Visakha Jilla Nava Nirmana Samithi, , Narsipatnam V. The Deputy Commissioner of Income Tax, CPC, Bengalore

ITA 152/VIZ/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4524 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 02-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B.SATYANARAYA RAJU
• Keywords: Capital Gains
• Section: 143(1); 201; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T. A.NO. 152 /VIZ/201 9 ( / A SSESSMENT Y EAR : 201 5 - 1 6 ) M/S VISAKHA JILLA NAVA NIRMANA SAMITHI D.NO.3 - 26, SIVARAMA NILAYAM FIRST LANE, SARADA NAGAR NARSIPATNAM [PAN :AAATV7396N] VS. DY .COMMISSIONER OF INCOME TAX CIRCLE - 5(1) VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : S HRI G.V.N.HARI, AR / RESPONDENT BY : SHRI B.SATYANARAYA RAJU, DR / DATE OF HEARING : 2 4 .0 2 .2020 / DATE OF PRONOUNCEMENT : 26 .0 2 . 20 20 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : TH IS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 6 , HYDERABAD IN I.T.A. NO. 10 607 /2018 - 19 / B3/ CIT(A) - 6 DATED 18 .0 2 .201 9 FOR THE ASSESSMENT YEAR (A.Y.) 201 5 - 1 6 . 2 I.T.A. NO. 152 /VIZ/2019 , A.Y.201 5 - 1 6 M/S VISAKHA JILLA NAVA NIRMAN SAMITHI, NARSIPATNAM 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ISSUE OF ADJUSTMENTS MADE U/S 143(1)(A) O F THE INCOME TAX ACT, 1961 (IN SHORT ACT). THE ASSESSEE FILED THE RETURN OF INCOME ADMITTING TOTAL INCOME OF RS.NIL ON 30.09.2015. THE INCOME TAX DEPARTMENT, CPC, BANGALORE PROCESSED THE RETURN U/S 143(1) (A) AND MADE THE ADJUSTMENT TO THE EXTENT OF RS.7,31,016/ - AND RAISED THE DEMAND OF RS.46,660/ - . THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) ENHANCED THE ADDITION AND DIRECTED THE ASSESSING OFFICER(AO) TO DENY THE EXEMPTION OF LONG TERM CAPITAL GAINS O N SALE OF PROPERTY TO THE EXTENT OF RS. 24,06,984/ - . 3. AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. DURING THE APPEAL HEARING, THE LD.AR ARGUED THAT THE ASSESSEE HAD SOLD THE PROPERTY DURING THE YEAR UNDER CONSIDERATION AND ADMITTED THE CAPITAL GAI NS ON SALE OF PROPERTY FOR A SALE CONSIDERATION OF RS.31,38,000/ - FROM WHICH THE COST OF DEVELOPMENT TO THE EXTENT OF RS.7,31,016/ - WAS CLAIMED AS DEDUCTION AND THE BALANCE AMOUNT OF RS.24,06,984/ - WAS INVESTED IN BANK FIXED DEPOSITS WHICH IS ELIGIBLE FOR DEDUCTION U/S 11(1A)(A) OF THE ACT. THE ASSESSEE ALSO ENCLOSED THE DETAILS OF FIXED DEPOSITS MADE IN PAGE NO.28 OF THE PAPER BOOK AND ARGUED THAT THE ADJUSTMENTS MADE BY THE AO U/S 143(1) (A) IS NOT PERMISSIBLE AND BEYOND THE SCOPE OF SECTION/S 143(1)(A) O F THE ACT , 3 I.T.A. NO. 152 /VIZ/2019 , A.Y.201 5 - 1 6 M/S VISAKHA JILLA NAVA NIRMAN SAMITHI, NARSIPATNAM THEREFORE, REQUESTED TO DELETE THE SAME. SIMILARLY, THE LD.AR SUBMITTED THAT THE LD.CIT(A) HAS DENIED EXEMPTION OF RS.24,06,984/ - IN TERMS OF SECTION 11(1A)(A) OF THE ACT WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE. THEREFORE, ARGUED THAT THE E NHANCEMENT MADE BY THE LD.CIT(A) IS ILLEGAL, HENCE REQUESTED TO DELETE THE SAME . 4. ON THE OTHER HAND, THE LD.DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL PLACED ON RECORD. AS PER THE ADJUSTMENTS MADE BY THE CPC, BANGALORE TO THE EXTENT OF RS.7,31,016/ - U/S 143(1) (A) IS AN ISSUE WHICH REQUIRED TO BE VERIFIED WITH THE RELEVANT DOCUMENTS. THEREFORE, THE ADJUSTMENTS ARE NOT WITHIN THE SCOPE PROVIDED U/S 143(1)(A) OF THE ACT. AS PER PROVI SO TO SECTION 143(1) (A) , THE AO IS REQUIRED TO GIVE AN INTIMATION BEFORE MAKING SUCH ADJUSTMENTS , EITHER IN WRITING OR IN ELECTRONIC MODE AND THE DEPARTMENT HAS NOT DEMONSTRATED THAT IT HAS GIVEN AN INTIMATION TO THE ASSESSEE PROPOSING TO MAKE SUCH ADJUST MENTS. THEREFORE, THE ADJUSTMENT MADE BY THE CPC U/S 143(1) (A) IS BEYOND THE SCOPE OF THE SAID SECTION, HENCE, NOT PERMISSIBLE AND ACCORDINGLY DELETED . 4 I.T.A. NO. 152 /VIZ/2019 , A.Y.201 5 - 1 6 M/S VISAKHA JILLA NAVA NIRMAN SAMITHI, NARSIPATNAM 6. THE NEXT ISSUE IS ENHANCEMENT MADE BY THE LD.CIT(A) IN THE APPEAL. THE LD.CIT(A) HAS DIRECTED TH E AO TO DENY THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 11(1A)(A) OF THE ACT AND THE ASSESSEE CONTENDED THAT THE LD.CIT(A) IS NOT PERMITTED TO MAKE ENHANCEMENT WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE. IN THE INSTANT CASE WE, OBSERVE FROM THE ORDER OF THE LD.CIT(A) THAT, HE HAS NOT GIVEN ANY ENHANCEMENT NOTICE BEFORE ENHANCING THE ADDITION. THEREFORE, THE ENHANCEMENT MADE BY THE LD.CIT(A) IS UNSUSTAINABLE, HENCE DELETED. 7. THE THIRD ISSUE IN THIS APPEAL IS DENIAL OF CREDIT FOR AN AMOUNT OF RS.35,309/ - AS AGAINST THE CLAIM OF RS.46,426/ - CLAIMED BY THE ASSESSEE. THE LD.CIT(A) WITHOUT VERIFYING THE DETAILS AND RECONCILIATION OF THE INCOME HAS DIRECTED THE AO TO ALLOW THE SUM OF RS.35,309/ - AS AGAINST RS.46,426/ - CLAIMED BY THE ASSESSEE. THEREFORE, WE, DIRECT THE AO TO CALL FOR THE INFORMATION FOR RECONCILIATION OF THE RECEIPTS AND THE ADMISSION OF INCOME AS PER THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE AND ALLOW THE CRE DIT FOR THE TAXES PAID/CREDIT CLAIMED IN RESPECT OF THE INCOME ADMITTED IN THE YEAR UNDER CONSIDERATION OR IN THE EARLIER YEARS AS PER THE METHOD OF ACCOUNTING . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ON THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES . 5 I.T.A. NO. 152 /VIZ/2019 , A.Y.201 5 - 1 6 M/S VISAKHA JILLA NAVA NIRMAN SAMITHI, NARSIPATNAM 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY , 2020. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 26 . 0 2 .20 20 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO : - 1. / THE ASSESSEE M/S VISAKHA JILLA NAVA NIRMAN SAMITHI, NARSIPATNAM 2 . / THE REVENUE DY.COMMISSIONER OF INCOME TAX, CIRCLE - 5(1), VISAKHAPATNAM 3. THE PR.COMMISSIONER OF INCOME TAX - 3 , VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 6 , HYDERABAD 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM