Sri Sri Dhulipala Ramachandra Koteswara Rao, Vijayawada V. The ACIT, Circle-2(1), Vijayawada, Vijayawada

ITA 187/VIZ/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1152 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 24-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOVINDA RAJAN
• Keywords: Revision of order; Principle of natural justice; Cost of acquisition; Fair market value; Assessment record
• Section: 143(3); 263

Judgement Text

ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.187/VIZAG/2012 ( / ASSESSMENT YEAR: 2007-08) SRI DHULIPALA RAMACHANDRA KOTESWARA RAO VIJAYAWADA VS. ACIT, CIRCLE - 2(1), VIJAYAWADA [PAN: AABHD1457M ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI GOVINDA RAJAN, DR / DATE OF HEARING : 02.0 5.2016 / DATE OF PRONOUNCEMENT : 20.05.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT, VIJAYAWADA DATED 27.3.2012 U/S 263 OF THE INCO ME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') AND IT PERTAINS T O THE ASSESSMENT YEAR 2007-08. ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A HUF CARRYING ON THE BUSINESS OF MONEY LENDING AND TRADING ON FUT URES HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 31.10.2007 DECLARING TOTAL INCOME OF ` 28,78,15,050/-, CONSISTING OF INCOME FROM HOUSE PROPERTY, INCOME FROM BUSINESS, INCOME FROM L ONG TERM CAPITAL GAIN AND INCOME FROM OTHER SOURCES. THE CASE HAS BE EN SELECTED FOR SCRUTINY ASSESSMENT, ACCORDINGLY, NOTICE U/S 143(2) OF THE ACT DATED 15.9.2008 WAS ISSUED. IN RESPONSE TO NOTICE, THE A. R. OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FURNISHED THE INFORM ATION/DOCUMENTS AND BANK ACCOUNTS CALLED FOR. THE A.O. AFTER EXAMIN ING THE BOOKS OF ACCOUNTS AND OTHER INFORMATION, COMPLETED THE ASSES SMENT UNDER SEC. 143(3) OF THE ACT AND ACCEPTED THE INCOME DECLARED BY THE ASSESSEE. 3. THE CIT, VIJAYAWADA ISSUED A SHOW-CAUSE NOTICE U /S 263 OF THE ACT DATED 17.6.2011 AND PROPOSED TO REVISE THE ASSE SSMENT ORDER. THE CIT PROPOSED TO REVISE THE ASSESSMENT ORDER FOR THE REASON THAT ON EXAMINATION OF ASSESSMENT RECORDS, CERTAIN OMISSION S AND COMMISSIONS WERE NOTICED, WHICH RENDERED THE ASSESSMENT ORDER E RRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE IN TERMS OF SECTION 263 OF THE ACT. THE CIT IN THE SAID SHOW CAUSE NOTICE, OBSERVED THAT THE A.O. HAS ALLOWED THE TDS CREDIT HELD IN THE NAME OF SRI SRIKANTH ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 3 DHULIPALA, COPARCENER, WITHOUT VERIFYING THE FACT W HETHER THE INCOME HAS BEEN CONSIDERED IN THE HANDS OF THE HUF OR NOT. TH E CIT FURTHER OBSERVED THAT THE A.O. HAS ALLOWED THE CLAIM OF FAI R MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 WITHOUT EXAMINING THE FACT THAT THE CLAIM OF THE ASSESSEE IS IN ACCORDANCE WITH LAW OR NOT. WITH TH ESE OBSERVATIONS, THE CIT WAS OF THE OPINION THAT THE ASSESSMENT ORDER PA SSED BY THE A.O. U/S 143(3) OF THE ACT, DATED 22.12.2009 IS ERRONEOU S IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFO RE, ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE ORDER SHO ULD NOT BE REVISED U/S 263 OF THE ACT. 4. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESS EE HAS FILED A WRITTEN SUBMISSIONS VIDE LETTER DATED 5.7.2011 AND CONTENDED THAT THE ASSESSMENT ORDER PASSED BY THE A.O. IS NOT ERRONEOU S IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS THE A.O. HAS VERIFIED THE ISSUE WITH REGARD TO THE CREDIT FOR TDS AND COMPUTA TION OF LONG TERM CAPITAL GAIN. THE ASSESSEE FURTHER SUBMITTED THAT T HE A.O. HAS RIGHTLY ALLOWED THE CLAIM OF TDS STANDING IN THE NAME OF SR I SRIKANTH DHULIPALA, A COPARCENER OF HUF OF DHULIPALA RAMA CHANDRA KOTES WARA RAO. IT WAS FURTHER SUBMITTED THAT THE TDS CERTIFICATE BEARS TH E PAN NUMBER OF THE HUF AND THE FUNDS PERTAIN TO HUF HAS BEEN DEPOSITED IN THE NAME OF ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 4 THE COPARCENER OF THE HUF AND THE RELATED INTEREST INCOME HAS BEEN CONSIDERED IN THE HANDS OF THE HUF. WHEN INCOME IS CONSIDERED IN THE HANDS OF THE HUF, THE RELATED TDS CLAIM HAS TO BE A LLOWED, THEREFORE, THE A.O. HAS RIGHTLY ALLOWED THE CLAIM OF TDS AGAIN ST SUCH INCOME WHICH CANNOT BE TERMED AS ERRONEOUS. AS REGARDS THE OTHE R ISSUE RAISED BY THE CIT, IT IS SUBMITTED THAT THE A.O. AT THE TIME OF COMPLETION OF ASSESSMENT U/S 143(3) OF THE ACT, HAS CONSIDERED TH E FAIR MARKET VALUE ADOPTED BY THE ASSESSEE AND AFTER DUE VERIFICATION HAS CHOSEN TO ACCEPT THE FAIR MARKET VALUE AS ON 1.4.1981. IT IS FURTHE R SUBMITTED THAT THE ASSESSEE HAS OBTAINED A CERTIFICATE FROM THE CONCER NED S.R.O. TO THE EFFECT THAT THE S.R.O. HAS CERTIFIED THE FAIR MARKE T VALUE OF THE PROPERTY IN THAT LOCALITY ON 1.4.1989 AND FURTHER STATED THA T THE FMV AS ON 1.4.1981 CANNOT BE GIVEN AS THE RELATED DOCUMENTS W ERE DESTROYED IN FIRE. THEREFORE, IT IS NOT POSSIBLE TO ISSUE A CER TIFICATE FOR THE RELEVANT FINANCIAL YEAR. HOWEVER, THE S.R.O. HAS ISSUED A CE RTIFICATE AS ON 1.4.1989, AS PER WHICH THE FAIR MARKET VALUE OF THE PROPERTY IS AT ` 500/- PER SQ.YD. THE ASSESSEE, BASED ON SUCH CERTIFICATE , HAS REWORKED THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 BY ALLOWING 25% DISCOUNT TO ARRIVE AT A FAIR MARKET VALUE OF ` 250/- PER SQ.YD. AS ON 1.4.1981. THESE FACTS HAVE BEEN FURNISHED BEFORE T HE ASSESSING OFFICER AT THE TIME OF ASSESSMENT. THE A.O. AFTER EXAMININ G THE ABOVE FACTS ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 5 HAS ACCEPTED THE FAIR MARKET VALUE CLAIMED BY THE A SSESSEE. THEREFORE, THE ORDER PASSED BY THE A.O. CANNOT BE CONSIDERED A S ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REV ENUE. 5. THE CIT AFTER CONSIDERING THE EXPLANATIONS FURNI SHED BY THE ASSESSEE HELD THAT THE A.O., WITHOUT VERIFYING THE FACTS HAS WRONGLY ALLOWED THE CREDIT FOR TDS STANDING IN THE NAME OF AN INDIVIDUAL MEMBER OF HUF TO THE TAX PAYABLE BY HUF. THEREFORE, HELD THAT THE ASSESSMENT ORDER PASSED BY THE A.O. IN SO FAR IN RELATION TO C LAIM OF TDS OF ` 21,359/- IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIA L TO THE INTEREST OF THE REVENUE. SIMILARLY, AS REGARDS THE ISSUE OF COMPUT ATION OF LONG TERM CAPITAL GAIN, THE CIT HELD THAT THE ASSESSEE HAS AD OPTED A FAIR MARKET VALUE OF ` 250/- PER SQ.YD. AS ON 1.4.1981 WITHOUT ANY BASIS. HOWEVER, THE DEPARTMENT HAD OBTAINED DETAILS FROM THE S.R.O. WHICH SHOWS THAT THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.198 1 IS AT ` 100/- PER SQ.YD. THE A.O. WITHOUT EXAMINING THE ISSUE, SIMPL Y ACCEPTED THE FAIR MARKET VALUE CLAIMED BY THE ASSESSEE WHICH RENDERS THE ASSESSMENT ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO T HE INTEREST OF THE REVENUE. WITH THESE OBSERVATIONS, THE CIT SET ASIDE THE ORDER PASSED BY THE A.O. AND DIRECTED THE A.O. TO RE-COMPUTE THE INCOME BY TAKING INTO ACCOUNT THE FAIR MARKET VALUE OF THE PROPERTY OF ` 100/- PER SQ.YD. ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 6 AS ON 1.4.1981. SIMILARLY, THE CIT DIRECTED THE A. O. TO DISALLOW THE TDS CREDIT OF ` 21,359/- CLAIMED AGAINST THE INCOME OF HUF. AGGRI EVED BY THE CIT ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE CIT HAS ERRED IN ASSUMED THE JURISDICTION U/S 263 OF THE ACT, AS THE ORDER PASSED BY THE A.O. IS NOT ERRONEOUS IN SO FAR AS IT IS PREJUDICIA L TO THE INTEREST OF THE REVENUE. THE LD. A.R. FURTHER SUBMITTED THAT THE A. O. HAS RIGHTLY ALLOWED THE CLAIM FOR TDS IN THE HANDS OF THE HUF, AS THE RELATED INTEREST INCOME HAS BEEN CONSIDERED IN THE HANDS OF HUF. ONCE THE INCOME IS CONSIDERED IN THE HANDS OF HUF, THE RELAT ED TDS NEEDS TO BE GIVEN CREDIT AGAINST SUCH INCOME, THEREFORE, THE CI T WAS NOT JUSTIFIED IN DIRECTING THE A.O. TO DISALLOW THE TDS. THE LD. A. R. FURTHER SUBMITTED THAT AS REGARDS THE FAIR MARKET VALUE OF THE PROPER TY AS ON 1.4.1981, THE A.O. HAS EXAMINED THE ISSUE AT THE TIME OF COMPLETI ON OF ASSESSMENT U/S 143(3) OF THE ACT. IT IS FURTHER SUBMITTED THA T THE ASSESSEE HAS RIGHTLY COMPUTED THE FAIR MARKET VALUE OF ` 250/- PER SQ.YD., BASED ON THE CERTIFICATE ISSUED BY THE CONCERNED S.R.O. THE S.R.O. HAS ISSUED A CERTIFICATE, AS PER WHICH THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1989 IS AT ` 500/- PER SQ.YD. SINCE THE EXACT FAIR MARKET VALU E IS NOT AVAILABLE AS ON 1.4.1981, THE ASSESSEE HAS REWORKED THE FAIR MARKET ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 7 VALUE BY BACK WORKING AND ARRIVED AT A FAIR MARKET VALUE OF ` 250/- PER SQ.YD., WHICH WAS SUPPORTED BY THE CERTIFICATE ISSU ED BY THE S.R.O. IT IS FURTHER SUBMITTED THAT THE A.O. AFTER CONSIDERED TH E DETAILS HAS ALLOWED THE CLAIM OF THE ASSESSEE, THEREFORE, THE ORDER PAS SED BY THE A.O. CANNOT BE CONSIDERED AS ERRONEOUS FOR THE SIMPLE RE ASON THAT THE A.O. HAS NOT OBTAINED A CERTIFICATE FROM THE S.R.O. TO T HE EFFECT THAT THE FAIR MARKET VALUE OF THE PROPERTY IS AT ` 100/- PER SQ.YD. THE CIT HAS RELIED UPON A CERTIFICATE OBTAINED BY THE DEPARTMENT SUBSE QUENT TO THE DATE OF ASSESSMENT ORDER, WHICH CANNOT BE RELIED UPON TO RE VISE THE ASSESSMENT ORDER U/S 263 OF THE ACT. ANY DOCUMENT, SUBSEQUENT TO PASSING OF THE ASSESSMENT ORDER, WHICH IS COMING TO THE KNOWLEDGE OF THE CIT, CANNOT BE A VALID GROUND FOR REVISION OF ASSESSMENT ORDER U/S 263 OF THE ACT. 7. THE LD. D.R. STRONGLY SUPPORTED THE ORDER OF THE CIT. THE LD. D.R. FURTHER ARGUED THAT THE A.O. WAS ERRED IN GIVING CR EDIT FOR TDS STANDING IN THE NAME OF CO-PARCENER TO THE TAX PAYABLE BY TH E HUF. THEREFORE, THE ORDER PASSED BY THE A.O. IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. D.R. FURTHER ARGUED THAT THE A.O. WAS COMPLETELY ERRED IN NOT CONSIDERING THE FAIR MA RKET VALUE OF THE PROPERTY AS ON 1.4.1981, WHEN THE SAME WAS AVAILABL E AT THE TIME OF COMPLETION OF ASSESSMENT. THE A.O. HAS WRONGLY CONS IDERED THE FMV OF ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 8 THE PROPERTY BASED ON THE CERTIFICATE FURNISHED BY THE ASSESSEE, WHICH IS NOT AT ALL RELEVANT FOR THE PERIOD. THE ACT IS CLE AR THAT IN THE CASE OF PROPERTY WHICH WAS ACQUIRED PRIOR TO 1.4.1981, THE ASSESSEE AT HIS OPTION, EITHER CAN ADOPT COST OF THE PROPERTY OR FA IR MARKET VALUE WHICHEVER IS HIGHER FOR THE PURPOSE OF COST OF ACQU ISITION. HOWEVER, THE A.O. WITHOUT ANY BASIS ACCEPTED THE FMV ADOPTED BY THE ASSESSEE, WHICH IS BASED THE VALUE OF 1-4-1989. UNDER THESE C IRCUMSTANCES, THE CIT HAS RIGHTLY ASSUMED THE JURISDICTION AND REVISE D THE ASSESSMENT ORDER. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CIT ASSUMED THE JURISDICTION TO REVISE THE ASSESSME NT ORDER FOR THE REASON THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUI RY AT THE TIME OF COMPLETION OF ASSESSMENT, THEREBY THE ASSESSMENT OR DER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT REVISED THE ASSESSMENT ORDER ON THE GROUND THAT THE A.O. HA S WRONGLY ALLOWED CREDIT FOR TDS STANDING IN THE NAME OF COPARCENER O F HUF. THE CIT FURTHER OBSERVED THAT THE A.O. HAS WRONGLY ALLOWED THE CLAIM OF COMPUTATION OF COST OF ACQUISITION OF PROPERTY. AC CORDING TO THE CIT, THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 IS AT ` 100/- PER SQ.YD. ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 9 THE A.O. HAS ACCEPTED FMV OF ` 250/- PER SQ.YD., BY TAKING INTO ACCOUNT THE CERTIFICATE ISSUED BY THE S.R.O., WHICH IS NOT RELEVANT FOR THE PARTICULAR PERIOD. IT IS THE CONTENTION OF THE ASSE SSEE THAT THE ASSESSMENT ORDER PASSED BY THE A.O. IS NOT ERRONEOU S IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS THE A.O. HAS EXAMINED BOTH THE ISSUES RAISED BY THE CIT AT THE TIME OF ASSESSM ENT. IT IS FURTHER CONTENDED THAT THE A.O. HAS RIGHTLY GIVEN CREDIT FO R TDS STANDING IN THE NAME OF THE COPARCENER OF HUF, AS THE RELATED INCOM E HAS BEEN OFFERED IN THE HANDS OF HUF. SIMILARLY, THE ASSESSEE HAS R IGHTLY COMPUTED THE FAIR MARKET VALUE OF THE PROPERTY BY TAKING INTO AC COUNT THE CERTIFICATE ISSUED BY THE S.R.O. THE REASON FOR NOT OBTAINING THE CERTIFICATE FOR THE RELEVANT PERIOD BEING THAT THE S.R.O. HAS EXPRESSED THEIR INABILITY TO GIVE FAIR MARKET VALUE FOR THE PERIOD AS ON 1.4.1981, AS THE RELEVANT PERIOD RECORDS HAS BEEN DESTROYED IN A FIRE. UNDER THESE CIRCUMSTANCES, THE ASSESSEE HAS RIGHTLY COMPUTED THE FAIR MARKET VALUE OF ` 250/- BY BACK WORKING THE VALUE OF 1989. THEREFORE, THE CIT IS NO T CORRECT IN OBSERVING THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUIRY OF T HE ISSUE BEFORE COMPLETION OF ASSESSMENT. 9. THE CIT ASSUMED THE JURISDICTION TO REVISE THE A SSESSMENT ORDER FOR THE REASON THAT THERE IS A LACK OF ENQUIRY ON T HE PART OF THE A.O. IN ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 10 EXAMINING THE ISSUES WITH REGARD TO CREDIT FOR TDS AND COMPUTATION OF COST OF ACQUISITION OF PROPERTY. THE CIT OBSERVED THAT THE A.O. HAS WRONGLY ALLOWED THE CREDIT FOR TDS WHICH IS OTHERWI SE NOT ALLOWABLE TO THE ASSESSEE. SIMILARLY, THE CIT OBSERVED THAT THE A.O. HAS WRONGLY ALLOWED THE COST OF ACQUISITION OF THE PROPERTY WIT HOUT EXAMINING THE FACT THAT WHETHER THE ASSESSEE HAS SUPPORTED THE CO MPUTATION OF COST OF ACQUISITION OF THE PROPERTY. IT IS THE CONTENTION OF THE ASSESSEE THAT BOTH THE ISSUES HAVE BEEN EXAMINED BY THE A.O. THE REFORE, THE CIT IS NOT CORRECT IN OBSERVING THAT THE A.O. HAS NOT COND UCTED PROPER ENQUIRY OF THE ISSUES AT THE TIME OF COMPLETION OF ASSESSME NT. THE ISSUES RAISED BY THE CIT WITH REGARD TO THE CREDIT FOR TDS AND CO MPUTATION OF COST OF ACQUISITION OF PROPERTY ARE ALREADY DEALT BY THE A. O. AND AFTER VERIFICATION OF DETAILS FURNISHED BY THE ASSESSEE H AS ALLOWED THE CLAIM, THEREFORE THE CIT IS NOT CORRECT IN REVISED THE ASS ESSMENT ORDER. 10. THE PRIMARY OBJECT OF S. 263 IS TO VEST A SUPER VISORY POWER TO THE CIT TO MODIFY, OR CANCEL ANY ORDER, INCLUDING AN AS SESSMENT ORDER MADE BY AN A.O., IF HE IS OF THE OPINION THAT SUCH AN OR DER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REV ENUE. BUT, TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, THE TWIN COND ITIONS MUST BE SATISFIED. (1) THE ORDER OF THE ASSESSING OFFICER I S ERRONEOUS (2) IN SO FAR ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 11 AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE . UNLESS BOTH CONDITIONS ARE SATISFIED, THE CIT CANNOT ASSUME JURISDICTION U /S 263 OF THE ACT. THEREFORE, THE QUESTION OF REVISION OF ASSESSMENT O RDER COMES ONLY WHEN THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. A PARTICULAR ASSESSMENT OR DER IS ERRONEOUS OR NOT HAS TO BE DECIDED BASED ON THE FACT AND CIRCUMS TANCES OF EACH CASE. WHETHER THE A.O. HAS VERIFIED THE PARTICULAR ISSUE O R NOT WHILE COMPLETING THE ASSESSMENT OR HE HAD APPLIED HIS MIN D WHILE ADJUDICATING THE PARTICULAR ISSUE IN THE LIGHT OF T HE PROVISIONS OF ACT IS TO BE DECIDED BASED ON THE FACTS AVAILABLE ON RECORDS, SUCH AS ASSESSMENT ORDER AND DETAILS SUBMITTED BY THE ASSESSEE. THE A. O. BEING QUASI JUDICIAL AUTHORITY SHOULD EXERCISE HIS POWER JUDICI ALLY WHILE DECIDING ANY ISSUE. THE A.O. MUST ACT AS AN INVESTIGATOR AND ADJ UDICATE THE ISSUES WHICH RENDER JUSTICE TO EITHER PARTY. IF HE PASSED ERRONEOUS ORDER NOT ONLY REVENUE, SOMETIMES ASSESSEE WILL ALSO LANDS IN PROBLEM, SO THAT THE LAW PROVIDES FOR REVISION OF ORDERS SUMOTO BY THE C OMMISSIONER, IN CASE REVENUE IS PREJUDICED AND ASSESSEE CAN FILE APPLICA TION UNDER SECTION 264 TO CORRECT THE MISTAKE COMMITTED BY THE A.O. TH EREFORE, THE LAW IS EQUALLY APPLICABLE FOR BOTH SIDES WHO CAN SEEK REME DY IN CASE IT IS REQUIRED. THEREFORE, THE POWERS OF THE COMMISSIONER IN WIDE ENOUGH, SO ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 12 THAT HE CAN ENTER INTO CORRECT THE MISTAKE CAUSED B Y THE ASSESSING OFFICER. 11. THE CIT MAY CONSIDER THE ORDER OF THE A.O. TO B E ERRONEOUS, NOT ONLY WHEN IT CONTAINS SOME APPARENT ERROR OF REASON ING OF LAW OR FACT ON THE FACE OF THE ORDER, BUT ALSO WITH ITS STEREO TYP ED ORDER WHICH SIMPLY ACCEPTS WHAT ASSESSEE HAS STATED IN HIS RETURN AND FAILED TO MAKE ANY ENQUIRIES OR EXAMINED THE CLAIM OF THE ASSESSEE. A N ORDER SOUGHT TO BE REVISED U/S 263 OF THE ACT WOULD BE ERRONEOUS AND F ALL IN THE CATEGORY OF ERRORS, IF IT IS BASED ON AN INCORRECT ASSUMPTION O F FACT OR AN INCORRECT APPLICATION OF LAW OR NON APPLICATION OF MIND BY TH E A.O. IT IS THE DUTY OF THE A.O. TO ADEQUATELY PROTECT THE INTEREST OF T HE BOTH THE PARTIES NAMELY THE ASSESSEE AS WELL AS THE REVENUE. IF HE FAILS TO DISCHARGE HIS DUTIES OR HE PASS AN ARBITRARY ASSESSMENT ORDER, WH ICH CAN BE CORRECTED EITHER AT THE INSTANCE OF THE ASSESSEE, IF THE ASSE SSEE IS PREJUDICIAL OR AT THE INSTANCE OF THE REVENUE IF THE REVENUE IS PREJU DICED. WHILE MAKING AN ASSESSMENT, THE ITO HAS A FAIR ROLE TO PLAY. HE IS AN INVESTIGATOR AS WELL AS ADJUDICATOR OF THE ISSUE. AS AN ADJUDICATO R OF THE ISSUE, HE HAS TO DISCHARGE HIS DUTIES JUDICIALLY AND JUSTIFY THE CASE FOR BOTH THE PARTIES. WHILE PASSING THE ASSESSMENT ORDER, HE MUST RECORD F INDINGS ON THE RELEVANT ISSUE BEFORE ALLOWING ANY CLAIM OF THE ASS ESSEE. IF THE A.O. IS ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 13 ALLOWED TO MAKE ASSESSMENTS IN AN ARBITRARY MANNER BOTH THE PARTIES EITHER REVENUE OR ASSESSEE WOULD SUFFER. IF WITHOUT DISCUSSING THE NATURE OF THE TRANSACTIONS AND MATERIALS ON RECORD, THE A. O. HAD MADE CERTAIN ADDITIONS TO THE INCOME OF THE ASSESSEE, THE SAME W OULD HAVE BEEN CONSIDERED ERRONEOUS BY ANY APPELLATE AUTHORITY AS BEING VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE WHICH REQUIRE THAT TH E AUTHORITY MUST INDICATE THE REASONS FOR ADVERSE ORDER. WE FIND NO REASON WHY THE SAME ANALOGY SHOULD NOT BE TAKEN WHEN AN ORDER IS A GAINST THE INTEREST OF THE REVENUE. AS A MATTER OF FACT, SUCH ORDERS A RE PREJUDICIAL TO THE INTEREST OF BOTH THE PARTIES, BECAUSE EVEN THE ASSE SSEE IS DEPRIVED OF A BENEFIT OF POSITIVE FINDING IN HIS FAVOUR, THOUGH H E MAY HAVE SUFFICIENTLY ESTABLISHED HIS CASE. 12. HAVING SAID THAT LET US EXAMINE, WHETHER THE AS SESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE. IT IS THE CONTENTION OF CIT THAT THE A.O. HAS WRONGLY ALLOWED THE CLAIM OF COST OF ACQUISITION OF PROPERTY WHILE COMPUTING LONG TERM C APITAL GAIN. ACCORDING TO THE CIT THE ASSESSEE HAS WRONGLY COMPU TED THE FMV OF THE PROPERTY AS ON 1-4-1981 WHICH WAS ACCEPTED BY THE A .O. WITHOUT VERIFICATION. THE CIT CONTENDED THAT WHERE A CAPITA L ASSET IS ACQUIRED PRIOR TO 1 ST APRIL 1981, ITS COST OF ACQUISITION HAS TO BE DETE RMINED BASED ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 14 ON THE COST OF THE PROPERTY IF KNOWN OR FMV OF THE PROPERTY AS ON 1-4- 1981. BUT, THE ASSESSEE HAS OBTAINED A FMV OF THE P ROPERTY AS ON 1-4- 1989 AND RE WORKED THE COST BY REVERSE METHOD BY AL LOWING 25% DISCOUNT PER YEAR WHICH IS NOT CORRECT. THE CIT HAS OBTAINED A CERTIFICATE FROM SRO WHICH INDICATES THE FMV OF THE PROPERTY AS ON 1-4-1981 AT ` 100/- PER SQ. YARD. IT IS THE CONTENTION OF ASSESSE E THAT IT HAS RIGHTLY COMPUTED FMV AS ON 1-4-1981. IT IS FURTHER SUBMITTE D THAT WHEN THE PROPERTY IS ACQUIRED BEFORE 1.4.1981, THE ASSESSEE AT ITS OPTION EITHER CAN ADOPT THE COST OF THE PROPERTY, IF KNOWN OR FAI R MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 TO COMPUTE THE COST OF ACQU ISITION OF THE PROPERTY. THE ASSESSEE HAS CHOSEN TO ADOPT THE FAI R MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 AND ACCORDINGLY, COMPUTED T HE COST OF ACQUISITION BY TAKING INTO ACCOUNT THE FAIR MARKET VALUE OF THE PROPERTY OF ` 250/- PER SQ.YD. THE ASSESSEE HAS WORKED OUT THE FAIR MARKET VALUE OF THE PROPERTY BASED ON THE CERTIFICATE ISSUED BY THE CONCERNED S.R.O. IT IS FURTHER CONTENDED THAT THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 IS NOT AVAILABLE, BECAUSE THE S.R.O. STATE D THAT THE RECORDS FOR THE RELEVANT PERIOD HAS BEEN DESTROYED. UNDER THESE CIRCUMSTANCES, THE ASSESSEE HAS REWORKED OUT THE COST OF THE PROPERTY AS ON 1.4.1981 WHICH WORKED OUT TO ` 250/- PER SQ.YD. THEREFORE, THE CIT WAS NOT CORRECT IN OBSERVING THAT THE COST OF THE PROPERTY AS ON 1.4.1981 IS ` ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 15 100/- PER SQ.YD. THE CIT HAS RELIED UPON THE CERTI FICATE, WHICH WAS OBTAINED SUBSEQUENT TO THE DATE OF PASSING THE ASSE SSMENT ORDER. THEREFORE, THE CIT IS NOT CORRECT IN REVISING THE A SSESSMENT ORDER BASED ON A SUBSEQUENT EVENT. WE DO NOT SEE ANY MERITS IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT, THE COST OF ACQUI SITION OF PROPERTY WHICH WAS ACQUIRED ON OR BEFORE 1-4-1981 HAS TO BE COMPUTED BASED ON THE FMV AS ON 1-4-1981 ONLY. IT IS THE DUT Y OF THE ASSESSEE TO PROVE WITH EVIDENCE THAT THE FMV ADOPTED IS THE COR RECT VALUE OF THE PROPERTY. SIMPLE TAKING A CERTIFICATE WHICH IS NOT RELEVANT TO THE PARTICULAR PERIOD CANNOT BE A BASIS FOR ARRIVING AT THE FMV AS ON 1-4- 1981. THEREFORE THE ASSESSMENT ORDER PASSED BY THE A.O. IS ERRONEOUS, IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE WHICH WAS RIGHTLY REVISED BY THE CIT UNDER SEC. 263 OF THE AC T. 13. COMING TO THE FACTS OF THE PRESENT CASE. IN TH E PRESENT CASE ON HAND, THE ASSESSEE HAS SOLD A PROPERTY AND COMPUTED LONG TERM CAPITAL GAIN BY ADOPTING FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981. ACCORDING TO THE ASSESSEE, IT HAS WORKED OUT FAIR M ARKET VALUE OF THE PROPERTY BASED ON A CERTIFICATE OBTAINED FROM THE C ONCERNED S.R.O. AS STATED BY THE ASSESSEE, THE S.R.O. HAS EXPRESSED HI S INABILITY TO FURNISH THE CERTIFICATE FOR THE RELEVANT PERIOD, BECAUSE TH E RECORDS OF THE ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 16 RELEVANT PERIOD ARE NOT AVAILABLE WITH S.R.O. THE S.R.O. HAS CERTIFIED THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.198 9. THE ASSESSEE HAS WORKED OUT THE FAIR MARKET VALUE OF ` 250/- PER SQ.YD. BY BACK WORKING BASED ON THE CERTIFICATE OF THE S.R.O. WHICH STATED THAT THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1989 IN THE SAME LO CALITY IS AT ` 500/- PER SQ.YD. THE ASSESSE HAS FILED A PAPER BOOK CONT AINING THE CERTIFICATE ISSUED BY THE S.R.O. ON VERIFICATION OF THE DOCUMEN T FILED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE HAS OBTAINED A CERTIFICATE FROM THE JOINT SUB REGISTRAR, VIJAYAWADA DATED 28.10.2015 AS PER WHICH THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1989 IN VIJA YAWADA CITY IS AT ` 501/- PER SQ.YD. ON FURTHER VERIFICATION OF THE CE RTIFICATE ISSUED BY THE S.R.O., WE FIND THAT THE SAID CERTIFICATE HAS BEEN OBTAINED ON 28.10.2015 WHICH IS AFTER THE DATE OF COMPLETION OF ASSESSMENT ORDER AS WELL AS REVISION ORDER PASSED BY THE CIT. THE ASSE SSEE CLAIMS TO HAVE FURNISHED THE SAID CERTIFICATE BEFORE THE A.O. AND THE A.O. HAS CONSIDERED THE CERTIFICATE AND ACCEPTED THE VALUE C LAIMED BY THE ASSESSEE. WE REALLY WONDER HOW A CERTIFICATE DATED 28.10.2015 IS MADE AVAILABLE TO THE ASSESSING OFFICER IN THE YEAR 2009 . WE FURTHER OBSERVED THAT THE CERTIFICATE ISSUED BY THE CONCERNED S.R.O. IS VAGUE WHICH DID NOT SPECIFY THE EXACT LOCATION OF THE PROPERTY. VI JAYAWADA IS A BIG PLACE AND EACH AREA OF THE CITY MAY HAVE DIFFERENT RATES FOR THE PROPERTIES. ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 17 THEREFORE, WE ARE OF THE VIEW THAT THE CERTIFICATE STATED TO BE OBTAINED FROM THE S.R.O. AND SUBMITTED BEFORE THE A.O. IS NO T CORRECT. THEREFORE, WE ARE OF THE OPINION THAT THE A.O. HAS FAILED TO E XAMINE THE ISSUE OF COMPUTATION OF COST OF ACQUISITION OF THE PROPERTY AND HENCE, THE CIT HAS RIGHTLY ASSUMED THE JURISDICTION TO REVISE THE ASSESSMENT ORDER. 14. COMING TO THE SECOND ISSUE QUESTIONED BY THE CI T. THE CIT OBSERVED THAT THE A.O. HAS WRONGLY ALLOWED THE CRED IT FOR TDS STANDING IN THE NAME OF MEMBER OF HUF. IT IS THE CONTENTION OF THE ASSESSEE THAT THE A.O. HAS RIGHTLY ALLOWED THE CLAIM OF TDS AS TH E RELEVANT INTEREST INCOME HAS BEEN CONSIDERED IN THE HANDS OF THE HUF. ON PERUSAL OF THE ASSESSMENT ORDER PASSED BY THE A.O., WE FIND THAT T HE ASSESSMENT ORDER IS BRIEF AND CRYPTIC. THE A.O. HAS NOT GIVEN ANY R EASONS FOR ACCEPTING THE TDS STANDING IN THE NAME OF THE COPARCENERS OF A HUF. THOUGH ASSESSEE CLAIMS THAT THE A.O. HAS EXAMINED THE ISSU E AND AFTER EXAMINATION GIVEN CREDIT FOR TDS, THE ASSESSMENT OR DER DOES NOT SHOW ANY IOTA OF EVIDENCE TO SHOW THAT THE A.O. HAS EXAM INED THE ISSUE BEFORE ALLOWING CREDIT FOR TDS. THEREFORE, WE ARE OF THE OPINION THAT THE CIT HAS RIGHTLY ASSUMED THE JURISDICTION TO REV ISE THE ASSESSMENT ORDER ON THE GROUND THAT THE A.O. HAS WRONGLY ALLOW ED THE CLAIM OF TDS WHICH IS NOT OTHERWISE ALLOWABLE TO THE ASSESSEE. ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 18 15. COMING TO THE CASE LAWS RELIED UPON BY THE ASSE SSEE. THE ASSESSEE RELIED UPON THE JUDGEMENT OF COORDINATE BE NCH, IN THE CASE OF SRI U.V. HARI PRASADA RAO VS. ITO WARD-2 IN ITA NO. 406/VIZAG/1998 AND SUBMITTED THAT IN THE ABSENCE OF SPECIFIC RATE AVAI LABLE FOR THE RELEVANT PERIOD, THE A.O. WAS JUSTIFIED IN REWORKING THE FAI R MARKET VALUE AS ON 1-4-1981 BY TAKING IN TO ACCOUNT THE AVAILABLE FAIR MARKET VALUE. WE HAVE GONE THROUGH THE CASE LAW RELIED UPON BY THE A SSESSEE, IN THE LIGHT OF THE FACTS OF THE PRESENT CASE. ALTHOUGH COORDIN ATE BENCH OF THIS TRIBUNAL, HELD THAT THE A.O. WAS RIGHT IN ACCEPTING THE FAIR MARKET VALUE WORKED OUT BY ALLOWING 20% DISCOUNT TO WORK OUT THE VALUE AS ON 1.4.1981, THE FACTS OF THE CASE BEFORE THE BENCH WA S DIFFERENT AND THE FACTS OF THE PRESENT CASE ARE DIFFERENT. IN THE PR ESENT CASE ON HAND, THE VERY GENUINENESS OF THE CERTIFICATE STATED TO BE FU RNISHED BEFORE THE A.O. IS IN DOUBTFUL. THE ASSESSEE CLAIMS TO HAVE F URNISHED A CERTIFICATE TO THE A.O. HOWEVER, ON VERIFICATION OF THE CERTIF ICATE WHICH IS AVAILABLE IN THE PAPER BOOK, THE DATE OF CERTIFICATE IS 28.10 .2015, WHICH IS BEYOND THE DATE OF ASSESSMENT AS WELL AS REVISION ORDER. T HEREFORE, CERTIFICATE OBTAINED IN THE FINANCIAL YEAR 2015 STATED TO HAVE BEEN SUBMITTED TO THE ASSESSING OFFICER AT THE TIME OF PASSING ASSESSMENT ORDER IN THE YEAR 2009 CANNOT BE ACCEPTED. THEREFORE, THE CASE LAW RE LIED UPON BY THE ASSESSEE IS REJECTED. ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 19 16. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE VIEW THAT ASSESSMENT ORDER PASSED BY THE A.O. U/S 1 43(3) OF THE ACT IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE ON BOTH COUNTS. THE A.O. HAS WRONGLY ALLOWED THE CLAI M FOR TDS STANDING IN THE NAME OF MEMBER OF A HUF. SIMILARLY, THE A.O . WITHOUT VERIFYING THE CLAIM OF THE ASSESSEE WITH REGARD TO THE FAIR M ARKET VALUE OF THE PROPERTY HAS ACCEPTED THE INCOME DECLARED BY THE AS SESSEE. ON VERIFICATION OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSMENT ORDER PASSED BY THE A.O. IS BRIEF AND CRYPTIC. THE A.O. WITHOUT EXAMINING THE ISSUES HAS SIMPLY ACCEPTED THE INCOME RETURNED BY T HE ASSESSEE BASED ON THE CLAIM MADE BY THE ASSESSEE. UNDER THESE CIR CUMSTANCES, THE CIT HAS RIGHTLY ASSUMED THE JURISDICTION TO REVISE THE ASSESSMENT ORDER. THEREFORE, WE UPHOLD THE ORDER PASSED BY THE CIT U/ S 263 OF THE ACT. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 TH MAY16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER ! /VISAKHAPATNAM: % /DATED : 20 TH MAY16 VG/SPS ITA NO.187/VIZAG/2012 SRI DHULIPALA RAMA CHANDRA KOTESWARA RAO, VIJAYWADA 20 '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI DHULIPALA RAMACHANDRA KOTESW ARA RAO, D.NO.32- 16-3, NEAR RAVI CHETTY, MOGALRAJAPURAM, VIJAYAWADA 2. / THE RESPONDENT THE ACIT, CIRCLE-2(1), VIJAYAWA DA 3. ) / THE CIT, VIJAYAWADA 4. ) ( ) / THE CIT (A), VIJAYAWADA 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM