Smt. Amudha Gopi, CHENNAI V. ITO, CHENNAI

ITA 1899/CHNY/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2538 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-06-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 25-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: G BASKAR
• Keywords: Capital asset; Business income; Rectification of order
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO. 1899/MDS/2011 ASSESSMENT YEAR : 2004 - 05 SMT. AMUDHA GOPI, 96/10, DR. AMBEDKAR ROAD, KODAMBAKKAM, CHENNAI 600 024. PAN : ADPPT8467L. V. THE INCOME TAX OFFICER, BUSINESS WARD III(1), CHENNAI.. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. BASKAR, ADVOCATE RESPONDENT BY : SHRI N. MADHAVAN, JCIT DAT E OF HEARING : 05 .06.2013 DATE OF PRONOUNCEMENT : 05. 06 . 2013 O R D E R PER S.S. GODARA, J.M : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V III, CHENNAI, IN CASE NO.88/09-10 DATED 26.9.20 11 {AS PER ITA NO.1899/MDS/2011 :- 2 -: CORRIGENDUM DATED 1.5.2013 ISSUED BY THE CIT(APPEAL S)} FOR ASSESSMENT YEAR 2004-05, IN PROCEEDINGS UNDER SEC .143(3) READ WITH SEC.147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE :- 1.1 THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGH T TO HAVE HELD THAT THE NOTICE ISSUED UNDER SECTION 148 IS WRONG, ILLEGAL AND OPPOSED TO FACTS. 1.2 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAVIN G NOTICED THAT THE ASSESSEE HAVING NOT OFFERED ANY CA PITAL GAINS NOR HAVING CLAIMED ANY EXEMPTION U/S.54B, THE ASSESSING OFFICER COULD NOT HAVE ENTERTAINED ANY RE ASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. 1.3 THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HELD THAT THE NOTICE U/S.148 BEING AB-INITIO VOID T HE ENTIRE PROCEEDINGS ARE LIABLE TO BE QUASHED. 2.1 THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT WRONG IN CONFIRMING THE ORDER OF ASSESSMENT WITHOUT CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIO NS MADE IN THE PROPER PERSPECTIVE. 2.2 THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT WRONG IN DISPOSING OF THE APPEAL IN A SUMMARY MANNE R WITHOUT APPLICATION OF MIND TO THE GROUNDS RAISED B Y THE APPELLANT. 2.3 THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT WRONG IN CONCLUDING THAT THE PROPERTY SOLD IS NOT A N AGRICULTURAL LAND. IN ANY EVENT THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT EVEN ASSUMING THAT THE PROPERTY SOLD ATTRACTS CAPITAL GA INS, THERE IS NO TAXABLE CAPITAL GAINS. ITA NO.1899/MDS/2011 :- 3 -: 2.4 THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE ALSO SEEN THAT THE SALE CONSIDERATION OF ` . 17,00,000 FOR THE LAND ALONE TAKEN BY THE ASSESSING OFFICER REPRESENTS IS INCORRECT. HE OUGHT TO HAVE FURTHER S EEN THAT THE PROFITS ARISING ON TRANSFER OF DEPRECIABLE FIXED ASSETS OF ` . 2,40,300/- HAD ALREADY BEEN ADMITTED AS INCOME IN THE RETURN OF INCOME FILED FOR THIS YEAR. 3. IN THE COURSE OF HEARING NO SUBMISSIONS HAVE BE EN MADE BY THE ASSESSEE QUA GROUND NO.1.1 AND 1.3. TH E SAME ARE THEREFORE REJECTED. BY INVITING OUR ATTENTION TO T HE OTHER GROUNDS THE ASSESSEE VEHEMENTLY CONTENDS THAT THE CIT(APPEA LS) HAS ERRED IN CONFIRMING THE FINDINGS OF THE ASSESSING O FFICER. THE A.R. ARGUES THAT AFTER THE RE-ASSESSMENT ORDER IN Q UESTION DATED 29.12.2009, THE ASSESSEE HAD FILED RECTIFICATION PE TITION UNDER SEC.154 OF THE ACT ON 19.1.2010. HOWEVER, THE CIT(A PPEALS) HAS REJECTED THE APPEAL FILED BY THE ASSESSEE WITHOUT D EALING WITH THE AFORESAID PETITION. ACCORDINGLY, HE SUBMITS THAT SI NCE THE ASSESSEE HAD PRAYED FOR ADOPTING CORRECT FIGURES STATED IN T HE SALE DEED IN QUESTION PERTAINING TO HER AGRICULTURAL LAND SOLD, THE CASE BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. ITA NO.1899/MDS/2011 :- 4 -: 4. THE REVENUE STRONGLY SUPPORTS THE CIT(APPEAL)S ORDER. 5. FACTS APROPOS ARE THAT THE ASSESSEE IS AN INDI VIDUAL. IN PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMEN T YEAR SHE IS STATED TO HAVE SOLD HER AGRICULTURAL LAND ALONG WIT H A SMALL FACTORY AND OTHER ASSETS. THE LAND IS STATED TO BE SITUATE D IN VILLAGE KANTHOOR AT A DISTANCE OF 14 KMS FROM SRIPERUMANDUR , DISTRICT KANCHIPURAM. AS PER HER VERSION, SHE HAD SOLD THE LAND VIDE THREE DIFFERENT SALE DEEDS, OUT OF WHICH TWO WERE E XECUTED ON 23.1.2004 AND THE THIRD ONE ON 28.1.2004 FOR TOTAL SALE CONSIDERATION OF ` .6,48,750/-. SIMILARLY, VIDE TWO DIFFERENT SALE DEEDS DATED 28.1.2004, SHE HAD DISPOSED OFF BUILDI NG AND OTHER DEPRECIABLE ASSETS APPURTENANT TO A PART OF THE LAN D FOR ` .11,43,500/- AND THE TOTAL SALE CONSIDERATION CAME TO BE OF ` .17,92,250/-. THEREAFTER SHE PURCHASED SOME OTHER IMMOVABLE PROPERTY AT 34, SHANTHAVELLORE, SRIPERUMANDUR TALUK , KANCHIPURAM FOR A VALUE OF ` .30 LAKHS. ITA NO.1899/MDS/2011 :- 5 -: 6. COMING TO THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE HAD FILED HER RETURN ON 13.8.2004 DISCLOSI NG BUSINESS INCOME OF ` .90,570/- AND AGRICULTURAL INCOME OF ` .72,466/-. AFTER GETTING INFORMATION QUA THE PURCHASE PRICE PAID BY THE ASSESSEE (SUPRA), THE ASSESSMENT IN HER CASE WAS REOPENED UN DER SEC.147 OF THE ACT AND FINALISED ON 26.12.2007. AS IT IS R EVEALED FROM THE RE-ASSESSMENT ORDER DATED 29.12.2009 IN QUESTION, T HE ASSESSING OFFICER FORMED AN OPINION THAT ASSESSEES INCOME C HARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR WANT OF FULFILLMENT OF CONDITIONS UNDER SEC.54B OF THE ACT. THEREFORE, HE ISSUED RE- OPENING NOTICE DATED 28.4.2008. THEREAFTER, HE FINALIZED RE-ASSESS MENT IN ASSESSEES CASE HOLDING THEREIN THAT THE ASSESSEE I S NOT ENTITLED FOR CLAIM UNDER SEC.54B OF THE ACT AND ALSO OBSERVE D THAT THE LAND SOLD WAS USED FOR NON-AGRICULTURAL PURPOSE. A CCORDINGLY, HE COMPUTED ASSESSEES TOTAL INCOME OF ` .12,73,023/- INCLUDING LONG TERM CAPITAL GAIN OF ` .11,09,987/-. ITA NO.1899/MDS/2011 :- 6 -: 7. AS IT EMANATES FROM THE PAPER BOOK SUBMITTED BY THE ASSESSEE, SHE PREFERRED TO FILE RECTIFICATION PETIT ION UNDER SEC.154 OF THE ACT STATING AS UNDER :- PETITION UNDER SEC.154 SUB : ASSESSMENT YEAR 2004-05 PAN ADPPT8467L REQUEST FOR RECTIFICATION OF MISTAKE. REF : ASSESSMENT ORDER U/S 143(3) R.W. 147 DATED 29.12.2009 IN THE ASSESSMENT ORDER UNDER REFERENCE THERE IS AN APPARENT MISTAKE AND THE DETAILS OF THE SAME IS GIV EN BELOW :- SALE CONSIDERATION OF LAND . 1) VIDE DOCUMENT DATED 24.1.2004 FOR SALE OF LAND TO MR. S.C. SEKAR 2,92,500 2) VIDE DOCUMENT DATED 24.1.2004 FOR SALE OF LAND TO MR. S.C. SEKAR 2,45,75 0 3) VIDE DOCUMENT DATED 28.1.2004 FOR SALE OF LAND INCLUDING BUILDING AND OTHER DEPRECIABLE ASSETS I) TOWARDS LAND AND TREES 1,06,50 0 1,06,500 II) BUILDINGS AND OTHER DEPRECIABLE ASSETS CONSIDERED SEPARATELY 6,43,50 0 6,48,750 ------------ 7,50,000 ======= 4) SALE CONSIDERATION OF MACHINERY AS PER DOCUMENT DATED 28.1.2004 5,00,000 SALE CONSIDERATION OF BUILDING AND OTHER DEPRECIABLE ASSETS INCLUDED IN 3(II) ABOVE 6,43,500 ----------- TOTAL SALE CONSIDERATION 17,92,250 ITA NO.1899/MDS/2011 :- 7 -: ====== OUT OF THE ABOVE THE PROFIT ON SALE OF DEPRECIABLE ASSETS OF `. 2,40,300/- HAS BEEN OFFERED TO INCOME TAX. WITH REGARD TO SALE OF AGRICULTURE LAND WHILE ARRIV ING AT THE INDEXED COST IN THE ASSESSMENT ORDER THE COST OF STAMP PAPE R AND REGISTRATION CHARGES INCURRED AT THE TIME OF PURCHA SE HAS NOT BEEN CONSIDERED. SALE CONSIDERATION OF AGRICULTURE LAND 6,48,750 LESS INDEX COST OF AGRICULTURE LAND 7,0 9,636 LONG TERM CAPITAL LOSS 60,886 NO CAPITAL GAIN WILL ARISE ON SALE OF RURAL AGRICUL TURE LAND WHICH IS EXEMPT UNDER SECTION 2(14). EVEN WHEN RURAL AGRICUL TURE LAND AS CONSIDERED BY ASSESSING OFFICER AS CAPITAL ASSET, I N MY CASE THE SALE HAS ENDED UP ONLY WITH LOSS AS ENUMERATED ABOVE AND NO TAX WILL BE PAYABLE . IN VIEW OF THE ABOVE I REQUEST YOU TO RECTIFY THE M ISTAKE AND ADVISE ME IN THE MATTER. COST OF LAND ALONE CONSIDERED IN THE ASSESSMENT ORDER RS. INDEXED COST AS PER ASSET ORDER COST OF LAND INCLUDING STAMP PAPERS & REGISTRATION CHARGES RS. FENCING COST RS. INDEXED COST RS. 88,400 1,34,194 99,008 1,50,297 22000 33396 139200 2,11,310 1,58,803 2,41,068 13000 19734 174800 1,74,800 1,89,550 2,65,141 TOTAL 5,90,013 7,09,636 ITA NO.1899/MDS/2011 :- 8 -: HOWEVER, THE CIT(APPEALS) HAS AFFIRMED THE FINDINGS OF ASSESSING OFFICER WHICH LEAVES THE ASSESSEE AGGRIEV ED. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE CASE FILE AS WELL AS PAPER BOOK SUBMITT ED BY THE ASSESSEE. IT IS APPARENT THAT THE ASSESSEES RECTI FICATION PETITION STATING THEREIN THAT THE EXACT FIGURES IN THE SALE DEED ETC. HAD NOT BEEN CONSIDERED BY THE ASSESSING OFFICER, HAS N EITHER BEEN DECIDED TILL DATE NOR THE CIT(APPEALS) HAS KEPT IT IN MIND BEFORE DISMISSING THE APPEAL. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT IT WOULD BE JUST AND APPROPRIATE THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL PASS A FRESH ORDER AFTER TAKING INTO CONSIDERATION THE PLE ADINGS OF THE ASSESSEE IN THE RECTIFICATION PETITION. NEEDLESS TO STATE, THE ASSESSEE WOULD ALSO BE PROVIDED ADEQUATE OPPORTUNIT Y OF HEARING BEFORE PASSING OF THE ORDER. 9. THE APPEAL IS THEREFORE PARTLY ALLOWED FOR STAT ISTICAL PURPOSE. ITA NO.1899/MDS/2011 :- 9 -: ORDER PRONOUNCED ON WEDNESDAY, THE 5TH OF JUNE, 2 013, AT CHENNAI. SD/- SD/- ( DR. O.K. NARAYANAN ) VICE PRESIDENT ( S.S. GODARA ) JUDICIAL MEMBER DATED: 5 TH JUNE, 2013. JLS. COPY TO: 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(APPEALS) 4) THE CIT, (5) THE D.R., 6) GUARD FILE.