Smt. P.Sujana, Hyderabad V. ACIT, Hyderabad

ITA 1249/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74599 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 04-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(3); 153A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1249/HYD/2013 ASSESSMENT YEAR 2007+08 SMT. P. SUJANA HYDERABAD PAN: AIPPP7869M VS. THE ASST. CIT CENTRAL CIRCLE+1 HYDERABAD [APPELLANT] [RESPONDENT] APPELLANT BY: SRI A.V. RAGHURAM RESPONDENT BY: SRI D. SUDHAKAR RAO DATE OF HEARING: 24.02.2014 DATE OF PRONOUNCEMENT: 24.02.2014 ORDER ORDER ORDER ORDER PER CHANDRA POOJARI, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT (CENTRAL), HYDERABAD DATED 21.02.2013 FO R ASSESSMENT YEAR 2007+08. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED CIT PASSED U/S. 263 OF THE IT ACT IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER ERRED IN EXERCISING HIS JURISDICTION U/S. 263 HOLDING THAT THERE IS AN ERRO R THAT IS PREJUDICIAL TO THE REVENUE IN THE ORDER OF ASSESSMENT PASSED ON 30.11.2010. ITA NO. 1249/HYD/2013 SMT. P. SUJANA ====================== 2 3. THE LEARNED CIT FAILED TO APPRECIATE THAT THE MATERIAL THAT IS RELEVANT FOR THAT ASSESSMENT YEAR ONLY COULD BE CONSIDERED BY THE ASSESSING OFFICER AND NOT MATERIAL THAT COMES SUBSEQUENT TO THE ASSESSMENT YEAR AND THEREBY ERRED IN HOLDING THAT THE ASSESSING OFFICER COMMITTED AN ERROR IN CONSIDERING THE SRO VALUE OF 13.11.2006 AND NOT CONSIDERING THE SRO VALUE OF 30.6.2008. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO WHILE COMPL ETING THE SCRUTINY ASSESSMENT HAD ADOPTED THE VALUE OF SU PER STRUCTURE @ RS. 380 PER SFT AS ON 13.11.2006 FOR TH E PURPOSE OF COMPUTATION OF CAPITAL GAINS WHICH WAS BASED ON SRO 'S CERTIFICATE DATED 2.9.2010. ACCORDINGLY, THE AO CO MPUTED SHORT TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. S UBSEQUENTLY, IT WAS FOUND THAT THE ASSESSEE HAS EXECUTED ANOTHER MO U ON 30.6.2008 WHEREIN THE VALUE OF THE SUPER STRUCTURE AS PER SRO WAS @ RS. 540 PER SFT. 4. ACCORDINGLY, THE CIT OBSERVED THAT THIS IS A CASE O F REVENUE RECOGNITION ON TRANSFER OF PROPERTY. THE AS SESSEE ENTERED INTO DEVELOPMENT AGREEMENT+CUM+GENERAL POWE R OF ATTORNEY ON 13.11.2006, TO TRANSFER THE LAND ADMEAS URING 1 ACRE 20 GUNTAS TO M/S. RAJA PUSHPA PROPERTIES FOR CONSTR UCTION OF ITA NO. 1249/HYD/2013 SMT. P. SUJANA ====================== 3 APARTMENTS AT ATTAPUR. ACCORDINGLY THE AO ARRIVED C APITAL GAINS. HOWEVER, WHILE COMPUTING THE CAPITAL GAINS F OR THE PURPOSE OF SALE CONSIDERATION, THE AO ADOPTED SQUAR E FOOT (SFT) RATE AT RS. 380 INSTEAD OF RS. 540 PER SFT. SINCE IT IS A CASE OF REVENUE RECOGNITION THE AO OUGHT TO HAVE ADOPTED TH E RATE AT RS. 540 PER SFT WHICH IS AVAILABLE AT THE TIME OF R EDEFINED MOU ENTERED WITH M/S. RAJA PUSHPA PROPERTIES. THEREFOR E, THE CIT SET ASIDE THE ORDER PASSED BY THE AO U/S. 143(3) R.W.S. 153A OF THE IT ACT FOR AY. 2007+08 WITH A DIRECTION TO REDO THE AS SESSMENT AFTER RE+COMPUTE THE CAPITAL GAINS AS ABOVE. AGAIN ST THIS, THE ASSESSEE FILED THE PRESENT APPEAL BY A DELAY OF 28 DAYS. 5. THE LEARNED AR SUBMITTED BEFORE US THAT THE DELAY I S ON ACCOUNT OF THE FACT THAT THE ASSESSEE WAS UNDER BON A FIDE BELIEF THAT THE CIT+CENTRAL HAS ONLY SET ASIDE THE ORDER OF THE ASSESSMENT ON THE ISSUE AND DIRECTED THE AO TO PASS FRESH ORDER ON THE SAME. THE ASSESSEE WAS UNDER THE IMPRESSION THAT SHE HAS A CHANCE TO MAKE OUT HER CASE BEFORE THE AO AND AS A MATTER OF FACT SHE HAS ATTENDED THE PROCEEDINGS BEF ORE THE AO ON 17.05.2013 AND 03.06.2013. HOWEVER, AT A LAT ER DATE IN ITA NO. 1249/HYD/2013 SMT. P. SUJANA ====================== 4 THE PROCEEDINGS BEFORE THE LEARNED AO WHEN THE MATT ER WAS DISCUSSED WITH RESPECT TO RETAINING THE COST OF CON STRUCTION OF SUPER STRUCTURE AT RS. 380 PER SFT AS WAS DONE IN T HE ASSESSMENT ORDER, THE AO EXPRESSED HIS HELPLESSNESS ON ACCOUNT OF THE DIRECTION IN THE ORDER OF THE CIT+CENTRAL. IMMEDIA TELY, THE ASSESSEE HAS CONSULTED THE PRESENT COUNSEL WHO REPR ESENTS HER MATTER BEFORE THE TRIBUNAL, WHO HAD CLARIFIED THAT THE ORDER PRESENTLY IMPUGNED CONTAINS A DIRECTION TO THE AO T O ADOPT RS. 540 PER SFT IN RESPECT OF COST OF CONSTRUCTION OF S UPER STRUCTURE, AND, THEREFORE, THAT SAID ORDER SHOULD HAVE BEEN CH ALLENGED. IMMEDIATELY, UPON THE INSTRUCTIONS OF THE ASSESSEE, THE APPEAL WAS PREPARED AND APPEAL FEE WAS PAID AND THE SAME W AS FILED BEFORE THE TRIBUNAL ON 04.09.2013. 6. THE AR SUBMITTED THAT THE DELAY IS NOT WILFUL BUT I S ON ACCOUNT OF THE FACT THAT THE ASSESSEE WAS IGNORANT ABOUT THE OPERATION OF THE ORDER OF THE CIT+CENTRAL. THE ASS ESSEE HAS REALIZED THE LEGAL POSITION ONLY IN THE PROCEEDINGS BEFORE THE AO AND IMMEDIATELY TOOK STEPS TO FILE THE APPEAL. THE AR SUBMITTED THAT THE ASSESSEE WOULD SUFFER A GREAT PR EJUDICE IF THE ITA NO. 1249/HYD/2013 SMT. P. SUJANA ====================== 5 DELAY IS NOT CONDONED. THE AR SUBMITTED THAT THE T RIBUNAL MAY KINDLY APPRECIATE THAT THE ASSESSEE WAS ALL THE TIM E APPEARING BEFORE THE AO AND WAS PURSUING THE PROCEEDINGS. IN THE SAID CIRCUMSTANCES, IF THE DELAY IS NOT CONDONED, IT WOU LD BE MISCARRIAGE OF JUSTICE. 7. THE LEARNED DR OBJECTED TO ADMISSION OF THE APPEAL SAYING THAT THERE IS NO REASON FOR CONDONING THE DE LAY. 8. WE HAVE HEARD BOTH THE PARTIES WITH REFERENCE TO CONDONATION OF DELAY IN FILING THE PRESENT APPEAL. ADMITTEDLY THE REASON ADVANCED BY THE ASSESSEE IN HER PETITION IS CORRECT. IN PARA THE CIT HAS GIVEN A DIRECTION TO THE AO TO ADOPT RS. 540 PER SFT AS PER MOU ENTERED BY THE ASSESSEE WITH RAJA PUSHPA PROPERTIES. IN THE SAME BREATH, THE CIT GIV EN A DIRECTION TO REDO THE ASSESSMENT AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. THE DIRECTION OF THE CIT IN PARAS 4 AND 5 OF HIS ORDER IS CONTRADICTORY IN NATURE. BEING SO, THE ASSESSEE FO RMED THE OPINION THAT THE AO WOULD GIVE AN OPPORTUNITY TO TH E ASSESSEE TO PRESENT HER CASE SO AS TO PROVE THE VALUE OF THE SUPER STRUCTURE IS TO BE ADOPTED AT RS. 380 PER SFT AS ON 13.11.2006. ITA NO. 1249/HYD/2013 SMT. P. SUJANA ====================== 6 ACCORDINGLY, IN OUR OPINION, THE ASSESSEE IS HAVING REASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY. HENCE, THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATIO N. 9. AFTER HEARING BOTH THE PARTIES REGARDING MERIT OF T HE ISSUE, IN OUR OPINION, THE DIRECTION OF THE CIT IN PARAS 4 AND 5 OF HIS ORDER IS CONTRADICTORY IN NATURE, AS DISCUSSED EARL IER. ACCORDINGLY, WE VACATE THE FINDINGS OF THE CIT WITH REGARD TO THE DIRECTION GIVEN BY HIM TO ADOPT THE RATE AT RS. 540 PER SFT INSTEAD OF RS. 380 PER SFT AND THE RATE IS TO BE DE CIDED BY THE AO ON THE BASIS OF EVIDENCE BROUGHT ON RECORD BY TH E ASSESSEE BEFORE COMING TO A CONCLUSION. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY, 2014. SD/+ (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/+ (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 24 TH FEBRUARY, 2014 TPRAO ITA NO. 1249/HYD/2013 SMT. P. SUJANA ====================== 7 COPY FORWARDED TO: 1. SMT. P. SUJANA, C/O. M/S. K. VASANTKUMAR, A.V. R AGHURAM, ADVOCATES, 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD+1. 2. THE ASST. CIT, CENTRAL CIRCLE,+1, HYDERABAD. 3. THE CIT (CENTRAL), HYDERABAD. 4. THE DCIT, CENTRAL CIRCLE+1, HYDERABAD. 4. THE DR BENCH 'B', ITAT, HYDERABAD