Nalamati Sea Foods Private Limited, Hyderabad, Hyderabad V. Income Tax Officer, Ward-16(2), Hyderabad

ITA 2018/Hyd/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3150 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 17-05-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Sale consideration of property below Jantri Value; Retrospective amendment; Condonation of delay; Capital Gains
• Section: 143(3); 50C; 115JB; 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. 2018/HYD/2017 A.Y. 2012 - 13 NALAMATI SEA FOODS PRIVATE LIMITED, HYDERABAD. PAN: AABCN 1440 K VS. INCOME TAX OFFICER, WARD - 16(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI S. RAMA RAO REVENUE BY: SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING: 17/5/2021 DATE OF PRONOUNCEMENT: 11 /6/2021 ORDER PER S.S. GODARA, J.M: THIS ASSESSEES APPEAL FOR A.Y. 2012 - 13 HAS ARISEN AGAINST THE LD. CIT(A) - 4, HYDERABADS ORDER DATED 21/08/2017 PASSED IN CASE NO.040/15 - 16/ITO, WD - 16(2)/CIT(A) - 4/HYD/17 - 18 INVOLVING PROCEEDINGS U/S. 143(3) R.W.S 250(6) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE ASSES SEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: - 2 (1) THE ORDER OF THE LD. CIT(A) IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE APPELLANT. (2) (I) THE LD. CIT(A) ERRED IN CONFIRMING THE APPLICATION OF THE PROVISIONS OF SECTION 50C OF T HE IT ACT AND CONSEQUENT ADDITION MADE TO THE CAPITAL GAIN OF 11,40,000/ - . (II) THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE TOTAL CONSIDERATION RECEIVED WAS RS. 2,60,00,000/ - AND WHEREAS THE MARKET VALUE FIXED WAS AT RS. 2,71,40,000/ - AND TH E DIFFERENCE IS LESS THAN 5%. (III) THE LD. CIT(A) OUGHT TO HAVE SEEN THAT THE ASSESSING OFFICER MADE THE ADDITION WITHOUT REFERENCE TO THE VALUATION CELL AS REQUIRED U/S. 50C(2) OF THE IT ACT. (3) THE LD. CIT(A) ERRED IN CONFIRMING COMPUTATION OF THE BOOK PRO FIT U/S. 115JB MADE BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE FACT THAT THE BROUGHT FORWARD BOOK LOSS IS QUITE SUBSTANTIAL AND NOT RS. 2,93,631/ - AS ADOPTED BY THE ASSESSING OFFICER. (4) THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE FIGURES OF RS. 2,93,631/ - AND RS. 5,66,506/ - REPRESENT THE LOSSES FOR THE PREVIOUS YEARS ENDED ON 31/3/2010 AND 31/3/2011 BUT DO NOT REPRESENT THE AGGREGATE OF LOSSES AS PER THE BOOKS OF ACCOUNT AWAITING SET OFF AGAINST THE PROFITS. (5) THE LD. CIT(A) OUGHT TO HAVE AC CEPTED THE CONTENTION OF THE APPELLANT THAT THE PROFIT ON SALE OF ASSETS WAS CREDITED TO THE PROFIT AND LOSS ACCOUNT DO NOT REPRESENT THE BOOK PROFIT ASSESSABLE UNDER THE PROVISIONS OF SECTION 115JB OF THE IT ACT. (6) ANY OTHER GROUND OR GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING. 3 . LD. AR SUBMITTED FIRST OF ALL BEFORE US THAT THERE IS A DELAY OF 29 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. IN THIS REGARD, THE ASSESSEE HAD FILED AN AFFIDAVIT SEEKING CONDONATION OF DELAY WHEREIN THE REASONS FOR NOT FILING THE APPEAL WITHIN THE PRESCRIBED TIME LIMIT WAS EXPLA INED. FOR REFERENCE, THE RELEVANT PORTION FROM THE AFFIDAVIT IS EXTRACTED HEREIN BELOW: - IT IS SUBMITTED THAT THE ORDER WAS SENT BY THE CHARTERED ACCOUNTANT TO THE OFFICE OF THE COMPANY AT PRASANTHI NAGAR, INDUSTRIAL ESTATE, KUKATPALLY, HYDERABAD. SR I B. SAHEB RAO WHO RECEIVED THE ORDER IN THE OFFICE, LEFT THE ORGANIZATION AS THE BUSINESS OF THE PETITIONER IS SUBSTANTIALLY REDUCED. HE KEPT THE PAPERS IN HIS TABLE DRAWER AND DID NOT INTIMATE THE FACT TO THE MANAGING DIRECTOR OF THE PETITIONER COMPANY. IN THE MEANTIME, THE INCOME TAX DEPARTMENT ATTACHED THE BANK ACCOUNT AND THE BANKER INTIMATED THT THE ACCOUNT WAS ATTACHED BY THE DEPARTMENT ON 27/11/2017. THE PETITIONER COULD APPROACH THE ADVOCATE ON 29/11/2017 AND PAID THE APPEAL FEE OF RS. 10,000/ - . AS THE ADVOCATE 3 WAS OUT OF STATION FROM 30/11/2017 TO 03/12/2017 TO 3/12/2017, THE APPEAL PAPERS WERE PREPARED ON 4/12/2017 AND THE APPEAL FEES WAS ONCE AGAIN PAID ON 4/12/2017 AS THE FEE PAID ON 29/11/2017 WAS UNDER A DIFFERENCE HEAD. THE APPEAL IS BEING FILED ON 5/12/2017. THERE IS A DELAY OF 29 DAYS IN FILING THE APPEAL BEFORE THE ITAT. THE DELAY IS FOR THE REASONS SUBMITTED ABOVE WHICH ARE BEYOND THE CONTROL OF THE PETITIONER AND IS NOT INTENTIONAL 4 . ON PERUSAL OF THE AFFIDAVIT FILED BY THE AS SESSEE, WE ARE OF THE VIEW THAT THE REASON FOR THE DELAY WAS DUE TO THE SUDDEN RESIGNATION OF THE ASSESSEE - COMPANYS EMPLOYEE AND WHO RECEIVED THE CIT (A)S ORDER AND DID NOT INFORM TO THE CONCERNED HIGHER OFFICIALS OF THE ASSESSEE - COMPANY AND THEREFORE , T HE ASSESSEE COULD NOT FILE THE APPEAL WITHIN THE STIPULATED TIME. THOUGH THE REASONS ADVANCED BY THE ASSESSEE FOR THE BELATED FILING OF THE APPEAL CANNOT BE APPRECIATED, CONSIDERING THE ISSUES INVOLVED IN THE APPEAL, IN THE INTEREST OF JUSTICE, WE HEREBY C ONDONE THE DELAY OF 29 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND PROCEED TO ADJUDICATE THE APPEAL ON MERITS. 5. COMING TO ASSESSEES FIRST AND FOREMOST GRIEVANCE CHALLENGING CORRECTNESS OF CAPITAL GAINS ADDITION OF RS. 11,40,000/ - , IT IS NOTICED AT THE OUTSET THAT THE SAME INVOLVES DIFFERENCE BETWEEN IT S ACTUAL SALE CONSIDERATION VIS - - VIS THAT DETERMINED U/S. 50C OF THE ACT TO BE LESS THAN 5% (SUPRA) AND THEREFORE, DESERVES TO BE CONDONED AS PER THIRD PROVISO TO SUB - SECTION (1) THEREOF. THE REVENUES ONLY ARGUMENT AT THIS STAGE IS THAT THE SAID PROVISO WAS INSERTED BY THE FINANCE ACT 2018 W.E.F, 1/4/2019 AND THEREFORE, IT IS NOT APPLIA BLE WITH RETROSPECTIVE EFFECT IN A.Y. 2012 - 13 BEFORE US. WE FIND NO MERIT IN THE INSTANT ARGUMENT AS PER MARIA FERNAND E S C HERYL VS. ITO ITA NO.4850/MUM/2019 DATED 4 15/1/2021 HAS ALREADY DECLINED THE REVENUES IDENTICAL ARGUMENT THEREBY TREATING THE FOREGOI NG STATUTORY PROVISIONS AS A CURATIVE ONE. THE IMPUGNED FORMER ADDITION OF RS. 11.40 LAKHS STANDS DELETED THEREFOR. 6. NEXT COMES SECTION 115JB BOOK PROFITS ISSUE VIS - - VIS BROUGHT FORWARD BOOK LOSS FIGURE DIFFERENCE OF RS. 2,93,631/ - AND RS. 5,66,506/ - AS PER AYS 2010 - 11 AND 2011 - 12 (SUPRA). 7. BOTH THE LEARNED REPRESENTATIVES ARE AD IDEM DURING THE COURSE OF HEARING THE INSTANT LAT T ER ISSUE REQUIRED AFRESH FACTUAL VERIFICATION. WE, THEREFORE, DIRECT THE ASSESSEE TO APPEAR BEFORE THE ASSESSING OFFICER O N OR BEFORE 30/09/2021 WITH ALL RELEVANT SUPPORTIVE DETAILS FOR THE NECESSARY CONSEQUENTLY VERIFICATION WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING AT ITS OWN RISK AND RESPONSIBILITY. THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOVE TERMS . PRONOUNCED IN THE OPEN COURT ON 11 TH JUNE, 2021. SD/ - SD/ - (L.P. SAHU) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: JUNE , 2021. OKK COPY TO: - 1) NALAMATI SEA FOODS PVT LTD., PLOT NO. 7B & 8A, TYPE - 3, PRASANTHI NAGAR, INDUSTRIAL ESTATE, KUKATPALLY, HYDERABAD. 2) INCOME TAX OFFICER, WARD - 16(2), IT TOWERS, MASAB TANK, HYDERABAD. 5 3) THE CIT(A) - 4, HYDERABAD . 4) THE PR. CIT - 4, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE