M/s Integrated Aqua Farms(P) Ltd., Visakhapatnam V. The ACIT, Central Circle-1, Visakhapatnam., Visakhapatnam

ITA 134/VIZ/2012

• Counselvise Citation: 13425314 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 20-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOMALI KRISHNA
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI SAKTIJIT DEY, JM ITA NO.134/VIZAG/2012 : ASST.YEAR 2007-2008 M/S.INTEGRATED AQUA FARMS (P) LIMITED C/O.I.KAMASASTRY, CHARTERED ACCOUNTANT SRI SAI LALITHA RAMAM, D.NO.9-16-29/1 RAMA TALKIES JUNCTION, CBM COMPOUND VISAKHAPATNAM 530 003. PAN : AAACI9377B. VS. THE ASST.COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 1 VISAKHAPATNAM. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI I.KAMASASTRY RESPONDENT BY : SMT.KOMALI KRISHNA, ADDL.CIT DATE OF HEARING : 0 5 .03 .2014 DATE OF PRONOUNCEMENT : 07 .0 3 .2014 O R D E R PER J.SUDHAKAR REDDY (AM) : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), VISAKHAPATNAM , DATED 30.11.2011. 2. FACTS IN BRIEF ARE AT PAGE 1 PARA 2, WHICH ARE E XTRACTED AS FOLLOWS:- THE FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME ADMITTING TOTAL INCOME OF RS.23,32,758/-. DURING TH E COURSE OF SEARCH PROCEEDINGS CONDUCTED IN THE CASE OF SRI RAP ETI GOVIND IT IS NOTICED THAT THE ASSESSEE SOLD LAND SITUATED AT MANGAMARIPETA, VISAKHAPATNAM TO SRI R.GOVIND FOR A SALE CONSIDERAT ION OF RS.31,46,600/-. THE MARKET VALUE OF THE PROPERTY IS RS.1,73,06,500/- AS PER REGISTERED SALE DEED. ASSES SEE IN ITS RETURN DECLARED SALE CONSIDERATION AT RS.31,46,600/ - WHEREAS THE SALE CONSIDERATION SHOULD HAVE BEEN RS.1,73,06,500/ - AS PER THE PROVISIONS OF SECTION 50C. THUS AO HAD REASONS TO B ELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WIT HIN THE MEANING OF SECTION 147 AND A NOTICE U/S 148 WAS ISS UED TO THE ASSESSEE. IN RESPONSE ASSESSEE FILED A LETTER STATI NG THAT THE RETURN FILED EARLIER MAY BE TREATED AS RETURN IN RE SPONSE TO NOTICE U/S 148. DURING THE COURSE OF ASSESSMENT PROCEEDING S ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY CAPITAL GAIN SHOULD NOT BE COMPUTED BY ADOPTING MARKET VALUE AT RS.1,73,06,500 /-. IN ITA NO.134/VIZAG/2012. M/S.INTEGRATED AQUA FARMS (P) LTD. 2 RESPONSE IT WAS STATED BY THE ASSESSEE THAT THE COM PANY IS ESTABLISHED WITH AN INTENTION TO ESTABLISH A HATCHE RY AND THE LAND WAS SOLD AS THE PURPOSE COULD NOT MATERIALIZE. THE SAID LAND IS IN THE EXCLUSIVE ZONE AND COULD NOT HAVE BEEN USED FOR OTHER PURPOSES. ASSESSEE STATED THAT DUE TO VARIOUS PROBL EMS FACED BY HIM FROM THE VILLAGERS AND LAND WAS SOLD AT AS IS W HERE IS CONDITIONS FOR A SALE CONSIDERATION OF RS.31,46,600 /- AND THE CAPITAL GAINS WAS OFFERED ON THE SAME AMOUNT. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE FILED A REGISTER ED VALUERS REPORT AS PER WHICH THE PROPERTY IS VALUED AT RS.34 ,95,000/- IN ACREAGE AND RS.34,70,280/- IN SQ.YARDS. THUS THE AS SESSEE IS ARGUED BEFORE THE AO THAT THE ACTUAL LAND VALUE IS NOT AS PER THE SRO REPORT AND HENCE CAPITAL GAINS BE CALCULATED AS DECLARED BY THE ASSESSEE. AO AFTER CONSIDERING THE REPLY GIVEN BY THE ASSESSEE COMPUTED THE CAPITAL GAINS BY TAKING THE S ALE VALUE AT RS.1,73,06,500/- BY INVOKING PROVISIONS OF SECTION 50C. AO ALSO DISALLOWED AN AMOUNT OF RS.3,80,000/- TOWARDS DEVEL OPMENT CHARGES CLAIMED BY THE ASSESSEE AS THE AMOUNT PAID IS AFTER THE ACTUAL SALE TOOK PLACE AND AS THE ASSESSEE DID NOT DEDUCT TDS ON THE AMOUNT PAID. FURTHER IT IS ALSO OBSERVED BY AO THAT ASSESSEE COULD NOT SUBSTANTIATE THE EXPENDITURE OF RS.50,000 /- OUT OF RS.3,80,000/- WITH PROPER VOUCHERS. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL WITHOUT SUCCESS. FURTHER AGGRIEVED, THE ASSESSEE IS BEFORE US ON THE FOLLOWING GROUNDS 1. THE LEARNED AO IS NOT CORRECT IN MAKING AN ASSE SSMENT UNDER SECTION 143(3) R.W.S. 147 INSTEAD OF UNDER SE CTION 153C R.W.S. 153A. 2. THE LEARNED CIT(APPEALS) AND THE LD.AO ARE NOT CORRECT IN APPLYING THE STAMP DUTY VALUATION OF THE PROPERT Y SOLD FOR COMPUTING THE CAPITAL GAINS WITHOUT REFERRING THE V ALUATION OF THE PROPERTY TO DVO EVEN WHEN THE AO WAS SPECIFICALLY R EQUESTED TO REFER THE VALUATION OF THE PROPERTY TO THE DVO. 3. THE LEARNED AO IS NOT CORRECT IN DISALLOWING TH E COMMISSION PAYMENT OF RS.3,30,000/- UNDER SECTION 4 0(A)(IA) WHILE COMPUTING THE INCOME UNDER THE HEAD CAPITAL G AINS. 4. WE HAVE HEARD THE SRI I.KAMASASTRY, THE LEARNED COUNSEL FOR THE ASSESSEE AND SMT.KOMALI KRISHNA, ADDL.CIT, THE LEARNED DEPAR TMENTAL REPRESENTATIVE. ITA NO.134/VIZAG/2012. M/S.INTEGRATED AQUA FARMS (P) LTD. 3 5. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE, WE HOLD AS FOLLOWS. 5.1 VISAKHAPATNAM BENCH OF THE TRIBUNAL IN THE CASE OF SMT.R.SUHASINI V. DCIT IN ITA NO.351/VIZAG/2011, ORDER DATED 6 TH DECEMBER, 2013, HELD THAT ONCE THE ASSESSEE DISPUTES THE VALUE ADOPTED BY THE STAMP VA LUATION AUTHORITY, EVEN THOUGH HE DOES NOT DISPUTE THE SAME BEFORE THE STAMP VALUA TION AUTHORITY, THE REFERENCE TO DVO UNDER SUB-SECTION (2) OF SECTION 50C IS MANDATO RY. WHILE HOLDING SO, THE VISAKHAPATNAM BENCH HAS FOLLOWED THE DECISION OF TH E JODHPUR BENCH OF THE TRIBUNAL IN MEGHRAJ BAID V. ITO (2008) 4 DTR 509 (J ODH). RESPECTFULLY FOLLOW THE SAME, WE ARE OF THE CONSIDERED OPINION THAT THE ISS UE SHOULD BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFT ER REFERENCE TO THE DVO. 5.2 THE ASSESSEE HAS RAISED ONE MORE GROUND ON THE ISSUE OF REOPENING. WE FIND THAT SUCH A GROUND HAS NOT BEEN TAKEN BEFORE T HE FIRST APPELLATE AUTHORITY. THIS IS A LEGAL GROUND. AS THE LEARNED CIT(A) DID NOT HA VE AN OPPORTUNITY TO ADJUDICATE THE ISSUE OF REOPENING, THOUGH IN THE NORMAL CASE, WE WOULD HAVE SET ASIDE THE MATTER TO THE FILE OF LEARNED CIT(A), AS ONE OF THE ISSUES HAS BEEN REMITTED TO THE FILE OF AO, WE SET ASIDE THIS ISSUE OF RE-OPENING T O THE FILE OF THE A.O. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 7 TH DAY OF MARCH, 2014. SD/- SD/- ( SAKTIJIT DEY ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM; DATED : 7 TH MARCH, 2014. DEVDAS* ITA NO.134/VIZAG/2012. M/S.INTEGRATED AQUA FARMS (P) LTD. 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, VISAKHAPATNAM. 4. CIT(A) VISAKHAPATNAM. 5. DR, ITAT, VISAKHAPATNAM. 6. GUARD FILE. BY ORDER, //TRUE COPY// (SENIOR PRIVATE SECRETARY) ITAT, VISAKHAPATNAM