Income Tax Officer, Hyderabad V. Smt. B.Nirmala, Hyderabad

ITA 1283/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6410 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 23-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. P.MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1282/HYD/13 (ASSESSMENT YEAR 2004 - 05) INCOME TAX OFFICER WARD 6(3), HYDERABAD V/S. SHRI B.PRAKASH, HYDERABAD ( PAN - AJHPB 3188 Q ) (APPELLANT) (RESPONDENT) AND ITA NO.1283/HYD/13 (ASSESSMENT YEAR 2004 - 05) INCOME TAX OFFICER WARD 6(3), HYDERABAD V/S. SMT. B.NIRMALA, HYDERABAD ( PAN - AZGPB 0204 L ) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. K.HARITHA DR RESPONDENTS BY : SHRI A.V.RAGHURAM DATE OF HEARING 21.04.2014 DATE OF PRONOUNCEMENT 21.04.2014 O R D E R PER SMT. P.MADHAVI DEVI, JUDICIAL MEMBER: BOTH THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME - TAX(APPEALS) IV, HYDERABAD, BOTH DATED 19.7.2013, FOR THE ASSESSMENT YEAR 2004 - 05. BOTH THE ASSESSEES ARE RELATED AND THE ISSUES INVOLVED ARE COMMON AND HENCE, THESE APPEALS ARE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER. 2. I N BOTH THESE APPEALS, THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN HOLDING THAT THE CAPITAL G A INS IN RESPECT OF THE LAND SURRENDERED UNDER THE DEVELOPMENT A GR E EMENT SHOULD B E CALCULATED B Y APPLYING THE ITA NO.1 282 - 83 /HYD/2013 SHRI B.PRAKASH & ANR. HYDERABAD 2 GUIDELINE VALUE O F THE SUB - R EGISTRAR O FFICE APPLICABLE FOR THE PERIOD OF TRANSACTION. 3. T HE LEARNED DEPARTMENTAL REPRESENTATIVE REITERATED THE FIN D IN G S OF THE ASSESSING OFFICER AND SUBMITTED THAT THE CIT(A) OUGHT TO H A VE APPRECIATED THAT THE ASSESSEE S THEMSELVES OFFERED VALUE OF THE SUPER STRUCTURE FOR CALCULATION OF SALE CON S I D ERATI ON, WHICH WAS ADOPTED BY TH E ASSESSING OFFICER . HE SUBMITTED THAT THE CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ADOPT THE GUIDELINE VALUE OF THE SRO, WHILE THE COST IN C URRED BY THE DEVELOPER SHOULD B E THE SALE CONSIDERATION OF THE OWN E R AND N OT TH E FAIR MARKET VALUE, AS HELD BY THE TRIBUNAL IN THE CASE OF DY. D IT V/S. G.R A GHURAM (2010) 39 SOT 406 (HYD). 4. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND, SUPPO R TED THE ORDERS OF THE CIT(A), BUT FAIRLY AGREED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF DY. D IT V/S. G.RAGHRUAM (SUPRA). 5. HAVING HE A RD BOTH THE PARTIES AND HAVIN G CONSIDERED THE RIVAL CON T ENTION S , WE FIND THAT THE UN D I S PU T ED FACTS ARE THAT THE ASSESSEE S HAD ENTERED INTO DEVELOPMENT AGR E EMENT WITH THE DEVELOPER DURING THE FIN AN CIAL Y E AR 2002 - 03 AND THE DEVELOPED FLATS WERE FOUND TO HAVE BEEN REGISTE R ED DURING THE FINANCIAL YEAR 2003 - 04 RELEVANT TO ASSESSMENT YEAR 2004 - 05. FOR TH E PU R PO S ES OF COMPUTATION OF CAPITAL GAINS ON THE TRANSFER/ SU R R E NDE R OF THE LAND TO THE DEVELOPER, THE ASSESSEES HAVE TAKEN THE SUB - RE G IS T RARS OFFICE VALUE FOR THE SAID LAND AS ON THE DATE OF AGREEMENT AS SALE CONSIDERATION , WHEREAS THE ASSESSING OFFICER HAS HELD THAT THE VALUE OF THE SUPER - STRUCTURE HAS TO BE ADOP T ED AS THE SALE CONSIDERATION. WE FIND THAT THIS TRIBUNAL IN TH E CA S E OF G.R A GHURAM (SUPRA), HAS FOLLOWED THE DECISION OF THE DELHI BENCH O F THE TRIBUNAL IN TH E CA S E OF VASAVI PRATAP CHAND V/S. DY. CIT (89 ITD 73), WHEREIN IT WAS HELD THAT THE COST OF CON S TRUC T ION OF TH E PROPOSED BUILDING , TO THE EXTENT IT FALLS TO THE SHARE OF THE ASSESSEE IN THE ULTIMATELY CON S TRUCTED AREA , IS TO B E CON S I D ERED AS THE SALE CON S IDE R ATION AND NO T THE MARKET VALUE OF ITA NO.1 282 - 83 /HYD/2013 SHRI B.PRAKASH & ANR. HYDERABAD 3 SUCH SHARE OF CONSTRUCTED AREA, WHICH MAY BE ASCERTAINED AFTER THE COMPLETION OF TH E CON S TRU CT ION. FOLLO W IN G THUS , THE TRIBUNAL HAS DIRECTED THAT TH E CO S T OF CONSTRU C TION SHOULD B E TAKEN AS THE SALE CONSIDERATION. RESPECTFULLY FOLLO W IN G THE SAID DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL, TO WHICH ONE OF US, I.E. ACCOUNTANT MEMBER, IS A SIGNATORY, WE DIRECT THE ASSESSING OFFICER TO ADOPT THE COST OF CONSTRUCTION OF THE FLOOR AREA SURRENDERED TO THE ASSESSEE BY THE DEVELOPER, AS THE CON S I D ERATION FOR THE LAND TRANSFER RED BY THE ASSESSEE TO THE DEVELOPER. H OWEVER, WE DIRECT THE ASSESSING OFFICER TO GIVE AN OPPORTUNITY OF HE A RING TO BOTH THE ASSESSEES BEFORE US, BEFORE DETERMINING THE CO S T OF CON S TRUC T ION T O THE DEVELOPER. 6. IN THE RESULT, R E VENU E S APPEALS ARE TRE A TED AS PARTLY ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION OF HEARING ON 21.4.2014 SD/ - SD/ - ( CHANDRA POOJARI ) ( P.MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 21ST APRIL, 2014 COPY FORWARDED TO: 1. 2. SHRI B.PRAKASH, PLOT NO.85/P, J.K.NAGAR, QUTUBULLAPUR, JEEDIMETLA HYDERABAD SMT. B.NIRMALA, DOOR NO.16 - 3 - 193A PLOT NO.326, VASANTHNAGAR, HYDERNAGAR, KUKATPALLY, HYDERABAD 3 . INCOME TAX OFFICER WARD 6(3) , HYDERABAD 4 . COMMISSIONER OF INCOME - TAX(APPEALS) IV HYDERABAD 5. COMMISSIONER OF INCOME - TAX III , HYDERABAD 6. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S