The Asst. CIT, Circle -11(1), Hyderabad V. Late Sri Allam Krishna, Hyderabad

ITA 1337/HYD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0400 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 03-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Search and seizure; Opportunity of being heard; Fair market value
• Section: 143(3); 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 1336/H/2012 2004- 2005 THE ACIT, CIRCLE 11(1) HYDERABAD. LATE ALLAM ADAVAIAH REPTD. BY L.R. MR. ALLAM AYALIAH, HYDERABAD. PAN ADNPA1785G 1337/H/2012 MR. ALLAM KRISHNA, HYDERABAD. 1338/H/2012 SMT. ALLAM MAISAMMA HYDERABAD. 1339/H/2012 LATE ALLAM AGAMAIAH REPTD. BY L.R. MR. ALLAM MALLESH, HYDERABAD. FOR REVENUE : MR. RAMAKRISHNA BANDI FOR ASSESSEE : MR. V. SRIDHAR DATE OF HEARING : 03.07.2015 DATE OF PRONOUNCEMENT : 10 .07.2015 ORDER PER P.M. JAGTAP, A.M. THESE FOUR APPEALS ARE PREFERRED BY THE REVENUE AGAINST FOUR SEPARATE ORDERS PASSED BY THE LD. CIT(A)-VI, HYDERABAD DATED 15.06.2012 WHEREBY SHE DELETED THE ENTIRE ADDITIONS MADE BY THE A.O. TO TH E TOTAL 2 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. INCOME OF THE FOUR ASSESSEES ON ACCOUNT OF LONG TER M CAPITAL GAINS. 2. ALL THE FOUR ASSESSEES IN THE PRESENT CASE ARE INDIVIDUALS. A SEARCH AND SEIZURE ACTION UNDER SECT ION 132 WAS CONDUCTED IN THE CASES BELONGING TO JANAPRI YA GROUP. DURING THE COURSE OF THE SAID ACTION, CERTAI N AGREEMENTS WERE FOUND SHOWING THAT ALL THE FOUR ASSESSEES HAVE SOLD LANDS BELONGING TO THEM TO M/S. JANAPRIYA ENGINEERS SYNDICATE, HIMAYATNAGAR, HYDERABAD DURING THE YEAR UNDER CONSIDERATION. THE DETAILS OF LANDS SOLD BY THEM AND THE CONSIDERATION FOR SUCH SALE AS DECLARED IN THE RELEVANT AGREEMENTS WE RE AS UNDER : SY.NO. ADVAIAH KRISHNA MAISAMMA AGAMAIAH 662 AC.3.22 -- AC.3.22 AC.6.22 663 AC.4.20 -- AC.4.20 -- 668 - AC.1.32 - - 671 AC.3.20 AC.2.20 - - CONSIDERATION 47,70,000 17,20,000 32,20,000 26,20,000 3. SINCE NONE OF THE FOUR ASSESSEES HAD FILED THE RETURNS OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING THE LONG TERM CAPITAL GAINS ARISING FROM THE SALE OF THEIR LANDS, NOTICES UNDER SECTION 148 WERE ISSU ED BY THE A.O. TO THEM ON 31.03.2011. IN RESPONSE TO THE SAID NOTICES, ALL THE ASSESSEES FILED THEIR RETURNS OF I NCOME ON 12.05.2011 DECLARING TOTAL INCOME AT NIL. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEES BEFORE THE A.O. THAT THE CORRESPONDING LANDS REPRESENTING THEIR ANCESTRAL PR OPERTY 3 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. IN YELLAREDDY (V), KEESARA (M), KAPRA REVENUE DIVIS ION WERE ACTUALLY AGREED TO BE SOLD WAY BACK ON 31.12.1 994 TO M/S. JANAPRIYA ENGINEERS SYNDICATE. IT WAS ALSO SUBMITTED THAT POSSESSION OF THE LAND IN SURVEY NOS .662 AND 663 WAS ALSO HANDED OVER TO M/S. JANAPRIYA ENGINEERS SYNDICATE, AS PER THE IRRECOVERABLE POWER OF ATTORNEY CUM- AGREEMENT FOR SALE DATED 31.12.1994, WHILE THE POSSESSION OF LAND IN OTHER TWO SURVEY NO S.668 AND 671 WAS HANDED OVER AS PER THE ORAL AGREEMENT ENTERED INTO WITH THE SAID PURCHASER. KEEPING IN VI EW THIS SUBMISSION MADE ON BEHALF OF THE ASSESSEES AND HAVI NG REGARD TO THE FACT THAT SALE CONSIDERATION DECLARED BY THE ASSESSEE WAS NOT ACCEPTED BY THE REGISTRATION AUTHO RITIES, THE A.O. PROCEEDED TO COMPUTE THE LONG TERM CAPITAL GAIN ARISING FROM SALE OF LAND CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE BY TAKING THE FAIR MARKET VALUE AS DETERMINED BY THE SUB-REGISTRAR OFFICE AT RS.400 PE R SQ. YARD DURING THE YEAR 1994 IN RESPECT OF LAND IN SUR VEY NO.662 AND 663 AND AT RS.600 AS DETERMINED BY THE S UB- REGISTRAR OFFICE FOR THE YEAR UNDER CONSIDERATION I N RESPECT OF LAND IN SURVEY NO.668 AND 671. ACCORDING LY, LONG TERM CAPITAL GAIN AMOUNTING TO RS.2,65,50,565, RS.1,23,88,140, RS.1,53,89,990 AND RS.1,25,22,290 W AS BROUGHT TO TAX IN THE HANDS OF MR. ALLAM AYALIAH, M R. ALLAM KRISHNA, SMT. ALLAM MAISAMMA AND MR. ALLAM AGAMAIAH RESPECTIVELY BY THE A.O. VIDE ASSESSMENTS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 14 7 OF THE ACT BY ORDERS DATED 30.12.2011. 4 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. 4. AGAINST THE ORDERS PASSED BY THE A.O. UNDER SECTION 143(3) READ WITH SECTION 147, APPEALS WERE PREFERRED BY ALL THE FOUR ASSESSEES BEFORE THE LD. CIT(A). DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. CIT(A), IT WAS CONTENDED ON BEHALF OF THE ASSESSEES THAT THE POSSESSION OF THE LANDS IN SURVEY NOS.662 AND 6 63 HAVING BEEN ALREADY HANDED OVER TO THE PURCHASER AT THE TIME OF EXECUTION OF IRREVOCABLE GENERAL POWER OF A TTORNEY CUM- AGREEMENT OF SALE ENTERED INTO ON 31.12.1994 AS WELL AS THE POSSESSION OF LANDS IN SURVEY NOS.668 A ND 671 ALSO BEEN HANDED OVER AS PER THE ORAL AGREEMENT S SIMULTANEOUSLY ENTERED INTO, THERE WAS TRANSFER OF LANDS ON 31.12.1994 ITSELF AS PER CLAUSE (V) OF SECTION 2 (47) READ WITH SECTION 53A OF THE TRANSFER OF PROPERTY ACT AN D THEREFORE, THE CAPITAL GAIN ARISING FROM SUCH TRANS FER WAS CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEES IN A.Y. 1995-1996 AND NOT IN THE YEAR UNDER CONSIDERATION. THIS CONTENTION OF THE ASSESSEE WAS FOUND ACCEPTABLE BY THE LD. CIT(A) AND RELYING ON THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT READ WITH SECTION 53A OF THE TRANSFER OF PROPERTY ACT, SHE HELD THAT THE CAPITAL GAIN ARISIN G FROM THE TRANSFER OF LANDS BY THE ASSESSEES WAS NOT CHAR GEABLE TO TAX IN THE YEAR UNDER CONSIDERATION. THE REASONS GIVEN BY THE LD. CIT(A) TO COME TO THIS CONCLUSION AS CON TAINED IN PARAGRAPH NOS.6.3 AND 6.4 OF HER IMPUGNED ORDER ARE REPRODUCED BELOW : 6.3. I HAVE CONSIDERED THE FACTS ON RECORD AND THE SUBMISSIONS OF THE A.R. THE AGREEMENT OF SALE DATED 31.12.1994 AND THE CONFIRMATION LETTER OF 5 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. THE PURCHASER CLEARLY ESTABLISH THAT THE POSSESSION HAD BEEN HANDED OVER DURING THE F.Y. 1994-95 ITSELF. THE A.O. HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEES CLAIM AS EVIDENCED BY THESE TWO DOCUMENTS IS INCORRECT. IN VIEW OF THIS, SECTION 2(47)(V) APPLIES TO THE ASSESSEES CASE AND IT IS HELD THAT THE CAPITAL GAINS ON THE SALE OF LAND WAS CHARGEABLE TO TAX IN THE A.Y. 1995-96 ITSELF AND NOT IN THE A.Y. 2004-05. 6.4. THE SUBSEQUENT PAYMENT OF CONSIDERATION TO THE ASSESSEE AND THE EXECUTION OF SALE DEED ARE ALSO OF NO CONSEQUENCE SINCE THE ONLY ISSUE RELEVANT FOR APPLICATION OF SECTION 2(47)(V) IS THE DATE OF HANDING OVER OF POSSESSION IN TERMS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT. IT IS, THEREFORE, HELD THAT THE ASSESSING OFFICERS DECISION IN BRING TO TAX, CAPITAL GAINS ON THE SALE OF LAND IN THE A.Y. 2004-05 IS NOT AS PER LAW AND THESE GROUNDS OF APPEAL ARE ALLOWED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), REVENUE H AS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL. 5. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. T HE COMMON ISSUE THAT IS INVOLVED IN THE PRESENT CASES IS, WHETHER THERE WAS A TRANSFER OF LANDS BY THE ASSESS EE AS ON 31.12.1994 WITHIN THE MEANING OF THE DEFINITION OF TRANSFER AS GIVEN IN CLAUSE (V) OF SUB-SECTION (4 7) OF SECTION-2. THE SAID PROVISIONS ALONG WITH THE PROVI SIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT INCORPO RATED THEREIN ARE EXTRACTED HEREUNDER : 2(47)(V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKE N 6 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF TH E NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER O F PROPERTY ACT, 1882 (4 OF 1882) ; SECTION 53A. PART PERFORMANCE. WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVABLE PROPERTY BY WRITING SINGED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY P ART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSION IN PART PERFORMANCE OF THE CONTRACT AN HAS DONE SOME ACT IN FURTHERANCE OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT B EEN COMPLETED IN THE MANNER PRESCRIBED THEREFOR BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMI NG UNDER HIM ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSSESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED B Y THE TERMS OF THE CONTRACT. PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF THE CONTRACT OR OF THE PART PERFORMANCE THEREOF. 6. IN THE PRESENT CASE, THE IRREVOCABLE GENERAL POWER OF ATTORNEYS CUM- AGREEMENT OF SALE WERE DUL Y ENTERED INTO BY THE ASSESSEES WITH M/S. JANAPRIYA 7 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. ENGINEERS SYNDICATE IN RESPECT OF LANDS IN SURVEY N OS.662 AND 663 AND THE SAID TRANSFEREE/PURCHASER HAVING TA KEN THE POSSESSION OF THE LAND ON 31.12.1994 ITSELF IN PART PERFORMANCE OF THE SAID CONTRACT, WE ARE OF THE VIE W THAT THE LAND IN SURVEY NO.662 AND 663 WAS TRANSFERRED B Y THE ASSESSEES TO THE PURCHASER IN THE PREVIOUS YEAR REL EVANT TO A.Y. 1995-1996 ITSELF WITHIN THE MEANING OF CLAU SE (V) OF SUB-SECTION(47) OF SECTION(2) READ WITH SECTION 53A OF THE TRANSFER OF PROPERTY ACT. THIS POSITION IS NOT EVEN DISPUTED EVEN BY THE LEARNED D.R. AT THE TIME OF HE ARING BEFORE US. 7. THE LEARNED D.R. HOWEVER HAS CONTENDED THAT IN SO FAR AS THE LAND IN SURVEY NO.668 AND 671 IS CONCERNED, THERE WAS NO AGREEMENT OR CONTRACTS IN W RITING ENTERED INTO BY THE ASSESSEES WITH THE PURCHASER IN THE PREVIOUS YEAR 1994-1995 AND IN THE ABSENCE OF SUCH AGREEMENT/CONTRACTS TO TRANSFER THE LAND, THERE WAS NO TRANSFER OF THE SAID LAND IN THE PREVIOUS YEAR 1994 -1995 WITHIN THE MEANING OF CLAUSE (V) OF SECTION 2(47) R EAD WITH SECTION 53A OF THE TRANSFER OF PROPERTY ACT EVEN IF IT IS AGREED THAT THE POSSESSION OF THE SAID LAND WAS TAK EN BY THE TRANSFEREE IN THAT PREVIOUS YEAR. WE FIND MERIT IN THIS CONTENTION OF THE LEARNED D.R. AS PER THE PROVISION S OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, WHICH ARE INCORPORATED IN SECTION 2(47)(V) OF THE INCOME TAX ACT, THE REQUIREMENT IS THAT THE TRANSFEREE HAS TAKEN POSSES SION OF THE PROPERTY OR ANY PART THEREOF IN PART PERFORMANC E OF THE CONTRACT AND SUCH CONTRACT TO TRANSFER FOR CONSIDER ATION 8 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. ANY IMMOVABLE PROPERTY HAS TO BE IN WRITING SIGNED BY THE TRANSFEREE OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTA INED WITH REASONABLE CERTAINTY. 7.1. IN THE PRESENT CASE, THERE WAS HOWEVER NO SUCH CONTRACT IN WRITING ENTERED INTO IN THE PREVIO US YEAR 1994-1995 IN RESPECT OF LAND IN SURVEY NOS.668 AND 671 SINGED BY THE ASSESSEES FROM WHICH THE TERMS NECESS ARY TO CONSTITUTE THE TRANSFER COULD BE ASCERTAINED WIT H REASONABLE CERTAINTY AND THE ORAL AGREEMENTS STATED TO BE ENTERED INTO BY THE ASSESSEES, IN OUR OPINION, CANN OT BE SAID TO HAVE RESULTED IN TRANSFER OF THE LAND AS EN VISAGED IN THE PROVISIONS OF SECTION 2(47)(V) OF THE INCOME TAX ACT READ WITH SECTION 53A OF TRANSFER OF PROPERTY ACT E VEN THOUGH IT IS ACCEPTED THAT THE POSSESSION OF THE SA ID LAND WAS TAKEN BY THE TRANSFEREE IN THAT YEAR. AT THE TI ME OF HEARING BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO RAISE ANY MATERIAL CONTENTION TO DISPU TE THIS POSITION. HE HOWEVER HAS SOUGHT TO RAISE ALTOGETHER NEW ISSUES BY FILING THE FOLLOWING ADDITIONAL GROUNDS W ITH AN APPLICATION UNDER RULE 27 OF THE APPELLATE TRIBUNAL RULES, 1963 SEEKING ADMISSION THEREOF. 1. THE RESPONDENT PRAYS THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE TRIBUNAL MAY BE PLEASED TO HOLD THAT THE TRANSFER OF THE IMPUGNED PROPERTY HAS TAKEN PLACE IN THE PREVIOUS YEAR 1994-95 RELEVANT TO A.Y. 1995-96 WITHIN THE MEANING OF SEC.2(47)(I), OR SEC.2(47)(II) OR SEC.2(47)(VI) AND AS SUCH THE CAPITAL GAINS CANNOT BE BROUGHT TO TAX IN THE A.Y. 2004-05. 9 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. 2. THE RESPONDENT PRAYS THAT THE HONBLE TRIBUNAL MAY BE PLEASED TO CONSIDER A BROADER VIEW OF THE WORD TRANSFER VIS--VIS THE FACTS AND CIRCUMSTANCES OF THE RESPONDENTS CASE AND NOT RESTRICT THE TRANSFER TO SEC.2(47)(V). 8. LEARNED D.R. HAS STRONGLY OPPOSED THE APPLICATION FILED BY THE ASSESSEE FOR ADMISSION OF THE ABOVE ADDITIONAL GROUNDS BY CONTENDING THAT THE ASS ESSEE AS A RESPONDENT CANNOT RAISE ALTOGETHER NEW ISSUES, WHICH WERE NOT RAISED EITHER BEFORE THE A.O. OR BEFORE TH E LD. CIT(A). IN THIS REGARD, IT IS OBSERVED THAT THE FOL LOWING QUESTION WAS RAISED BY THE REVENUE IN THE APPEAL FI LED IN THE CASE OF DCIT VS. TURQUOISE INVESTMENT AND FINAN CE LTD., (2008) 299 ITR 143 (MP) BEFORE THE HONBLE MA DHYA PRADESH HIGH COURT AS QUESTION NO.3. 3. WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN LAW IN RECORDING A FINDING ON AN ISSUE WHICH WAS NOT RAISED BY THE ASSESSEE EITHER BEFORE THE A.O. OR BEFORE THE CIT(A) BUT WAS RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL AND THAT TOO IN AN APPEAL FILED BY THE DEPARTMENT.? 8.1. THE HONBLE MADHYA PRADESH HIGH COURT ANSWERED THE ABOVE QUESTION ALONG WITH THE RELATED QUESTION NO.4 IN FAVOUR OF THE ASSESSEE AFTER RECOR DING THE FOLLOWING OBSERVATIONS : COMING TO QUESTIONS NOS. 3 AND 4, WHETHER THE ISSUE COULD BE RAISED BY THE ASSESSEE BEFORE THE INCOME-TAX APPELLATE TRIBUNAL FOR THE FIRST TIME AN D HAVING DISMISSED THE CROSS-OBJECTION, THE INCOME-TA X 10 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. APPELLATE TRIBUNAL COULD PROCEED TO GIVE A FINDING ON THE SAME, LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE DECISION OF THE CIT AP PEAL EX./CIT(A) IN I. T. A. NO. 112 OF 2003 IN WHICH REFERENCE HAS BEEN MADE TO THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN CIT V. VR. S. R. M. FI RM (1994) 208 ITR 400, BUT HE HAS ERRONEOUSLY STATED THAT IT WAS HELD IN THE SAID DECISION THAT THE SAID DIVIDEND IS TAXABLE IN INDIA UNDER SECTIONS 8 AND 9 OF THE INCOME-TAX ACT, 1961, THOUGH THE DECISION HOLDS TO THE CONTRARY. LEARNED COUNSEL, THEREFORE, CONTEN DS THAT THE FACT THAT THE SAID DECISION WAS CITED BEAR S TESTIMONY TO THE FACT THAT CONTENTION WAS RAISED WI TH REGARD TO THE NON-TAXABILITY OF THE DIVIDEND EARNED IN MALAYSIA IN INDIA UNDER THE AGREEMENT IN QUESTION. LEARNED COUNSEL HAS FURTHER SUBMITTED THAT IN THE APPEALS FILED BY THE RESPONDENTS, THEY HAVE CLEARLY RAISED THE QUESTIONS THAT THE TRIBUNAL WAS NOT JUSTIFIED IN DISMISSING THE CROSS-OBJECTION FILED B Y THE ASSESSEE ON THE GROUND OF LIMITATION SPECIALLY WHEN IT TOOK THE VIEW THAT THE DIVIDEND INCOME WAS NOT TAXABLE IN INDIA. ATTENTION HAS ALSO BEEN INVITED T O RULE 27 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULE S, 1963. THE SAID RULE READS AS UNDER : '27. RESPONDENT MAY SUPPORT ORDER ON GROUNDS DECIDED AGAINST HIM. THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS AGAINST HIM.' REFERENCE HAS ALSO BEEN MADE TO THE DECISION OF THE APEX COURT IN NATIONAL THERMAL POWER CO. LTD. V . CIT [1998] 229 ITR 383 IN WHICH THEIR LORDSHIPS HAV E OBSERVED THAT THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS EXPRESSED IN WIDEST POSSIBLE TERMS. THE PURPOSE OF ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF , FOR EXAMPLE, AS A RESULT OF JUDICIAL DECISION GIVEN WHI LE THE APPEAL IS PENDING BEFORE THE TRIBUNAL, IT IS FO UND THAT A NON-TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, THERE IS NO REASON WHY THE 11 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESPECT OF T HE ITEM. FROM THE ABOVE POSITION, IT IS CLEAR THAT IF THE MATERIAL IS ON RECORD ON THE BASIS WHEREOF OBJECTIO N CAN BE RAISED, THE PARTIES TO THE APPEAL CANNOT BE PRECLUDED FROM RAISING SUCH CONTENTION, ESPECIALLY THE RESPONDENT, IN VIEW OF RULE 27 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963, QUOTED ABOVE. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT BOTH QUESTIONS NOS. 3 AND 4 IN THE DEPARTMENT'S APPEAL DESERVE TO BE ANSWERED AGAINST THE DEPARTMENT. IN VIEW OF THE WIDE POWERS THAT THE TRIBUNAL IS INVEST ED WITH, AS CLEARLY REFERRED TO AND SPELT OUT BY THEIR LORDSHIPS IN THEIR DECISION IN NATIONAL THERMAL POW ER CO. LTD. [1998] 229 ITR 383, THE TRIBUNAL CANNOT B E PRECLUDED FROM CONSIDERING THE QUESTIONS OF LAW ARISING IN AN ASSESSMENT PROCEEDING NOT RAISED EARLIER, AND RESTRICTED TO ISSUES ARISING OUT OF AP PEAL BEFORE THE COMMISSIONER. 9. THE ISSUE INVOLVED IN THE PRESENT CASE AS TO WHETHER THE ASSESSEE AS A RESPONDENT CAN RAISE A NE W ISSUE, WHICH WAS NOT RAISED BY HIM EITHER BEFORE TH E A.O. OR BEFORE THE LD. CIT(A), FOR THE FIRST TIME BEFORE THE TRIBUNAL AS A RESPONDENT IN THE APPEAL FILED BY THE DEPARTMENT THUS IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE BY THE DECISION OF THE HONBLE MADHYA PRAD ESH HIGH COURT IN THE CASE OF DCIT VS. VS. TURQUOISE INVESTMENT AND FINANCE LTD., (SUPRA) AND THERE BEIN G NO DECISION OF ANY HIGH COURT THAT HAS BEEN BROUGHT TO OUR NOTICE BY THE LEARNED D.R. TAKING A CONTRARY VIEW, WE RESPECTFULLY FOLLOW THE SAID DECISION OF THE HONBL E MADHYA PRADESH HIGH COURT AND ADMIT THE ADDITIONAL GROUNDS FILED BY THE ASSESSEE. 12 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. 10. AS THE ISSUE INVOLVED IN THE ADDITIONAL GROUND S RAISED BY THE ASSESSEE HAS BEEN RAISED FOR THE FIRS T TIME BEFORE THE TRIBUNAL AND NEITHER THE A.O. NOR THE LD . CIT(A) HAS GOT AN OPPORTUNITY TO EXAMINE THE SAME, WE CONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE, TO RESTORE THIS MATTER TO THE FILE OF THE A.O. WITH A DIRECTION TO DECIDE THE SAME IN THE LIGHT OF FACTS AND MATERI ALS ALREADY AVAILABLE ON RECORD AFTER GIVING THE ASSESS EE AN OPPORTUNITY OF BEING HEARD. 