABOVE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 4TH JUNE , 2021. SD/ - SD/ - (L . P . SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 04 .0 6 .2021. * REDDY GP COPY TO : 1. I) SHRI NIMMALA SRINIVAS, 8 - 2 - 293/82/L/51/B/1, ROAD NO.12, BANJARA HILLS, HYDERABAD. II) SHRI NIMMALARAGHUPATHI, 8 - 2 - 293/82/52/B, SRI VENKATESHWARA COLONY, ROAD NO.12, BANJARA HILLS, HYDERABD - 34. III) SMT. NIMMALA SUCHITRA, H.NO.8 - 2 - 293/82/L/51/B/1, MLA COLONY, ROAD NO.12, BANJARA HILLS, HYDERABAD. 2. I) ACIT, CIRCLE 6(1), HYDERABAD. II) DCIT, CIRCLE 6(1), HYDERABAD. 3. I) PR. CIT - 6, HYDERABAD. II) ADDL. C I T , RANGE 3, RANGE 6, HYDERABAD. 4. CIT(A) - III, IV, VI, HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.