SHRI S, VENKATESWARA BABU, CHENNAI V. ITO, NCW - 10 (5), CHENNAI

ITA 2134/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3347 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 18-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: THARISH.V
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Tax effect
• Section: 143(3); 143(2); 44AB; 43

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ' , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.2134/CHNY/2019 ( ( /ASSESSMENT YEAR: 2015-16 SHRI S. VENKATESWARA BABU, NO.7/495, 2 ND STREET, D-TYPE, SIDCO NAGAR, VILLIVAKKAM, CHENNAI-600 049. V . THE INCOME TAX OFFICER, NON-CORPORATE WARD-10(5), CHENNAI-600 034. [PAN : ADDPV6161H ] ( + /APPELLANT) ( ,-+ /RESPONDENT) + . / APPELLANT BY : MS.THARISH.V, CA ,-+ . /RESPONDENT BY : MS.R.ANITHA, JCIT . /DATE OF HEARING : 13.11.2019 . /DATE OF PRONOUNCEMENT : 15.11.2019 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST APPELLATE ORDER DATED 29.04.2019 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI (HEREINAFTER CALLED THE CIT( A)), IN ITA NO.43/CIT(A)-12/17-18 FOR ASSESSMENT YEAR (AY) 2015 -16, THE APPELLATE PROCEEDINGS BEFORE LEARNED CIT(A) HAD ARISEN FROM A SSESSMENT ORDER ITA NO.2134/CHNY/2019 :- 2 -: DATED 29.11.2017 PASSED BY LEARNED ASSESSING OFFI CER (HEREINAFTER CALLED THE AO) U/S.143(3) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER CALLED THE ACT) FOR AY: 2015-16. 2. THE GROUNDS OF APPEAL RAISED BY ASSESSEE IN MEM O OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, CHENNAI (HE REINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- SL.NO. GROUND TAX EFFECT 1. THE ORDER OF THE LD.COMMISSIONER OF INCOME-TAX (A PPEALS) 12, CHENNAI IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) - 12, CHENNAI ERRED IN ADJUDICATIN G THE APPEAL WITHOUT CONSIDERING THE GROUNDS OF APPEAL FILED BY THE APPE LLANT. 3.1 THE LD.CIT(A)- 12, CHENNAI ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SECTION 56(2)(V II)(B) AND ADDING THE DIFFERENCE BETWEEN THE CONSIDERATION RECORDED IN TH E SALE DEED AND THE STAMP DUTY VALUE WITHOUT CONSIDERING THE MARKET VAL UE OF THE UNDIVIDED SHARE OF LAND IN THE LOCATION. RS. 66,413/- 3.2 THE LD. C1T(A) - 12, CHENNAI ERRED IN IGNORING T HE FACT THAT VALUE PER SQ. FT. OF VACANT LAND WILL ALWAYS BE HIGHER THAN THE V ALUE OF UNDIVIDED SHARE OF LAND AS THERE IS A BUILT-UP AREA ATTACHED WITH U NDIVIDED SHARE OF LAND AND SUCH UNDIVIDED SHARE OF LAND CANNOT BE INDEPEND ENTLY PARTED AWAY. 3.3 THE LD. CIT(A) - 12, CHENNAI ERRED IN NOT CONSID ERING THE FACT THAT, IN CASE OF RESIDENTIAL FLATS, THE VALUE OF UNDIVIDED S HARE OF LAND CANNOT BE DETERMINED INDIVIDUALLY WITHOUT CONSIDERING THE VAL UE OF THE BUILT UP AREA ATTACHED TO IT, AS ONLY THE PURCHASE PRICE FOR IS D ETERMINED BY THE ASSESSEE AND THE BUILDER AND THE VALUE OF UNDIVIDED SHARE OF LAND MENTIONED IN THE SALE DEED IS AN AMOUNT ASSIGNED FO R REGISTRATION PURPOSES. 4.1 THE LD. CIT(A) - 12, CHENNAI ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER WITH REGARD TO DIESEL EXPENSES AND VEHICLE MAINTENANCE EXPENDITURE INCURRED DURING THE YEAR UNDER CONSIDER ATION. RS. 3,79,976/- 4.2 THE LD. CIT(A) - 12, CHENNAI ERRED IN NOT CONSID ERING THE FACT THAT THE APPELLANT HAS ENGAGED THIRD PARTY CONTRACTORS FOR C ARRYING OUT SUBSTANTIAL WORKS IN THE EARLIER YEARS AND WHEREAS DURING THE A SSESSMENT YEAR UNDER CONSIDERATION, THE ENTIRE WORK HAS BEEN CARRIED OUT BY THE APPELLANT ONLY, WHICH IS ALSO EVIDENT FROM THE SUBSTANTIAL DECREASE IN TURNOVER DURING THE YEAR UNDER CONSIDERATION. 4.3 THE LD. CIT(A) - 12, CHENNAI ERRED IN IGNORING T HE FACT THAT DURING THE EARLIER ASSESSMENT YEAR, VEHICLE MAINTENANCE AND FU EL EXPENSES WERE INCLUDED IN THE CONTRACT PAYMENTS MADE BY THE APPEL LANT, WHEREAS DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THESE EXPE NSES WERE DIRECTLY BORNE BY THE APPELLANT CAUSING THE INCREASE IN FUEL AND MAINTENANCE EXPENSES. 4.4 THE LD. CIT(A) - 12, ERRED IN CONFIRMING THE ORD ER OF THE ASSESSING OFFICER, WHEREIN ONLY CASH BOOK WAS CALLED FOR TO INVOKE THE DISALLOWANCE, WITHOUT CONSIDERING THE BILLS FOR FUEL EXPENSES AND VEHICLE MAINTENANCE EXPENSES TO CONFIRM THE DISALLOWANCE. 4.5 THE LD. CIT(A) - 12, ERRED IN CONFIRMING THE ORD ER OF THE ASSESSING OFFICER, ITA NO.2134/CHNY/2019 :- 3 -: EVEN AFTER THE FACT THAT, THE BOOKS OF ACCOUNTS WER E DULY AUDITED UNDER SECTION 44AB OF THE ACT AFTER VERIFICATION OF THE B OOKS OF ACCOUNT, AND MAKING A FURTHER DISALLOWANCE OF 30 PERCENT OF DIES EL AND MAINTENANCE EXPENSES IS UNCALLED FOR. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND OR A LTER THE ABOVE GROUNDS OF APPEAL AS MAY BE DEEMED NECESSARY. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AS SESSEE IS ENGAGED IN BUSINESS OF EARTHWORK EXCAVATION, ROAD WORKS, FILLI NG & HIRERS OF PROCLAIN, JBC, TIPPER AND OTHER MACHINERY. THE ASSESSMENT WA S FRAMED AGAINST THE ASSESSEE BY AO U/S.143(3) VIDE ASSESSMENT ORDER DAT ED 29.11.2017, WHEREIN, ADDITIONS WERE MADE BY THE AO TO THE RETUR NED INCOME OF THE ASSESSEE UNDER DIFFERENT HEADS . THE ASSESSEE HAD F ILED RETURN OF INCOME WITH REVENUE DECLARING LOSS OF ` 7,81,340/-, WHILE ASSESSED INCOME BY AO WAS TO THE TUNE OF ` 17,27,327/- VIDE ASSESSMENT ORDER PASSED U/S 143(3) OF THE 1961 ACT. AGGRIEVED BY AN ASSESSMENT FRAMED BY THE AO VIDE ASSESSMENT ORDER DATED 29.11.2017 PASSED U/S 143(3) OF THE 1961 ACT, THE ASSESSEE FILED FIRST APPEAL BEFORE LD.CIT(A) WH ICH WAS DISMISSED BY LD.CIT(A) , INTER-ALIA, FOR NON-PROSECUTION, BUT HO WEVER, WHILE PASSING APPELLATE ORDER THE LD.CIT(A) SIMPLY UPHELD ASSESSM ENT ORDER PASSED BY THE AO WITHOUT INDEPENDENTLY DISCUSSING ON MERITS T HE ISSUES RAISED BY ASSESSEE IN ITS APPEAL FILED WITH LEARNED CIT(A) , AS IS REQUIRED UNDER PROVISIONS OF SEC.250(6) OF THE 1961 ACT. ITA NO.2134/CHNY/2019 :- 4 -: 4. AGGRIEVED BY AN APPELLATE ORDER DATED 29.04.2019 PASSED BY LEARNED CIT(A) , THE ASSESSEE HAS FILED THIS APPEAL BEFORE TRIBUNAL AND ARGUMENTS ARE ADVANCED BY BOTH THE RIVAL PARTIES BEFORE THE B ENCH. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD.CIT(A) OUGHT TO HAVE ADJUDICATED THE ISSUES IN APPEAL FILED BY ASSESSEE ON MERITS BY IND EPENDENT APPLICATION OF MIND , AS IS REQUIRED UNDER PROVISIONS OF SECTION 250(6) BUT HOWEVER LEARNED CIT(A) SIMPLY UPHELD ASSESSMENT ORDER PASSE D BY LEARNED AO. IT WAS PRAYED THAT MATTER MAY BE RESTORED TO THE FILE OF LD.CIT(A) FOR FRESH ADJUDICATION AND AN FRESH OPPORTUNITY MAY BE GRANTE D TO THE ASSESSEE TO APPEAR BEFORE LD.CIT(A) AND PRESENT ITS CASE/ARGUME NTS/EVIDENCES IN ITS DEFENSE IN DENOVO APPELLATE PROCEEDINGS . THE LD.D R SUBMITTED THAT THE ASSESSEE DID NOT APPEARED BEFORE LEARNED CIT(A) IN THE FIRST ROUND OF LITIGATION AND IT IS THE ASSESSEE WHO IS RESPONSIBL E FOR ITS WOES BUT HOWEVER, LEARNED DR FAIRLY SUBMITTED THAT THE ISSU ES MAY BE RESTORED TO THE FILE OF LD.CIT(A) FOR FRESH ADJUDICATION. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT ASSESSEE IS ENGAGED I N THE BUSINESS OF EARTHWORK EXCAVATION, ROAD WORKS, FILLING & HIRERS OF PROCLAIN, JCB, TIPPER AND OTHER MACHINERY. IT IS OBSERVED THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY BY REVENUE FOR FRAMING ASSESS MENT U/S.143(3) & 143(2) OF THE 1961 ACT. THE RETURN OF INCOME DECLA RING LOSS OF ` 7,81,340/- WAS FILED BY ASSESSEE , WHEREIN THE AO A SSESSED INCOME OF ITA NO.2134/CHNY/2019 :- 5 -: ` 17,27,327/- OF THE ASSESSEE WHILE FRAMING SCRUTINY ASSESSMENT U/S 143(3) OF THE 1961 ACT, WHEREIN, SEVERAL ADDITIONS WERE MADE BY AO TO THE RETURNED INCOME OF THE ASSESSEE. AGGRIEVED BY AN ASSESSMENT FRAMED BY THE AO U/S 143(3) OF THE 1961 ACT, THE ASSESSEE FILED FIRST APPEAL BEFORE LD.CIT(A). THE ASSESSEE DID NOT APPEAR BEFO RE LD.CIT(A) DESPITE SEVERAL OPPORTUNITIES GRANTED BY LEARNED CIT(A), BU T , HOWEVER, LD.CIT(A) PASSED AN APPELLATE ORDER WITHOUT DISCUSSING ISSUES IN THE APPEAL FILED BY ASSESSEE INDEPENDENTLY ON MERITS AND HAS , INTER-AL IA, DISMISSED APPEAL OF THE ASSESSEE FOR NON-PROSECUTION AND SIMPLY UPHE LD ASSESSMENT ORDER PASSED BY THE AO WITHOUT INDEPENDENTLY DISCUSSING A LL THE ISSUES IN APPEAL FILED BY ASSESSEE ON MERITS BASED ON MATERIAL ON RE CORD , AS IS REQUIRED U/S 250(6) OF THE 1961 ACT. IN OUR CONSIDERED VIEW , THE MATTER NEEDS TO BE RESTORED TO FILE OF LD.CIT(A) FOR FRESH ADJUDICA TION ON MERITS IN ACCORDANCE WITH THE LAW OF ALL THE ISSUES/GROUNDS R AISED BY ASSESSEE IN ITS FIRST APPEAL FILED WITH LEARNED CIT(A). WE HEREBY DIRECT ASSESSEE TO APPEAR BEFORE LD.CIT(A) AND SUBMIT ALL NECESSARY EV IDENCES, EXPLANATIONS ETC., IN SUPPORT OF ITS CONTENTION , WHEN THE APPEA L COMES FOR DENOVO HEARING BEFORE LD.CIT(A). IT IS MADE CLEAR THAT IN CASE IF THE ASSESSEE STILL DID NOT COME FORWARD AND CO-OPERATE IN DENOVO APPE LLATE PROCEEDINGS BEFORE LEARNED CIT(A), THEN LD.CIT(A) SHALL BE AT L IBERTY TO DECIDE THE ISSUES ON MERITS IN ACCORDANCE WITH LAW. THE LD.C IT(A) IS DIRECTED TO DENOVO ADJUDICATE ALL THE ISSUES RAISED BY ASSESSEE IN ITS FIRST APPEAL FILED WITH LEARNED CIT(A) DENOVO ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT LEARNED CIT(A) SHALL PROVIDE PROPER AND AD EQUATE OPPORTUNITY OF ITA NO.2134/CHNY/2019 :- 6 -: BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRIN CIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW, IN DENOVO APPELLATE PROCEED INGS. THUS, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTIC AL PURPOSES. WE ORDER ACCORDINGLY. 6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I N ITA NO.2134/CHNY/2019 FOR AY: 2015-16 IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 15 TH DAY OF NOVEMBER, 2019 IN CHENNAI. SD/- SD/- ( . . . ) ( N.R.S. GANESAN ) /JUDICIAL MEMBER ( ' ) ( RAMIT KOCHAR ) /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 15 TH NOVEMBER, 2019. TLN . ,'3 43 /COPY TO: 1. + /APPELLANT 4. 5 /CIT 2. ,-+ /RESPONDENT 5. 3 , /DR 3. 5 ( ) /CIT(A) 6. ( /GF