Sivapothuluru Veerareddy Gadluru, Hyderabad, Hyderabad V. Asst.Commissioner of Income Tax, Circle-2(2), Hyderabad

ITA 1685/Hyd/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5711 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 18-03-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 03-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Search and seizure; Tangible material; Fair market value; Reassessment proceedings; Set aside; Capital Gains
• Section: 143(3); 50C; 2(14); 153A; 13; 148; 37; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1685/HYD/17 2007-08 SIVAPOTHULURU VEERAREDDY GADLURU, HYDERABAD [PAN: ACAPG0993Q] ASST.COMMISSIONER OF INCOME TAX, CIRCLE-2(2) HYDERABAD 1686/HYD/17 2007-08 SIVA SHANKAR REDDY GANDLURU, HYDERABAD [PAN: AHAPG3919M] FOR ASSESSEE : SHRI M.V.ANIL KUMAR, AR FOR REVENUE : SHRI ROHIT MUJUMDAR, DR DATE OF HEARING : 18-03-2021 DATE OF PRONOUNCEMENT : 30-04-2021 O R D E R PER S.S.GODARA, J.M. : THESE TWO ASSESSEES APPEALS FOR AY.2007-08 ARISE F ROM THE CIT(A)-2, HYDERABADS ORDERS DATED 30-06-2017 PA SSED IN APPEAL NOS.0095 & 0094/2015-16; IN PROCEEDINGS U/S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH PARTIES. CASE FILES PERUSED. 2. WE NOTICE FROM A PERUSAL OF THE ASSESSEES PLEADIN G IN THE INSTANT TWIN APPEALS THAT IT HAS CHALLENGED VALIDITY OF SECTION 148/147 PROCEEDINGS ON VARIOUS FACETS FOLLOWED BY TH E ISSUE ON MERITS THAT THE IMPUGNED LONG TERM CAPITAL GAINS ADD ITION OF RS.37,00,000/- EACH HAS BEEN WRONGLY MADE IN ITS HANDS BY ITA NOS. 1685 & 1686/HYD/2017 :- 2 -: INVOKING SECTION 50C DESPITE THE ALLEGED FACT THAT THE LA ND SOLD HEREIN IS AGRICULTURAL ONLY THAN A CAPITAL ASSET U/S.2 (14) OF THE ACT. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL SUBMISSIONS. WE DEEM IT APPROPRIATE FIRST OF ALL TO DE AL WITH CERTAIN BASIC FACTS. THE CIT(A)S DETAILED DISCUSSION HAS SUMMARISED THE RELEVANT BACKDROP AS FOLLOWS: 5. I HAVE CONSIDERED THE ASSESSMENT ORDER AND GROU NDS OF APPEAL. THE ONLY ISSUE INVOLVED IN THE APPEAL IS WITH REGAR D TO AO'S ACTION IN MAKING AN ADDITION OF RS.37,00,000/- (RS.69,37,500 - RS.32,37,500) TOWARDS CAPITAL GAINS AS AGAINST THE AMOUNT ADMITTE D BY THE ASSESSEE. AO'S OBSERVATIONS ARE AS UNDER: '2.0, A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 28/07/2008 IN THE CASE OF SRI VENKATA KUTAMBA RAO & OTHERS AND ASSESSEES RESIDENTIAL PREMISE WAS ALSO COVERED UNDER THE SEAR CH OPERATION. DURING THE SEARCH PROCEEDINGS, THE ASSESSEE'S UNDIS CLOSED INCOME WAS QUANTIFIED BY THE INVESTIGATION WING AT RS. 60 LAKHS FOR A.Y.2007-08, ON ACCOUNT OF NON-FILING OF RETURN OF INCOME. THE ASSESSEE VIDE HIS DEPOSITION DTD: 12/09/2008 ADMITT ED THE SAME (I.E. RS.60 LAKHS) AS HIS INCOME AND ACCORDINGLY FI LED THE RETURN OF INCOME ON 05/03/2010 IN RESPONSE TO THE NOTICE U/S. 153A OF THE ACT RETURNING AN INCOME OF RS.45,60,602/-. THE ASSESSME NT WAS COMPLETED ON 27/12/2010 U/S. 143(3) R.W.S.153A OF T HE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS 'THE ACT') M AKING AN ADDITION OF RS.14,40,000/- BEING THE DIFFERENCE BETWEEN THE INC OME ADMITTED BY THE ASSESSEE VIDE HIS DEPOSITION DTD: 12/09/2008 AN D INCOME ADMITTED BY THE ASSESSEE IN THE RETURN OF INCOME FI LED BY HIM ON 05/03/2010. 3.0. IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR A.Y.2007-08 ON 05/03/2010, THE ASSESSEE ADMITTED INCOME OF RS. 45, 60,602/- UNDER VARIOUS HEADS OF INCOME AS FOLLOWS: SALARY RS. 12,56,400/- INCOME FROM HOUSE PROPERTY RS. 10,92,938/- CAPITAL GAINS RS. 21,59,554/- INCOME FROM OTHER SOURCES RS. 21,710/- GROSS TOTAL INCOME RS. 45,60,602/- ITA NOS. 1685 & 1686/HYD/2017 :- 3 -: 4.0. THE LONG TERM CAPITAL GAIN ADMITTED BY THE ASS ESSEE WAS OFFERED ON THE SALE OF HIS SHARE OF PROPERTY OF LAND ADMEAS URING AC 4.14 GTS (WHICH THE ASSESSEE JOINTLY OWNED SRI. G. SIVA SANK AR REDDY) SITUATED AT SURVEY NO. 124/1, SHAMSHABAD VILLAGE GR AMPANCHAYAT, SHAMSHABAD MANDAL, RANGAREDDY DIST, VIDE SALE DEED NO. 15085/2006. 4.1. SUBSEQUENTLY, IT WAS OBSERVED THAT THE ASSESSE E HAS FAILED TO DISCLOSE IN THE RETURN OF INCOME FILED BY HIM, THE MATERIAL TACT THAT THE VALUE ADOPTED BY THE CONCERNED AUTHORITIES) FOR THE PURPOSE OF STAMP DUTY IS RS.1,38,75,000/- AS AGAINST. THE FULL VALUE CONSIDERATION OF RS.