ITO, Ward - 1, Mahabubnagar V. Shri P Srinivasulu Yadav, Mahabubnagar

ITA 187/HYD/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8992 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Additional evidence; Cost of acquisition; Revised return
• Section: 54F; 133A

Judgement Text

ITA NOS.196 & 187 OF 2012P SRINIVASULU YADAV, PENUK ONDA, MAHABOOBNAGAR PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.196/HYD/2012 (ASSESSMENT YEAR: 2008-09) SRI P. SRINIVASA L U YADAV, 1 - 4-134/16/C METTUGADDA MAHABOOBNAGAR PAN: AMWPP 6154 G VS. INCOME TAX OFFICER WARD-1 MAHABOOBNAGAR (APPELLANT) (RESPONDENT) ITA NO.187.HYD/2012 (A.Y 2008-09) INCOME TAX OFFICER WARD-1 MAHABOOBNAGAR VS. SRI P. SRINIVASA L U YADAV, 1-4-134/16/C METTUGADDA MAHABOOBNAGAR PAN: AMWPP 6154 G (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI MOHD. AFZAL, ADVOCATE DEPARTMENT BY: SMT. SUMAN MALIK, (DR) DATE OF HEARING: 22/01/2015 DATE OF PRONOUNCEMENT: 28/01/2015 O R D E R PER SAKTIJIT DEY, J.M. THESE CROSS APPEALS FILED BY THE ASSESSEE AND THE R EVENUE ARE DIRECTED AGAINST THE ORDER DATED 14.11.2011 OF CIT (A)-V HYDERABAD PERTAINING TO THE A.Y 2008-09. THE GROUND S RAISED BY THE ASSESSEE AND THE REVENUE IN THE MEMORANDUM OF A PPEAL ARE AS UNDER: GROUNDS RAISED BY THE ASSESSEE IN ITA NO.196/HYD/20 12 1. THE LD CIT (A) IS AGAINST LAW AND PROBABILITIES OF CASE. ITA NOS.196 & 187 OF 2012P SRINIVASULU YADAV, PENUK ONDA, MAHABOOBNAGAR PAGE 2 OF 6 2. THE LD CIT (A) OUGHT TO HAVE HELD THAT THE SUBJE CT LAND ON WHICH CAPITAL GAINS ARE DETERMINED ARE INAM LANDS AS OBSERVED BY THE AO, (PARA C), THEREFORE, N OT LIABLE FOR CAPITAL GAINS TAX AS THERE IS NO ELEMENT OF COST OF ACQUISITION IN THE TRANSACTION. GROUNDS RAISED BY THE REVENUE IN ITA NO.187/HYD/201 2 : 1. THE CIT (A)-V, HYDERABAD HAS ERRED IN ALLOWING THE RELIEF TAKING BASE YEAR AS 1981 INSTEAD OF 2002 -03 AS THE ASSESSEE WAS NOT HAVING FULL RIGHTS OF OWNERSHIP OVER THE AGRICULTURAL LAND AS HE WAS HAVI NG ONLY INAMDAR RIGHT FOR CULTIVATION ONLY. 2. THE CIT (A)-V HYDERABAD HAS ERRED IN ALLOWING THE RELIEF ON ACCOUNT OF DEVELOPMENT EXPENSES OF 20 %, WHICH IS VERY REASONABLE. 2. AS CAN BE SEEN FROM THE GROUNDS RAISED BY BOTH T HE PARTIES, THE ISSUE IN DISPUTE IN BOTH THE APPEALS IS IN RELA TION TO CHARGING OF CAPITAL GAIN. BRIEF FACTS OF THE ISSUE RELATING TO THE DISPUTE ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE A.Y UNDER CO NSIDERATION, THE ASSESSEE ORIGINALLY FILED ITS RETURN DECLARING TOTAL INCOME OF RS.1,58,690/- FROM WINE BUSINESS. DURING A SURVEY O PERATION U/S 133A CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 23.08.2009, IT CAME TO THE NOTICE OF THE DEPARTMENT THAT ASSESSEE HAS SOLD IMMOVABLE PROPERTY GIVING RISE TO LONG TERM CAPITAL GAIN. AS A RESULT OF SURVEY, THE ASSESSEE F ILED A REVISED RETURN ON 22.03.2010 DECLARING LONG TERM CAPITAL GA IN OF RS.86,41,400/-. IN COURSE OF THE SCRUTINY ASSESSMEN T PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE DURIN G THE RELEVANT FINANCIAL YEAR HAS SOLD LAND TO THE EXTENT OF 3728 SQ.YARDS AT RS.100/- PER SQ. YARD AS ON 1.4.1981. A CCORDINGLY THE ASSESSEE CLAIMED THE COST OF PLOT ON THE DATE O F SALE AT RS.20.00 LAKHS. THE AO HOWEVER, OBSERVED THAT ON VE RIFICATION WITH THE REGISTRATION AUTHORITIES OF THE STATE GOVT . IT WAS FOUND ITA NOS.196 & 187 OF 2012P SRINIVASULU YADAV, PENUK ONDA, MAHABOOBNAGAR PAGE 3 OF 6 THAT THE VALUE OF THE LAND AS ON 1.4.81 IS RS.30,00 0/- PER ACRE, AS THE LAND WAS AGRICULTURAL IN NATURE. HE ALSO OBS ERVED THAT AS PER THE SALE DEED SUBMITTED BY THE ASSESSEE, THE AN CESTORS OF THE ASSESSEE WERE INAMDARS OF THE LAND HAVING RIGHT OF CULTIVATION AND ENJOYMENT. ACCORDINGLY, HE WAS OF THE VIEW THAT THE COST OF PLOT COULD NOT BE TAKEN AT RS.100/- PER SQ. YARD AS CLAIMED BY THE ASSESSEE. THE AO ULTIMATELY ADOPTED THE INDEXED COST OF ACQUISITION OF THE LAND AT RS.8,15,400/- AS AGAINST THE COST ADOPTED BY THE ASSESSEE AT RS.20.00 LAKHS. HE ALSO MADE DISALLOWANCE ON ESTIMATE FROM THE DEVELOPMENT EXPEN SES CLAIMED TO HAVE BEEN INCURRED BY THE ASSESSEE ON TH E PLOT SOLD. THE AO ALSO INTERFERED WITH THE EXEMPTION CLAIMED U /S 54F BY THE ASSESSEE. AS A RESULT, THE NET LONG TERM CAPITA L GAIN WAS DETERMINED AT RS.1,11,71,000/-. BEING AGGRIEVED WIT H THE ASSESSMENT ORDER, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE LD CIT (A) AFTER CONSIDERI NG THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF MATER IALS AVAILABLE ON RECORD DISPOSED OF THE APPEAL BY GRANTING PARTIA L RELIEF TO THE ASSESSEE. BEING AGGRIEVED OF THE AFORESAID ORDER OF THE LD CIT (A), BOTH THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEF ORE US. 3. AS CAN BE SEEN FROM THE GROUNDS RAISED, ASSESSEE HAS RAISED AN ISSUE THAT THE NATURE OF LAND BEING INAM LAND, THERE IS NO COST OF ACQUISITION TO THE ASSESSEE, HENCE CAPIT AL GAIN CANNOT BE COMPUTED. HOWEVER, AS BORNE OUT FROM THE FACTS A ND MATERIALS ON RECORD, THIS ISSUE WAS NEVER RAISED BY THE ASSESSEE EITHER BEFORE THE AO OR BEFORE THE LD CIT (A). WHEN THIS FACT WAS POINTED OUT TO THE LD AR, IN COURSE OF HEARING OF A PPEAL BEFORE US, THE LD AR THOUGH, ADMITTED THE FACT THAT THE ISSUE IS BEING RAISED FOR THE FIRST TIME, BUT HE NEVERTHELESS REQUESTED T O TREAT THE GROUND RAISED BY THE ASSESSEE ON THE ISSUE AS ADDIT IONAL GROUND. ITA NOS.196 & 187 OF 2012P SRINIVASULU YADAV, PENUK ONDA, MAHABOOBNAGAR PAGE 4 OF 6 IN THIS REGARD HE ALSO FILED A PETITION PRAYING FOR ADMISSION OF THE ADDITIONAL GROUND. THE LD AR ALSO FILED A SEPARATE PETITION SEEKING PERMISSION TO FILE ADDITIONAL EVIDENCES IN SUPPORT OF THE GROUND RAISED. THE LD AR FURTHER SUBMITTED, THE FAC T THAT THE LAND SOLD WAS INAM LAND IS BORNE OUT FROM THE RECOR D AS THE AO ON EXAMINATION OF THE SALE DEED HAS OBSERVED THAT T HE LAND WAS RECEIVED BY THE ANCESTORS OF THE ASSESSEE AS INAM L AND. THEREFORE, THE PRIMARY FACTS FOR DECIDING THE ISSUE RAISED BY THE ASSESSEE ARE ALREADY ON RECORD. THE LD AR SUBMITTED THAT SINCE THE LAND IN QUESTION WAS RECEIVED AS INAM BY THE AN CESTORS OF THE ASSESSEE, THE LAND HAS NO COST OF ACQUISITION. ACCORDINGLY, IN ABSENCE OF COST OF ACQUISITION, CAPITAL GAIN CANNOT BE COMPUTED. IN SUPPORT OF SUCH CONTENTION, THE LD AR RELIED UPO N A NUMBER OF DECISIONS. 4. THE LD DR WHILE OBJECTING TO THE ADDITIONAL GROU ND RAISED BY THE ASSESSEE FOR THE FIRST TIME SUBMITTED THAT T HE ASSESSEES CLAIM THAT THE LAND SOLD BEING AN INAM LAND, THERE IS NO COST OF ACQUISITION, HENCE CAPITAL GAIN CANNOT BE COMPUTED IS NOT ACCEPTABLE IN VIEW OF THE DECISION OF THE HON'BLE P UNJAB & HARYANA HIGH COURT IN CASE OF CIT VS. RAJA MALWINDE R SINGH (334 ITR 48). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDE RS OF THE REVENUE AUTHORITIES. UNDISPUTEDLY, THE ISSUE IN DIS PUTE HAS BEEN RAISED BY ASSESSEE FOR THE FIRST TIME BEFORE T HE TRIBUNAL AND IT WAS NEVER RAISED EITHER BEFORE THE AO, NOR WAS A SUBJECT MATTER OF APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY. THEREFORE, THE GROUND RAISED BY THE ASSESSEE IS TO BE TREATED AS AN ITA NOS.196 & 187 OF 2012P SRINIVASULU YADAV, PENUK ONDA, MAHABOOBNAGAR PAGE 5 OF 6 ADDITIONAL GROUND. HOWEVER, THERE IS NO DOUBT THE ISSUE RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUND IS PURELY A LEGAL ISSUE. THE CONTENTION OF THE ASSESSEE THAT THE PRIMARY FAC TS RELATING TO THE AFORESAID ISSUE ARE ALSO ON RECORD, TO SOME EXT ENT APPEARS TO BE TRUE. AS CAN BE SEEN FROM THE ASSESSMENT ORDER, THE AO ON EXAMINING THE SALE DEED HAS OBSERVED THAT THE LAND SOLD WAS RECEIVED AS INAM LAND BY THE ANCESTORS OF THE ASSES SEE FOR CULTIVATION. THEREFORE, CONSIDERING THE FACT THAT T HE ISSUE RAISED IS PURELY A LEGAL ISSUE GOING TO THE ROOT OF THE MA TTER AS IT QUESTIONS THE VERY ASSESSABILITY OF CAPITAL GAIN AN D SINCE THE PRIMARY FACT THAT IT IS AN INAM LAND IS ALSO BEFORE THE AO, IN OUR CONSIDERED VIEW, THE GROUND RAISED BY THE ASSESSEE HAS TO BE ADMITTED AS AN ADDITIONAL GROUND. IN THIS REGARD WE RELY UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF NATIONAL THERMAL POWER CORPORATION VS. CIT (229 ITR 383). HOWEVER, SINCE THE ISSUE HAS BEEN RAISED FOR THE FI RST TIME BEFORE US AND NEITHER THE AO, NOR THE FIRST APPELLATE AUTH ORITY HAVE EXAMINED THE ISSUE, WE CANNOT DECIDE THIS ISSUE, EI THER WAY AT THIS STAGE WITHOUT GIVING A FAIR OPPORTUNITY TO THE DEPARTMENT. IN THAT VIEW OF THE MATTER, WE ARE INCLINED TO REMIT T HIS ISSUE TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. WE FURTHER DIRECT THE AO TO CONSIDER THE ADDITIONAL EVIDENCES PRODUCED BEFORE US WHILE TAKING A DECISIO N ON THE MATTER. THE AO SHOULD ALSO EXAMINE APPLICABILITY OF THE RATIO LAID DOWN IN THE DECISIONS WHICH MAY BE RELIED UPON BY T HE ASSESSEE AND ALSO THE DECISION RELIED UPON BY THE LD DR REFE RRED TO HEREIN BEFORE. AFTER CONSIDERING ALL ASPECTS OF THE ISSUE AND KEEPING IN VIEW THE RATIO LAID DOWN IN THE DECISIONS, THE AO M UST DECIDE THE ISSUE AFTER AFFORDING REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. ITA NOS.196 & 187 OF 2012P SRINIVASULU YADAV, PENUK ONDA, MAHABOOBNAGAR PAGE 6 OF 6 6. AS THE ISSUES RAISED IN DEPARTMENTS APPEAL DEPE ND UPON THE FINAL OUTCOME OF THE DECISION, THE AO IS GOING TO TAKE WHILE DECIDING THE ISSUE RAISED BY THE ASSESSEE, WE DEEM IT PROPER TO REMIT THE GROUNDS RAISED BY THE DEPARTMENT TO THE F ILE OF THE AO FOR DECIDING AFRESH, IF WARRANTED. 7. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2015. S D/ - S D/ - (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 28 TH JANUARY, 2015. VNODAN/SPS COPY TO: 1. SHRI MOHD. AFZAL, ADVOCATE, 11-5-465, FLAT NO.402, SHERSONS RESIDENCY, CRIMINAL COURT ROAD, RED HILLS , HYDERABAD 2. INCOME TAX OFFICER WARD-1 MAHABOOBNAGAR 3. THE CIT(A)-V HYDERABAD 4. THE CIT HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER