Perabattula Narasimha Rao, , Hyderabad V. Income Tax Officer, Ward-11(5), Hyderabad

ITA 1305/Hyd/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3959 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-07-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITHARAM
• Assessee Lawyers: L V UMA MAHESWAR RAO
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value; Valuation report
• Section: 143(3); 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1305 /HYD/201 7 ASSESSMENT YEAR: 20 08 - 09 PERABATTULA NARASIMHA RAO, HYDERABAD. PAN AHTPP 0693G VS. INCOME - TAX OFFICER, WARD 11(5), HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI L.V. UMA MAHESWAR RAO REVENUE BY : SHRI M. SITHARAM DATE OF HEARING 3 0 / 0 7 /2018 DATE OF PRONOUNCEMENT 1 0 / 0 8 / 201 8 O R D E R PER S . RIFAUR RAHMAN , A .M. : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 3 0 / 0 5 / 201 7 OF CIT(A) 5 , HYDERABAD FOR AY 20 08 - 09. 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE ALONG WITH SHRI K. RAM PRASAD PURCHASED AN OPEN PLOT BEARING NO. 1834 ADMEASURING 425 SQ.YDS. AT SHANKER HILLS COLONY, SERINGAMPALLY (M) AT A CONSIDERATION OF RS. 2,35,589/ - (RS. 2,12,500 + STAMP DUTY) ON 6 TH MARCH , 2006. THE SAID PROPERTY WAS SOLD TO SHRI KISHORE K S/O SHRI K. NAGABHUSHANAM ON 24 TH JANUARY, 2008. THE SALE CONSIDERATION AS PER SALE DEED WAS RS. 10,00,000/ - , WHICH WAS PAID PRIOR TO REGISTRATION. THE AO OBSERVED THAT AS PER THE STAMP AND REGISTRATION AUTHORITY SRO, THE MARKET VALUE OF THE PROPERTY WAS RS. 23,37,500/ - AND STAMP DUTY RS. 2,22,065/ - WAS PAID TO EFFECT THE TRANSFER. 2 ITA NO. 1305 /HYD/1 7 PERBATTULA NARASIMHA RAO 2.1 DUE TO THE ABOVE TRANSACTION AND SINCE NO RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR THE AY UNDER CONSIDERATION, TH E AO ISSUED NOTICE U/S 148 ON 26/03/2015 AND IN RESPONSE TO THE SAME, THE ASSESSEE FILED REPLY ALONG WITH SALE DEED AND RETURN OF INCOME. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S 143(2) AND SUMMONS U/S 131, FOR WHICH NO RESPONSE FROM ASSESSEE. THE AO FINALIZ ED THE ASSESSMENT U/S 143(3) RWS 147 INVOKING THE PROVISIONS OF SECTION 50C, TREATED THE SALE CONSIDERATION AT RS. 23,37,500/ - ( OF WHICH 50% SHARE RELATED TO ASSESSEE) AND DETERMINED THE SHORT TERM CAPITAL GAINS AT RS. 9,33,161/ - . 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND FURNISHED WRITTEN EXPLANATION, WHICH WAS EXTRACTED BY THE CIT(A) AT PAGES 4 TO 6 OF HIS ORDER. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) UPHELD TH E ACTION OF AO BY OBSERVING THAT THE ASSESSEE WAS NOT DISCLOSED THE LAND TRANSACTION IN THE RETURN OF INCOME AND AFTER RECEIPT OF INFORMATION THE AO ISSUED NOTICE U/S 148 OF THE ACT AND NO EXPLANATION WAS PROVIDED DURING THE ASSESSMENT PROCEEDINGS. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS: 1. THAT THE CIT APPEALS - 5 IS ERRED IN DISMISSING THE APPEAL AND THE SAME IS NOT TENABLE EITHER ON LAW OR ON FACTS. 2. THAT THE CIT, APPEALS - 5, HYDERABAD HAS FAILED TO CONSIDER THE DOCUMENTS PLACED IN THE APPEAL AND WITHOUT APPOINTING THE VALUATION OFFICER TO DETERMINE THE FAIR MARKET VALUE IN VIEW OF THE CONTENTIONS RAISED BY THE ASSESSE. 3. THAT THE CIT, APPEALS - 5 OUGHT TO HAVE REMITTED BACK THE MATTER TO THE ASSESSING OFFICER AND OUGHT TO HAVE DIRECTED TO CALL FOR THE VALUATION OFFICERS REPORT TO DETERMINE THE FAIR VALUE BY WAY OF RE - ASSESSMENT AS CONTEMPLATED UNDER SEC. 50 C {2} OF THE INCOME TAX ACT, 1961. 3 ITA NO. 1305 /HYD/1 7 PERBATTULA NARASIMHA RAO 4. THAT THE CIT ( APPEALS - 5 ) , HYDERABAD WAS ERRED IN DISMISSING THE APPEAL WITHOUT LOOKING INTO THE ASPECT OF APPOINTING A VALUATION OFFICER UNDER SEC. 50C ( 2 ) . 5. THAT THE CIT APPEALS - 5, HYDERABAD., OUGHT TO HAVE APPOINTED THE VALUATION OFFICER UNDER SEC.50C ( 2 ) OF THE INCOME TAX ACT, 1961 AND OUG HT TO HAVE CALLED FOR THE REPOT OF THE VALUATION OFFICER BY TAKING ALL SURROUNDING FACTS AND CIRCUMSTANCES BEFORE ARRIVAL OF THE CONCLUSION OF THE DISMISSAL ORDER. 6. THAT THE CIT APPEALS - 5 WAS ERRED IN NOT CONSIDERING THE THIRD PARTY AFFIDAVITS, PHOTOGR APHS SHOWING THE PLOT AREA IS VERY REMOTE, NOT DEVELOPED AND VALUATION CERTIFICATE ISSUED BY THE VALIER WHICH WERE ON RECORD IN APPEAL. 7. IT IS SUBMITTED THAT THE CIT ( APPEALS ) ,HYDERABAD - 5 WAS FAILED TO CONSIDER THE SUBMISSION OF THE CONTINUED SICKNESS A ND PROLONGED ILLNESS OF THE BLOOD RELATIONS OF THIS APPELLANT EVEN WHEN THE APPELLANT WAS READY TO FURNISH THE MEDICAL CERTIFICATE. 8. THAT IN THE ABOVE FACTS AND CIRCUMSTANCES, IT IS HUMBLY PRAYED THAT THIS HON'BLE TRIBUNAL MAY BE PLEASED TO REMIT THE M ATTER TO THE ASSESSING OFFICER DENOVO ASSESSMENT AFRESH / RE - ASSESSMENT BY DULY APPOINTING A VALUATION OFFICER AND VALUATION REPORT THEREON IN RESPECT OF THE VALUE OF THE PROPERTY/PLOT IN QUESTION WHEN IT WAS SOLD BY THE ASSESSE AND ANOTHER TO SOME THIRD P ARTY AND TO ASCERTAIN ITS TRUE VALUE IN THE OPEN MARKET BASED UPON THE SURROUNDING FACTS AND CIRCUMSTANCES AND THE THEN PREVAILING RATE AND VALUE OF THE PLOT AND PASS SUCH OTHER ORDER OR ORDERS AS THIS HON'BLE TRIBUNAL MAY DEEM FIT AND PROPER IN THE INTERE STS 'OF JUSTICE OR ELSE THE APPELLANT/ ASSESSE HEREIN SHALL SUFFER SERIOUS AND IRREPARABLE LOSSES. 6. BEFORE US, THE LD. AR OF THE ASSESSEE FILED THE FOLLOWING DOCUMENTS, WHICH ARE PART OF PAPER BOOK FILED AND THE SAME WERE SUBMITTED BEFORE THE CIT(A) 1. 06/04/2006 CERTIFIED COPY OF SALE DEED BEARING DOC. NO. 4914 OF 2006. 2. 15/05/2017 THIRD PARTY AFFIDAVIT STATING THAT THE LANDS IN QUESTION ARE NOT DEVELOPED. 3. 22/04/2017 PHOTOGRAPHS SHOWING THE PLOTS AREA WITHOUT ANY DEVELOPMENTS TILL DATE 4. 24 /04/2017 THIRD PARTY VALUATION CERTIFICATE IN RESPECT OF THE PLOT AND LANDS AT SHANKAR HILL COLONY, VATTINAGULAPALLY VILLAGE, RAJENDRANAGAR MANDAL, RR DIST. 5. 24/01/2008 SALE DEED EXECUTED BY THE ASSESSEE AND ANOTHER FOR RS. 10,00,000/ - ONLY BEARING D OCUMENT NO. 235/2008. 4 ITA NO. 1305 /HYD/1 7 PERBATTULA NARASIMHA RAO 6.1 REFERRING TO THE ABOVE DOCUMENTS, THE LD. AR SUBMITTED THAT THE CIT(A) FAILED TO CONSIDER THE DOCUMENTS PLACED IN THE APPEAL AND WITHOUT APPOINTING THE VALUATION OFFICER TO DETERMINE THE FAIR MARKET VALUE IN VIEW OF THE CONTENTIONS RAISED BY THE ASSESSEE. FURTHER, HE SUBMITTED THAT THE CIT(A) OUGHT TO HAVE REMITTED THE MATTER TO THE AO AND DIRECTED TO CALL FOR THE VALUATION OFFICERS REPORT TO DETERMINE THE FAIR MARKET VALUE BY WAY OF REASSESSMENT AS CONTEMPLATED U/S 50C(2) OF THE ACT. HE ALSO SUBMITTED THAT THE CIT(A) FAILED TO CONSIDER THE THIRD PARTY AFFIDAVITS, PHOTOGRAPHS SHOWING THE PLOT AREA IS VERY REMOTE, NOT DEVELOPED AND VALUATION C ERTIFICATE ISSUED BY THE VALUE R IS ON RECORD. 6.2 THE LD. AR RELIED ON TH E FOLLOWING DECISIONS TO SUBMIT THAT FOR APPOINTMENT OF VALUATION OFFICER AND CALLING FOR HIS REPORT IN ARRIV ING CONCLUSION U/S 50C( 2 ) OF THE ACT: 1. RAVI KANT VS. ITO, [2007] 110 TTJ 297 (DEL.) 2. Y. ABDUL RAZCK SAIT VS. DEPT. OF IT, ORDER DATED 2 ND JANUARY, 2013 BY ITAT, CHENNAI. 3. NAVEEN KUMAR THAKKAR VS. ITO, 110 ITD 525 4. AKG CONSULTANTS (P) LTD. VS. ITO, 117 TTJ 424 (LUCK.) 7. LD. DR, ON THE OTHER HAND RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. THE GRIEVANCE OF THE LD. AR OF THE ASSESSEE IS THAT THE CIT(A) WITHOUT APPRECIATING OR EXAMINING THE DOCUMENTS FILED BEFORE HIM IN THE PROPER PERSPECTIVE, UPHELD THE ACTION OF THE AO. ACCORDING TO LD. AR, THE CIT(A) OUGHT TO HAVE REMITTED THE MATTER BAC K TO THE AO AND DIRECTED HIM TO CALL FOR THE VALUATION OFFICERS REPORT TO DETERMINE THE FAIR MARKET VALUE BY WAY OF REASSESSMENT AS CONTEMPLATED U/S 50C(2) OF THE ACT. AS PER THE VALUATION CERTIFICATE SUBMITTED BY THE ASSESSEE FROM LN ASSOCIATES, THE REGISTRATION DEPARTMENT DURING 2007 - 08 HAS INCREASED THE MARKET VALUE OF THE ABOVE IMPUGNED LANDS MORE THAN TEN TIMES THAN THE EXISTING RATES FOR THE PURPOSE OF COLLECTION OF STAMP 5 ITA NO. 1305 /HYD/1 7 PERBATTULA NARASIMHA RAO DUTY AND REVENUE ON THE REGISTRATIONS ON THE DOCUMENTS ETC. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, TO MEET THE ENDS OF JUSTICE, WE SE T ASIDE THE ORDER OF CIT(A) AND REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO RE - DO THE ASSESSMENT DE - NOVO AFTER EXAMINI NG THE DOCUMENTS AS PER LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST , 2018 . SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 10 TH AUGUST , 2018 KV C OPY TO: - 1) NARASIMHA RAO PERABATTULA, H.NO. 5 - 3 - 361/1, PROP. RUBY POWER SYSTEMS, LAXMI NAGAR, KUKATPALLY, HYDERABAD. 2) ITO, WARD NO. 11(5), HY DERABAD 3) CIT(A) 5 , HYDERABAD. 4) PR. CIT 5 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE