Prem Chander Maragani, USA V. Income Tax Officer, (International Taxation)-2, Hyderabad

ITA 1492/Hyd/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0107 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 01-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Cost of acquisition; Set aside
• Section: 50C; 147; 148

Judgement Text

ITA NOS 1491 AND 1492 OF 2019 PREM CHANDER MARAGANI SAN DIEGO USA PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NOS.1491 & 1492/HYD/2019 ASSESSMENT YEAR: 2011-12 SHRI PREM CHANDER MARAGANI, SAN DIEGO, USA VS. INCOME TAX OFFICER, INTERNATIONAL TAXATION-2 HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI S. RAMA RAO REVENUE BY : SRI SUNIL KUMAR PANDEY, DR DATE OF HEARING: 23/12/2020 DATE OF PRONOUNCEMENT: 31/12/2020 ORDER THESE ARE ASSESSEES APPEALS FOR THE A.Y 2011-12 AGAINST THE ORDER OF THE CIT (A)-10, HYDERABAD, DAT ED 25.07.2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND AN NRI. AS PER THE INFORMATION RECEI VED FROM THE DIRECTOR OF INCOME TAX (I&CI), THE ASSESSEE BEING T HE CO-OWNER OF THE PROPERTY ALONG WITH 7 OTHERS HAD SOLD A PROPERT Y TO ONE SHRI RAJESH NAHATA FOR A TOTAL CONSIDERATION OF RS.50.00 LAKHS AS AGAINST THE MARKET VALUE OF RS.86,83,000/- THROUGH SALE DEED NO.679/2011, DATED 23.03.2011. SINCE THE ASSESSEE H AD NOT FILED THE RETURN OF INCOME FOR THE A.Y 2011-12 ADMITTING THE ABOVE TRANSACTION, PROCEEDINGS U/S 147 WERE INITIATED AND DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO FU RNISH DETAILS OF THE TRANSACTION. HOWEVER, NONE APPEARED FOR THE ASSESSEE AND NEITHER WAS ANY EXPLANATION GIVEN AND THEREFORE, TH E AO HAS INVOKED THE PROVISIONS OF SECTION 50C AND CONSIDERE D THE SALE ITA NOS 1491 AND 1492 OF 2019 PREM CHANDER MARAGANI SAN DIEGO USA PAGE 2 OF 3 CONSIDERATION AS RS.86,83,000/- AND TREATED 1/8 TH SHARE AS THE ASSESSEES SHARE IN THE PROPERTY AT RS.10,85,375/- AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) CHALLENGING THE APPLICATION OF SECTION 50C OF T HE ACT AND ALSO COMPUTATION OF THE CAPITAL GAIN WITHOUT CONSIDERING THE COST OF ACQUISITION OF THE PROPERTY. THE CIT (A) CALLED FOR A REMAND REPORT FROM THE AO ON THE SUBMISSIONS MADE BY THE ASSESSEE AND THE AO REPORTED THAT THE NOTICES U/S 148 AND ALSO 142(1 ) WERE SENT TO THE ASSESSEE THROUGH SPEED POST AND THE SAME WERE S ERVED ON THE ASSESSEE. HOWEVER, THE AO DID NOT MENTION ANYTHING ABOUT THE MERITS OF THE CASE OR THE COST OF ACQUISITION FOR C OMPUTING THE CAPITAL GAIN TAX. THE CIT (A) AFTER CONSIDERING THE REMAND REPORT OF THE AO, HAS HELD THAT IN THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS FURNISHED CERTAIN DETAILS AND COPIES OF THE DOC UMENTS BUT THERE WAS NO REQUEST FOR ADMISSION OF ADDITIONAL EV IDENCE. THEREFORE, HE DID NOT ADMIT THE ADDITIONAL EVIDENCE AND DID NOT ALLOW THE COST OF ACQUISITION. AGAINST THIS ORDER O F THE CIT (A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISIN G THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS T O THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. 2. THE LEARNED CIT (A) ERRED IN CONFIRMING THE DETERMINATION OF CAPITAL GAIN WITHOUT ALLOWING COST OF ACQUISITION OF THE PROPERTY. 3. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE RELEVANT PAPERS WERE FILED BEFORE THE CIT (A) A ND REQUESTED THAT THE CIT (A) OR THE AO MAY BE DIRECTED TO ALLOW THE COST OF ACQUISITION WHILE COMPUTING THE CAPITAL GAIN. 4. THE LEARNED DR WAS ALSO HEARD. ITA NOS 1491 AND 1492 OF 2019 PREM CHANDER MARAGANI SAN DIEGO USA PAGE 3 OF 3 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I DEEM IT FIT AND PROPER TO ADMIT THE AD DITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE AND ALLOW THE CO ST OF ACQUISITION WHILE COMPUTING THE CAPITAL GAIN. THE I SSUE IS SET ASIDE TO THE FILE OF THE AO FOR DENOVO RE-CONSIDERA TION. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVEN A FAIR OPP ORTUNITY OF HEARING. 6 IN THE RESULT, ASSESSEES APPEAL IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2020. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST DECEMBER, 2020. VINODAN/SPS COPY TO: 1 SHRI PREM CHANDER MARAGANI, 12752 APT 117 RANCHO PQ BLVD, SAN DIEGO, CA, USA 921290, PRESENTLY REP. BY KONDAJ U GURU PRASAD, C.A. 3-6-258/C, HIMAYATNAGAR, HYDERABAD 500 029 2 ITO (INTERNATIONAL TAXATION)-II, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500029 3 CIT (A)-10 HYDERABAD 4 PR. CIT (IT & TP) HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER