Income Tax Officer, Ward-15(1), Hyderabad V. Krishna Pitla , Secunderabad

ITA 1374/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9354 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M MAHIDHAR
• Keywords: Sale consideration of property below Jantri Value; Search and seizure
• Section: 143(3); 50C; 147; 148; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 1374/HYD/ 2019 ASSESSMENT YEAR: 2009 - 10 INCOME TAX OFFICER, WARD - 15(1), HYDERABAD. VS. KRISHNA PITLA, SECUNDERABAD. PAN: AEPPP 5735 E (APPELLANT) (RESPONDENT) ITA NO.137 5 /HYD/ 2019 ASSESSMENT YEAR: 2009 - 10 INCOME TAX OFFICER, WARD - 15(1), HYDERABAD. VS. MOHAN RAJ PITLA, SECUNDERABAD. PAN: AEPPP 5736 E (APPELLANT) (RESPONDENT) ITA NO.137 9 /HYD/ 2019 ASSESSMENT YEAR: 2009 - 10 INCOME TAX OFFICER, WARD - 15(1), HYDERABAD. VS. LAKSHMI PITLA, SECUNDERABAD. PAN: AJLPP 0134 A (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI K.C. DEVDAS REVENUE BY: SHRI M. MAHIDHAR, DR DATE OF HEARING: 25/02/2021 DATE OF PRONOUNCEMENT: 11 /03/2021 ORDER 2 PER A. MOHAN ALANKAMONY, AM.: ALL THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS OF THE LD. CIT (A) - 7, HYDERABAD IN APPEAL NO. 192, 190 & 193/CIT(A) - 7/2017 - 18 , DATED 22/07/2019 PASSED U/S. 143(3) R.W.S 147 AND U/S. 250(6) OF THE ACT FOR THE AY 2009 - 10 IN THE CASES OF KRISHNA PITLA, MOHAN RAJ PITLA AND SMT. LAKSHMI PITLA RESPECTIVELY. SINCE, ALL THE SE THREE ASSESSEES ARE RELATED TO EACH OTHER AND THE ISSUE BEING SOMEWHAT SIMILAR AND WITH RESPECT TO THE TRANSFER OF THE SAME IMMOVABLE PROPERTY, FOR THE SAKE OF CONVENIENCE, THESE APPEALS ARE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER. 2. THE REVENUE HAVE RAISED THREE IDENTICAL GROUNDS IN ITS APPEALS HOWEVER, THE CRUX OF THE ISSUE IS THAT: THE LD. CIT (A) ERRED I N LAW AND ON FACTS THAT THE CANCELLATION DEED IS NOT A REGISTERED DOCUMENT KEPT PENDING BY THE REGISTRATION AUTHORITY AND HENCE THE JOINT DEVELOPMENT AGREEMENT IS NOT YET CANCELLED. 3. THE BRIEF FACTS OF THE CASE ARE THAT ALL THE THREE ASSESSEES ARE INDIVIDUALS RELATED TO EACH OTHER EARNING AGRICULTURAL INCOME. THE ASSESSEE S SRI PITLA KRISHNA AND SMT. PITLA LAKSHMI FILED THEIR INCOME TAX RETURN ON 31/7/2009 DECLARING TOTAL INCOME OF RS. 4,23,040/ - AND 3,13,96 3/ - AND AGRICULTURAL INCOME OF RS. 2,40,000/ - AND RS. 1,80,000 / - RESPECTIVELY. THE ASSESSEE SRI PITLA MOHAN RAJ INITIALLY DID NOT FILE HIS RETURN OF INCOME HOWEVER, IN RESPONSE TO NOTICE U/S. 148 OF 3 THE ACT FILED HIS RETURN OF INCOME ON 6/12/2016 ADMITTING TOTAL INCOME OF RS. 2,30,500/ - . A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF SRI G. BALREDDY AND HIS RELATED GROUP. DURING THE COURSE OF THE SEARCH AND SEIZURE OPERATION AND POST SEARCH PROCEEDINGS IT WAS OBSERVED THAT THAT THE ASSESSEE SHRI PITLA KRISHNA ALONG WITH WIFE SMT. PITLA LAKSHMI AND SON SHRI MOHAN RAJ HAD ENTERED INTO A SALE AGREEMENT COUPLED WITH REGISTERED GENERAL POWER OF ATTO RNEY VIDE DOCUMENT NO. 2234/2008 DATED 30/07/2008 TOWARDS SALE OF THEIR IMMOVABLE PROPERTY CONSISTING OF 14 ACRES OF LAND FOR AN AGGREGATE SALE CONSIDERATION OF RS. 14 CRS. IT WAS FURTHER OBSERVED FROM THE SWORN STATEMENT DATED 6/1/2015 RECORDED FROM SRI P . KRISHNA DURING THE COURSE OF SEARCH PROCEEDINGS THAT PHYSICAL POSSESSION OF THE LAND WAS HANDED OVER TO THE VENDEE G. BALREDD Y. SINCE THE SRO VALUE OF THE LAND WAS RS. 14,22,96,000/ - , THE LD. AO INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT AND ADOPTED THE SALE CONSIDERATION AT THE SRO VALUE OF THE PROPERTY FOR COMPUTING THE LTCG WHICH WORKED OUT TO RS.4, 72,89,652 / - IN THE CASE OF EACH OF THE ASSESSEE. THE ASSESSEE S HAD FAILED TO DECLARE THE LTCG IN THEIR RESPECTIVE RETURNS OF INCOME SINCE T HE SALE TRANSACTION WAS CANCELLED. 4. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT THE LD. REVENUE AUTHORITIES HAD HELD THE TRANSFER TO BE VALID BECAUSE THE SALE CANCELLATION DEED WAS NOT EXECUTED BY WAY OF A REGISTERED DOCUMENT. THE LD. AR FURTHER SUBMITTED THAT THE SALE DOCUMENT WAS EXECUTED BY 4 WAY OF REGISTERED SALE CANCELLATION DEED DATED 07/03/2019 . HOWEVER, THE SAME WAS KEPT AS PENDING DOCUMENT AND WAS RELEASED ON 2/11/2019 , BY THEN THE LD. CIT (A) HAD PASSED THE ORDER ON 22/7/2019 AS THE REGISTERED DOCUMENT WAS NOT PRODUCED BEFORE HIM. THE L D. AR THEREFORE SUBMITTED THAT EITHER THE MATTER MAY BE DECIDED IN THE ASSESSEES FAVOUR SINCE THE REGISTERED SALE CANCELLATION DEED IS PLACED ON RECORD BEFORE THE TRIBUNAL OR REMITTED BACK TO THE FILE OF LD. AO FOR DE - NOVO CONSIDERATION. THE LD. DR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE LD. REVENUE AUTHORITIES AND PRAYED FOR CONFIRMING THE SAME. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. SINCE THE ASSESSEE HAS PRODUCED THE REGISTERED SALE CANCELLATION DOCUMENT BEFORE US WHICH GOES TO THE ROOT OF THE MATTER WITH RESPECT TO THE VALIDITY OF THE SALE OR THE TRA NSFER OF THE PROPERTY AS THE CASE MAY BE, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. AO FOR DE - NOVO CONSIDERATION. IT IS ALSO PERTINENT TO MENTION THAT NO T PRODUCING THE REGISTERED SALE CANCELATION DOCUMENT AT THE A PPROPRIATE TIME BEFORE THE LD. REVENUE AUTHORITIES IS NOT ATTRIBUTABLE TO THE LAPSE ON THE PART OF THE ASSESSEE AS THE SAME WAS WITHHELD BY THE REGISTRATION DEPARTMENT WHICH IS BEYOND THE CONTROL OF THE ASSESSEE. 6. IN THE RESULT, APPEALS OF THE REVENUE A RE ALLOWED FOR STATISTICAL PURPOSES . 5 PRONOUNCED IN THE OPEN COURT ON THE ELEVENTH MARCH OF 2021. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 11 TH MARCH, 2021. OKK COPY TO: - 1. (I) SRI KRISHNA PITLA, 36 - 26, BRINDAVAN COLONY, SAINIK PURI, SECUNDERABAD. (II) SRI MOHAN RAJ PITLA, 36 - 26, BRINDAVAN COLONY, SAINIK PURI, SECUNDERABAD. (III) SMT. LAKSHMI PITLA, 36 - 26, BRINDAVAN COLONY, SAINIK PURI, SECUNDERABAD. 2. INCOME TAX OFFICER, WARD - 15(1), 5 TH FLOOR, D - BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) - 7, HYDERABAD. 4. THE PRINCIPAL COMMISSIONER OF INCOME TAX - 7, HYDERABAD. 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. 6. GUARD FILE