Sri Eshwar Goud Bingi, Hyderabad V. Income Tax Officer, Ward-15(2), Hyderabad

ITA 2024/Hyd/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8134 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-11-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 06-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Cost of acquisition
• Section: 50C; 148; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.2024/HYD/2017 ASSESSMENT YEAR: 2009 - 10 SRI ESHWAR GOUD BINGI, 2 - 76, BHARAT NAGAR COLONY, UPPAL KALAN, UPPAL, HYDERABAD. PAN: AGHPB 1423 D VS. INCOME TAX OFFICER, WARD - 15(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K.C. DEVDAS REVENUE BY: SRI R. MOHAN REDDY, DR DATE OF HEARING: 14.11.2018 DATE OF PRONOUNCEMENT: 26 .12.2018 ORDER PER S. RIFAUR RAHMAN, A .M.: THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 7, HYDERABAD, DATED 12.10.2017 FOR THE ASSESSMENT YEAR 2009 - 10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, ALONG WITH 8 CO - VENDORS HAD SOLD IMMOVABLE PROPERTY FOR A CONSIDERATION OF RS. 12,50,000/ - . AT THE SAME TIME, A.O. NOTICED THAT THE SELLER HAS PAID STAMP DUTY FOR RS. 32,50,000/ - VIDE DOCUMENT NO.6434/2008, DATED 10.07.2008. SINCE THE ASSESSEE HAS NOT DECLARED ANY CAPITAL GAINS IN ITS RETURN OF INCOME , NOTICE U /S 148 WAS ISSUED ON 12.02.2016 BY ENHANCING THE TAXABLE INCOME TO THE EXTENT OF RS. 3,61,111/ - (1/9 TH SHARE OF SALE CONSIDERATION) AS LONG TERM CAPITAL GAINS. AGGRIEVED WITH 2 THE ABOVE ORDER OF THE A.O, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER. AGGRIEVED WITH THE ORDER OF THE CIT(A), ASSESSEE PREFERRED THE PRESENT APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE CIT(A) UPHOLDING THE VIEW OF THE A.O. IN ASSESS ING LONG TERM CAPITAL GAINS OF RS. 3,61,111/ - IS ERRONEOUS IN LAW AND IN FACTS OF THE CASE. 2. THE LD. CIT(A) FAILED TO CONSIDER THAT THE POSSESSION OF THE LAND WAS GIVEN IN THE YEAR 1962 WHICH IS MENTIONED IN THE SALE DEED OF 6434/2008 AND THEREFORE, THE CIT(A) ERRED IN HOLDING THAT THE CAPITAL GAIN WAS ASSESSED IN THE ASST. YEAR 2009 - 10 CONSEQUENTIAL TO REGISTRATION OF THE LAND ON 10.08.2008. 3. THE CIT(A) IN THE ALTERNATIVE ERRED IN HOLDING THAT THE SUM OF RS. 3,61,111/ - WAS AN ASSESSMENT U/S 56 OF THE I T ACT, 1961. 4. ANY OTHER GROUNDS THAT MAY ARISE AT THE TIME OF HEARING. 3. ASSESSEE HAS NOT PRESSED GROUND NO.2 AND GROUND NO.4 IS GENERAL IN NATURE AND THEREFORE, THEY ARE DISPOSED OF AS SUCH. THE ONLY ISSUE BEFORE US IS LONG TERM CAPITAL GAINS. 4. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSEE HAS SOLD THE PROPERTY ADMEASURING AC. 0 - 20 GUNT A S OR 0.202 HECTARES AT UPPAL VILLAGE FOR REGISTERED CONSIDERATION OF RS. 12,50,000/ - ALONG WIT H 8 OTHER CO - VENDORS. AS PER THE SALE DEED SUBMITTED BEFORE THE ASSESSING OFFICER, HE NOTICED THAT THE SRO VALUE ADOPTED FOR PAYMENT OF STAMP DUTY WAS AT RS. 32,50,000/ - . FURTHER, ASSESSING OFFICER RECORDED A SWORN - IN STATEMENT FROM ONE OF THE PURCHASER SMT. N. GIRIJA ON 31.11.2016. AS PER THE SWORN - IN STATEMENT, MS. GIRIJA CONFIRMED THE PURCHASE OF THE PROPERTY AS WELL AS THE PAYMENT OF RS. 32,50,000/ - TO THE ASSESSEE BUT SHE COULD NOT SUBSTANTIATE HER STATEMENT WITH EVIDENCE THAT THE PAYMENT OF RS. 32, 50,000/ - WAS PAID TO THE ASSESSEE. RELYING ON THE ABOVE STATEMENT AND SRO VALUE OF THE PROPERTY, ASSESSING OFFICER HAS ADDED 1/9 TH SHARE OF THE SALE CONSIDERATION AS LONG TERM CAPITAL GAINS IN 3 THE HANDS OF THE ASSESSEE. ON CAREFUL PERUSAL OF THE SALE DEE D SUBMITTED BEFORE THE ASSESSING OFFICER AND BEFORE US, THE SALE DEED CLEARLY ESTABLISHES THAT THE VENDOR S NO. 1 TO 4 ( VENDOR NO. 4 IS THE ASSESSEE) HAVE SOLD THE ABOVE SAID PROPERTY TO THE VENDORS NO. 5 TO 9 VIDE AN ORAL DEED DATED 23.06.1962 AND VENDORS N O. 5 TO 9 ARE IN ACTUAL PHYSICAL POSSESSION AND ENJOYMENT OF THE ABOVE SAID PROPERTY AS ABSOLUTE OWNERS THEREOF. IT IS ALSO CLEARLY HIGHLIGHTED THAT THE VENDORS NO. 1 TO 4 ARE THE PATTADARS OF THE AGRICULTURAL LAND. SINCE THIS PROPERTY WAS SOLD BY THEIR RESPECTIVE PARENTS TO THE VENDORS NO. 5 TO 9 IN THE YEAR 1962 (ON 23/06/1962) AND ON THE REQUEST OF THE VENDORS 5 TO 9, THE ASSESSEE ALONG WITH THE OTHER 3 CO - OWNERS OF THE PROPERTY AGREED TO SELL THE PROPERTY TO THE PURCHASERS AS PER THE AGREEMENT. IT IS CLEAR FROM THE DOCUMENT THAT THE VENDORS HAVE RECEIVED SALE CONSIDERATION OF RS. 12,50,000/ - ONLY WHEREAS THE SRO VALUE CLEARLY SHOWS THAT THE MARKET VALUE OF THE PROPERTY IS RS. 32,50,000/ - . IT IS NOT CLEAR FROM THE AGREEMENT THAT THE SALE CONSIDERATION WAS DISTRIBUTED ONLY TO THE VENDORS NO. 5 TO 9 OR ALL THE VENDORS HAVE DISTRIBUTED AMONG THEM EQUALLY. SINCE THE PROVISIONS OF SECTION 50C ARE APPLICABLE DIRECTLY, THE LIABILITY FALLS ON ALL THE VENDORS. NOW THE ASSESSEE CLAIMS THAT THE PROPERTY WAS SOL D ONLY BY THE VENDORS NO. 5 TO 9 AND THE VENDORS NO. 1 TO 4 ARE MERE SIGNATORIES IN ORDER TO SET RIGHT THE TRANSACTIONS ENTERED INTO BY THEIR PARENTS IN THE YEAR 1962. FROM THE AGREEMENT IT IS CLEAR THAT THE POSSESSION WAS IN THE HANDS OF THE VENDORS NO. 5 TO 9 WHEREAS THE NAMES IN THE P ATTADAR PASS BOOK ARE OF THE VENDORS NO. 1 TO 4. THE SALE DEED MERELY CONFIRMS THE ABOVE POSSESSION AND COMPLETION OF THE SALE TRANSACTION. THERE IS NO WHISPER ABOUT THE DISTRIBUTION OF ALL THE SALE CONSIDERATION AND ALSO THE TRANSACTION WAS DONE IS AN ORAL TRANSACTION IN THE YEAR 1962. SINCE THERE IS NO EVIDENCE TO PROVE THE ABOVE ORAL TRANSACTION, WE HAVE TO GO BY THE EVIDENCE SUBMITTED BEFORE US. THEREFORE, IN OUR CONSIDERED VIEW, ALL THE VENDORS ARE EQUALLY 4 RESPONSIBL E FOR THE ABOVE SALE TRANSACTION. HOWEVER, WE NOTICED THAT THE ASSESSING OFFICER SHOULD HAVE BROUGHT TO TAX ONLY CAPITAL GAINS NOT THE SHARE OF SALE CONSIDERATION IN THE HANDS OF THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT TO REMI T THIS CASE BACK TO THE FILE OF THE A.O. IN ORDER TO FIND THE LONG TERM CAPITAL GAINS BY ADOPTING THE SALE CONSIDERATION U/S 50C OF THE ACT AND ADOPT MARKET VALUE AS ON 1981 AS THE COST OF ACQUISITION AND ARRIVE AT THE ACTUAL CAPITAL GAINS. SINCE THE CAS E IS REMITTED BACK TO THE ASSESSING OFFICER, IT IS ALSO DIRECTED THAT THE OWNERSHIP OF THE PROPERTY SHOULD ALSO BE VERIFIED DE NOVO AND IF IT IS FOUND THAT THE REAL OWNERS ARE THE VENDORS NO. 5 TO 9, THEN THE WHOLE TAX LIABILITY SHOULD BE ASSESSED IN THE H ANDS OF THE VENDORS NO. 5 TO 9. THEREFORE, WE ARE GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE TO PROVE ITS CASE. IT IS NEEDLESS TO MENTION THAT THE ASSESSING OFFICER SHOULD GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER LAW BEFORE COMPLETION O F THE ASSESSMENT. ACCORDINGLY, GROUND NO.3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH DECEMBER, 2018. SD/ - SD/ - (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 26 TH DECEMBER, 2018 OKK COPY TO: - 1) SEKHAR & CO, 133/4, R.P. ROAD, SECUNDERABAD. 2) INCOME TAX OFFICER, WARD - 15(2), HYDERABAD. 3) THE CIT(A) - 7, HYDERABAD 4) THE PR. CIT - 7, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE