Subhash Saste, Pune V. Deputy Commissioner of Income-tax, Circle - 8, Pune

ITA 2002/PUN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5182 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 24-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Opportunity of being heard; Principle of natural justice; Fair market value
• Section: 54F; 144

Judgement Text

SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.2002/PUN/2017 / ASSESSMENT YEAR : 2008-09 MR. SUBHASH SASTE, BORHEWADI, MOSHI, TALUKA HAVELI, DIST. PUNE PAN : AXAPS3485J . /APPELLANT VS. DCIT, CIRCLE-8, PUNE . / RESPONDENT / APPELLANT BY : SHRI KISHOR PHADKE / RESPONDENT BY : SHRI RAJESH GAWALI / DATE OF HEARING : 03.10.2018 / DATE OF PRONOUNCEMENT: 10.10.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY ASSESSEE AGAINST THE ORDER O F CIT(A)-9, PUNE DATED 02-05-2017 FOR THE ASSESSMENT YEAR 2008-09. 2. ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL AND THE SAME ARE EXTRACTED AS UNDER : 1. THE APPELLANT CONTENDS THAT, THE HEARING OF THE APPEAL BEFORE THE LEARNED CIT(A) - 9, PUNE COULD NOT BE ATTENDED DUE TO NON-AVAILABILITY OF RELATED DOCUMENTS AND CONFUSIONS IN COMMUNICATION. APPELLANT CONTENDS AND PRAYS THAT THE APPEAL MAY PLEASE BE RESTORED TO THE FILE OF THE LEARNED CIT(A) - 9, PUNE FOR A FRESH ADJUDICATION. 2. WITHOUT PREJUDICE TO GROUND NO. 1, THE LEARNED C IT(A)-9, PUNE ERRED IN LAW AND ON FACTS BY CONFIRMING THE ORDER O F THE LEARNED AO WHEREIN, THE LEARNED AO HAS INCORRECTLY ASSUMED COS T OF ACQUISITION WHILE DECIDING QUANTUM OF LONG TERM CAPITAL GAINS. IN PARTICULAR THE LEARNED AO ERRED BY CONSIDERING THE FAIR MARKET VAL UE OF 01/04/1981 INSTEAD OF THE FAIR MARKET VALUE OF THE YEAR 2000 W HEN, APPELLANT WAS FINALLY GRANTED LAND RIGHTS BY THE LOCAL AUTHORITY. ITA NO.2002/PUN/2017 MR. SUBHASH SASTE 2 3. WITHOUT PREJUDICE TO GROUND NO. 1 & 2, THE LEARNED CIT(A) AS WELL AS THE LEARNED AO ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE APPELLANT HAD CONSTRUCTED A NEW RESIDENTIAL HOUSE A ND THEREBY, ERRED IN NOT GRANTING DEDUCTION U/S 54F OF THE ITA, 1961 TO THE APPELLANT. 4. WITHOUT PREJUDICE TO GROUND NO. 1, 2 & 3 AND ON AN ALTERNATE BASIS, THE APPELLANT CONTENDS THAT THE APPELLANT IS ELIGIBLE FOR EXEMPTION U/S 10(37) OF THE ITA, 1961 SINCE THE LAND RIGHT TR ANSFERRED IS A FALL OUT OF THE AGRICULTURAL LAND WHICH HAD BEEN COMPULSORILY A CQUIRED BY GOVERNMENT . 5. THE APPELLANT CRAVES LEAVE TO ADD / MODIFY / AME ND / DELETE ALL / ANY OF THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS A FARMER. THERE WAS SURVEY ACTION U/S.133A OF THE ACT IN THE CASE OF M/S. PHARANDE PROMOTERS AND BUILDERS. THE SAID FIR M IS ENGAGED IN THE BUSINESS OF DEVELOPERS AND BUILDERS. SURVE Y ACTION REVEALED THAT M/S. PHARANDE PROMOTERS AND BUILDERS ENTE RED INTO AN AGREEMENT WITH THE ASSESSEE AND HIS FAMILY MEMBERS ON S ALE OF LAND LOCATED AT PLOT NO.18, SECTOR 6, BORHADEWADI. THE TOTAL C ONSIDERATION INVOLVED IS RS.88,29,000/-. THE LAND IS ANCESTRAL PROPERTY O F THE ASSESSEE AND THE ASSESSEE ALONG WITH FAMILY MEMBERS AR E THE CO- OWNERS. AO NOTICED THAT ASSESSEE RECEIVED RS.33,32,250/- AS HIS SHARE TOWARDS THE SAID LAND TRANSACTION. NEITHER THE ASSESSEE NOR THE AR OF THE ASSESSEE ATTENDED BEFORE THE AO. EVENTUALLY, THE A O IN HIS ORDER U/S.144 R.W.S.147 OF THE ACT MADE ADDITION OF RS.33,10,899/- AS TAXABLE UNDER THE HEAD CAPITAL GAINS. EVEN BEFORE THE CIT(A) TOO, THE RE WAS NONE TO REPRESENT THE CASE OF THE ASSESSEE. THER EFORE, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AS NOT PRESSED. 4. BEFORE ME, LD. COUNSEL FOR THE ASSESSEE FILED AN AFFIDAVIT/N OTE EXPLAINING THE REASONS FOR NON-APPEARANCE BEFORE THE LOWE R AUTHORITIES AND MADE A SUBMISSION FOR REMANDING THE ISSUE TO THE FILE O F AO KEEPING ALL THE ISSUES OPEN FOR THE AO TO MAKE FRESH ASSE SSMENT. ITA NO.2002/PUN/2017 MR. SUBHASH SASTE 3 CONTENTS OF THE SAID NOTE READ AS UNDER : A. BACKGROUND OF THE APPELLANT - THE APPELLANT HAS RECEIVED SHARE IN VARIOUS INHERITED ANCESTRAL AGRICULTURAL L ANDS ON WHICH THE APPELLANT'S ANCESTORS HAD BEEN CARRYING AGRICULTURA L ACTIVITIES FOR PAST MANY YEARS. THE APPELLANT IS AN INDIVIDUAL AND HAS BEEN ENGAGED IN AGRICULTURAL ACTIVITY, ALONG WITH HIS OTHER FAMILY MEMBERS. THE SAID AGRICULTURAL ACTIVITY IS CARRIED OUT ON THE ANCESTR AL AGRICULTURAL LANDS IN AND AROUND MAUJE MOSHI, TALUKA HAVELI, NEAR PUNE. B. ASSESSMENT PROCEEDINGS - THE APPELLANT RECEIVED NOTICE V/S 148 OF THE ITA, 1961. THE APPELLANT'S CASE WAS SELECTED ON ACCOUNT OF CAPITAL GAINS ARISING TO THE APPELLANT ON ACCOUNT OF TRANSF ER OF A CAPITAL ASSET WHICH WAS INHERITED TO HIM. IN ABSENCE OF ADEQUATE KNOWLEDGE ABOUT THE INCOME TAX PROCEEDINGS, THE APPELLANT AND HIS OTHER FAMILY MEMBERS COULD NOT REPRESENT THE CASE BEFORE THE LEARNED AO APPROPRIATELY. AS SUCH, THE APPELLANT ALONG WITH HIS OTHER FAMILY SUF FERED A HUGE ADDITION ON ACCOUNT OF THE SAID TRANSACTION AS THE LEARNED P ASSED AN ORDER U/S 144 OF THE ITA, 1961. C. IST APPELLATE PROCEEDINGS - ON BEING AGGRIEVED WITH THE ORDER OF THE LEARNED AO, THE APPELLANT SOUGHT FOR PROFESSION AL ADVICE AS TO THE FUTURE COURSE OF ACTION. ON BEING ADVISED THE APPEL LANT ALONG WITH HIS FAMILY MEMBERS FILED AN APPEAL BEFORE THE CIT(A), P UNE. HOWEVER, DUE TO SOME CONFUSION AND ON ACCOUNT OF NON-AVAILABILITY O F THE REQUISITE DOCUMENTS, THE APPELLANT'S CASE GOT DISMISSED ON AN EX-PARTE BASIS AGAIN. THE CASES OF THE APPELLANT'S OTHER FAMILY ME MBERS ARE STILL PENDING BEFORE THE LEARNED CIT(A), WHEREIN THE CIT(A) HAS C ALLED FOR A REMAND REPORT FROM THE AO. D. PRESENT ISSUE - THE ISSUE INVOLVED IN THE PRESENT APPEAL ARE AS FOLLOWS: GRANT OF DEDUCTION OF APPROPRIATE INDEXED COST OF A CQUISITION GRANT OF EXEMPTION U/S 54F OF THE ITA, 1961 PRAYER - CONSIDERING THE ABOVE THE APPELLANT CONTENDS THA T A LENIENT VIEW MAY KINDLY BE TAKEN IN THE APPELLANT'S CASE SI NCE THE APPELLANT IS A POOR FARMER AND CARRYING AGRICULTURAL ACTIVITIES FO R THE PAST MANY YEARS. FURTHER, THE APPELLANT REQUESTS THAT THE APPELLANT' S CASE MAY KINDLY BE SET ASIDE TO EITHER THE CIT(A) OR THE AO SO THAT TH E VARIOUS FACTS CAN BE CONSIDERED APPROPRIATELY. 5. ON THE OTHER HAND, LD. DR SUBMITTED FOR CONFIRMING THE ORDERS OF THE AO/CIT(A) CONSIDERING THE ASSESSEES NON-COOPERATION AT THE TIME OF ASSESSMENT/APPELLATE PROCEEDINGS. 6. ON GOING THROUGH THE FACTS OF THE CASE AND THE ARGU MENTS OF THE LD. COUNSEL FOR THE ASSESSEE, I FIND THIS IS A CASE WHERE A SSESSMENT WAS COMPLETED U/S.144 OF THE ACT AFTER MAKING ADDITIONS AND TH E ADDITIONS WERE CONFIRMED BY THE CIT(A) AGAIN WITHOUT THE PROPER RE PRESENTATION ITA NO.2002/PUN/2017 MR. SUBHASH SASTE 4 FROM THE ASSESSEE. IT IS AN ADMITTED FACT THAT THE ADD ITIONS WERE CONFIRMED IN VIEW OF LACK OF PROPER REPRESENTATION BY THE A SSESSEE BEFORE THE LOWER AUTHORITIES. HOWEVER, CONSIDERING THE SET PRINCIPLES OF NATURAL JUSTICE, AS MENTIONED IN THE OPEN COURT, I FIND IT APPROPRIATE TO REMAND THE ENTIRE ISSUES TO THE FILE OF AO FOR FRESH ADJUDIC ATION AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSES SEE. ASSESSEE IS DIRECTED TO APPEAR BEFORE THE AO WITH RELEVANT DOCUME NTS TO REPRESENT HIS CASE. IN THE EVENT OF ASSESSEES FAILURE T O REPRESENT HIS CASE, AO IS AT LIBERTY TO REPEAT THE ADDITIONS IN THE FRES H ASSESSMENT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLO WED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 10 TH DAY OF OCTOBER, 2018. SD/- (D.KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 10 TH OCTOBER, 2018. SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A)-9, PUNE 4. / THE PR.CIT-5, PUNE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVA TE SECRETARY , / ITAT, PUNE