JONATHAN PRADEEP, CHENNAI V. ITO, NCW - 13 (4), CHENNAI

ITA 1751/CHNY/2019

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 6212 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 04-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINIVASA RAO JCIT
• Assessee Lawyers: K SARAVANAN
• Keywords: Capital Gains
• Section: 143(3); 143(2); 54

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , .. , BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L.REDDY, JUDICIAL MEMBER ITA NO.1751/CHNY/2019 /ASSESSMENT YEAR: 2013-14 MR. JONATHAN PRADEEP K-6, SANGATH ALACRITY FLATS MGR NAGAR, 2 ND MAIN ROAD VELACHERRY, CHENNAI-600042 V . THE INCOME TAX OFFICER, NON-CORPORATE WARD-13(4), CHENNAI-600 034. [PAN: AHTPR2152C ] ( # /APPELLANT) ( $%# /RESPONDENT) # & / APPELLANT BY : MR. K.SARAVANAN $%# & /RESPONDENT BY : MR. SRINIVASA RAO, JCIT & /DATE OF HEARING : 19.11.2019 & /DATE OF PRONOUNCEMENT : 19.11.2019 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST APPELLATE ORDER DATED 15.03.2019 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-7, CHENNAI (HEREINAFTER CALLED THE CIT(A )), IN ITA NO.93(T- 14)/CIT(A)-7/2017-18 FOR ASSESSMENT YEAR (AY) 2013- 14, THE APPELLATE PROCEEDINGS BEFORE LEARNED CIT(A) HAD ARISEN FROM A SSESSMENT ORDER ITA NO.1751/CHNY/2019 :- 2 -: DATED 28.03.2016 PASSED BY LEARNED ASSESSING OFFI CER (HEREINAFTER CALLED THE AO) U/S.143(3) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER CALLED THE ACT) FOR AY: 2013-14. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AS SESSEE ALONG WITH HIS BROTHER ENTERED INTO JOINT DEVELOPMENT AGREEMENT WI TH A DEVELOPER , HORIZON ABODES ON 20.01.2012 , HANDING OVER A HOUSE AND LAND APPURTENANT THERETO IN RETURN FOR TWO FLATS EACH. T HE TOTAL CONSIDERATION RECEIVED BY BOTH THE BROTHERS WERE TO THE TUNE OF ` 4.36 CRORES( ` 2.18 CRORES EACH) WHILE THE COST OF CONSTRUCTION WAS ` 3.36 CRORES ( ` 1.68 CRORES EACH) . THE ASSESSEE CLAIMED DEDUCTION U/S 5 4 OF THE 1961 ACT WITH RESPECT TO INVESTMENTS MADE IN TWO RESIDENTIAL FLA TS WHILE THE AO WAS OF THE VIEW THAT ASSESSEE IS ENTITLED FOR DEDUCTION U/ S 54 OF THE 1961 ACT W.R.T. INVESTMENT MADE IN ONE RESIDENTIAL FLAT AND HENCE DEDUCTION CLAIMED U/S 54 OF THE 1961 ACT W.R.T. TO INVESTMENT MADE IN SECOND RESIDENTIAL FLAT WAS DENIED BY AO , VIDE ASSESSMENT ORDER DATED 28.0 3.2016 PASSED BY THE AO U/S. 143(3) OF THE 1961 ACT LEADING TO ADDIT IONS TO THE TUNE OF ` 84 LACS AS INCOME IN THE HANDS OF THE ASSESSEE. AGGRIE VED BY AN ASSESSMENT FRAMED BY AO VIDE ASSESSMENT ORDER DATED 28.03.2016 PASSED BY AO U/S 143(3) OF THE 1961 ACT, THE ASSESSEE FILED FIRST AP PEAL BEFORE LD.CIT(A) WHICH WAS DISMISSED BY LD.CIT(A) VIDE APPELLATE ORD ERS DATED 15.03.2019 , INTER-ALIA, FOR NON-PROSECUTION, BUT HOWEVER, WHI LE PASSING APPELLATE ORDER THE LD.CIT(A) SIMPLY UPHELD ASSESSMENT ORDER PASSED BY THE AO WITHOUT INDEPENDENTLY DISCUSSING ON MERITS ISSUES R AISED BY ASSESSEE IN ITS ITA NO.1751/CHNY/2019 :- 3 -: FIRST APPEAL FILED WITH LEARNED CIT(A) , AS IS RE QUIRED UNDER PROVISIONS OF SEC.250(6) OF THE 1961 ACT. 3. AGGRIEVED BY AN APPELLATE ORDER DATED 15.03.2019 PASSED BY LEARNED CIT(A) , THE ASSESSEE HAS FILED THIS APPEAL BEFORE TRIBUNAL AND ARGUMENTS ARE ADVANCED BY BOTH THE RIVAL PARTIES BEFORE THE B ENCH. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD.CIT(A) OUGHT TO HAVE ADJUDICATED THE ISSUES IN APPEAL FILED BY ASSESSEE ON MERITS BY IND EPENDENT APPLICATION OF MIND , AS IS REQUIRED UNDER PROVISIONS OF SECTION 250(6) OF THE 1961 ACT BUT HOWEVER LEARNED CIT(A) SIMPLY UPHELD ASSESSMENT ORDER PASSED BY LEARNED AO. IT WAS PRAYED THAT MATTER MAY BE RESTOR ED TO THE FILE OF LD.CIT(A) FOR FRESH ADJUDICATION AND AN FRESH OPPOR TUNITY MAY BE GRANTED TO THE ASSESSEE TO APPEAR BEFORE LD.CIT(A) AND PRES ENT ITS CASE/ARGUMENTS/EVIDENCES IN ITS DEFENSE IN DENOVO A PPELLATE PROCEEDINGS. THE LD.DR SUBMITTED THAT ASSESSEE DID NOT APPEAR BE FORE LEARNED CIT(A) IN FIRST ROUND OF LITIGATION AND IT IS THE ASSESSEE WHO IS RESPONSIBLE FOR ITS WOES BUT HOWEVER, LEARNED DR FAIRLY SUBMITTED THAT THE ISSUES MAY BE RESTORED TO THE FILE OF LD.CIT(A) FOR FRESH ADJUDIC ATION. 