Marri Damodar Reddy, Medchal, Hyderabad V. ITO, Ward-11(2), Hyderabad, Hyderabad

ITA 1284/HYD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2592 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 03-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P V SUBBA RAJU
• Assessee Lawyers: B SHANTHI KUMAR
• Section: 54F; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 1283/HYD/16 2007-08 MARRI VENKAT RAM REDDY, MEDCHAL [PAN: AMYPM1194R] INCOME TAX OFFICER, WARD-11(2), HYDERABAD 1284/HYD/16 MARRI DAMODAR REDDY, MEDCHAL [PAN: AHOPD4947N] 1285/HYD/16 MARRI ANJUN REDDY, SECUNDERABAD [PAN: AKUPM5704B] INCOME TAX OFFICER, WARD-15(1), HYDERABAD FOR ASSESSEE : SHRI B. SHANTHI KUMAR, AR FOR REVENUE : SHRI P.V. SUBBA RAJU, DR DATE OF HEARING : 01-02-2018 DATE OF PRONOUNCEMENT : 09-02-2018 O R D E R THESE THREE APPEALS ARE BY ASSESSEES AGAINST THE ORDE RS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDER ABAD, DATED 29-07-2016. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, ALL THE APPEALS ARE HEARD TOGETHER AND D ECIDED BY THIS COMMON ORDER. I.T.A. NOS. 1283, 1284 & 1285/HYD/2016 :- 2 -: 2. BRIEFLY STATED, ASSESSEES HEREIN HAVE SOLD THEIR AN CESTRAL AGRICULTURAL LANDS AND THEY FILED RETURNS WITHOUT DISCL OSING THE SALE OF AGRICULTURAL LANDS, BY WAY OF PLOTS. ON REC EIPT OF INFORMATION, ASSESSING OFFICER (AO) INITIATED PROCEED INGS U/S. 147 OF THE INCOME TAX ACT [ACT] AND AS SEEN FROM THE O RDER OF AO, ASSESSEES HEREIN HAVE FILED REVISED COMPUTATIONS IN RESPONSE TO THE NOTICES ISSUED U/S. 148. SINCE THERE IS NO COMPLIANCE FROM ASSESSEES DURING THE COURSE OF ASSES SMENT PROCEEDINGS, AO TREATED THE SALE OF PLOTS AS ADVENTU RE IN NATURE OF TRADE AND DENIED THE DEDUCTION U/S. 54F CLAI MED ON INVESTMENT IN A HOUSE RESPECTIVELY. 3. BEFORE THE LD.CIT(A), ASSESSEES NOT ONLY CONTENDED THAT THEY HAVE SOLD THEIR INHERITED AGRICULTURAL LANDS AND THERE WAS NO INTENTION OF DOING ANY BUSINESS. CONSIDERING THE A SSESSEES SUBMISSIONS AND CASE LAW RELIED ON, LD.CIT(A) DIREC TED THE AO TO TREAT THE GAINS AS CAPITAL GAINS AND NOT AS ADVENTUR E IN NATURE OF TRADE. REVENUE HAS ACCEPTED THE SAME. HOWEV ER, ASSESSEES CLAIMS U/S. 54F HAVE NOT BEEN ACCEPTED BY THE LD.CIT(A). IN THE CASE OF SHRI MARRI ANJUN REDDY, L D.CIT(A) NOTED THAT THE SAID ASSESSEE HAS DECLARED RENTAL INCOME S THEREFORE, HE IS HAVING MORE THAN ONE HOUSE. IN THE CASE OF SHRI MARRI VENKAT RAM REDDY, LD.CIT(A) NOTICED THAT EV EN THOUGH ASSESSEE HAS INVESTED AN AMOUNT OF RS. 5,40,00 0/-, NO CASH FLOW STATEMENT OR COPY OF BANK STATEMENT WAS PRODUC ED. HENCE, HE RESTRICTED THE DEDUCTION TO AN AMOUNT OF RS. 5,40,000/- AS AGAINST RS. 15,81,624/- CLAIMED BY ASSESSEE. WITH REFERENCE TO SHRI MARRI DAMODAR REDDY, LD.CIT(A ) I.T.A. NOS. 1283, 1284 & 1285/HYD/2016 :- 3 -: REJECTED THE CONTENTIONS THAT INVESTMENT IN HOUSE HAS NOT B EEN SUBSTANTIATED. 4. AGGRIEVED, ASSESSEES HAVE PREFERRED THE GROUNDS O N THE CLAIM OF DEDUCTION U/S. 54F STATING THAT AO HAS NOT ASKE D ANY EVIDENCE WITH REFERENCE TO INVESTMENT IN THE HOUSE AND CIT(A) SHOULD HAVE RESTORED THE ISSUE TO AO. 5. IT WAS THE SUBMISSION OF LD. COUNSEL THAT ASSESSEES DO SATISFY THE CONDITIONS U/S. 54F AND LD.CIT(A) HAS NOT EXAMINED THE ISSUE IN THE CORRECT PERSPECTIVE. IT WAS THE SUBMISS ION THAT ASSESSEES MAY BE GRANTED RELIEF U/S. 54F. 6. LD.DR, HOWEVER, RELIED ON THE ORDERS OF CIT(A). 7. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE PAPER BOOK PLACED ON RECORD. AO HAD NO OCCASION TO EXAMINE THE CLAIM OF SECTION 54/54F AS HE HAS TREATED THE INCOM E NOT UNDER THE HEAD CAPITAL GAINS BUT UNDER THE HEAD BUS INESS. THEREFORE, EVEN THOUGH THERE WAS NON-COMPLIANCE BEFOR E THE AO, AO HAD NO OCCASION TO EXAMINE THE CLAIM U/S. 54F . NOW THAT LD.CIT(A) HAS GIVEN A FINDING THAT THE TRANSACTIONS DO FALL UNDER THE HEAD- CAPITAL GAINS AND NOT AS BUSINESS INCO ME, ASSESSEES CLAIM 54F SHOULD HAVE BEEN REMANDED TO AO TO EXAMINE. IT IS THE CONTENTION OF ASSESSEES THAT THEY ARE ELIGIBLE FOR DEDUCTION U/S. 54/54F AND ENCLOSED CERTAIN DOCUME NTS IN THE PAPER BOOK IN SUPPORT. WITHOUT CONSIDERING THE ISSU E ON MERITS, I AM OF THE OPINION THAT CLAIM OF DEDUCTION US 54/54F SHOULD HAVE BEEN EXAMINED BY THE AO IN DETAIL. THEREF ORE, WITH I.T.A. NOS. 1283, 1284 & 1285/HYD/2016 :- 4 -: REFERENCE TO DEDUCTION U/S. 54/54F IN ALL THE THREE IM PUGNED CASES, I HEREBY SET ASIDE THE ORDERS OF CIT(A) TO THA T EXTENT AND RESTORE IT TO THE FILE OF AO TO EXAMINE THE CLAIM AND CONSIDER AS PER THE FACTS AND LAW. 8. IN THE RESULT, ALL THE APPEALS ARE CONSIDERED ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH FEBRUARY, 2018 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 9 TH FEBRUARY, 2018 TNMM I.T.A. NOS. 1283, 1284 & 1285/HYD/2016 :- 5 -: COPY TO : 1. MARRI VENKAT RAM REDDY, C/O. B. SHANTHI KUMAR, ADVOCATE, 111, TARAMANDAL COPLEX, 5-9-13, SAIFABAD, HYDERABAD. 2. MARRI DAMODAR REDDY, C/O. B. SHANTHI KUMAR, ADVOCATE, 111, TARAMANDAL COPLEX, 5-9- 13, SAIFABAD, HYDERABAD. 3. MARRI ANJUN REDDY, C/O. B. SHANTHI KUMAR, ADVOCA TE, 111, TARAMANDAL COPLEX, 5-9-13, SAIFABAD, HYDERABA D. 4. THE INCOME TAX OFFICER, WARD-11(2), HYDERABAD. 5. THE INCOME TAX OFFICER, WARD-15(1), HYDERABAD. 6. CIT (APPEALS)-5, HYDERABAD. 7. PR.CIT-5, HYDERABAD. 8. D.R. ITAT, HYDERABAD. 9. GUARD FILE.