(64,75,000/- ADOPTED BY THE ASSESSEE FOR THE COM PUTATION OF CAPITAL GAIN FOR A.Y.2007-08. AS PER THE PROVISIONS OF SEC.50C OF THE ACT; THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUT Y SHOULD BE DEEMED AS THE FULL VALUE CONSIDERATION RECEIVED BY THE ASSESSEE. SINCE THE INCOME OF THE ASSESSEE FOR A.Y.2007-08, H AS ESCAPED ASSESSMENT TO AN EXTENT OF RS.37,00,000/- (RS.69,37 ,500 RS.32,37,500) WITH REGARD TO HIS SHARE OF PROPERTY (I.E., 50% OF 1,38,75,000), THE CASE WAS RE-OPENED U/S.147 OF THE ACT WITH THE PRIOR APPROVAL OF THE COMMISSIONER OF INCOME TAX (C ENTRAL), HYDERABAD. SUBSEQUENTLY, A NOTICE U/S. 148 OF THE A CT WAS ISSUED TO THE ASSESSEE ON 28/03/2014. 4.2. IN RESPONSE, THERETO THE ASSESSEE VIDE LETTER DTD: 31/07/2014 REQUESTED FOR THE ADJOURNMENT OF THE CASE FOR 15 DA YS. 4.3. SUBSEQUENTLY, THE CASE WAS NOTIFIED TO THE UND ERSIGNED VIDE THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (CEN TRAL) IN F.NO. CIT(C)/1-1/DECENTRAL/2014-15 DATED 16/06/2014 AND C ORRIGENDURM PASSED IN F.NO. CIT(C)/HYD/CORRIGENDUM/2014-15 DATE D 29/10/2014. 4.5. SINCE THE ASSESSEE DID NOT FILE THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.148 OF THE ACT, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 30/12/2014 IN WHICH IT WAS PROPOSED TO APPLY THE PROVISIONS OF S. 50C OF THE ACT, THEREBY DEEMING TH E VALUE OF RS.1,38,75,000/- ADOPTED FOR THE PURPOSE OF STAMP D UTY AS THE FULL VALUE CONSIDERATION RECEIVED BY THE ASSESSEE. IN T HIS CONNECTION THE ASSESSEE WAS ASKED TO FURNISH HIS OBJECTION IF ANY ON OR BEFORE 06/01/2015. 4.6. IN RESPONSE TO THE ABOVE MENTIONED SHOW CAUSE NOTICE, THE ASSESSEE VIDE LETTER DTD:06/01/2015 REQUESTED FOR T HE ADJIOURNMENT OR THE CASE TO TIC WECIT. THE ASSESSEES REQUEST W AS CONSIDERED AND THE CASE WAS ADJOURNED TO 12/01/2015 SUBSEQUENTLY, THE ASSESSEE VIDE LETTER DTD: 23/01/2015 SUBMITTED THAT IN RESPO NSE TO NOTICE U/S. ITA NOS. 1685 & 1686/HYD/2017 :- 4 -: 148 OF THE ACT, THE ASSESSEE HAD FILED A RETURN OF INCOME ON 23/01/2015 AND ENCLOSED A COPY OF THE SAME. IN THE RETURN OF INCOME FILED BY THE ASSESSEE ON 23/01/2015 (IN RESPONSE TO NOTICE U/S. 148 OF THE ACT) THE ASSESSEE ADMITTED AN INCOME OF ONLY RS, 24,01,048/- AS AGAINST THE INCOME OF RS.45,00,600/- ADMITTED BY HIM IN THE RETURN FILED ON 05/03/2010. FURTHER, THE ASSESSEE R EQUESTED FOR THE REASONS FOR ISSUE OF NOTICE U/S. 148 OF THE ACT. , 4.7. IN RESPONSE TO THE SAME, VIDE THIS OFFICE LETT ER 27/01/2015, THE REASONS FOR REOPENING THE CASE PROVIDED TO THE ASSE SSEE. SUBSEQUENTLY THE ASSESSEE VIDE LETTER RECEIVED IN T HIS OFFICE ON 02/02/2015 SUBMITTED AS FOLLOWS: 'AT THE TIME OF FILING OF THE ORIGINAL RETURN OF IN COME THE SALE OF AGRICULTURAL LAND WAS INADVERTENTLY COMPUTED AS LON G TERM CAPITAL GAIN AND TAX PAID. HOWEVER, ON RECEIPT OF THE NOTIC E U/S. 148, REALIZED THAT THE SALE WAS IN RESPECT OF AGRICULTUR AL LANDS AND THE SAME ARE EXEMPT FROM TAX. THE LAND BEING AGRICULTUR AL LAND WITHIN THE MEANING OF SEC.2(14)(III) OF THE I.T.ACT IS EXE MPT FROM TAX. HENCE, ACCORDINGLY IN THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.148, THE EXEMPTION OF AGRICULTURAL LAND WAS CLAIMED. THE PRO VISIONS OF SEC.50C OF THE I.T.ACT ARE NOT APPLICABLE TO AGRICU LTURAL LANDS FOR THE REASON THAT AGRICULTURAL LANDS DO NOT COME UNDER TH E DEFINITION OF 'CAPITAL ASSET'. WE BRING TO YOUR KIND ATTENTION THAT THE ASSESSMENT WAS COMPLETED UNDER SEC 153A RWS 143(3) OF THE I.T.ACT. THE THEN ASSESSING OFFICER HAS IN FACT VERIFIED THE SALE DEED AND TOOK INTO AC COUNT ALL THE MATERIALS AVAILABLE ON RECORD. THEREFORE THERE IS N O FRESH MATERIAL BROUGHT ON RECORD. 5.0.THE ASSESSSEE'S SUBMISSIONS WERE CONSIDERED AND FOUND TO BE NOT ACCEPTABLE FOR THE FOLLOWING FACTS. 5.1. THE ASSESSEE HAS SUBMITTED THAT THE LAND ON WH ICH CAPITAL GAIN WAS OFFERED IN THE ORIGINAL RETURN IS ACTUALLY AN A GRICULTURAL LAND. THIS SUBMISSION OF THE ASSESSEE DOES NOT HOLD GOOD FOR THE FACT THAT THE ASSESSEE HIMSELF OFFERED THE SAME TO TAX. IT IS PERTINENT HERE TO NOTE THAT THE ASSESSEE IN HIS DEPOSITION DT: 12/09/ 2008 ADMITTED AN INCOME OF RS. 60,00,000/- AND ACCORDINGLY OFFERED T HE CAPITAL GAIN FROM THE ABOVE MENTIONED LAND IN ADDITION TO OTHER INCOME AS MENTIONED IN PARA 3.0. OF THIS ORDER. CONSEQUENT TO THE SEARCH OPERATION, THE ASSESSEE HAVING TAKEN A CONSCIOUS DE CISION TO OFFER CAPITAL GAIN ON THE SALE OF THE ABOVE MENTIONED PRO PERTY, IS NOT CORRECT IN STATING THAT THE SAID LAND IS AN AGRICUL TURE LAND AND THE CAPITAL GAIN WAS OFFERED ON THE SAME BY MISTAKE. ITA NOS. 1685 & 1686/HYD/2017 :- 5 -: 5.2. FURTHER, THE ASSESSEE FURNISHED A LETTER DT: N IL FROM SOME RETIRED INSPECTOR OF SURVEY, STATING THAT THE SAID PROPERTY IS 5 KILO METERS AWAY FROM SHAMSHABAD AREA. THIS LETTER DOES NOT HAV E ANY EVIDENTIARY VALUE FOR THE FACT THAT IT HAS BEEN ISS UED BY AN UNIDENTIFIED PERSON, IT IS NOT ADDRESSED TO ANY AUT HORITY/PERSON IN PARTICULAR, THE LETTER DOES NOT CONTAIN ANY DATE AN D THE SURVEY NUMBER OF THE LAND. IT IS SEEN THAT THE SALE DEED M ENTIONS THE LAND AS 'AGRICULTURE LAND', BUT THE ASSESSEE COULD NOT SUBS TANTIATE THAT SAID LAND IS NOT SITUATED WITHIN THE JURISDICTION OF ANY MUNICIPAL CORPORATION OR CANTONMENT OR NOTIFIED AREA OR WITHI N PRESCRIBED DISTANCE FROM THE LOCAL LIMIT OF THE ABOVE MENTIONE D AREAS. IN VIEW OF THE ABOVE, THERE IS NO MERIT IN THE ASSESSEE'S CONT ENTION THAT THE LAND THAT WAS SOLD BY THE ASSESSEE DURING F.Y. 2005-07 I S AN AGRICULTURAL ONE, HENCE, THE PROVISIONS OF S. 50C OF THE ACT IS APPLICABLE TO THE ASSESSEE'S CASE. 5.3. FURTHER THE ASSESSEE HAS SUBMITTED THAT SINCE THE AGRICULTURAL LAND THAT WAS SOLD BY THE ASSESSEE WAS NOT HAVING A PROPER APPROACH ROAD AND THE LAND WAS SURROUNDED BY THE LA NDS OF THE NEIGHBORS FROM ALL THE SIDES, THE LAND WAS SOLD FOR A PRICE LESS THAN THE MARKET VALUE FIXED BY THE SRO. THE ASSESSEE HAS FURTHER REQUESTED TO REFER THE ISSUE TO THE DEPARTMENT VALU ATION OFFICER TO DETERMINE THE FAIR MARKET VALUE OF THE LAND AS ON T HE DATE OF SALE. THIS SUBMISSION OF THE ASSESSEE IS NOT ACCEPTABLE F OR THE FACT THAT THE ASSESSEE HAS NOT DISPUTED THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY BEFORE THE SRO. THE ASSESSEE HAS PAID A STAMP DUTY OF RS.12,54,800/- ON THE VALUE ADOPTED FOR PURPOSE OF STAMP DUTY OF RS. 1,38,75,000/-. WHEN THIS IS THE CASE, IT IS NOT COR RECT ON THE PART OF THE ASSESSEE TO STATE THAT THE MARKET VALUE OF PROP ERTY WAS LOW AND S.50C OF THE ACT, SHOULD NOT BE APPLIED, FROM THE L AYOUT OF THE PROPERTY (ENCLOSED TO THE SALE DEED) IT WAS FURTHER OBSERVED THAT, THE SAME IS NOT COMPLETELY SURROUNDED BY THE LANDS OF N EIGHBORS FROM ALL SIDES BUT IN FACT, TO THE NORTHERN CORNER OF THE LA ND, LEADS TOWARDS WEST. IN VIEW OF THE ABOVE FACTS, THERE IS NO MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE LAND IS LACKING PROPER APPROA CH ROADS AND HENCE IT WAS SOLD FOR A VALUE BELOW THE MARKET VALU E. IN LIGHT OF THE ABOVE FACTS, THE QUESTION OF REFERRING THE VALUATIO N OF THE PROPERTY TO DEPARTMENT VALUATION OFFICER DOES NOT ARISE. IT SHO ULD BE FURTHER NOTED THAT THE LANGUAGE USED IN S.50C OF THE ACT IS AS FO LLOWS: .... THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER. AS DISCUSSED ABOVE, THE FACTS OF THE INSTANT CASE D OES NOT WARRANT REFERENCE TO THE VALUATION OFFICER. ITA NOS. 1685 & 1686/HYD/2017 :- 6 -: 5.4. THE ASSESSEE HAS FURTHER SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS U/S.143(3) R.W.S.153A THE ASSESSING OFF ICER VERIFIED ALL THE MATERIALS AND HENCE NOTICE U/S. 148 OF THE ACT CANNOT BE ISSUED. THIS SUBMISSION OF THE ASSESSEE IS NOT ACCEPTABLE F OR THE FACT THAT IN THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S.153A, THE ISSUE OF CAPITAL GAIN WAS NEVER A MATTER OF DISCUSSION. IT I S PERTINENT HERE TO REPEAT THAT IN THE SAID ORDER THE ONLY ADDITION MAD E WAS RS.14,40,000/- BEING THE DIFFERENCE BETWEEN THE INC OME ADMITTED BY THE ASSESSEE VIDE HIS DEPOSITION DTD: 12/09/2008 AN D THE INCOME RETURNED BY THE ASSESSEE IN THE RETURN OF INCOME FI LED ON 05/03/2010 IN RESPONSE TO NOTICE U/S.153A OF THE ACT. HAVING A DMITTED AN INCOME OF RS.60,00,000/- DURING THE COURSE OF SEARCH IT IS NOT CORRECT ON THE PART OF THE ASSESSEE TO CLAIM AT THIS POINT THAT TH E SAID LAND IS AN AGRICULTURAL LAND AND TAX WAS PAID ON LONG TERM CAP ITAL GAIN BY MISTAKE. 5.5. IT IS PERTINENT HERE TO MENTION THAT THE ASSES SEE'S APPEAL QUESTIONING THE VALIDITY OF THE ASSESSMENT ORDER PA SSED ON U/S. 143(3) 153A OF THE ACT, AND THE ADDITION OF RS.14,4 0,000/-, WAS DISMISSED BY THE COMMISSIONER OF INCOME TAX (APPEAL S)-VII, HYDERABAD VIDE HIS ORDER IN APPEAL NO.1812/ACIT/CIT (A)-VII/10-11, DTD: 30/05/2011. IT SHOULD BE NOTED HERE THAT EVEN DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT(A), THE ASSESS EE DID NOT DISPUTE THE NATURE OF THE LAND (I.E AGRICULTURE OR NOT). 5.6. AGGRIEVED BY THE ABOVE MENTIONED ORDER OF THE CIT(A), THE ASSESSEE FILED AN APPEAL BEFORE ITAT, HYDERABAD. IT IS PERTINENT HERE TO MENTION AT THE COST OF REPLETION THAT EVEN BEFOR E THE ITAT, THE ASSESSEE DID NOT RAISE THE ISSUE THAT THE SAID LAND IS AN AGRICULTURE LAND. THE ITAT VIDE ITS ORDER IN ITA NO.1491/HYD/20 11, DTD.29.02.2012 ALLOWED RELIEF TO THE APPEAL OF THE ASSESSEE W.R.T. ADDITION OF RS.14,40,000. FROM THE ABOVE, IT IS EVI DENT THAT NEITHER THE ISSUE OF CAPITAL GAIN NOR THE ISSUE OF NATURE O F LAND SOLD WAS THE SUBJECT MATTER OF ASSESSEE'S BEFORE CIT(A) AND THE ITAT. 6.0. IN VIEW OF THE ABOVE FACTS AND DISCUSSIONS, TH E LONG TERM CAPITAL GAIN OR THE ASSESSEE ON THE SALE OF LAND PROPERTY S ITUATED AT SY.NO. 124/1, SHAMSHABAD VILLAGE, SHAMSHABAD MANDAL, RANGA REDDY DIST., IS COMPUTED AS FOLLOWS BY DEEMING THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY AS THE FULL VALUE CONSIDERATI ON RECEIVED OR ACCRUING AS RESULT OF THE ABOVE MENTIONED SALE. VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY RS.1,3 8,75,000/- FULL VALUE CONSIDERATION AS ADMITTED BY THE ASSESSEE FOR THE PURPOSE OF COMPUTATION OF LTCG: RS. 64,75,000/- ITA NOS. 1685 & 1686/HYD/2017 :- 7 -: DIFFERENCE BETWEEN (A) AND (B) RS. 74,00,000/- ASSESSEE'S SHARE ON THE SAID PROPERTY 50% ON RS.74,00,000/- RS. 37,00,000/- IN VIEW OF THE ABOVE DISCUSSION, AN AMOUNT OF RS.37 ,00,000/- BEING 50% SHARE OF THE VALUE ADOPTED FOR THE PURPOSE OF S TAMP DUTY IN EXCESS OF FULL VALUE CONSIDERATION ADMITTED BY THE ASSESSEE IS ADDED TO THE INCOME OF THE ASSESSEE ADDITION: RS.37,00,000/- 8.0. IT IS PERTINENT HERE TO MENTION THAT THE OBJEC T, SCOPE AND AMBIT OF SECTION 147 OF THE ACT IS WELL SETTLED BY THE DECIS ION OF THE HON'BLE SUPREME COURT IN CIT V SUN ENGINEERING WORKS P. LTD , [1992] 198 ITR 297. THE SUPREME COURT, HELD AS UNDER : AS A RESULT OF THE AFORESAID DISCUSSION, WE FIND T HAT, IN PROCEEDINGS UNDER SECTION 147 OF THE ACT, THE INCOME-TAX OFFICE R MAY BRING TO CHARGE ITEMS OF INCOME WHICH ESCAPED ASSESSMENT OTH ER THAN OR IN ADDITION TO THAT ITEM OR ITEMS WHICH HAVE LED TO TH E ISSUANCE OF THE NOTICE UNDER SECTION 148 AND WHERE REASSESSMENT IS MADE UNDER SECTION 147 IN RESPECT OF INCOME WHICH HAS ESCAPED TAX, THE INCOME- TAX OFFICER'S JURISDICTION IS CONFINED TO ONLY SUCH INCOME WHICH HAS ESCAPED TAX OR HAS BEEN UNDER ASSESSED AND DOES NOT EXTEND TO REVISING, REOPENING, OR, RECONSIDERING THE WHOLE AS SESSMENT OR PERMITTING THE ASSESSEE TO REAGITATE QUESTIONS WHIC H HAD BEEN DECIDED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. IT IS ONLY THE UNDERASSESSMENT WHICH IS SET ASIDE AND NOT THE ENTI RE ASSESSMENT WHEN REASSESSMENT PROCEEDINGS ARE INITIATED. THE IN COME-TAX OFFICER CANNOT MAKE AN ORDER OF REASSESSMENT INCONSISTENT, WITH THE ORIGINAL ORDER OF ASSESSMENT IN RESPECT OF MATTERS WHICH ARE NOT THE SUBJECT MATTER OF PROCEEDINGS UNDER SECTION 147. AN ASSESSE E CANNOT RESIST VALIDLY INITIATED REASSESSMENT PROCEEDINGS UNDER TH IS SECTION, MERELY BY SHOWING THAT OTHER INCOME WHICH HAD BEEN ASSESSE D OR WAS AT TOO HIGH A FIGURE EXCEPT IN CASES UNDER SECTION 152 (2). THE WORDS SUCH INCOME' IN SECTION 147 CLEARLY REFER TO THE I NCOME WHICH IS CHARGEABLE TO TAX BUT HAS 'ESCAPED ASSESSMENT' AND THE INCOME-TAX OFFICERS JURISDICTION UNDER THE SECTION IS CONFINE D ONLY TO SUCH INCOME WHICH HAS ESCAPED ASSESSMENT, IT DOES NOT EXTEND TO RECONSIDERING GENERALLY THE CONCLUDED EARLIER ASSESSMENT, CLAIMS WHICH HAVE BEEN DISALLOWED IN THE ORIGINAL ASSESSMENT PROCEEDING CA NNOT HE PERMITTED TO BE RE-AGITATED OR THE ASSESSMENT BEING REOPENED FOR BRINGING TO TAX CERTAIN INCOME WHICH HAD ESCAPED ASSESSMENT BECAUSE THE CONTROVERSY ON REASSESSMENT IS CONFINED TO MATTERS WHICH ARE RELEVANT ONLY IN RESPECT OF THE INCOME WHICH HAD NO T BEEN BROUGHT TO TAX DURING THE COURSE OF THE ORIGINAL ASSESSMENT. A MATTER NOT AGITATED IN THE CONCLUDED ORIGINAL ASSESSMENT PROCE EDINGS ALSO ITA NOS. 1685 & 1686/HYD/2017 :- 8 -: CANNOT BE PERMITTED TO HE AGITATED IN THE REASSESSM ENT PROCEEDINGS UNLESS RELATABLE TO THE ITEM SOUGHT TO BE TAXED AS ESCAPED INCOME. INDEED, IN THE REASSESSMENT PROCEEDINGS FOR BRINGIN G TO TAX ITEMS WHICH HAD ESCAPED ASSESSMENT, IT WOULD BE OPEN TO A N ASSESSEE TO PUT FORWARD CLAIMS FOR DEDUCTION OF ANY EXPENDITURE IN RESPECT OF THAT INCOME OR THE NON-TAXABILITY OF THE ITEMS AT ALL. K EEPING IN VIEW THE OBJECT ARID PURPOSE OF THE PROCEEDINGS UNDER SECTIO N 147 OF THE ACT WHICH ARE FOR THE BENEFIT OF THE REVENUE AND NOT AN ASSESSEE, AN ASSESSEE CANNOT BE PERMITTED TO CONVERT THE REASSES SMENT PROCEEDINGS AT HIS APPEAL OR REVISION, IN DISGUISE, AND SEEK RELIEF IN RESPECT OF ITEMS EARLIER REJECTED OR CLAIM RELIEF I N RESPECT OF ITEMS NOT CLAIMED IN THE ORIGINAL ASSESSMENT PROCEEDINGS, UNL ESS RELATABLE TO ESCAPED INCOME AND REAGITATE THE CONCLUDED MATTERS . EVEN IN CASES WHERE THE CLAIMS OF THE ASSESSEE DURING THE COURSE OF REASSESSMENT PROCEEDINGS RELATING TO THE ESCAPED ASSESSMENT ARE ACCEPTED, STILL THE ALLOWANCE OF SUCH CLAIMS HAS TO BE LIMITED TO THE E XTENT TO WHICH THEY REDUCE THE INCOME TO THAT ORIGINALLY ASSESSED. 8.1. IN VIEW OF THE RATIO HELD IN THE ABOVE JUDGMEN T, IT IS CLEAR THAT THE ASSESSEE CANNOT BE PERMITTED TO CONVERT THE REASSES SMENT PROCEEDINGS AS HIS APPEAL OR REVISION, IN DISGUISE, AND SEEK RELIEF IN RESPECT OF ITEMS NOT CLAIMED IN THE ORIGINAL ASSESS MENT PROCEEDINGS. AS MENTIONED ABOVE, CONSEQUENT TO THE SEARCH OPERAT ION, THE ASSESSEE ADMITTED RS. 60,00,000/- AS HIS INCOME VID E HIS DEPOSITION DTD: 12.09.2008 AND THE SAME WAS ASSESSED HIS INCOM E U/S. 143(3) R.W.S. 153A OF THE ACT, WHICH IN TURN WAS CONFIRMED BY THE ITAT TO AN EXTENT OF RS.45,60,000 (I.E. INCOME AS PER CONSEQUE NTIAL ORDER DTD: 11.06.2012). THIS BEING THE CASE, THE ASSESSES CANN OT UTILIZE THE OCCASION OF REASSESSMENT PROCEEDINGS (I.E. THE PRES ENT PROCEEDINGS), AS AN OPPORTUNITY TO RETRACT THE INCOME THAT WAS AL READY ADMITTED BY HIM VIDE HIS DEPOSITION DTD:12.09.2008 CONSEQUENT T O THE SEARCH OPERATION. HENCE THE INCOME OF RS.24,01,048 AS RETU RNED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY HIM ON 23 .01.2015 IN RESPONSE TO NOTICE U/S.148 OF THE ACT, IS IGNORED A ND THE INCOME OF RS.45,60,000 AS CONFIRMED BY THE ITAT VIDE ITS ORDE R IN ITA NO.1491/HYD/2011, DT: 29.02.2012 IS HEREBY ADOPTED FOR THE COMPUTATION OF REASSESSED INCOME OF THE ASSESSEE. 5.1. ON THE OTHER HAND, THE AR CONTENDS AS UNDER: 'YOUR APPELLANT IS AN INDIVIDUAL. HE IS THE MANAGIN G DIRECTOR OF GVPR, ENGINEERS LTD AT THAT TIME. A SEARCH AND SEIZ URE OPERATION WAS CONDUCTED ON 28-07-2008 IN THE BUSINESS AND RES IDENTIAL PREMISES OF YOUR APPELLANT IN CONNECTION WITH SRI. VENKATA KUTUMBA RAO & OTHERS. AT THE TIME OF SEARCH THE RETURN FOR THIS ASSESSMENT ITA NOS. 1685 & 1686/HYD/2017 :- 9 -: WAS NOT FILED AND ADMITTED THAT RS.60 LAKHS WOULD B E THE TAXABLE INCOME IN HIS DEPOSITION DT.12-09-2008. IN RESPONSE TO NOTICE U/S 153A YOUR APPELLANT SUBMI TTED RETURN OF INCOME FOR AY 2007-08 ON 5-3-2010, ADMITTING NET IN COME OF RS. 45,60,602/- AND AGRICULTURAL INCOME. THE ASSESSMENT U/S 143(3) RWS 153A OF IT ACT WAS COMPLETED ON 27.12.2010. IN THE SAID ORDER, THE ASSESSING OFFICER ADDED AN AMOUNT OF RS.14,40,000/- BEING THE DIFFERENCE BETWEEN THE INCOME RETURNED AND RS.60 LA KHS VIDE HIS DEPOSITION DATED 12-09-2008. THIS WAS CARRIED ON AP PEAL TO CIT(A), WHO CONFIRMED THE ADDITION AND LATER THE HON'BLE IT AT VIDE ORDER DATED 29-02-2013 IN ITA NO 347/HYD/2011 DELETED THE ENTIRE ADDITION OF RS.14,40,000/-. THE RETURNED INCOME OF RS. 45,60,602/- INCLUDED THE FOLLOWING: INCOME FROM AMOUNT RS. SALARY 12,86,400 HOUSE PROPERTY 10,92,938 CAPITAL GAINS 21,59,554 OTHER SOURCES 21,710 GROSS TOTAL INCOME 45,60,602 AGRICULTURAL INCOME YOUR APPELLANT SUBMITS THAT THE LONG TERMS CAPITAL GAINS OFFERED TO TAX PERTAINS TO SALE OF AGRICULTURAL LAND JOINTLY H ELD ALONG WITH HIS SON SRI. G. SIVA SHANKAR REDDY, ADMEASURING AC 4.14 GTS , SITUATED AT SURVEY NO.124/1, SHAMSHABAD VILLAGE & GRAMPANCHAYAT , SHAMSHABAD MANDAL, RANGA REDDY DIST. VIDE SALE DEED NO. 15085/2006,. THE THEN ASSESSING OFFICER HAD OBTAINE D ALL THE INFORMATION INCLUDING THE COPIES OF THE SALE AND PU RCHASE DEEDS; THE THEN ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSE SSMENT AS WELL AS THE ASSESSING OFFICER AT THE TIME OF RE-ASSESSMENT RELIED ON THE SAME SALE DEED ON RECORD. THERE IS NO OTHER EVIDENCE BRO UGHT ON RECORD TO SAY THAT INCOME HAS ESCAPED ASSESSMENT . YOUR APPELLANT FILED A RETURN IN RESPONSE TO THE NO TICE UNDER SECTION 148 ON 23-01-2015, ADMITTING AN INCOME OF RS. 24,01 ,048/- AFTER REDUCING THE LONG TERM CAPITAL GAINS OF RS. 21,59,5 54/- ON THE GROUND THAT IT IS SALE AT. AGRICULTURAL LANDS BEING EXEMPT FROM TAX. YOUR APPELLANT ALSO CALLED FOR THE REASONS FOR ISSUE OF THE SAID NOTICE. THE ASSESSING OFFICER PROVIDED THE REASONS AND YOUR APP ELLANT FILED OBJECTIONS FOR THE SAME. THE OBJECTIONS OF YOUR APP ELLANT HAVE NOT BEEN DISPOSED OF BY AN ORDER AS LAID DOWN BY THE HO N'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS 259 ITR 19 (SC ). YOUR APPELLALNT THEREFORE SUBMITS THAT THE ASSESSMENT UNDER SECTION 143(3) R.W.S 148 ITA NOS. 1685 & 1686/HYD/2017 :- 10 -: IS NULL AND VOID. THE ASSESSMENT HAS TO BE QUASHED. IN THIS CONNECTION WE RELY ON THE FOLLOWING CASE LAWS: EVEN, IF ASSUMING THAT THE ASSESSMENT IS VALID, THE RE IS NO TANGIBLE MATERIAL BROUGHT ON RECORD, IN FACT THE ASSESSING O FFICER'S HAS IGNORED THE FACT THAT THE SALE DEED IT SELF STATES THAT THE LAND IS AGRICULTURAL LAND AND THE CERTIFICATE SUBMITTED IS ONLY TO SUPPO RT THAT THE LAND IS BEYOND 5 KMS., AS NOTIFIED BY CBDT, THEREFORE THIS BEING AGRICULTURAL LAND, IS EXEMPT FROM TAX AND PROVISIONS OF SECTION 50C ARE APPLICABLE. THE ASSESSING OFFICER CANNOT JUST BRUSH ASIDE THESE FACTS ON THE GROUND THAT THERE WAS NO DISPUTE WITH REGARD TO THE CAPITAL GAINS IN THE ORIGINAL ASSESSMENT NOR IN APPEALS FILED. THE T HEN ASSESSING OFFICER AFTER CONSIDERING THE DEPOSITION, RETURN, A LL THE DOCUMENTS AND INFORMATION FILED DURING THE COURSE OF ASSESSMENT P ROCEEDINGS COMPLETED THE ASSESSMENT MAKING AN ADDITION OF RS.1 4,40,000/- WHICH WAS RIGHTLY DELETED BY THE ITAT. THE ASSESSING OFFICER OUGHT TO HAVE DROPPED THE RE- ASSESSMENT PROCEEDING, AFTER CONSIDERING THE FACT THAT THE LAN D WAS AGRICULTURAL LAND AND PROVISIONS OF SECTION 50C DO NOT APPLY, AS AGRICULTURAL LANDS ARE NOT CAPITAL ASSETS, AS DEFINED IN THE ACT. THE ASSESSING OFFICER IS WRONG IN NOT REFERRING THE PROPERTY TO THE DEPARTME NT VALUATION OFFICER, AS PER PROVISIONS OF SECTION 50C. THE ASSE SSING OFFICER IGNORED THE FACT THAT AS PER SECTION 50C(2), THE AS SESSEE HAS THE RIGHT TO REQUEST FOR REFERENCE TO DVO ONLY IF THERE ARE N O PENDING CASES, THE PROVISION READS AS UNDER; (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE - (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORIT Y UNDER SUB- SECTION(1) EXCEEDS THE FAIR MARKET VALUE OF THE PRO PERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP V ALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTH ORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE (1) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUBSECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1 957), SHALL, WITH NECESSARY MODIFICATION, APPLY IN RELATION TO SUCH R EFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THE ACT. ITA NOS. 1685 & 1686/HYD/2017 :- 11 -: EXPLANATION. -FOR THE PURPOSES OF THIS SECTION, 'VA LUATION OFFICER SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SEC TION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). YOUR APPELLANT SUBMITS THAT FROM THE READING OF SEC TION 50C(2) (A) AND (B) IT IS CLEAR THAT ON THE REQUEST OF THE ASSE SSEE, THE ASSESSING OFFICER MAY REFER THE PROPERTY TO THE VALUATION OFF ICER, IN THE INSTANT CASE THE ASSESSING OFFICER HAS NOT REFERRED THE MAT TER ON THE GROUND THAT THERE IS NO DISPUTE BEFORE THE SRO, WHICH IS N OT REQUIRED BY THE ACT. THEREFORE, THE ADDITION IS NOT WARRANTED. FURTHER, IT IS WELL SETTLED PRINCIPALS OF LAW THAT EVEN IF BY MISTAKE ANY INCOME IS ADMITTED TO TAX WHICH IS OTHERWISE NOT TA XABLE, THIS CAN BE RECTIFIED, DURING THE ASSESSMENT PROCEEDINGS OR RE- ASSESSMENT PROCEEDINGS. THEREFORE, THE CLAIM OF YOUR APPELLANT THAT THE LAND IS AGRICULTURAL LAND AND EXEMPT FROM INCOME TAX BEING BEYOND 5 KMS., FROM SHAMSHABAD, THE ADDITION IS NOT WARRANTED. THE ASSESSING OFFICER HAS NOT DISPUTED THE FACT THAT THE LAND IS NOT AGRICULTURAL LAND. FURTHER SUBMITTED THAT A NOTIFICATION OF GOVERNMENT OF ANDHRA PRADESH IS ENCLOSED TO ESTABLISH THE FACT THAT THE SAID LAND HAS TO BE USED AS AGRICULTURAL LAND AND CANNOT BE CONVERTED I NTO NON- AGRICULTURAL OR RESIDENTIAL AREA. THE GOVERNMENT BA RS FROM GIVING APPROVALS FOR CONSTRUCTION OF HOUSES. EVEN IN LIGH T OF THIS NOTIFICATION, THE LAND IS ONLY AGRICULTURAL LAND AND THE PROVISIO NS OF SECTION 50C OF THE INCOME TAX ACT, 1961 ARE NOT APPLICABLE, CONSEQ UENTLY, THE ADDITION ON ACCOUNT OF CAPITAL GAINS MAY BE DELETED BEING SALE OF AGRICULTURAL LANDS. YOUR APPELLANT SUBMITS THAT THE LAND BEING AGRICULT URAL LANDS, IT IS NOT A CAPITAL ASSET WITH IN THE DEFINITION AND HENCE PR OVISIONS OF SECTION 50C ARE NOT APPLICABLE TO THE FACTS OF THIS CASE AN D FURTHER BEING AGRICULTURAL LANDS THERE IS NO TAX PAYABLE. 5.2 I HAVE GONE THROUGH THE AO'S OBSERVATIONS AND A R'S CONTENTIONS. IT IS SEEN FROM THE FACTS THAT THE AO HAS DETERMINE D LONG TERM CAPITAL GAINS AT RS.37,00,000 BEING 50% SHARE OF THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY IN EXCESS OF FULL VALUE CONSI DERATION ADOPTED BY THE ASSESSEE WHILE COMPUTING THE LONG TERM CAPIT AL GAIN ON THE SALE OF HIS SHARE OF PROPERTY OF LAND ADMEASURING A C 4.14 GTS (WHICH THE ASSESSEE JOINTLY OWNED WITH HIS SON G.SHIVA SHA NKAR REDDY) SITUATED AT SURVEY NO.124/1, SBAMSHABAD VILLAGE GRA MPANCHAYAT, SHAMSHABAD MANDAL, RANGAREDDY DIST. VIDE SALE DEED NO 15085/2006. WHILE DOING SO, THE AO STATED AS UNDER: '5.2. FURTHER, THE ASSESSEE FURNISHED A LETTER DT: NIL FROM SOME RETIRED INSPECTOR OF SURVEY, STATING THAT THE SAID PROPERTY IS 5 KILO METERS AWAY FROM SHAMSHABAD AREA, THIS LETTER DOES NOT HAV E ANY ITA NOS. 1685 & 1686/HYD/2017 :- 12 -: EVIDENTIARY VALUE FOR THE FACT THAT IT HAS BEEN ISS UED BY AN UNIDENTIFIED PERSON, IT, IS NOT ADDRESSED TO ANY AU THORITY/PERSON IN PARTICULAR, THE LETTER DOES NOT CONTAIN ANY DATE AN D THE SURVEY NUMBER OF THE LAND. IT IS SEEN THAT THE SALE DEED M ENTIONS THE LAND AS 'AGRICULTURE LAND', BUT THE ASSESSEE COULD NOT SUBS TANTIATE THAT SAID LAND IS NOT SITUATED WITHIN THE JURISDICTION OF ANY MUNICIPAL CORPORATION OR CANTONMENT OR NOTIFIED AREA OR WITHI N PRESCRIBED DISTANCE FROM THE LOCAL LIMIT OF THE ABOVE MENTIONE D AREAS. IN VIEW OF THE ABOVE, THERE IS NO MERIT IN THE ASSESSEE'S CONT ENTION THAT THE LAND THAT WAS SOLD BY THE ASSESSEE DURING F.Y.2005-07 IS AN AGRICULTURAL ONE, HENCE, THE PROVISIONS OF S. 50C OF THE ACT IS APPLICABLE TO THE ASSESSEE'S CASE. 5.3. FURTHER THE ASSESSEE HAS SUBMITTED THAT SINCE THE AGRICULTURAL LAND THAT WAS SOLD BY THE ASSESSEE WAS NOT HAVING A PROPER APPROACH ROAD AND THE LAND WAS SURROUNDED BY THE LA NDS OF THE NEIGHBORS FROM ALL THE SIDES, THE LAND WAS SOLD FOR A PRICE LESS THAN THE MARKET VALUE FIXED BY THE SRO. THE ASSESSEE HAS FURTHER REQUESTED TO REFER THE ISSUE TO THE DEPARTMENT VALU ATION OFFICER TO DETERMINE THE FAIR MARKET VALUE OF THE LAND AS ON T HE DATE OF SALE. THIS SUBMISSION OF THE ASSESSEE IS NOT ACCEPTABLE F OR THE FACT THAT THE ASSESSEE HAS NOT DISPUTED THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY BEFORE SRO. THE ASSESSEE HAS PAID A STAM P DUTY OF RS.12,54,800/- ON THE VALUE ADOPTED FOR THE PURPOS E OF STAMP DUTY OF RS.1,38,75,000/-. WHEN THIS IS THE CASE, IT IS N OT CORRECT ON THE PART OF THE ASSESSEE TO STATE THAT THE MARKET VALUE OF P ROPERTY WAS LOW AND S.50C OF THE ACT, SHOULD NOT BE APPLIED, FROM T HE LAYOUT OF THE PROPERTY (ENCLOSED TO THE SALE DEED) IT WAS FURTHER OBSERVED THAT, THE SAME IS NOT COMPLETELY SURROUNDED BY THE LANDS OF N EIGHBORS FROM ALL SIDES BUT IN FACT, TO THE NORTHERN CORNER OF THE LA ND, THERE ARE TWO APPROACH ROADS: ONE LEADS TOWARDS NORTH AND ANOTHER LEADS TOWARDS WEST. IN VIEW OF THE ABOVE FACTS, THERE IS NO MERI T IN THE SUBMISSION OF THE ASSESSEE THAT THE LAND IS LACKING PROPER APP ROACH ROADS AND HENCE IT WAS SOLD FOR A VALUE BELOW THE MARKET VALU E. IN LIGHT OF THE ABOVE FACTS, THE QUESTION OF REFERRING THE VALUATIO N OF THE PROPERTY TO DEPARTMENT VALUATION OFFICER DOES NOT ARISE. 5.3. ON THE OTHER HAND, THE AR CONTENDS THAT THE LA ND SOLD BY THE ASSESSEE IS AGRICULTURAL LAND WHICH IS BEYOND THE L IMITS AS PER THE CBDT CIRCULAR AND HENCE THE SALKE PROCEEDS ARE NOT TAXABLE. 5.4. AFTER HAVING GONE THROUGH THE ABOVE, I AM OF T HE CONSIDERED VIEW THAT THE AO'S ACTION IN DETERMINING THE LONG TERM C APITAL GAIN AT RS.37,00,000/- IS JUSTIFIED. I FULLY AGREE WITH THE REASONING GIVEN BY THE AO IN DETERMINATION OF LONG TERM CAPITAL GAIN A T RS.37,00,000/-. THE ASSESSEE'S CONTENTION THAT THE SAID LAND IS AGR ICULTURAL, IS NOT ACCEPTABLE AS IT IS NOT SUPPORTED BY CORROBORATIVE EVIDENCE. HENCE, ITA NOS. 1685 & 1686/HYD/2017 :- 13 -: THE ADDITION OF RS.37,00,000/- IS HEREBY CONFIRMED. AS A RESULT, THE GROUNDS RAISED ARE DISMISSED. 4. THE REVENUES CASE IN LIGHT OF THE CIT(A)S FOREGO ING DETAILED DISCUSSION IS THAT SINCE THE ASSESSEE HAD FAI LED TO ADOPT SRO PRICE FOR THE PURPOSE OF COMPUTING CAPITAL GA INS, THE SAME FORMED SUFFICIENT TANGIBLE MATERIAL FOR THE ASS ESSING OFFICER TO TREAT IT AS AN INSTANCE OF HIS TAXABLE INCOME HAVING ESCAPED ASSESSMENT THEREBY TRIGGERING SECTION 148 MECH ANISM IN MOTION. 5. LEARNED DEPARTMENTAL REPRESENTATIVE NEXT CONTENDED TH AT THE ASSESSEES LATTER ARGUMENTS ON MERITS ABOUT THE LAND IN QUESTION AS NOT A CAPITAL ASSET ALSO DESERVES TO BE DE CLINED SINCE HE HAD HIMSELF TREATED IT TO THE CONTRARY IN ORIGIN AL RETURN AND A COMPUTATION FORMING SUBJECT MATTER OF SECTI ON 153A ASSESSMENT. 6. HEARD RIVAL ARGUMENTS ON THE TWIN ISSUES OF VALIDI TY OF SECTION 148/147 RE-OPENING AS WELL AS CORRECTNESS OF THE IMPUGNED RE-OPENING AS WELL AS ON MERITS. WE FIND N O MERIT IN ASSESSEES FIRST AND FOREMOST GRIEVANCE QUA LEGALITY OF THE IMPUGNED RE-OPENING SINCE THE DIFFERENCE BETWEEN SRO VALUE AND ACTUAL PRICE (SUPRA) VERY WELL FORMED THE TANGIBLE MATERIAL FOR THE ASSESSING OFFICER TO RECORD HIS REASONS TO THIS EFFECT. THE ASSESSEES FORMER GRIEVANCE IDENTICAL IN BOTH AP PEALS STAND REJECTED. 7. NEXT COMES THE LATTER ISSUE OF SECTION 50C ADDITION ON MERITS. THE REVENUES ONLY ARGUMENT QUOTE CIT VS. SUN ENGINEERING WORKS P. LTD, (1992) [198 ITR 297] (SC) THAT THE ITA NOS. 1685 & 1686/HYD/2017 :- 14 -: ISSUE OF ASSESSEES LAND SOLD NOT FORMING A CAPITAL A SSET U/S.2(14) OF THE ACT OUGHT NOT TO BE ALLOWED TO BE RAISED IN SECTION 148/147 PROCEEDINGS SINCE THE SAME IS MEANT FOR THE SPECIFIC PURPOSE TO TAX THE INCOME ESCAPING ASSESSMENT FOR THE BENEFIT OF THE DEPARTMENT ONLY. THIS ARGUMENT FAILS TO EV OLVE OUR CONCURRENCE SINCE APPLICABILITY OF SECTION 2(14) HEREIN QUA THE ASSESSEES LAND SOLD GOES TO THE VERY ROOT OF THE MA TTER. AND ALSO IT MIGHT LEAD TO THE IMPUGNED CAPITAL GAINS ADD ITION WITHOUT DETERMINATION OF THE NATURE OF THE CORRESPONDIN G CAPITAL ASSET. THE REVENUE FURTHER FAILS TO DISPUTE THA T THE CASE LAW SUNIL KUMAR AGARWAL VS. CIT (2014) [372 IT R 83] (CAL) HOLDS THAT SECTION 50C(2) REFERENCE IS MANDATORY EVEN IF THERE IS NO SUCH PRAYER FROM THE ASSESSEES SIDE BEFO RE THE ASSESSING OFFICER. AND THAT THERE IS NO INDICATION A BOUT THE NEAREST MUNICIPALITY UNDER ARTICLE 243T R.W. ARTICLE 2 43P OF THE CONSTITUTION OF INDIA. WE THUS ACCEPT THE ASSESSEE S IDENTICAL LATTER GROUNDS OF SECTION 50C ADDITION AND R ESTORE THE SAME BACK TO THE ASSESSING OFFICER FOR HIS AFRESH ADJUDICATION AFTER MAKING THE NECESSARY REFERENCE TO TH E DVO U/S.50C(2) OF THE ACT. ORDERED ACCORDINGLY. 8. THESE ASSESSEES APPEALS ARE TREATED AS ALLOWED FO R STATISTICAL PURPOSES IN ABOVE TERMS. A COPY OF THIS CO MMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 30-04-2021 TNMM ITA NOS. 1685 & 1686/HYD/2017 :- 15 -: COPY TO : 1.SIVAPOTHULURU VEERAREDDY GADLURU, C/O.M.ANANDAM & CO., CHARTERED ACCOUNTANTS, 7A, SURYA TOWERS, S.P.R OAD, SECUNDERABAD. 2.SIVA SHANKAR REDDY GANDLURU, C/O.M.ANANDAM & CO., CHARTERED ACCOUNTANTS, 7A, SURYA TOWERS, S.P.ROAD, SECUNDERABAD. 3.THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE-2(2), HYDERABAD. 4.CIT(APPEALS)-2, HYDERABAD. 5.PR.CIT-2, HYDERABAD. 6.D.R. ITAT, HYDERABAD. 7.GUARD FILE.