Anil Lahoti , Hyderabad V. Income Tax Officer, Ward-4(1), Hyderabad

ITA 1350/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3753 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Assessment Year: 2008-2009
• Appeal Filed On: 26-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Cost of acquisition; Condonation of delay; Set aside; Capital Gains
• Section: 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A - SMC BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 1350 /HYD./201 8 ASSESSMENT YEAR: 20 08 - 09 SHRI ANIL LAHOTI VS. ITO, WARD 4 ( 1 ) H.NO.1 - 1 - 267/4, STREET NO.2 HYDERABAD. CHIKKADPALLY HYDERABAD PAN: A DYPL6374K ITA NO. 135 1 /HYD./2018 ASSESSMENT YEAR: 2008 - 09 SHRI JAGADISH LAHOTI VS. ITO, WARD 4(1) H.NO.1 - 1 - 267/4, STREET NO.2 HYDERABAD. CHIKKADPALLY HYDERABAD PAN: AD WPL2065R ITA NO. 135 2 /HYD./2018 ASSESSMENT YEAR: 2008 - 09 S MT. MATHURA DEVI LAHOTI VS. ITO, WARD 4(1) H.NO.1 - 1 - 267/4, STREET NO.2 HYDERABAD. CHIKKADPALLY HYDERABAD PAN: A HU PL 9223H (APPELLANT) (RESPONDENT) FOR ASSESSE E : S MT. S. SANDHYA, A.R. FOR REVENUE : S MT. N. SWAPNA, D.R. DATE OF HEARING : 1 1 / 02 / 20 DATE OF PRONOUNCEMENT : 28 / 02 / 20 O R D E R ALL THE THREE APPEALS ARE FILED BY THE RESPECTIVE ASSESSEES FOR A.Y. 20 08 - 09 AGAINST THE ORDER OF THE LD.CIT(A) - 1 , HYDERABAD DATED 12.03. 2018. 1.1. ALL THE ASSESSEES ARE CO - OWNERS OF THE PROPERTY AND SINCE SIMILAR FACTS AND CIRCUMSTANCES ARE EXISTING, ALL THE THREE APPEALS WERE CLUBBED AND HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER. 1.2. AT THE OUTSET IT IS SEEN THAT THERE IS A DELAY OF 01 DAY IN FILING OF THE APPEAL BEFORE THE TRIBUNAL AND THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY STATING THAT THE DELAY HAD OCCURRED DUE T O THE PERSON ITA NO.1350 - 1351 - 1352/H/18 AY:2008 - 09 SRI ANIL LAHOTI, SRI JAGDISH LAHOTI & SMT.MATHURA DEVI LAHOTI, HYD. VS. ITO, WARD4(1),HYD. 2 WHO WAS ENTRUSTED WITH THE OUT - DOOR JOBS INCLUDING FILING OF THE APPEAL IN THE TRIBUNAL COULD NOT REACH THE ITAT IN TIME AND HENCE THE APPEAL WAS FILED THE NEXT DAY WITH A DELAY OF 01 DAY. BEING SATISFIED WITH THE REASONS GIVEN FOR DELAY IN FILING OF THE APPEAL, I AM INCLINED TO CONDONE THE DELAY AND PROCEED WITH THE APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT ALL THE THREE ASSESSEE S ALONG WITH TWO OTHERS EXECUTED A SALE DEED ON 05.09.2007 VIDE REGISTERED DOCUMENT NO.4752/2007 REGISTERED AT SRO , AZAMPURA FOR A CONSIDERATION OF RS.3,00,000/ - , BUT THE SUB - REGISTRAR VALUED THE SAID PROPERTY AT RS.23,74,800/ - AND COLLECTED THE STAMP DUTY, TRANSFER DUTY AND OTHER CHARGES ACCORDINGLY. THE AO RECEIVED INFORMATION ABOUT THE SAID TRANSA CTION. THE AO OBSERVED THAT THERE IS A VARIATION BETWEEN THE MARKET VALUE AS DETERMINED BY THE SUB - REGISTRAR AND AS SHOWN BY THE ASSESSEE IN THE REGISTERED DOCUMENT AND ALSO THAT THE ASSESSEE S HA VE NOT FILED ANY RETURN S OF INCOME FOR THE YEAR UNDER CON SIDERATION AND THUS HA VE NOT PAID TAXES. IN VIEW OF THE FACT THAT THE ASSESSEE HAS NOT DECLARED CAPITAL GAINS ON THE ABOVE TRANSACTION , ADOPTING THE MARKET VALUE OF THE PROPERTY AS DETERMINED BY THE SUB - REGISTRAR, THE AO RE - OPENED THE ASSESSMENT BY ISSU ANCE OF A NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (THE ACT). THE ASSESSEE INITIALLY DID NOT RESPOND TO THE NOTICES OF THE AO BUT SU BSEQUENTLY FILED A LETTER STATING THAT THE PROPERTY WAS ACTUALLY SOLD BY HIS FATHER LATE SHIV A NARAYAN A LAHOTI IN THE YEAR 1980 AFTER RECEIPT OF THE CONSIDERATION AGREED TO BETWEEN THE PARTIES AT THAT TIME ONLY, BUT BEFORE HIS FATHER COULD EXECUTE THE REG ISTERED SALE DEED HE SUDDENLY DI E D ON 22.12.1980 AND THEREFORE, THE SALE DEED WAS NOT EXECUTED BY HIM. IT WAS SUBMITTED THAT ASSESSEES FATHER HAD ENTERED INTO AGREEMENT OF SALE IN THE YEAR 1980 ITSELF , AND THE SALE CONSIDERATION IS MENTIONED AS RS.3 LAKHS WHICH WAS RECEIVED BY THE VENDORS FROM THE VENDEE IN 1980 ITSELF AND ON THE REQUEST OF THE LEGAL HEIRS OF THE VENDEES , THE ASSESSEES BEFORE THE TRIBUNAL ALONG WITH TWO OTHERS HAVE EXECUTED THE SALE DEED. THEREFORE, ACCORDING TO THE ASSESSEES B EFORE US THERE WAS NO TRANSFER IN THE RELEVANT A.Y. ATTRACTING A CAPITAL GAIN TAX. HOWEVER, IN THE ALTERNATIVE, ASSESSEES ALSO CLAIMED COST OF CONSTRUCTION @ RS.250/ - PER SQ.FT. FOR 850 SQ.FT. ITA NO.1350 - 1351 - 1352/H/18 AY:2008 - 09 SRI ANIL LAHOTI, SRI JAGDISH LAHOTI & SMT.MATHURA DEVI LAHOTI, HYD. VS. ITO, WARD4(1),HYD. 3 I.E. RS.2,12,500/ - IN THE YEAR 1980 ITSELF FOR COMPUTING CAPI TAL GAIN. HOWEVER, SINCE THE ASSESSEE DID NOT SUBMIT ANY PROOF OF THE COST OF THE CONSTRUCTION AND ALSO THE AGREEMENT OF SALE, THE AO DID NOT ACCEPT ASSESSEES CONTENTION AND BY APPLYING THE PROVISIONS OF S. 5 0C OF THE ACT ADOPTED MARKET VALUE OF THE PROP ERTY AT RS.23,74,800/ - AND ASSESSEES SHARE WAS CALCULATED AT RS.3,95,800/ - . HE CALCULATED DEEMED COST OF ACQUISITION OF THE PROPERTY I.E. RS.5,856/ - AND AFTER ALLOWING COST OF INDEXATION HE ARRIVED AT LONG TERM CAPITAL GAIN OF RS.3,63,533/ - . 2.1. AGGR IEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO REFUSED TO ACCEPT ASSESSEES CONTENTIONS ABOUT THE SALE OF PROPERTY IN 1980 AND THUS CONFIRMED THE ORDER OF THE AO . 3 . AGAINST THE ORDER OF THE CIT(A), THE ASSESSEE S ARE IN APPEAL BEFORE THE TRIBUNAL . IN THE CASE OF SHRI ANIL LAHOTI, THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED C IT (A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN INITIATING PROCEEDINGS U/S 147 OF THE I.T.ACT WITHOUT CONSIDERING THE FACT THAT THERE IS NO ESCAPEMENT OF INCOME. 3. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN APPLYING THE PROVISIONS OF SEC.50C OF THE I.T.ACT IN DETERMINING THE VALUE FIXED BY THE SUB REGISTRAR AT RS.23,74,800 / - AS THE CONSIDERATION AS AGAINST RS.3,00,000 / - RECEIVED BY THE APPELLANT . 4. THE LEARNED CIT (A) OUGHT TO HAVE CONSIDERED THE FACT TH AT THE AGREEMENT BETWEEN THE VENDEE AND SRI SHIVANARAYAN LAHOTI WAS EXECUTED SOMETIME DURING 1980 AND THE REGISTRATION WAS EFFECTED NOW AS SRI SHIVANARAYAN LAHOTI PASSED AWAY AND EVEN THE VENDEE SRI P.VENKATESWARA RAO ALSO PASSED AWAY 5. THE LEARNED CIT (A) OUGHT TO HAVE HELD THAT THE PROPERTY WAS TRANSFERRED ON 22.12.1980 AND THAT THE CAPITAL GAIN AROSE FOR THE ASSESSMENT YEAR 1981 - 82 AND IN THE ALTERNATE OUGHT TO HAVE HELD THAT THE PROVISIONS OF S 50C HAVE NO APPLICATION AND THE AMOUNT ACTUALLY RECEIVED IS THE CONSIDERATION FOR DETERMINING THE CAPITAL GAIN. 6. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. THE GROUNDS RAISED BY OTHER ASSESSEES ARE ALSO SIMILAR. ITA NO.1350 - 1351 - 1352/H/18 AY:2008 - 09 SRI ANIL LAHOTI, SRI JAGDISH LAHOTI & SMT.MATHURA DEVI LAHOTI, HYD. VS. ITO, WARD4(1),HYD. 4 3. 1. THE LD .COUNSEL FOR THE ASSESSEE SMT.S.SANDHYA , REITERATED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEES FATHER HAD ENTERED INTO AN AGREEMENT OF SALE WITH VENDEES IN THE YEAR 1980 ITSELF AND HAS RECEIVED THE SALE CONSIDERATION BUT BEFORE HE COULD EXECUT E THE REGISTERED SALE DEED , HE DIED. LD.COUNSEL ALSO SUBMITTED THAT THE VENDEES ARE IN POSSESSION OF THE SAID PROPERTY EVER SINCE 1980 AND EVEN CONSTRUCTED HOUSE THEREON WHICH PROVES THAT THE TRANSFER OF PROPERTY HAS TAKEN PLACE IN THE YEAR 1980 ITSELF. SHE HAS ALSO PRODUCED A CO PY OF THE AGREEMENT OF SALE DATED 5 TH DECEMBER, 1977 AND 15 TH AUGUST, 1978 AND ALSO COPIES OF THE PROPERTY TAX RECEIPTS IN FAVOUR OF THE VENDEES. SHE SUBMITTED THAT THESE DOCUMENTS GO TO PROVE THAT THE TRANSFER HAD TAKEN PLACE IN THE YEAR 1978 - 79 ITSELF AND IT CANNO T BE BROUGHT TO TAX IN THE RELEVANT A.Y. AS THE SALE DEED HAS BEEN EXECUTED ONLY TO GIVE EFFECT TO THE AGREEMENT OF SALE AND THE TRANSFER WHICH HAS TAKEN PLACE EARLIER. SHE THEREFORE PRAYED THAT THE ADDITIONAL EVIDENCE IN THE FORM OF AGREEMENT OF SALE AND THE PROPERTY TAX RECEIPTS B E ADMITTED AND CONSIDERED FOR ADJUDICATION OF THE ISSUE. 3.2. LD.DR WAS ALSO HEARD WHO OPPOSED THE ADMISSION OF ADDITIONAL EVIDENCE. 4. HAVING REGARD TO RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, I FIND THA T THE ASSESSEE S COULD NOT FURNISH COPIES OF AGREEMENT OF SALE OR ANY OTHER EVIDENCES BEFORE THE AO OR THE CIT(A) , IN SUPPORT OF THEIR CLAIM THAT THE PROPERTY HAS BEEN SOLD AND THE POSSESSION HAS BEEN HANDED OVER TO THE VENDEES IN THE YEAR 197 8 - 79 AND THE VENDEES ARE IN POSSESSION OF THE PROPERTY AND HAVE EVEN CONSTRUCTED HOUSE THEREON . T HEY HAVE FILED THE RELEVANT DOCUMENTS BEFORE THE TRIBUNAL FOR THE FIRST TIME AS ADDITIONAL EVIDENCE. AS THEY GO TO THE ROOT OF THE MATTER, I AM INCLINED TO ADMIT THE ADDITIONAL EVIDENCE AND REMAND THE MATTER TO THE AO FILE OF THE WITH A DIRECTION TO EXAMINE WHETHER THE VENDEES OR T HEIR LEGAL HEIRS ARE IN POSSESSION OF THE PROPERTY AND TO EXAMINE THE ADDITIONAL EVIDENCE FILED BY ASSESSEE, AND, IF IT IS FOUND THAT THE VENDEES ARE IN POSSESSION OF THE PROPERTY FROM THE EARLIER PERIOD I.E. 1979 - 80 ONWARDS, THEN THE TRANSFER IS TO BE CONSIDERED TO HAVE BEEN COMPLETED IN THOSE YEARS AND CAPITAL GAIN CANNOT BE BROUGHT TO TAX IN ITA NO.1350 - 1351 - 1352/H/18 AY:2008 - 09 SRI ANIL LAHOTI, SRI JAGDISH LAHOTI & SMT.MATHURA DEVI LAHOTI, HYD. VS. ITO, WARD4(1),HYD. 5 THE RELEVANT AY BEFORE THE TRIBUNAL. WITH THESE DIRECTIONS THE ADDITIONAL EVIDENCE IS ADMITTED , AND THE MATTER IS SET ASIDE TO THE FILE OF AO. NEEDLESS TO MEN TION THAT THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARING. 5 . IN THE RESULT, ASSESSEES APPEAL S ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 28 TH FEBRUARY, 2020 . SD/ - (P MADHAVI DEVI) JUDICIAL MEMBER DATED: 28 TH FEBRUARY, 2020 . *GMV COPY FORWARDED TO: 1. SHRI ANIL LAHOTI, SHRI JAGADISH LAHOTI AND SMT.MATHURA DEVI LAHOTI, H.NO.1 - 1 - 267/4, STREET NO.2, CHIKKADPALLY, HYDERABAD . 2. ITO, WARD 4 ( 1 ), HYDERABAD. 3. ACIT, RANGE 4 , HYDERABAD 4. CIT(A) - 1 , HYDERABAD 5. PR.CIT - 1 , HYDERABAD 6 . D.R. ITAT HYDERABAD 7 . GUARD FILE ITA NO.1350 - 1351 - 1352/H/18 AY:2008 - 09 SRI ANIL LAHOTI, SRI JAGDISH LAHOTI & SMT.MATHURA DEVI LAHOTI, HYD. VS. ITO, WARD4(1),HYD. 6 1. DRAFT DICTATED ON 1 1 /02/20 20 2. DRAFT PLACED BEFORE THE AUTHOR 1 2 /02/20 20 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 28/02/2020 6. KEPT FOR PRONOUNCEMENT 28/02/2020 7. FILE SENT TO BENCH CLERK