Anne Sridhar, Hyderabad V. Income Tax Officer, Ward-6(4), Hyderabad

ITA 1973/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1287 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 07-03-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 28-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V RAJITHA
• Assessee Lawyers: K K GUPTA
• Keywords: Value adopted by valuation officer; Opportunity of being heard; Competent authority
• Section: 147; 148; 143(3); 56(2); 143(1)

Judgement Text

` IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE S HRI V. DURGA RAO , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 1973 / HYD/201 8 ASSESSMENT YEAR: 20 14 - 15 A NNE SRIDHAR , HYDERABAD. PAN A AYPA 1531C VS. INCOME - TAX OFFICER, WARD 6(4) , HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S HRI K.K. GUPTA REVENUE BY: S MT. V. RAJITHA DATE OF HEARING: 07 / 0 3 / 201 9 DATE OF PRONOUNCEMENT: 15 / 0 3 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 6 , HYDERABAD, DATED, 19 / 06 /201 8 FOR AY 20 14 - 15 . 2. BRIEFLY THE FACTS OF THE CASE ARE, ASSESSEE, AN INDIVIDUAL, DERIVING INCOME FROM BUSINESS, FILED THE RETURN OF INCOME FOR THE IMPUGNED AY 2014 - 15 ON 27/01/2015 DECLARING A TOTAL INCOME OF RS. 2,93,000/ - , WHICH WAS PROCESSED U/S 143(1) ACT. SUBSEQUENTLY, TH E AO NOTICED THAT THE ASSESSEE HAD PURCHASED A PROPERTY FOR A CONSIDERATION OF RS. 16,75,000/ - AS AGAINST THE MARKET VALUE ADOPTED BY THE SRO OF RS. 36,32,500/ - VIDE REGISTERED SALE DEED, DATED 10/01/2014. IN VIEW OF THE ABOVE, THE AO REOPENED THE ASSESSME NT BY ISSUING A NOTICE U/S 148 OF THE ACT, DATED 06/07//2016, AFTER RECORDING REASONS IN WRITING AND OBTAINING APPROVAL OF THE COMPETENT AUTHORITY. I.T.A. NO. 1973 /HYD/1 8 ANNE SRIDHAR, HYDERABAD. 2 2.1 IN VIEW OF THE ABOVE FACTUAL BACKGROUND, THE AO COMPLETED THE ASSESSMENT U/S 143(3) RWS 147 OF THE ACT VIDE ORDER DATED 28/12/2017, DETERMINING THE TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS. 22,50,500/ - . WHILE DOING SO, THE AO MADE AN ADDITION OF RS. 19,57,500/ - BEING THE DIFFERENCE BETWEEN THE SRO VALUE OF THE PROPERTY OF RS. 36,32,500/ - AND THE ACTUAL S ALE CONSIDERATION PAID OF RS. 16,75,000/ - BY INVOKING THE PROVISIONS OF SECTION 56(2)(VII)9B)(II) OF THE ACT. 3. WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF AO. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADOPTING THE VALUE AS PER SUB - REGISTRAR IN RESPECT OF THE FLAT PURCHASED BY THE APPELLANT AND MAKING AN ADDITION OF RS.19,57,500 / - UNDER SECTION 56(2)(VII)(B). 2) THE MATTER OF VALUATION OF FLAT SHOULD HAVE BE EN REFERRED TO THE VALUATION OFFICER, BY THE ASSESSING OFFICER. 3) ON THE ABOVE GROUNDS AND OTHER GROUNDS THAT MAY ARISE DURING THE COURSE OF APPEAL, THE APPELLANT REQUESTS FOR AN ORDER DELETING THE ADDITIONS. 5. BEFORE US, LD. AR SUBMITTED THAT THE AS SESSEE ENTERED INTO AGREEMENT OF SALE IN THE AY 2012 - 13, AT THAT TIME, THE SRO VALUE OF THE PROPERTY WAS AT RS. 21 LAKHS, WHEREAS, THE AO CONSIDERED THE SRO VALUE AS PER SALE DEED, THE REGISTRATION OF WHICH WAS MADE IN AY 2013 - 14. 5.1 FURTHER, HE SUBMITT ED THAT THE PURCHA SED FLAT WAS CONSTRUCTED UNAUTHORIZED AS THE BUILDING WAS PLANNED FOR 4 FLATS ONLY, WHEREAS, THE FLAT SITUATED AT 5 TH FLOOR. THE SAME WAS REGULARIZED IN THE SUBSEQUENT YEAR, THE RELEVANT APPROVAL AND I.T.A. NO. 1973 /HYD/1 8 ANNE SRIDHAR, HYDERABAD. 3 APPLICATION FOR REGULARIZATION IS PLAC ED AT PAGES 14 - 18 OF THE PAPER BOOK. 5.2 HE SUBMITTED THAT THE FLAT WAS PURCHASED WHEN THE SAME WAS UNFINISHED AND THE SRO HAS ADOPTED THE VALUE OF THE FLAT AS PER MARKET RATE AND DID NOT DISTINGUISH THE INCOMPLETE OR FINISHED FLAT. 5.3 FURTHER, HE SUB MITTED THAT IT WAS BROUGHT TO T HE NOTICE OF AO THAT THE BUILDING WAS UNAUTHORIZED AND BEFORE CIT(A), IT WAS SUBMITTED THAT THIS FLAT WAS UNFINISHED, BUT, THE CIT(A) IGNORED THE SAME. HE SUBMITTED THAT THE CIT(A) SHOULD HAVE ORDERED THE AO TO REFER THIS TO T HE DEPARTMENT VALUATION OFFICER, IN STEAD OF REJECTING THE PLEA OF THE ASSESSEE. 6. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS IN APPEA L BEFORE US WITH THE MAIN PLEA THAT THE AO SHOULD HAVE REFERRED THE CASE TO VALUATION OFFICER. WE HAVE CONSIDERED THE SUBMISSION OF THE ASSESSEE BEFORE THE LD. CIT(A) AND ORDER PASSED BY THE LD. CIT(A). LD. CIT(A) HAS ADJUDICATED ALL THE OBJECTIONS OF THE ASSESSEE AND RIGHTLY SO, WE ARE IN AGREEMENT, EXCEPT, ON THE POINT OF REFERENCE TO VALUATION OFFICER, HE OBSERVED THAT THIS ISSUE WAS NOT RAISED BEFORE THE AO, THEREFORE, ASSESSEE CANNOT RAISE BEFORE HIM. WE ARE TOTALLY NOT IN AGREEMENT WITH HIS OBSERVATIO NS. ASSESSEE CAN RAISE OBJECTION ONLY BEFORE ADJUDICATING AUTHORITIES FOR THE LAPSES ON LEGAL AS WELL AS PROCEDURAL FAILURE OF THE ASSESSING AUTHORITIES. I.T.A. NO. 1973 /HYD/1 8 ANNE SRIDHAR, HYDERABAD. 4 7. 1 WE FIND THAT THE ASSESSEE HAS BROUGHT TO THE NOTICE OF THE AO THAT THE STRUCTURE WAS UNAUTHORIZE D AND THE MARKET VALUE WILL NEVER BE THE SAME AS AUTHORIZED BUILDING. THE SRO VALUE IS NOT DETERMINED ON SCIENTIFIC BASIS RATHER LATEST REGISTRATION VALUE OF THE PROPERTY IN THE LOCALITY OR THE SIMILAR PROPERTY. AS PER THE SALE DEE D , IT IS CLEAR THAT THE C ONSTRUCTION WAS IN PROGRESS. THE STATUS OF THE COMPLETION IS NOT KNOWN. IT IS THE DUTY OF THE AO TO REFER THIS CASE TO THE VALUATION OFFICER WHEN THE ASSESSEE MAKES AN OBJECTION FOR ADOPTION OF THE SRO VALUE. PARTICULARLY, WHEN THE DEEMING PROVISION IS APP LIED, THE ASSESSING AUTHORITY AND THE ASSESSEE SHOULD BE ON THE SAME PAGE. WE DO AGREE THAT WHENEVER DEEMING PROVISION IS APPLIED, ASSESSEE MAY NOT BE IN AGREEMENT BUT AT LEAST THE ASSESSING AUTHORITY SHOULD BE CERTAIN WITH THE VALUE HE ADOPTS FOR COMPLETI NG THE ASSESSMENT. 7.2 IN OUR CONSIDERED VIEW, WE ARE IN AGREEMENT WITH THE ASSESSEE THAT AO SHOULD HAVE REFERRED THIS CASE TO VALUATION OFFICER. THEREFORE, WE ARE INCLINED TO REMIT THIS CASE BACK TO AO TO REFER THIS ISSUE TO THE VALUATION OFFICER AND D ETERMINE THE ACTUAL MARKET VALUE, THEN, APPLY THE PROVISIONS OF SECTION 56(2) ( VII) OF THE ACT, AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH , 201 9. SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 15 TH MARCH , 201 9. I.T.A. NO. 1973 /HYD/1 8 ANNE SRIDHAR, HYDERABAD. 5 KV COPY FORWARDED TO: 1. SHRI ANNE SRIDHAR, C/O K.K GUPTA, CA, 3464, DUNDOO VIHAR, RP ROAD, SECUNDERABAD 500 003; 2 . IT O , WARD 6(4) , IT TOWERS, AC GUARDS, HYD. 3 . CIT (A) - 6 , HYDERABAD 4. PR. CIT 6 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE