Shri P. Dilip Kumar, Hyderabad V. The DCIT Central Circle - 6, Hyderabad

ITA 1383/HYD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91755 (ITAT-HYDERABAD)
• Duration Of Justice: 45 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Capital asset; Search and seizure; Opportunity of being heard
• Section: 54F; 2(14); 132

Judgement Text

ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI SAKTIJIT DEY, JUDICIAL MEMBER APPEAL (ITA NO) APPELLANT RESPONDENT A.Y 1383 & 1384 /HYD/2010 P. BHAGYA LAKSHMI L/R OF LATE P. DILIP KUMAR, HYDERABAD PAN: AKXPP 2875 K DCIT, CENTRAL CIRCLE 6 HYDERABAD 2008-09 & 2007- 08 1396/HYD/2010 ACIT, CENTRAL CIRCLE 6 HYDERABAD P. BHAGYA LAKSHMI L/R OF LATE P. DILIP KUMAR, HYDERABAD PAN: AKXPP 2875 K 2008-09 1381 & 1382/HYD/ 2010 SHRI SYED NASEER HYDERABAD PAN: BPNPS 7174C DCIT, CENTRAL CIRCLE 6 HYDERABAD 2008-09 & 2007- 08 1395/HYD/2010 ACIT, CENTRAL CIRCLE 6, HYDERABAD SHRI SYED NASEER HYDERABAD PAN: BPNPS 7174 C 2008-09 FOR ASSESSEE : SHRI T. C HAITANYA KUMAR FOR REVENUE : SHRI RAJAT MITRA, DR DATE OF HEARING : 09.07.2015 DATE OF PRONOUNCEMENT : 17 .07.2015 O R D E R PER BENCH: THESE SETS OF SIX APPEALS IN CASE OF TWO DIFFERENT ASSESSEES (FOUR BY THE ASSESSEES AND TWO BY THE DEPARTMENT) A RE AGAINST TWO SEPARATE ORDERS OF THE LD CIT (A)-I HYDERABAD, FOR THE A.YS 2007-08 AND 2008-09. WHILE APPEALS FOR A.Y 2007-08 ARE BY THE RESPECTIVE ASSESSEES ONLY, THERE ARE CROSS APPEALS BY THE ASSESSEES AND DEPARTMENT FOR A.Y 2008-09. SINCE, FA CTS AND ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON AND I DENTICAL, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED TOGETHER AND DISPOSED ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 2 OF 15 OFF IN THIS COMBINED ORDER. WE WILL FIRST TAKE UP A PPEALS RELATING TO LATE P. DILIP KUMAR. ITA NOS. 1383 & 1384/HYD/2010: 2. THE ONLY COMMON ISSUE IN BOTH THESE APPEALS OF A SSESSEE IS IN RELATION TO DISALLOWANCE OF CLAIM U/S 54F. SINCE FACTS RELATING TOTHE AFORESAID ISSUE ARE COMMON FOR BOTH THE APPEA LS, AND THE SUBSTANTIVE ORDER PASSED BY THE LD CIT (A) IS FOR A .Y 2007-08, FOR THE SAKE OF CONVENIENCE, WE WILL REFER TO THE FACTS INVOLVED IN A.Y 2007-08. 3. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPU TE ARE, THE DECEASED ASSESSEE WAS AN INDIVIDUAL. A SEARCH AND S EIZURE OPERATION U/S 132 OF THE I.T. ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF RADHA REALTY GROUP OF CASES. AS A CONSE QUENCE OF THE SEARCH AND SEIZURE OPERATIONS, A NOTICE U/S 153 C WAS ISSUED TO THE ASSESSEE CALLING UPON HIM TO SUBMIT HIS RETU RN OF INCOME. IN RESPONSE TO THE SAID NOTICE, ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING TOTAL IN COME OF RS.6,68,514. 4. DURING THE ASSESSMENT PROCEEDINGS AO NOTICED THA T IN THE RELEVANT PREVIOUS YEAR, ASSESSEE HAS RECEIVED AN AM OUNT OF RS.20.00 LAKHS ON ACCOUNT OF SALE OF LAND SITUATED IN PUPPALAGUDA VILLAGE IN SURVEY NOS.262 TO 264 FROM O NE SHRI RAM CHANDRA RAO. AGAINST THE AMOUNT RECEIVED FOR SA LE OF THE LAND, IT WAS NOTICED BY THE AO, ASSESSEE HAS CLAIME D DEDUCTION TOWARDS INCIDENTAL EXPENSES AMOUNTING TO RS.12.00 L AKHS. WHEN THE AO CALLED UPON THE ASSESSEE TO FURNISH EVIDENCE IN SUPPORT OF THE EXPENDITURE CLAIMED, ASSESSEE SUBMITTED THAT HE HAD ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 3 OF 15 WRONGLY CLAIMED THE AMOUNT AS INCIDENTAL EXPENDITUR E ON SALE OF LAND, , ACTUALLY THE AMOUNT OF RS.12.00 LAKHS WAS U TILISED FOR CONSTRUCTION OF NEW HOUSE PROPERTY, HENCE IT SHOULD BE ALLOWED AS EXEMPTION U/S 54F OF THE ACT. TO SUPPORT HIS CLA IM, ASSESSEE SUBMITTED GENERAL POWER OF ATTORNEY DATED 2.4.1994 AND 28.12.1995 WHEREIN THE ASSESSEE AND SHRI SYED NASE ER WERE APPOINTED AS GPA HOLDERS OF SHRI MOHD. JAMALUDDIN, MOHD. KHAIRUDDIN AND MOHD. KHARIMUDDIN FOR THE SALE OF TH EIR LAND SITUATED IN PUPPALAGUDA VILLAGE REFERRED TO ABOVE. ON PERUSING THE GPAS, AO FOUND THAT AS PER THE RECITALS MADE TH EREIN, AS THE LANDLORD WAS UNABLE TO LOOK AFTER THE AFFAIRS AND T RANSACTIONS OF THE LAND, THEY HAD AUTHORISED ASSESSEE AND SHRI SYE D NASEER TO ACT AS THEIR AGENTS IN ATTENDING THE COURT MATTERS AND ALSO TO SELL THE LAND ON THEIR BEHALF. THE LANDS WERE SOLD DURIN G THE YEAR UNDER CONSIDERATION TO DLF GROUP OF COMPANIES. AO O BSERVED THAT THE ORIGINAL LANDLORDS WHO HAVE RECEIVED THE S ALE CONSIDERATION FROM DLF HAVE DECLARED CAPITAL GAIN O N THE SALE PROCEEDS. FROM THE ORDER OF THE LOKA ADALAT PASSED BY THE HON'BLE DISTRICT JUDGE, R.R. DISTRICT IN O.S. NO.48 1 OF 2007, AO FOUND THAT ASSESSEES NAME IS NOT MENTIONED IN THE SAID ORDER. THEREFORE, AO WAS OF THE VIEW THAT THE ASSESSEE HAD NO RIGHTS OVER THE LAND IN QUESTION, HENCE CANNOT CLAIM THE C ONSIDERATION RECEIVED REPRESENTS ANY SALE CONSIDERATION FOR SALE OF LAND OR RELINQUISHMENT OF THE RIGHTS OVER THE SAID PROPERTY . AO WAS OF THE VIEW THAT THE AMOUNT RECEIVED BY THE ASSESSEE I N CONNECTION WITH THE SAID TRANSACTION DOES NOT REPRESENT ANY CO NSIDERATION FOR SALE OF LONG TERM CAPITAL ASSET IN THE HANDS OF THE ASSESSEE. IN THIS CONNECTION, HE OBSERVED THAT THE ASSESSEE HIMS ELF IN THE RETURN FILED HAS SHOWN THE AMOUNT AS COMMISSION/BUS INESS INCOME. ON THE AFORESAID REASONING, AO ULTIMATELY H ELD THAT THE ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 4 OF 15 ASSESSEE IS NOT ENTITLED FOR CLAIM OF EXEMPTION U/S 54F OF THE ACT AND ACCORDINGLY DISALLOWED THE DEDUCTION CLAIMED OF RS.12.00 LAKHS. BEING AGGRIVED OF SUCH DISALLOWANCE, ASSESSE E PREFERRED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. 5. IN COURSE OF HEARING BEFORE THE LD CIT (A), ASSE SSEE REITERATED WHAT WAS SUBMITTED BEFORE THE AO. THE C IT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF THE MATERIALS AVAILABLE ON RECORD FOUND THAT THE SUBJEC T LAID IN SURVEY NOS.262 TO 264 OF PUPPALAGUDA VILLAGE, WHICH WAS A LITIGATED PROPERTY WAS FINALLY SETTLED BY THE LOKA ADALAT VIDE ORDER PASSED IN OS NO.481 OF 2007 UNDER WHICH ALL T HE RIGHTS IN THE LAND WERE TRANSFERRED TO M/S. DEMI REALTORS. HE ALSO FOUND THAT WHILE PASSING THE JUDGMENT THE LOKA ADALAT HAS CONSIDERED THE COMPROMISE PETITION OF THE VENDEE AND DEFENDANT S AND ONE AMONGST THE DEFENDANT IS ALSO THE PRESENT ASSESSEE. ON GOING THROUGH THE COMPROMISE PETITION, THE LD CIT (A) FOU ND THAT THE ASSESSEE ALONG WITH ANOTHER DEFENDANT SHRI SYED NAS EER HAS EXECUTED VARIOUS SALE DEEDS IN FAVOUR OF THE DEFEND ANT NO.10 TO 19. SUCH SALE DEEDS WERE EXECUTED BASED ON THE POWE R OF ATTORNEY HELD BY THE ASSESSEE ALONG WITH SHRI SYED NASEER. 6. FURTHER IT WAS FOUND BY THE LD CIT (A) THAT IN T HE JUDGMENT DELIVERED BY THE LOKA ADALAT IT HAS BEEN CLEARLY ME NTIONED THAT THE PAYMENTS ARE MADE FOR RELINQUISHMENT OF TITLE R IGHTS CLAIMED AND INTEREST OVER THE SCHEDULED PROPERTY. THE LD C IT (A) AFTER CONSIDERING ALL THE FACTS AND MATERIALS ON RECORD C ONCLUDED THAT THE AMOUNT RECEIVED BY THE ASSESSEE WAS IN CONNECTI ON WITH TRANSACTION IN SALE OF LAND OR RELINQUISHMENT OF RI GHTS OVER THE LAND. HE, THEREFORE, DID NOT AGREE WITH THE OBSERVA TIONS OF THE AO ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 5 OF 15 ON THIS ISSUE. IN OTHER WORDS HE ACCEPTED ASSESSEE S CLAIM THAT THE AMOUNT RECEIVED WAS TOWARDS TRANSFER OF A CAPIT AL ASSET. HOWEVER, WHILE CONSIDERING ASSESSEES CLAIM OF EXEM PTION U/S 54F, THE LD CIT (A) OBSERVED THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SUBSTANTIATE HIS CLAIM THAT HE HAS INCURRED THE EXPENDITURE FOR CONSTRUCTION OF THE HOUSE AS PER TH E CONDITIONS OF SECTION 54F. HE, THEREFORE, UPHELD THE ADDITION OF AN AMOUNT OF RS.12.00 LAKHS MADE BY THE AO ON ACCOUNT OF DISA LLOWANCE OF ASSESSEES CLAIM OF DEDUCTION U/S 54F. WHILE DOING SO, THE LD CIT (A) RELIED UPON THE ORDER PASSED BY HIM IN MOHD. AL EEMUNDDIN GROUP OF CASES IN ITA NO.0845/CC-6,HYD/CIT (A)-1/09 -10 TO 854/CC-6,HYD/CIT (A)-I/09-10 DATED 28.07.2010. 7. THE LD AR SUBMITTED BEFORE US, THE ASSESSEE HAVI NG UTILISED THE SALE CONSIDERATION RECEIVED FROM SALE OF LAND I N CONSTRUCTION OF HOUSE PROPERTY, IT IS ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT. TO SUBSTANTIATE HIS CLAIM THAT THE ASSESSEE HAS CON STRUCTED A HOUSE PROPERTY, HE SUBMITTED BEFORE US A PLAN OF TH E HOUSE PROPERTY CLAIMED TO HAVE BEEN CONSTRUCTED BY THE AS SESSEE ON WHICH EXEMPTION U/S 54F WAS CLAIMED. THE LD AR ALSO SUBMITTED THAT IN CASE OF MOHD. ALEEMUNDDIN AND OTHERS GROUP CASES, THE ITAT HAS RESTORED THE MATTER BACK TO THE FILE OF TH E AO FOR DECIDING AFRESH ASSESSEES CLAIM OF EXEMPTION U/S 5 4F. HE, THEREFORE, SUBMITTED THAT THE ISSUE MAY BE RESTORED TO THE FILE OF THE AO FOR DECIDING ASSESSEES CLAIM OF EXEMPTION U /S 54F. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WE LL AS MATERIALS ON RECORD. AT THE OUTSET IT NEEDS TO BE C LARIFIED AS FAR AS NATURE OF RECEIPT IS CONCERNED, THERE CANNOT BE ANY DISPUTE THAT ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 6 OF 15 IT IS TOWARDS TRANSFER OF A CAPITAL ASSET AS DEFINE D U/S 2(14) OF THE ACT, AS THE DECISION OF THE LD CIT (A) IN THIS REGA RD HAS NOT BEEN CHALLENGED BY THE DEPARTMENT BEFORE US. HAVING HELD SO, IT HAS TO BE EXAMINED WHETHER THE ASSESSEES CLAIM OF DEDU CTION U/S 54F IS ALLOWABLE OR NOT. ON A PERUSAL OF THE ORDER OF THE LD CIT (A), IT IS EVIDENT THAT HE HAS REJECTED ASSESSEES CLAIM BASICALLY FOR THE REASON THAT NO EVIDENCE REGARDING UTILIZATI ON OF SALE PROCEEDS IN CONSTRUCTION OF A NEW HOUSE PROPERTY HA S BEEN PRODUCED, EITHER AT THE STAGE OF ASSESSMENT OR BEFO RE HIM. FOR THIS PURPOSE, HE ALSO RELIED UPON AN ORDER PASSED B Y HIM IN CASE OF MOHD. ALEEMUNDDIN AND OTHERS. HOWEVER, COUNSEL F OR THE ASSESSEE HAS ASSERTED BEFORE US THAT NOT ONLY THE A SSESSEE HAD CONSTRUCTED A NEW HOUSE PROPERTY BY UTILISING THE S ALE PROCEEDS, BUT IN FACT ASSESSEES FAMILY IS ALSO STAYING IN TH AT HOUSE ONLY. ON A PERUSAL OF THE ORDER PASSED IN CASE OF MOHD. A LEEMUNDDIN AND OTHERS IN ITA NOS.1264 TO 1267/HYD/2010 FOR A.Y 2008-09 DATED 29.04.2014, IT IS NOTICED THAT THE ITAT WHILE DECIDING IDENTICAL ISSUE RELATING TO THE CLAIM OF DEDUCTION U/S 54F HAS RESTORED THE MATTER BACK TO THE FILE OF THE AO WITH THE FOLLOWING OBSERVATIONS: 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE MATERIAL ON RECORD, WE FIND THAT GROUP OF CASES PER TAINING TO THE ASSESSEES QUA THE OWNERS OF THE LANDS ADJOINING TO THE LANDS OF THE ASSESSEES, WERE DISPOSED OF BY THIS TRIBUNAL BY HOLDING AS UNDER- 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE PROVISIONS OF SECTION 54F ARE THAT I F THE ASSESSEE BEING A INDIVIDUAL OR HUF, THE CAPITAL GAI N ARISES FROM TRANSFER OF ANY LONG TERM CAPITAL ASSET NOT BE ING A RESIDENTIAL HOUSE AND THE ASSESSEE HAS, WITHIN A PE RIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHIC H THE TRANSFER TAKES PLACE, PURCHASES OR, HAS WITHIN A PE RIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED A RESIDENTI AL HOUSE, THE CAPITAL GAIN WILL NOT BE CHARGED TO THE EXTENT OF COST OF NEW ASSET IF THE ENTIRE NET CONSIDERATION IS INVEST ED OR ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 7 OF 15 PROPORTIONATE TO THE EXTENT OF NEW ASSET BEARS TO T HE NET CONSIDERATION IF THE CONDITIONS LAID DOWN U/S. 54F ARE FULFILLED THE ASSESSEE IS ENTITLED FOR DEDUCTION U/ S. 54F. ACCORDINGLY, THE ONUS IS ON THE ASSESSEES TO PROVE THAT THE CLAIM MADE BY THEM U/S. 54F IS IN ACCORDANCE WITH L AW. IN VIEW OF THIS, CONSIDERING THE ARGUMENTS OF THE ASSE SSEES COUNSEL, AS THERE IS LACK OF ENQUIRY FROM THE SIDE OF THE ASSESSING OFFICER IN THE INTEREST OF JUSTICE, WE RE MIT BACK THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINATION. HOWEVER, WE MAKE IT CLEAR THAT THE ASS ESSEE SHALL CO-OPERATE WITH THE ASSESSING OFFICER BY PLAC ING NECESSARY EVIDENCE TO SUGGEST THAT CONSTRUCTION HAS BEEN COMPLETED AS PRESCRIBED IN THE PROVISIONS OF SECTIO N 54F OF THE ACT AND THE MERE WITHDRAWALS FROM BANK ACCOUNT BY THE ASSESSEE ITSELF CANNOT BE CONSIDERED AS IT IS U SED FOR CONSTRUCTION. IT MAY BE USED FOR ANY PURPOSE AND TH E ASSESSEE IS DIRECTED TO PROVE THE ACTUAL TRANSACTIO N DURING THE AS PERIOD PRESCRIBED IN SECTION 54F OF THE IT A CT. IF THE PROVISIONS OF SECTION 54F ARE COMPLIED WITH BY THE ASSESSEE, THE DEDUCTION U/S. 54F IS TO BE GRANTED I N ACCORDANCE WITH LAW. IT IS NEEDLESS TO SAY THAT THE ONUS IS ON THE ASSESSEES TO PROVE THEIR CLAIMS. THE ASSESSI NG OFFICER SHALL AFFORD REASONABLE OPPORTUNITY OF HEAR ING TO THE ASSESSEES. SINCE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US IN THESE APPEALS ARE EXACTLY SAME, AS THOSE CONSIDERED BY TH E TRIBUNAL IN ITS ORDER DATED 31.8.2012, AND ONE OF U S, I.E. ACCOUNTANT MEMBER IS AUTHOR AND SIGNATORY OF THE SA ID ORDER DATED 31.8.2012, WE ARE INCLINED TO FOLLOW TH E DECISION OF THE COORDINATE BENCH. WE ACCORDINGLY SE T ASIDE THE ORDERS OF THE CIT(A) IN THESE CASES AS WELL AND REMIT THE MATTERS TO THE FILE OF THE ASSESSING OFFICER WI TH SIMILAR DIRECTIONS. NEEDLESS TO MENTION THAT THE ASSESSING OFFICER SHALL GIVE FAIR OPPORTUNITY OF HEARING TO THE ASSES SEES BEFORE DECIDING THESE MATTERS AFRESH IN ACCORDANCE WITH LAW AND AS PER THE DIRECTIONS OF THE TRIBUNAL IN IT S ORDER DATED 31.8.2012. 9. SINCE LD CIT (A) WHILE REJECTING ASSESSEES CLAI M OF DEDUCTION U/S 54F HAS RELIED UPON THE ORDER PASSED BY HIM IN CASE OF MOHD. ALEEMUNDDIN AND OTHERS, WHICH IN TURN HAS BEEN SET ASIDE BY THE COORDINATE BENCH IN THE ORDER UNDE R REFERENCE, WE CONSIDER IT APPROPRIATE TO REMIT THE ISSUE RELAT ING TO THE ASSESSEES CLAIM OF DEDUCTION U/S 54F TO THE FILE O F THE AO WITH ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 8 OF 15 SIMILAR DIRECTION. FACTS AND ISSUES BEING MATERIALL Y SAME IN A.Y 2008-09, EXCEPT FOR THE AMOUNT OF DEDUCTION OF RS.5 1,00,000/-, FOLLOWING OUR DECISION FOR A.Y 2007-08, WE ALSO RES TORE THE ISSUE RELATING TO ASSESSEES CLAIM OF DEDUCTION U/S 54F T O THE FILE OF THE AO FOR DECIDING AFRESH AFTER DUE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 1396/HYD/2010- REVENUES APPEAL 11. IN THIS APPEAL, DEPARTMENT HAS RAISED FOUR EFFE CTIVE GROUNDS. IN GROUND NO.1, DEPARTMENT HAS CHALLENGED THE DECISION OF THE LD CIT (A) IN DELETING THE ADDITION S OF RS.11.50 LAKHS AND RS.2,19,000 REPRESENTING THE ADVANCES REC EIVED FROM SHRI V. RAMACHANDRA RAO AND SHRI JAGAT SINGH RESPEC TIVELY. 12. BRIEFLY THE FACTS ARE, DURING THE ASSESSMENT PR OCEEDINGS, AO ON THE BASIS OF INFORMATION ON RECORD FOUND THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.11.50 LAKHS AS COMMISS ION FROM SHRI V. RAMACHANDRA RAO DURING THE FINANCIAL YEAR 1 999-2000 IN RESPECT OF LANDS SOLD DURING THE A.Y UNDER CONSI DERATION TO DLF GROUP OF COMPANIES. AO OPINED THAT THOUGH THE C OMMISSION OF RS.11.50 LAKHS WAS RECEIVED BY THE ASSESSEE DURI NG FINANCIAL YEAR 1999-2000, BUT SINCE THE SALE TRANSACTION OF T HE PROPERTY WAS FINALIZED DURING THE A.Y UNDER CONSIDERATION, T HE INCOME ACCRUED TO THE ASSESSEE DURING THE CURRENT YEAR, HE NCE IS TAXABLE IN THE IMPUGNED A.Y. THOUGH, THE ASSESSEE OBJECTED TO THE VIEW ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 9 OF 15 EXPRESSED BY THE AO BY STATING THAT THE AMOUNT RECE IVED FROM SHRI V. RAMACHANDRA RAO WAS SPENT IN SETTLEMENT OF LITIGATIONS ON THE LAND, BUT THE AO ALLEGING THAT THE ASSESSEE FAILED TO PRODUCE EVIDENCE IN RESPECT OF THE EXPENDITURE CLAI MED ADDED BACK THE AMOUNT OF RS.11.50 LAKHS TO THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. SIMILARLY, HE FOU ND THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.2,19,000 AS C OMMISSION FROM SHRI JAGAT SINGH DURING FINANCIAL YEAR 1995-96 TO 1997-98 IN RESPECT OF LAND WHICH WERE SOLD IN THE IMPUGNED A.Y TO THE DLF GROUP OF COMPANIES. ON THE BASIS OF THE REASONI NG ON WHICH HE TREATED COMMISSION AMOUNT OF RS.11.50 LAKHS AS T HE INCOME OF THE ASSESSEE, AO ALSO TREATED THE AMOUNT OF RS.2 ,19,000 AS THE ASSESSEES INCOME OF THE ASSESSEE UNDER THE YEA R CONSIDERATION. BEING AGGRIEVED OF SUCH ADDITION, AS SESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY. THE LD CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE IN THE CONTEXT OF THE FACTS AND MATERIALS ON RECORD FOUND THAT THE COMMISSION WAS RECEIVED BY THE ASSESSEE IN FINANCIA L YEAR 1999- 2000 ON THE BASIS OF AGREEMENT OF SALE ENTERED INTO BETWEEN THE TWO PARTIES. THEREFORE, HE WAS OF THE VIEW THAT WHE N THE AMOUNT WAS RECEIVED IN FINANCIAL YEAR 1999-2000, IT CANNOT BE TAXED FOR THE YEAR UNDER CONSIDERATION. FURTHER HE NOTICED TH AT THE LAND WHICH WAS SOLD TO DLF WAS UNDER VARIOUS LITIGATION. HE NOTED THAT ASSESSEE ALONG WITH SHRI SYED NASEER WAS THE O RIGINAL GPA AND IRREVOCABLE POWER OF ATTORNEY HOLDER IN THE SAI D LAND AND IN PURSUANCE OF THE SAME HE HAD ENTERED INTO TRANSACTI ON WITH SHRI V. RAMACHANDRA RAO. THE LAND TRANSACTION WITH DLF I S DIFFERENT THAN THE LAND TRANSACTION OF THE ASSESSEE WITH SHRI V. RAMACHANDRA RAO. HE ALSO OBSERVED THAT THE INCIDENT S OF TRANSACTION WAS ALSO IN DIFFERENT YEAR. HE NOTED TH AT IN THE ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 10 OF 15 ASSESSMENT ORDER PASSED IN THE CASE OF SHRI V. RAMA CHANDRA RAO, AO ALSO MADE A REFERENCE TO THE LAND TRANSACTI ON BETWEEN THE ASSESSEE WITH SHRI V.RAMACHANDRA RAO. ON THE BA SIS OF THE AFORESAID FACTS, LD CIT (A) FINALLY CONCLUDED THAT AS THE ASSESSEE RECEIVED THE AMOUNT IN QUESTION IN FINANCIAL YEAR 1 999-2000 THAT TOO FOR A DIFFERENT TRANSACTION, OTHER THAN THE TRA NSACTION WITH DLF, THE AMOUNT CANNOT BE TAXED AS INCOME DURING TH E YEAR UNDER CONSIDERATION. ACCORDINGLY HE DELETED THE ADD ITION. AS FAR AS THE AMOUNT OF RS.2,19,000 RECEIVED FROM SHRI JAG AT SINGH IS CONCERNED, THE LD CIT (A) AGAIN OBSERVED THAT NOT O NLY THE AMOUNT WAS RECEIVED IN THE FINANCIAL YEAR 1995-96 T O 19997-98, BUT THE TRANSACTION FOR WHICH THE AMOUNT WAS RECEIV ED IS DIFFERENT FROM THE TRANSACTION IN RELATION TO THE L AND SOLD TO THE DLF. ACCORDINGLY HE DELETED THE ADDITION. 13. WE HEARD BOTH THE PARTIES. AFTER PERUSAL OF THE MATERIALS ON RECORD, WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE LD CIT (A). THE AO HIMSELF ADMITS THAT THE COMMISSION AMOUNT WA S RECEIVED BY THE ASSESSEE IN CASE OF TRANSACTION WIT H SHRI V. RAMACHANDRA RAO IN THE FINANCIAL YEAR 1999-2000 AND IN CASE OF SHRI JAGAT SINGH IN FINANCIAL YEARS 1995-96 TO 1997 -98. THUS WHEN THE AMOUNT IN QUESTION WAS RECEIVED LONG BACK, WE FAIL TO UNDERSTAND HOW THEY CAN BE TAXED IN THE IMPUGNED A. Y, EVEN ASSUMING THAT THE SAID TRANSACTION ULTIMATELY FRUCT IFIED IN THE IMPUGNED A.Y. EVEN, OTHERWISE ALSO THE LD DR APART FROM MAKING SUBMISSIONS HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FACTUAL FINDING OF THE LD CIT (A) TH AT THE TRANSACTIONS FOR WHICH THE ASSESSEE RECEIVED THE CO MMISSION IS DIFFERENT FROM THE TRANSACTION WITH DLF. IN VIEW OF THE AFORESAID, ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 11 OF 15 WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ER OF THE LD CIT (A) IN DELETING THE ADDITION OF RS.11.50 LAKHS AND RS.2,19,000. ACCORDINGLY THE GROUND RAISED BY THE DEPARTMENT IS DISMISSED. 14. THE NEXT ISSUE RAISED BY THE DEPARTMENT IS AGAI NST THE DECISION OF THE LD CIT (A) IN DELETING THE ADDITION OF AN AMOUNT OF RS.2.50 LAKHS BEING COMMISSION RECEIVED FROM M/S MA LI FLOREX ON SALE OF LAND. 15. BRIEFLY THE FACTS ARE, DURING THE ASSESSMENT PR OCEEDINGS AO NOTICED THAT AS PER THE EVIDENCE ON RECORD M/S. MAL I FLOREX CLAIMED TO HAVE MADE PAYMENT OF RS.2.50 LAKHS TO TH E ASSESSEE AND ANOTHER SUM OF RS.2.50 LAKHS TO SHRI SYED NASEE R TOWARDS COMMISSION IN RESPECT OF LAND SOLD DURING THE YEAR UNDER CONSIDERATION TO DLF GROUP OF COMPANIES. IT WAS ALS O NOTICED THAT M/S MALI FLOREX HAD CLAIMED THAT THE ABOVE PAY MENTS WERE MADE THROUGH CHEQUES. WHEN THIS FACT WAS CONFRONTED TO THE ASSESSEE, HE DENIED OF HAVING RECEIVED ANY PAYMENT FROM M/S MALI FLOREX. AO, HOWEVER, CONSIDERING THE FACTS THA T M/S MALI FLOREX HAD SHOWN THE PAYMENT IN THE NAME OF THE ASS ESSEE, ADDED AMOUNT OF RS.2.50 LAKHS PROTECTIVELY AT THE H ANDS OF THE ASSESSEE. ASSESSEE CHALLENGED THE ADDITION IN THE A PPEAL FILED BEFORE THE CIT (A). LD CIT (A) AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE ASSESSMENT ORDER PAS SED IN CASE OF MALI FLOREX FOR A.Y 2008-09 NOTICED THAT THE AMO UNT OF RS.5.00 LAKHS PAID TO THE ASSESSEE AND SHRI SYED NA SEER FORM PART OF RS.2,48,12,500 RECEIVED AS ADVANCE FROM DLF GROUP OF COMPANIES IN RESPECT OF SALE OF LAND TO IT. IN COUR SE OF THE ASSESSMENT PROCEEDINGS WHEN MALI FLOREX WAS QUESTIO NED ABOUT ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 12 OF 15 SUCH PAYMENT, IT WAS SUBMITTED BY THE COMPANY THAT THE SAID PAYMENTS ARE APPEARING IN SALE DEED DOCUMENT NO.837 9/2007 DATED 22.08.2007 AS ADVANCES. IT WAS ALSO SUBMITTED BY THE COMPANY THAT THE PAYMENT TO THE ASSESSEE AND SHRI S YED NASEER AMOUNTING TO RS.5.00 LAKHS WAS MADE THROUGH BEARER CHEQUES. THE LD CIT (A) ALSO OBSERVED THAT ON EXAMINATION OF THE SALE DEED NO.8379/2007, IT WAS FOUND THAT THE PAYMENT OF RS.2 ,48,12,500 WAS IN FACT MADE TO DEMI REALTORS AND NOT TO THE AS SESSEE AND SHRI SYED NASEER AS CLAIMED BY THE SAID COMPANY. TH US ON CONSIDERATION OF THE AFORESAID FACTS, THE CIT (A) C ONCLUDED THAT SINCE THE PAYMENT OF RS.5.00 LAKHS BY MALI FLOREX T O THE ASSESSEE AND SHRI SYED NASEER WAS NOT CONCLUSIVELY PROVED AND SINCE THE ASSESSEE HAD CATEGORICALLY DENIED OF HAVI NG RECEIVED ANY SUCH AMOUNT FROM MALI FLOREX, THERE IS NO JUSTI FICATION TO UPHOLD THE ADDITION OF RS.2.50 LAKHS AT THE HANDS O F THE ASSESSEE ON PROTECTIVE BASIS. ACCORDINGLY, HE DIRECTED THE A O TO DELETE THE ADDITION. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS ON RECORD. AS COULD BE SEEN, ADDITION OF RS.2.50 LA KHS WAS MADE AT THE HANDS OF THE ASSESSEE RELYING UPON THE STATE MENT OF MALI FLOREX THAT IT HAS PAID THE AMOUNT OF RS.5.00 LAKHS TO THE ASSESSEE AND SHRI SYED NASEER AS COMMISSION TOWARDS SALE OF LAND. THOUGH, THE AO HAD MENTIONED THAT THE AMOUNTS WERE PAID THROUGH CHEQUES, BUT AS PER DISCUSSION MADE BY THE LD CIT (A), IT APPEARS, THAT MALI FLOREX IN COURSE OF THE ASSESSME NT PROCEEDINGS STATED THAT THE AMOUNTS WERE PAID THROU GH BEARER CHEQUES. AS IT APPEARS, BEFORE MAKING THE ADDITION, AO HAS NOT MADE ANY INQUIRY TO FIND OUT WHETHER THE CHEQUES WE RE ACTUALLY ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 13 OF 15 ENCASHED BY THE ASSESSEE. ASSESSEE HAS NOT ONLY DEN IED OF HAVING RECEIVED THE AMOUNT IN QUESTION AT THE STAGE OF ASSESSMENT AND BEFORE THE LD CIT (A), IT HAS ALSO S UBMITTED THAT THE AMOUNT IN QUESTION IS NOT REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE. THEREFORE, THE AO HAVING NOT MADE ANY INQUIRY OR BROUGHT ANY MATERIAL RECORD TO PROVE THAT THE ASSES SEE HAS ACTUALLY RECEIVED AMOUNT OF RS.2.50 LAKHS, THE ADDI TION CANNOT BE SUSTAINED. MOREOVER, ON PERUSAL OF THE ORDER PAS SED BY THE ITAT HYDERABAD BENCH IN CASE OF MALI FLOREX LTD FOR A.Y 2008-09 IN ITA NO.891/HYD/2011 DATED 28.09.2012, IT IS SEEN THAT WHILE CONSIDERING THE ISSUE RELATING TO ADDITION OF THE A MOUNT OF RS.5.00 LAKHS REPRESENTING THE PAYMENT MADE TO THE ASSESSEE AND SHRI SYED NASEER, THE COORDINATE BENCH DELETED THE ADDITION MADE AT THE HANDS OF M/S MALI FLOREX BEING CONSCIOU S OF THE FACT THAT THE SAID ADDITION MADE AT THE HANDS OF THE ASS ESSEE AND SHRI SYED NASEER WERE DELETED BY THE CIT (A). IN TH E AFORESAID FACTS AND CIRCUMSTANCES, THERE BEING NO EVIDENCE BR OUGHT BY THE AO TO CONCLUSIVELY PROVE THE FACT THAT THE ASSESSEE IN FACT HAS RECEIVED AMOUNT OF RS.2.50 LAKHS FROM M/S MALI FLOR EX LTD, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD CIT (A) ON THIS ISSUE. ACCORDINGLY, UPHOLDING THE O RDER OF THE LD CIT (A) WE DISMISS THE GROUNDS RAISED BY THE REVENU E. IN VIEW OF OUR DECISION IN THE PRECEDING PARAGRAPHS, THERE IS NO NEED TO ADJUDICATE GROUND NOS.3 & 4 SEPARATELY. ITA NOS. 1381 & 1382/HYD/2010:A.Y 2007-08 & 2008-09 2. THE ONLY ISSUE WHICH IS COMMON IN BOTH THE APPEA LS OF SHRI SYED NASEER RELATES TO DISALLOWANCE OF CLAIM OF DE DUCTION U/S 54F AMOUNTING TO RS.37,50,000 AND RS.60,00,000 FOR A.Y 2007- 08 AND 2008-09 RESPECTIVELY. ON PERUSING THE ASSESS MENT ORDERS ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 14 OF 15 AND CIT(A)S ORDER, WE FIND THAT FACTS RELATING THI S ISSUE ARE IDENTICAL TO SIMILAR ISSUE ARISING IN CASE OF LATE P. DILIP KUMAR. IN FACT, LD CIT (A) WHILE DECIDING THE AFORESAID IS SUE HAS SIMPLY FOLLOWED THE ORDER PASSED BY HIM IN CASE OF LATE P. DILIP KUMAR. IN THE AFORESAID FACTS AND IRCUMSTANCES, FOLLOWING OUR DECISION WHILE DECIDING SIMILAR ISSUE IN CASE OF LATE P. DIL IP KUMAR IN PARAGRAPHS 8 & 9 (SUPRA), WE REMIT THE ISSUE BACK T O THE FILE OF THE AO FOR DECIDING AFRESH IN TERMS WITH OUR DIRECT ION CONTAINED THEREIN. THE AO MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 1395/HYD/2010- REVENUES APPEAL 1. IN THIS APPEAL DEPARTMENT HAS RAISED FOUR EFFECT IVE GROUNDS. IN GROUND NO.1, DEPARTMENT HAS CHALLENGED THE DECISION OF THE LD CIT (A) IN DELETING THE ADDITION S OF RS.11.50 LAKHS AND RS.1,25,000 REPRESENTING THE COMMISSIONS RECEIVED FROM SHRI V. RAMACHANDRA RAO AND SHRI JAGAT SINGH RESPECTIVELY. THIS ISSUE IS IDENTICAL TO ISSUE RAIS ED BY THE DEPARTMENT IN GROUND NO.1 OF ITA NO.1396/HYD/2010 I N CASE OF LATE P. DILIP KUMAR. FOLLOWING OUR DECISION IN PARA GRAPH 13 OF THE ORDER, WE UPHOLD THE ORDER OF LD CIT (A) BY DIS MISSING THE GROUND RAISED. 2. THE NEXT ISSUE RAISED BY THE DEPARTMENT IS AGAIN ST THE DECISION OF THE LD CIT (A) IN DELETING THE ADDITION OF AN AMOUNT OF RS.2.50 LAKHS BEING COMMISSION RECEIVED FROM M/S MA LI FLOREX ITA NOS 1383 1384 1396 AND OTHERS P DILIP KUMAR HYD ERABAD PAGE 15 OF 15 ON THE SALE OF LAND. THIS ISSUE IS IDENTICAL TO THE ISSUE RAISED BY THE DEPARTMENT IN GROUND NO.2 OF DEPARTMENTS APPEA L IN ITA NO.1396/HYD/2010 IN CASE OF LATE P. DILIP KUMAR. FO LLOWING OUR DECISION IN PARA 16 (SUPRA), WE UPHOLD THE ORDER OF LD CIT (A) ON THIS ISSUE BY DISMISSING THE GROUND RAISED BY DEPAR TMENT. IN VIEW OF OUR DECISION HEREINABOVE, THERE IS NO NEED FOR ADJUDICATING GROUND NOS. 3 & 4 SEPARATELY. 3. IN THE RESULT DEPARTMENTS APPEAL IS DISMISSED. 4. TO SUM UP WHILE ASSESSEES APPEALS IN ITA NOS.13 83 & 1384/HYD/2010 AND 1381 & 1382/HYD/2010 ARE ALLOWED FOR STATISTICAL PURPOSES, THE DEPARTMENTAL APPEALS IN I TA NO.1396 & 1395/HYD/2010 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2015. S D/ - S D/ - (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 17 TH JULY, 2015. VNODAN/SPS COPY TO: 1. SHRI T. CHAITANYA KUMAR, ADVOCATE, FLAT NO.409, MET RO RESIDENCY, RAJBHAWAN ROAD, SOMAJIGUDA, HYDERABAD 2. DY.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 6 HYD ERABAD 3. CIT(A)-I HYDERABAD 4. CIT (CENTRAL) HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER