Shri.V.Srinivasa Raju L/R Late Venkataswamy Raju(HUF), Bangalore V. Income Tax Officer, Bangalore

ITA 2130/BANG/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5406 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU BENGALURU
• Assessee Lawyers: C R NULVI
• Keywords: Capital asset; Opportunity of being heard
• Section: 54F; 142(1); 147; 54; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ITA NO.2130/BANG/2016 ASSESSMENT YEAR : 2006-07 V. SRINIVASA RAJU, L/R LATE VENKATA SWAMY RAJU(HUF), NO.2917, 14 TH A CROSS, 2 ND STAGE, BANASHANKARI, BANGALORE 560 070. PAN: AAGHV 0968N VS. THE INCOME TAX OFFICER, WARD 7(2)(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI C.R. NULVI, CA RESPONDENT BY : SHRI M.K. BIJU, CIT(DR)(ITAT-3), BENGALURU DATE OF HEARING : 01.03.2017 DATE OF PRONOUNCEMENT : 28.04.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER PASSED BY THE ASSESSING OFFICER U/S 144 R.W.S 147 IS BAD IN LAW AND LIABLE TO BE SQUASHED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND UNDER THE PROVISIONS OF LAW, THE ASSESSING OFFICER ERRED IN P ASSING THE ORDER U/S 144 R.W.S 147 WITHOUT SERVING A SHOW CAUS E NOTICE OR NOTICE U/S 142(1) AS PER PROVISO TO SECTION 144. ITA NO.2130/BANG/2016 PAGE 2 OF 4 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT (APPEALS) ERRED IN UPHOLDING THE ORDER PASSED U/S 144 BY THE ASSESSING OFFICER ON THE GROUND THAT ISSUE OF A SHO W CAUSE NOTICE OR NOTICE U/S 142(1) IS NOT NECESSARY SINCE THE APP ELLANT HAS NOT FILED THE RETURN OF INCOME IN RESPONSE TO A NOTICE U/S 148. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ASSESSING OFFICER AND CIT (APPEALS) ERRED IN NOT ALLOWING THE EXEMPTION U/S 54F IN RESPECT OF OWNER SHARE OF CONSTRUCTED SU PER BUILT UP AREA FOR MULTIPLE FLATS BY DISREGARDING THE JURISDI CTIONAL HIGH COURT JUDGMENT. 5. FOR THESE AND OTHER REASONS WHICH MAY BE ADDUC ED AT THE TIME OF HEARING, THE APPELLANT PRAYS THIS HON'BLE B ENCH TO ANNUL THE ORDER PASSED BY THE ASSESSING OFFICER U/S 144 O R TO ALLOW THE EXEMPTION U/ S 54F FOR MULTIPLE FLATS. 6. THE APPELLANT CRAVES LEAVES, TO ADD, TO ALTER, TO A MEND AND TO DELETE ANY OF THE GROUNDS AT THE TIME OF HEARING . 2. DURING THE COURSE OF HEARING, OUR ATTENTION WAS INVITED TO THE FACT THAT ASSESSEE HAS NOT FILED RETURN OF INCOME. HAVI NG NOTED THAT JOINT DEVELOPMENT AGREEMENT WITH BUILDER, M/S. PIONEER DE VELOPERS FOR A PROPERTY BEARING SY.NO.24/2 AND SY.NO.53/3 SITUATED AT PUTTENAHALLI VILLAGE, BANGALORE WAS ENTERED UPON BY THE ASSESSEE , WHEREBY THE ASSESSEE TRANSFERRED 60% UNDIVIDED SHARE OF PROPERT Y IN FAVOUR OF M/S. PIONEER DEVELOPERS AND IN LIEU OF IT 40% SUPER BUIL T UP AREA IN THE FORM OF APARTMENTS/FLATS AND SIMILAR 40% OF CAR PARKING AND OTHER BENEFITS IN THE CONSTRUCTED AREA ALONG WITH INTEREST FREE REFUNDABL E DEPOSIT OF RS.20 LAKHS WOULD BE RECEIVED BY THE ASSESSEE; THE AO HAS ISSU ED A NOTICE U/S. 147 OF THE ACT. BUT IN RESPONSE TO THIS NOTICE, THE ASSES SEE HAS NOT FILED RETURN OF INCOME. HE, HOWEVER, REPLIED THAT NO CAPITAL GAIN HAS ACCRUED IN THIS YEAR, ITA NO.2130/BANG/2016 PAGE 3 OF 4 THEREFORE NO INCOME IS CHARGEABLE TO TAX. THE AO HAVING RELIED UPON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT V. T.K. DAYALU, 202 TAXMAN 531, WAS OF THE VIEW THAT CAPITAL GAIN ACCRUED TO THE ASSESSEE IN THE YEAR OF TRANSFER OF LAND AND HE ACC ORDINGLY PROCEEDED U/S. 144 OF THE ACT AND COMPUTED THE CAPITAL GAIN AND CO MPLETED THE ASSESSMENT. 3. BEFORE THE CIT(APPEALS), THE ASSESSEE HAS CLAIME D DEDUCTION U/S. 54 OF THE ACT, BESIDES CHALLENGING THE COMPLETION O F ASSESSMENT U/S. 144 OF THE ACT WITHOUT ISSUING SHOW CAUSE NOTICE TO THE AS SESSEE. THE CIT(APPEALS) CONFIRMED THE ASSESSMENT FRAMED U/S. 1 44 R.W.S. 147 OF THE ACT, BUT DID NOT ADJUDICATE THE CLAIM OF EXEMPTION U/S. 54 OF THE ACT ON THE GROUND THAT THIS CLAIM WAS NOT RAISED BEFORE THE AO . 4. AGGRIEVED, THE ASSESSEE IS BEFORE US AND REITERA TED ITS CONTENTIONS. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF AUTHORIT IES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE C LAIM OF DEDUCTION U/S. 54/54F OF THE ACT SHOULD HAVE BEEN EXAMINED, IF THE REVENUE COMES TO THE CONCLUSION THAT CAPITAL GAIN IS TO BE CHARGED IN TH E IMPUGNED ASSESSMENT YEAR. SINCE THIS ASPECT HAS NOT BEEN EXAMINED BY TH E LOWER AUTHORITIES, WE ARE OF THE VIEW THAT THE MATTER SHOULD GO BACK TO A O FOR READJUDICATION OF ENTIRE ISSUE AGAIN. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(APPEALS) AND RESTORE THE MATTER TO AO WITH A DIRECTION TO RE ADJUDICATE THE ISSUE OF CAPITAL GAIN AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ITA NO.2130/BANG/2016 PAGE 4 OF 4 ASSESSEE AND IF THE AO COMES TO THE CONCLUSION THAT CAPITAL GAIN IS TO BE CHARGED FOR THE IMPUGNED ASSESSMENT YEAR, THE CLAIM OF DEDUCTION U/S. 54/54F BE EXAMINED IN THE LIGHT OF PROVISIONS OF TH E ACT. ACCORDINGLY, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SES. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF APRIL, 2017. SD/- SD/- ( S. JAYARAMAN ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 28 TH APRIL, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.