11. IN VIEW OF THE ABOVE DISCUSSION, WE UPHOLD THE IMPUGNED ORDERS OF THE LD. CIT(A) PASSED IN THE CAS E OF SMT. ALLAM MAISAMMA AND MR. ALLAM AYALAIAH (L.R. OF LATE ALLAM ADAVAIAH) HOLDING THAT THEIR RESPECTIVE LANDS IN SURVEY NOS.662 AND 663 HAVING BEEN TRANSFERRED IN T HE PREVIOUS YEAR RELEVANT TO A.Y. 1995-1996 WITHIN THE MEANING OF SECTION 2(47)(V) READ WITH SECTION 53A O F THE TRANSFER OF PROPERTY ACT, THE ADDITION MADE BY THE A.O. ON ACCOUNT OF CAPITAL GAIN IN THE YEAR UNDER CONSIDERA TION WAS NOT SUSTAINABLE. THE IMPUGNED ORDER OF THE LD. CIT(A) PASSED IN THE CASE OF MR. ALLAM KRISHNA HOLDING THA T THERE WAS A SIMILAR TRANSFER OF THE LAND BELONGING TO HIM IN SURVEY NO.668 AND 671 IN A.Y. 1995-1996 HOWEVER IS SET ASIDE IN THE ABSENCE OF ANY CONTRACT FOR TRANSF ER IN WRITING AND THE MATTER IS RESTORED TO THE FILE OF T HE A.O. FOR THE LIMITED PURPOSE OF EXAMINING AND DECIDING THE N EW ISSUE RAISED BY THE ASSESSEE FOR THE FIRST TIME BEF ORE THE TRIBUNAL BY WAY OF ADDITIONAL GROUNDS. IN SO FAR AS THE CASE OF MR. ALAM AYALIAH L.R. OF LATE ALLAM ADAVAIA H IS 13 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. CONCERNED, THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) IS UPHELD ONLY TO THE EXTENT WHEREBY SHE HELD THAT THERE WAS A TRANSFER OF LAND BELONGING TO HIM IN SURVEY N O.662 AND 663 WITHIN THE MEANING OF SECTION 2(47)(V) READ WITH SECTION 53A OF THE TRANSFER OF PROPERTY ACT IN THE PREVIOUS YEAR RELEVANT TO A.Y. 1995-1996 AND THEREFORE, THE CAPITAL GAIN ATTRIBUTABLE TO SUCH TRANSFER WAS NOT CHARGEAB LE TO TAX IN THE YEAR UNDER CONSIDERATION. THE SAID ORDER OF THE LD. CIT(A) HOLDING THAT THERE WAS SIMILAR TRANSFER OF LAND BELONGING TO ASSESSEE IN SURVEY NO.671 IN A.Y. 1995 -96, HOWEVER, IS SET ASIDE IN THE ABSENCE OF ANY CONTRAC T FOR TRANSFER IN WRITING AND THIS MATTER IS RESTORED TO THE FILE OF THE A.O. FOR THE LIMITED PURPOSE OF EXAMINING AND DECIDING THE NEW ISSUE RAISED BY THE ASSESSEE FOR T HE FIRST TIME BEFORE THE TRIBUNAL. 12. IN THE RESULT, ITA.NO.1338 & 1339/HYD/2012 OF THE REVENUE ARE DISMISSED AND ITA.NO.1336 & 1337/HYD/2012 OF THE REVENUE ARE TREATED AS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 10.07.2015. SD/- SD/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD, DATED 10 TH JULY, 2015 VBP/- 14 ITA.NO.1336, 1337, 13381339/H/2012 MR. ALLAM AYALIAH AND OTHERS, HYDERABAD. COPY TO : 1. THE ACIT, CIRCLE 11(1), D BLOCK, 5 TH FLOOR, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 2. LATE ALLAM ADAVAIAH REPTD. BY L.R. MR. ALLAM AYALIAH, 2-123-2/3, YELLAREDDYGUDA, KAPRA, ECIL ROAD, HYDERABAD. 3. MR. ALLAM KRISHNA 4. SMT. ALLAM MAISAMMA 5. LATE ALLAM AGAMAIAH REPTD. BY L.R. MR. ALLAM MALLESH 6 . CIT(A) - V I, 6A, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 7 . CIT - V , HYDERABAD 8 . D.R. ITAT A BENCH, HYDERABAD. 9 . GUARD FILE