ITO, Ward-7(2), Hyderabad, Hyderabad V. Konijeti Ashok Kumar, Hyderabad, Hyderabad

ITA 173/HYD/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3765 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 27-04-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DIPAK
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Competent authority; Capital Gains
• Section: 50C; 13; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. & ASST. YEAR APPELLANT RESPONDENT 173/HYD/2017 2008 - 09 INCOME TAX OFFICER, WARD 7(2), HYDERABAD. SHRI KONIJETI ASHOK KUMAR, HYDERABAD. PAN AHBPK 1507C 1157/HYD/2017 2008 - 09 - DO - SHRI KONIJETI PAVAN KUMAR, HYDERABAD. PAN AHBPK 1509N 1158/HYD/2017 2008 - 09 - DO - SMT. KONIJETI USHA RANI, HYDERABAD. \ PAN AHBPK 1510H APPELLANT BY : SHRI R. DIPAK (D.R.) RESPONDENT BY : SHRI LAXMINIWAS SHARMA, C.A. DATE OF HEARING : 28.04 .2021. DATE OF PRONOUNCEMENT : 27 .05. 2021. O R D E R PER LAXMI PRASAD SAHU , A .M. : THESE THREE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, HYDERABAD DT.4.11.2016 AND 4.4.2017 RESPECTIVELY , FOR THE ASSESSMENT YEAR 2008 - 09. 2 ITA NO S.173, 1157 & 1158 /HYD/201 7 2. THE IDENTICAL GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER : ITA NO.173 /HYD/2017 1. THE LD. CIT(A) ERRED BOTH IN LAW AND ON FACTS OF THE CASE. 2. THE LD. CIT(A) OUGHT TO HAVE CONFIRMED THE SRO VALUE ADOPTED BY THE AO FOR THE PURPOSE OF WORKING OUT THE CAPITAL GAINS, SINCE (I ) THE BUYERS ARE ENJOYING THE UNENCUMBERED RIGHT OVER THE PROPERTY AND (II) THE ASSESSEE CONSTRUCTED FUNCTION HALLS ON THE LAND CLAIMED TO BE UNDER THE ULC ACT AND SUPERSTRUCTURES ON THE BALANCE ADJACENT AND SOLD LATER. 3. THE LD. CIT(A) OUGHT TO HAVE TAK EN THE FACT IN COGNIZANCE THAT THE PROPERTY REMAINED AT SECTION 10(1) STAGE OF THE ULC ACT AND THAT THE LAND HAS NOT GOT VESTED WITH THE GOVERNMENT, IN THE ABSENCE OF AN ORDER PASSED UNDER SECTION 10(3) OF THE ULC ACT. 4. THE LD. CIT(A) FAILED TO APPRECI ATE THAT IF THE LAND WAS REALLY UNDER THE ULC ACT, THE ASSESSEE AS SELLER COULD NOT HAVE 3 ITA NO S.173, 1157 & 1158 /HYD/201 7 SOLD THE LAND AND THE BUYER ALSO COULD NOT HAVE BOUGHT THE LAND FROM THE ASSESSEE. 5. THE LD. CIT(A) OUGHT TO HAVE REMANDED THE MATTER FOR VERIFICATION OF ADDITIONAL EVIDENCES/SUBMISSIONS MADE BY THE ASSESSEE REGARDING STRIKING OFF OF SURVEY NUMBERS OF THE LAND IN ALL DOCUMENTS AS THE SAME COULD HAVE BEEN VERIFIED WITH THE BUYER. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. FROM THE ABOVE GROUN DS OF APPEAL, IT IS CLEAR THAT THE ISSUE INVOLVED IN ALL THE APPEALS ARE SIMILAR IN NATURE THEREFORE FOR THE SAKE OF CONVENIENCE AND BREVITY, WE DECIDE TO TAKE UP ITA NO.173/HYD/2017 AND THE DECISION OF THIS APPEAL SHALL APPLY MUTATIS MUTANDIS TO OTHER TWO APPEALS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 ON 31.03.2009 DECLARING INCOME OF RS.20,13,750. LATER ON THE INVESTIGATION WING OF INCOME TAX DEPARTMENT THAT THE ASSESSEE ALO NG WITH THREE OTHER FAMILY MEMBERS HAVE SOLD 4 ITA NO S.173, 1157 & 1158 /HYD/201 7 HOUSE PROPERTY DURING THE PERIOD FROM 26.11.2007 TO 15.12.2007 AND IT WAS OBSERVED THAT THERE WAS A HUGE DIFFERENCE BETWEEN SALE VALUE AND ITS SUB - REGISTRAR OFFICE VALUE (FOR STAMP DUTY PURPOSE). IT WAS ALSO NO TICED THAT SECTION 50 C IS APPLIED THEN THERE WILL BE OMISSION ON THE PART OF ASSESSEE TO AVAIL LONG TERM CAPITAL GAIN (LTCG). ACCORDINGLY, A NOTICE U/S. 148 WAS ISSUED AND SERVED ON THE ASSESSEE ON 7.10.2014. IN RESPONSE TO THE NOTICE ISSUED BY THE I.T. DEPARTMENT U/S. 148 OF THE ACT, THE ASSESSEE FILED A LETTER DT.4.11.2014 STATING THAT THE RETURN FILED U/S. 139 OF THE ACT MAY BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE. SUBSEQUENTLY, OTHER STATUTORY NOTICES WERE ISSUED TO THE ASSESSEES. THE ASSESSEE FILED VARIOUS DOCUMENTS RELATING TO THE URBAN LAND CEILING ACT (ULCA) AND STATED THAT THE ULC ACT IS NOT IN FORCE IN RESPECT OF THE LAND UNDER CONSIDERATION THEREFORE SECTION 50C OF THE ACT IS NOT APPLICABLE. THE AR OF THE ASSESSEE ALSO REQUEST ED TO THE ASSESSING OFFICER THAT THE MATTER 5 ITA NO S.173, 1157 & 1158 /HYD/201 7 MAY KINDLY BE REFERRED TO THE DEPARTMENT VALUATION OFFICER (DVO) BUT THE ASSESSING OFFICER DENIED BY HOLDING AS UNDER : THE ASSESSEE REQUESTED TO REFER THE VALUATION TO THE VALUATION OFFICER, WHICH IS REJECTED FOR THE REASON THAT WHEN THE PLEA OF URBAN LAND CEILING ITSELF IS REJECTED, IT WOULD NOT BE CORRECT TO REFER THE MATTER TO DVO. MOREOVER, THE VALUATION IS NOT FOR ANY APPARENT REASON I.E. LOCATION OF THE PROPERTY, DISTANCE FORM THE MAIN ROAD, SURROUNDINGS AND UNEVEN/BARREN LAND ETC. BUT ONLY A PRETEXT, WHICH DID NOT PREVENT ANY ACTIVITY CARRIED ON IN THE LAND. THE ASSESSING OFFICER HAS ALSO EXAMINED THE DETAILS AS FILED BY T HE ASSESSEE AND ACCORDINGLY HE COMPUTED THE CAPITAL GAINS. THE PROCEEDINGS ALSO MADE IN RESPECT OF OTHER TWO ASSESSEES I.E. SHRI K. PAVAN KUMAR AND SMT. K. USHA RANI IN THE RATIO OF 50:50. FEELING AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS) AND CIT(APPEALS) OBSERVED AFTER EXAMINING THE DETAILS FILED BY THE ASSESSEE, HE ALLOWED THE APPEAL OF THE ASSESSEE AND IN RESPECT OF PROTECTIVE ASSESSME NTS 6 ITA NO S.173, 1157 & 1158 /HYD/201 7 ALSO. FEELING AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(APPEALS) HAS WRONGLY CONSIDERED THE ULC ACT WHICH HAS BEEN RE PEALED BY THE STATE LEGISLATURE VIDE RESOLUTION DT.27.03.200 8 AND THE ASSESSEE HAS UNENCUMBERED RIGHT ON THE PROPERTY AND HAS CONSTRUCTED FUNCTION HALL ON THE LAND AND LATER ON SOLD THE PROPERTY AND HE ALSO STRONGLY OBJECTED THAT THE OTHER ADDITIONAL EVIDENCES WERE SUBMITTED BUT THE CIT(APPEALS) DID NOT GIVE ANY OPPORTUNITY TO THE ASSESSING OFFICER BEFORE ACCEPTING THE ADDITIONAL EVIDENCES. THEREFORE, HE REQUESTED THE ISSUE IN THIS GROUND BE RESTORED TO ASSESSING OFFICER FOR EXAMINATION AFRESH. 5. ON THE O THER HAND, THE LD. AR RELIED ON THE ORDER OF THE CIT(APPEALS) AND SUBMITTED THAT I F ULC ACT IS ADMISSIBLE IN THE CASE ON HAND THEN SECTION 50C CANNOT BE APPLIED. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD 7 ITA NO S.173, 1157 & 1158 /HYD/201 7 REQUESTED THE ASSESSING OFFICER TO REFER THE MATT ER TO THE DVO BUT THE ASSESSING OFFICER DENIED. IN ADDITION TO THE ABOVE, HE HAS FILED WRITTEN SYNOPSIS AS UNDER : 8 ITA NO S.173, 1157 & 1158 /HYD/201 7 6. AFTER HEARING BOTH THE SIDES AND PERUSAL OF THE RECORD AVAILABLE, WE OBSERVE THAT THE CIT(APPEALS) HAS DECIDE D THE ISSU E IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER : 6(B) ALL THE SURVEY NUMBERS TOTALING TO 5.35 ACRES WERE SUBJECT MATTER OF ULCA (URBAN LAND CEILING ACT.) 9 ITA NO S.173, 1157 & 1158 /HYD/201 7 THEREFORE THE APPELLANT FILED A SUIT BEFORE HONBLE HIGH COURT OF ANDHRA PRADESH IN 2002 AGAINST GOVERNMENT OF ANDHRA PRADESH; COMMISSIONER OF LAND REVENUE, AP; SPECIAL OFFICER AND COMPETENT AUTHORITY, ULC; MRO, ASIF NAGAR AND DISTRICT COLLECTOR, HYDERABAD. 10 ITA NO S.173, 1157 & 1158 /HYD/201 7 THEREFORE AS THE PROPERTY WAS COVERED BY ULC ACT, SEC. 50C CANNOT BE INVOKED AND SR O VALUE CANNOT BE TAKEN AS THE SALE CONSIDERATION. IN RESULT, 1 ST , 2 ND , 3 RD , 4 TH AND 5 TH GROUNDS OF APPEALS ARE TREATED AS ALLOWED. FROM THE ABOVE, IT IS CLEAR THAT THE CIT(APPEALS) HAS EXAMINED THE ISSUE ON THE BASIS OF DOCUMENTS AVAILABLE BEFORE HIM AND HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY STATING THAT THE LAND WAS UNDER THE ULC ACT AND IN SUCH SITUATION THE SECTION 50C OF THE ACT CANNOT BE APPLIED. WE A LSO GONE THROUGH THE ORDER OF THE ASSESSING OFFICER AND SUBMISSIONS MADE BY THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE, WE NOTICE THAT THE SALE DOCUMENTS WERE EXECUTED AS UNDER : 11 ITA NO S.173, 1157 & 1158 /HYD/201 7 WE FURTHER NOTICE THAT ON THE ABOVE DATE OF SALE, THE LAND WAS UNDER THE ULC ACT AND THE STATE LEGISLATURE REPEALED ON 27.3.2008 AND THEREAFTER DIVISION OF HONBLE JURISDICTIONAL HIGH COURT, THE STATE GOVERNMENT ISSUED A MEMO ON 11.7.2012 DECLARING THAT THE PROPERTY DOES NOT ATTRACT THE PROVISIONS OF ULC ACT AND THE REAFTER THE TAHSILDAR VIDE LETTER DT.24.5.2014 ALLOWED THE CONSTRUCTION ON THE LAND. WE DO NOT FIND ANY SUBSTANCE IN THE ARGUMENTS ADVANCED BY THE LD. DR AND THERE IS NO INFIRMITY IN THE ORDER OF CIT(APPEALS). THEREFORE WE DISMISS THE APPEAL OF THE REVEN UE. 7. FURTHER THE ASSESSING OFFICER HAS MADE PROTECTIVE ASSESSMENTS IN RESPECT OF KONIJETI PAVAN KUMAR (ITA NO.1157/HYD/2017) AND SMT. USHA RANI (ITA 12 ITA NO S.173, 1157 & 1158 /HYD/201 7 NO.1158/HYD/2017); THE ISSUE IN THE SAID PROPERTY HAS BEEN DECIDED (SUPRA) . SINCE WE HA VE DECIDED THE APPEAL OF REVENUE ON SIMILAR ISSUE IN RESPECT OF SHRI KONIJETI ASHOK KUMAR (ITA NO.173/HYD/2017) , THEREFORE THE DECISION OF ITA 173/HYD/2017 SHALL APPLY MUTATIS MUTANDIS IN THE CASE OF ITA NOS.1157/HYD/2017 & 1158/HYD/2017 ALSO. THE CIT(APPEALS) IN RESPECT OF PROTECTIVE ASSESSMENTS ARE ALSO DISMISSED. 8. IN THE RESULT, ALL THE THREE APPEALS OF REVENUE ARE DISMISSED. A COPY OF COMMON ORDER PASSED SHOULD BE KEPT IN RESPECTIVE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH MAY, 2021. SD/ - SD/ - ( S.S. GODARA ) ( LAXMI PRASAD SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DT. 27 .05 .2021. * REDDY GP 13 ITA NO S.173, 1157 & 1158 /HYD/201 7 COPY TO : 1. I) SHRI KONIJETI ASHOK KUMAR, H.NO.13 - 6 - 447, KONIJETI ENCLAVE, GUDIMALKAPUR, HYDERABAD. II) SHRI KONIJETI PAVAN KUMAR, KONIJETI ENCLAVE, HYDERABAD. III) SMT. USHA RANI K, KONIJETI ENCLAVE, HYDERABAD. 2. PR. CIT - 3 , HYDERABAD. 3. C I T (A) - 3 , HYDERABAD. 4 . DR, ITAT, HYDERABAD. 5 . GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.