4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT ASSESSEE HAS DECLARED INCOME FROM SALARIES AND CAPITAL GAINS DURING THE YEAR UNDER CO NSIDERATION IN ITS RETURN OF INCOME FILED WITH REVENUE . IT IS OBSERVED THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY BY REVENUE FOR F RAMING ASSESSMENT U/S.143(3) & 143(2) OF THE 1961 ACT. THE RETURN OF INCOME DECLARING ITA NO.1751/CHNY/2019 :- 4 -: INCOME OF ` 38,46,570/- WAS FILED BY ASSESSEE , WHEREIN THE A O ASSESSED INCOME OF ` 1,22,46,570/- OF THE ASSESSEE WHILE FRAMING SCRUTINY ASSESSMENT U/S 143(3) OF THE 1961 ACT, WHEREIN, MAI NLY DEDUCTION OF ` 84,00,000/- CLAIMED BY ASSESSEE U/S 54 OF THE 1961 ACT FROM LONG TERM CAPITAL GAINS EARNED BY ASSESSEE WAS DISALLOWED BY THE AO WHICH WAS WITH RESPECT TO INVESTMENT MADE IN SECOND RESIDENTIAL HO USE WHILE AO ALLOWED DEDUCTION U/S 54 OF THE 1961 ACT W.R.T. TO ONE RESI DENTIAL HOUSE. THE BACKGROUND OF THE DISALLOWANCE MADE BY THE AO IS DI SCUSSED BY US IN PRECEDING PARA OF THIS ORDER. AGGRIEVED BY AN ASSE SSMENT FRAMED BY THE AO U/S 143(3) OF THE 1961 ACT, THE ASSESSEE FILED F IRST APPEAL BEFORE LD.CIT(A). THE ASSESSEE DID NOT APPEAR BEFORE LD.C IT(A) DESPITE OPPORTUNITIES GRANTED BY LEARNED CIT(A) , BUT , HOW EVER, LD.CIT(A) PASSED AN APPELLATE ORDER WITHOUT DISCUSSING ISSUES IN THE APPEAL FILED BY ASSESSEE INDEPENDENTLY ON MERITS AND HAS , INTER-AL IA, DISMISSED APPEAL OF THE ASSESSEE FOR NON-PROSECUTION AND SIMPLY UPHE LD ASSESSMENT ORDER PASSED BY THE AO WITHOUT INDEPENDENTLY DISCUSSING A LL THE ISSUES IN APPEAL FILED BY ASSESSEE ON MERITS BASED ON MATERIAL ON RE CORD , AS IS REQUIRED U/S 250(6) OF THE 1961 ACT. IN OUR CONSIDERED VIEW , THE MATTER NEEDS TO BE RESTORED TO FILE OF LD.CIT(A) FOR FRESH ADJUDICA TION ON MERITS IN ACCORDANCE WITH THE LAW OF ALL THE ISSUES/GROUNDS R AISED BY ASSESSEE IN ITS FIRST APPEAL FILED WITH LEARNED CIT(A). WE HEREBY DIRECT ASSESSEE TO APPEAR BEFORE LD.CIT(A) AND SUBMIT ALL NECESSARY EV IDENCES, EXPLANATIONS ETC., IN SUPPORT OF ITS CONTENTION , WHEN THE APPEA L COMES FOR HEARING BEFORE LD.CIT(A) IN DENOVO APPELLATE PROCEEDINGS IN SECOND ROUND OF ITA NO.1751/CHNY/2019 :- 5 -: LITIGATION. IT IS MADE CLEAR THAT IN CASE IF THE AS SESSEE STILL DID NOT COME FORWARD AND CO-OPERATE IN DENOVO APPELLATE PROCEED INGS BEFORE LEARNED CIT(A), THEN LD.CIT(A) SHALL BE AT LIBERTY TO DECID E THE ISSUES ON MERITS IN ACCORDANCE WITH LAW. THE LD.CIT(A) IS DIRECTED TO DENOVO ADJUDICATE ALL THE ISSUES RAISED BY ASSESSEE IN ITS FIRST APPEAL F ILED WITH LEARNED CIT(A) DENOVO ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS T O SAY THAT LEARNED CIT(A) SHALL PROVIDE PROPER AND ADEQUATE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATUR AL JUSTICE IN ACCORDANCE WITH LAW, IN DENOVO APPELLATE PROCEEDINGS. THUS, T HE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. WE ORDER ACCORDINGLY. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I N ITA NO.1751/CHNY/2019 FOR AY: 2013-14 IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 19 TH DAY OF NOVEMBER, 2019 IN CHENNAI. SD/- SD/- ( - . . . 1 ) (DUVVURU R.L.REDDY) 3 /JUDICIAL MEMBER ( ) (RAMIT KOCHAR) 3 /ACCOUNTANT MEMBER /CHENNAI, 4 /DATED: 19 TH NOVEMBER, 2019. TLN & $6 76 /COPY TO: 1. # /APPELLANT 4. 8 /CIT 2. $%# /RESPONDENT 5. 6 $ /DR 3. 8 ( ) /CIT(A) 6. /GF