ITO, CHENNAI V. G.Poonkodi, CHENNAI

ITA 1992/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86253 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: ANAND BABUNATH
• Keywords: Capital asset; Principle of natural justice; Additional evidence
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . , . . , ! '# [BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.1992/MDS/2014 / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER BUSINESS WARD XIV(3) CHENNAI VS. SMT.G.POONKODI PLOT NO.8, 5 TH STREET, R.V. NAGAR ANNA NAGAR EAST CHENNAI 600 102 [PAN ALHPP 8247 J] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : SHRI N. MADHAVAN, JCIT /RESPONDENT BY : SHRI ANAND BABUNATH, CA / DATE OF HEARING : 29-01-2015 / DATE OF PRONOUNCEMENT : 06-02-2015 ( / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2009 -10, IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INC OME-TAX (APPEALS)- VII CHENNAI DATED 26.3.2014, PASSED IN APPEAL NO.9 94/13-14, TREATING VALUE OF THE ASSESSEES LAND SOLD AT ` 15,07,370/- AS AGAINST ` 55,51,687/- ADOPTED IN THE COURSE OF A REGULAR AS SESSMENT FRAMED ON I.T.A.NO1992/14. :- 2 -: 28.12.2011, IN PROCEEDINGS UNDER SECTION 143(3) O F THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. A PERUSAL OF THE CASE FILE REVEALS THAT THIS APPEAL IS TIME BARRED BY 10 DAYS IN FILING. THE INCOME TAX OFFICE R, BUSINESS WARD XIV(3), CHENNAI, HAS FILED AN AFFIDAVIT STATING REA SONS THEREOF. THE ASSESSEE DOES NOT CONTEST THE SOLEMN AFFIRMATIONS A VERRED THEREIN. THEREFORE, WE CONDONE THIS DELAY OF 10 DAYS IN FI LING THE APPEAL. 3. THE ASSESSEE/INDIVIDUAL TRADES IN SHARES AND SECU RITIES. SHE HAD FILED HER RETURN ON 28.10.2009 ADMITTING IN COME OF ` 3,42,557/-. THE SAME WAS SUMMARILY PROCESSED. 4. THE ASSESSEE HAD PURCHASED A PROPERTY PLOT NO.8, 5 TH STREET, R.V NAGAR, ANNA NAGAR EAST, CHENNAI -102 ON 16.4.2008 FOR ` 41,38,500/-. THIS WAS FOLLOWED BY A JOINT VENTURE AGREEMENT DATED 19.11.2008 WITH M/S AUROVIL HOMES, CHENNAI, FOR DEV ELOPING THE SAID PROPERTY. ITS TOTAL LAND AREA READS 2,759 SQ FT. THE ASSESSEE WOULD RETAIN 764 SQ FT UNDIVIDED SHARE OF LAND. THE REMA INING LAND MEASURING 1995 SQ FT WOULD GO TO THE DEVELOPER FOR ` 60 LAKHS CONSIDERATION. THE ASSESSEE WAS FURTHER PAID AN I NTEREST FREE DEPOSIT OF ` 10 LAKHS. THE DEVELOPER ENTITY ALSO AGREED TO GIV E A FLAT F-2 MEASURING 1546 SQ FT INCLUDING COMMON AND CAR PARK ING AREA. IT I.T.A.NO1992/14. :- 3 -: PERFORMED ALL OF ITS OBLIGATIONS STIPULATED IN THE JOINT VENTURE AGREEMENT.. 5. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE INTER ALIA NOTICED THAT THE AFORESAID DEVELOPMENT AGREEMENT AMOUNTED T O A TRANSFER U/S 2(47)(V) OF THE ACT. ALSO HE WAS OF THE VIEW T HAT THE TOTAL CONSIDERATION IN THE DEVELOPMENT AGREEMENT AFORESAI D WAS ` 60 LAKHS ADDED BY THE MARKET VALUE OF THE ASSESSEES FLAT F -2 MEASURING 1546 SQ FT. THE DEVELOPER ENTITY HAD INTIMATED SALE PR ICE OF ITS FLATS SOLD ON THE ASSESSEES LAND @ ` 3591 PER SQ FT. IN VIEW THEREOF, THE ASSESSING OFFICER SOUGHT TO COMPUTE VALUE OF THE A SSESSEES FLAT TO ` 55,51,686/-. THE ASSESSEE CONTESTED THIS PROPOSAL . SHE PLEADED THAT CONSIDERATION FOR HER FLAT WAS DUE TO TRANSFER OF LAND MEASURING 1995 SQ FT HAD TO BE CALCULATED WITH REFERENCE TO THE CO ST OF CONSTRUCTION AND NOT MARKET VALUE. SHE FURTHER STATED THAT HER FLAT HAD BEEN HANDED OVER IN SUCCEEDING ASSESSMENT YEAR 2010-11 A ND NOT IN THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER RE JECTED BOTH HER CONTENTIONS IN ASSESSMENT ORDER, ADOPTED VALUE OF T HE FLAT AT ` 55,51,686/- AS AGAINST ` 15,07,370/- FOR ASSESSING THE IMPUGNED SHORT TERM CAPITAL GAINS OF ` 70,22,541/-. I.T.A.NO1992/14. :- 4 -: 6. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS ACCEPTED HER ARGUMENTS ON FLAT VALUATION ISSUE AS UNDER: 5.3. REGARDING THE SALE CONSIDERATION RECEIVED, T HE A.O ADOPTED THE VALUE OF ` 55,51,686/- FOR THE FLAT ALLOTTED TO THE APPELLANT. BUT THE JOINT VENTURE PARTNER IN HIS LE TTER FILED ON 25.3.2014 STATED THAT THE COST OF CONSTRUCTION WAS ARRIVED AS PER ACTUAL COST OF MATERIAL AND LABOUR WITHOUT INCL UDING ANY PROFIT. IT WAS ALSO STATED IN THAT LETTER THAT THE FLATS SOLD TO OTHERS INCLUDE COST OF LAND, CONSTRUCTION COST AND PROFIT AND FLAT SOLD TO MRS. POONKODI INCLUDES ONLY COST OF CO NSTRUCTION BEING THE LAND OWNER AS PER THE JOINT VENTURE AGREE MENT. IN THESE CIRCUMSTANCES ADOPTION OF SALE VALUE TO OTHER S IN THE CASE OF APPELLANT IS NOT JUSTIFIED. THE A.O IS DIR ECTED TO ADOPT ` 15,07,370/- INSTEAD OF ` 55,51,686/-. THIS LEAVES THE REVENUE AGGRIEVED. 7. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. THE REVENUES PLEADINGS SEEK TO RESTORE VALUATION O F THE ASSESSEES FLAT AS ` 55,51,686/- AS AGAINST ` 15,07,370/- ADOPTED IN THE LOWER APPELLATE ORDER. IT IS AVERRED THAT THE LOWER APPE LLATE AUTHORITY HAS VIOLATED RULE 46A IN ADMITTING ADDITIONAL EVIDENCE. THERE IS NO DISPUTE THAT THE IMPUGNED ASSESSMENT HAD BEEN FRAMED ON 28. 12.2011. TILL THEN THE DEVELOPER ENTITY NEVER APPEARS TO HAVE CLA RIFIED THAT THE COST OF ASSESSEES FLAT ONLY INCLUDED COST OF CONSTRUCT ION AS PER JOINT VENTURE AGREEMENT UNLIKE OTHER BUYERS PAYING FOR CO ST OF LAND, CONSTRUCTION AND PROFITS. IT IS EVIDENT THAT NECES SARY CLARIFICATION IN THIS REGARD WAS FILED IN THE LOWER APPELLATE PROCEE DINGS ON 25.3.2014 I.T.A.NO1992/14. :- 5 -: I.E JUST A DAY BEFORE PASSING OF THE CIT(A)S ORDER . THESE FACTS LEAD US TO A CONCLUSION THAT THE LOWER APPELLATE AUTHORITY HAS NOT VERIFIED THE SAID FACTUAL POSITION ON THE CRUCIAL ISSUE OF VALUA TION. THIS COURSE OF ACTION HAS VIOLATED PRINCIPLES OF NATURAL JUSTICE. WE, THEREFORE, FEEL THAT THIS ISSUE DESERVES TO BE SET ASIDE TO THE ASS ESSING AUTHORITY FOR DECISION AFRESH AS PER LAW. WE ORDER ACCORDINGLY. THE REVENUES SOLE SUBSTANTIVE GROUND IS REMITTED TO THE ASSESSING OFF ICER. 8. THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED ON FRIDAY, THE 6 TH OF FEBRUARY, 2015, AT CHENNAI. SD/- SD/- ( . . ) (B.R. BASKARAN) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! '# / JUDICIAL MEMBER $! / CHENNAI %' / DATED: 6 TH FEBRUARY, 2015 RD '&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/0 / CIT(A) 6. -1'2 / GF