Bathula Venugopal , Hyderabad V. Income Tax Officer, Ward-4(3), Hyderabad

ITA 1959/Hyd/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7025 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 31-10-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 27-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: Y V BHANU NARAYAN RAO
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Set aside; Capital Gains
• Section: 50C; 147; 54

Judgement Text

ITA NO 1959 OF 2018 BATHULA VENUGOPAL HYDERABAD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1959/HYD/2018 ASSESSMENT YEAR: 2011-12 SHRI BATHULA VENUGOPAL HYDERABAD PAN: ABRPB6485C VS. INCOME TAX OFFICER, WARD 4(3) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI Y.V. BHANU NARAYAN RAO REVENUE BY : SRI NILANJAN DEY, CIT-DR DATE OF HEARING: 31/10/2019 DATE OF PRONOUNCEMENT: 01/11/2019 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2011-12 AGAIN ST THE ORDER OF THE CIT (A)-1, HYDERABAD, DATED 26.7.2 018. 2. AT THE OUTSET, IT IS NOTICED THAT THERE IS A DEL AY OF 1 DAY IN FILING OF THE APPEAL BEFORE THE TRIBUNAL AND AN AFFIDAVIT IN SUPPORT OF CONDONATION OF THE DELAY WAS FILED BY TH E ASSESSEE. TAKING INTO CONSIDERATION THE FACT THAT THE DELAY I S ONLY ONE DAY, THE DELAY IS CONDONED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, DERIVING INCOME FROM BUSINESS, FILED HI S RETURN OF INCOME FOR THE A.Y 2011-12 ON 13.6.2012 DECLARING T OTAL INCOME OF RS.1,73,400/-. ACCORDING TO THE INFORMATION RECE IVED BY THE DEPARTMENT, THE ASSESSEE HAS SOLD TWO IMMOVABLE PRO PERTIES VIDE DOCUMENT NO.1993/2010 AND 1994/2010 BOTH DATED 29.6 .2010 ITA NO 1959 OF 2018 BATHULA VENUGOPAL HYDERABAD. PAGE 2 OF 5 DURING THE RELEVANT PREVIOUS YEAR FOR A VALUE OF RS .9,22,000/- EACH AS AGAINST THE SRO VALUE OF RS.16,38,000/- EAC H RESPECTIVELY. THE AO OBSERVED THAT THE SRO VALUE BE ING HIGHER THAN THE SALE CONSIDERATION MENTIONED IN THE SALES DEED, THE PROVISIONS OF SECTION 50C ARE APPLICABLE. ACCORDING LY, A SHOW- CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO WHICH TH E ASSESSEE REPLIED STATING THAT WITH REGARD TO THE SALE OF PRO PERTY DURING THE FINANCIAL YEAR 2010-11, THERE WAS CAPITAL LOSS AND HENCE HE HAS NOT DISCLOSED THE CAPITAL LOSS IN HIS I.T. RETURNS. THE AO HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTION AND ADOPTE D THE SRO VALUE OF RS.16,38,000/- FOR EACH OF THE FLAT AS SAL E CONSIDERATION U/S 50C AND COMPUTED THE LONG TERM CAPITAL GAIN ACC ORDINGLY. AGGRIEVED BY THE SAME, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) AND ALSO MADE A CLAIM OF EXEMPTION U/S 54 OF TH E I.T. ACT. THE CIT (A), HOWEVER, CONFIRMED THE ORDER OF THE AO AND REJECTED THE CLAIM OF DEDUCTION U/S 54 ON THE GROUND THAT THE SA ID CLAIM WAS NOT MADE IN THE RETURN OF INCOME AND THEREFORE, IS NOT ALLOWABLE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE PROPERTY IS SURROUNDED BY VARIOUS DEFICIENCIES DUE TO WHICH THE ASSESSEE HAS RECEIVED LESS CONSIDERATION THAN T HE SRO VALUE AND SINCE THE ASSESSEE HAD RAISED THIS OBJECTION BE FORE THE CIT (A), HE OUGHT TO HAVE REFERRED THE MATTER TO THE FI LE OF THE VALUATION OFFICER, RATHER THAN CONFIRMING THE ORDER OF THE AO. FURTHER, HE ALSO SUBMITTED THAT THE ASSESSEES CLAI M OF DEDUCTION U/S 54 SHOULD HAVE BEEN CONSIDERED BY THE CIT (A). 4. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE CIT (A). ITA NO 1959 OF 2018 BATHULA VENUGOPAL HYDERABAD. PAGE 3 OF 5 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS RAISED ADDI TIONAL GROUND VIDE LETTER DATED 31.10.2019 I.E. AT THE TIME OF HE ARING. THE REGULAR GROUNDS RAISED BY THE ASSESSEE AS WELL AS T HE ADDITIONAL GROUND ARE AS UNDER: REGULAR GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, HYDERABAD IS ERRONEOUS AND BAD IN LAW . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, HYDERABAD OUGHT NOT TO HAVE DISMISSED THE APPEAL FI LED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, HYDERABAD ERRED IN UPHOLDING THE ORDERS PASSED BY T HE LEARNED ASSESSING OFFICER BEING THE ITO- WARD 4(3), HYDERABAD DETERMINING THE NORMAL INCOME OF THE APPE LLANT AT RS. 2,65,400/- AND LONG-TERM CAPITAL GAINS AT RS . 20,87,555/-BY INVOKING THE PROVISIONS OF SECTION 50 C OF THE IT ACT 1961 VIDE ORDER U/S 143 RWS 147 OF THE IT AC T, 1961 DATED 14/3/2016 AND WHICH LONG TERM CAPITAL GAINS W AS REVISED TO RS. 27,84,483/- VIDE MODIFICATION ORDER DATED 16/09/2016. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, HYDERABAD ERRED BY UPHOLDING THE WRONGFUL ACT OF TH E LEARNED ASSESSING OFFICER IN INVOKING SECTION 50C O F THE IT ACT 1961 FOR DETERMINING THE SALE CONSIDERATION AND BY NOT CONSIDERING THE VALUE AS PER SECTION 50C FOR DETERM INING THE INDEXED COST OF ACQUISITION. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -1, HYDERABAD ERRED BY NOT CONSIDERING THE CLAIM OF THE ASSESSEE/APPELLANT FOR DEDUCTION U/S 54 OF THE INCO ME TAX ACT, 1961. 6. LEAVE THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR DELET E ANY OF THE ABOVE GROUNDS OF APPEAL AND/OR TO ADD ANY FRESH GROUND(S) OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL ITA NO 1959 OF 2018 BATHULA VENUGOPAL HYDERABAD. PAGE 4 OF 5 ADDITIONAL GROUND 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT (A) BEING THE FIRST APPELLATE AUTHORITY ERRED BY NOT REFERRING TO THE VALUATION OFFICER FOR DETERMIN ING THE APPROPRIATE VALUE OF THE PROPERTY SINCE THE ASSESSE E REPRESENTED DURING THE ASSESSMENT AS WELL AS THE FI RST APPELLATE PROCEEDINGS THAT THE ACTUAL MARKET VALUE OF THE PROPERTY WAS MUCH LESS THAN THE VALUE ADOPTED BY TH E SRO FOR STAMP DUTY PURPOSE DUE TO LOCAL FACTORS. 6. SINCE THE ADDITIONAL GROUND RAISED BY THE ASSESS EE IS FOR REFERENCE TO THE VALUATION OFFICER AND THE ASSE SSEE HAD ALREADY RAISED THE SAID OBJECTION BEFORE THE CIT (A), I DEE M IT FIT AND PROPER TO ADMIT THE SAME AND ADJUDICATE AS UNDER. S INCE THE ASSESSEE HAD RAISED ITS OBJECTION TO THE ADOPTION O F THE SRO VALUE U/S 50C OF THE ACT, BY POINTING OUT CERTAIN DEFICIE NCIES IN THE PROPERTY, I DEEM IT FIT AND PROPER TO SET ASIDE THE ORDER OF THE CIT (A) AND REMAND THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO REFER THE VALUATION OF THE PROPERTY TO THE VALUATIO N CELL AND RECOMPUTE THE CAPITAL GAIN AFTER GIVING THE ASSESSE E A FAIR OPPORTUNITY OF HEARING INCLUDING CLAIM OF DEDUCTION U/S 54 MADE BY THE ASSESSEE ON A PROPERTY THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST NOV. 2019. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 1 ST NOV. 2019. VINODAN/SPS ITA NO 1959 OF 2018 BATHULA VENUGOPAL HYDERABAD. PAGE 5 OF 5 COPY TO: 1 SHRI BATHULA VENUGOPAL C/O Y.V. BHANU NARAYAN RAO , C.A. 10-2- 195, OPP: DECCAN CLUB, EAST MAREDPALLY, SECUNDERABA D 500026 2 ITO WARD 4(3) HYDERABAD 3 CIT (A)-1 HYDERABAD 4 PR. CIT 1 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER