Mohammed Naseeruddin , Hyderabad V. Income Tax Officer, (International Taxation)-II, Hyderabad

ITA 2188/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4555 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 01-09-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 19-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M MAHIDHAR
• Assessee Lawyers: J RAJESHWAR
• Keywords: Unexplained cash credit; Opportunity of being heard; Cost of acquisition; Capital expenditure
• Section: 143(3); 142(1); 143(2); 68; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A - SMC , HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 2188/HYD/ 2018 ASSESSMENT YEAR: 2011 - 12 MOHAMMED NASEERUDDIN, 9 - 4 - 135/D/8, VALI COLONY, TOLICHOWKI , HYDERABAD 500 008. PAN: AFFPN 1575 F VS. INCOME TAX OFFICER (INTERNATIONAL TAXATION) - II, AAYAKAR BHAVAN, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI J. RAJESHWAR REVENUE BY: SRI M. MAHIDHAR, DR DATE OF HEARING: 01/09/2021 DATE OF PRONOUNCEMENT: 28 /09/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 10, HYDERABAD IN APPEAL NO. 0211/CIT(A) - 10/2017 - 18, DATED 19/09/2018 PASSED U/S. 143(3) R.W.S 250(6) OF THE ACT FOR THE AY: 2011 - 12. 2. THE ASSESSEE HAS RAISED THREE GROUNDS IN HIS APPEAL AND THEY ARE EXTRACTED HEREIN UNDER FOR REFERENCE: 1. THE LD. CIT (A) - 10 ERRED IN LAW AND FACTS OF THE CASE. 2 2. THE LD. CIT (A) - 10 OUGHT TO HAVE ALLOWED THE CLAIM U/S. 54 OF THE I T ACT, 1961 AS THE CLAIM MADE BY THE APPELLANT IS NOT CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT, 1961. 3. ANY OTHER GROUN D AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A NON - RESIDENT INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE AY 2011 - 12 ON 14/07/2011 ADMITTING TOTAL TAXABLE INCOME OF RS. 1,13,487/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND THE NOTICES U/S. 143(2) & 142(1) WERE ISSUED . 4. DURING THE SCRUTINY PROCEEDINGS, THE LD. AO OBSERVED THAT : (I) RS. 12,00,000/ - WAS DEPOSITED IN THE ASSESSEES SBI SAVINGS BANK ACCOUNT (II) THE ASSESSEE HAS SOLD A HOUSE PROPERTY AT MOTIGALLI, HYDERABAD FOR A SALE CONSIDERATION OF RS. 32,00,000/ - AND CLAIMED INDEXED COST OF ACQUISITION OF THE PROPERTY AT RS.14,90,320/ - . (III) THE ASSESSEE HAS CLAIMED RS. 17,09,680/ - AS EXEMPTION OF CAPITAL EXPENDITURE U/S. 54 OF THE ACT. 5. ON THE ABOVE OBSERVATION, A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE LD. AO COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT WHEREIN CERTAIN ADDITIONS WERE MADE VIZ., (I) RS. 12,00,000/ - AS UNEXPLAINED CREDITS U/S. 68 OF THE ACT AND (II) RS.17,91,460/ - AS LTCG 3 ARISING OUT OF DIS POSAL OF THE HOUSE PROPERTY AND DETERMINED THE TOTAL TAXABLE INCOME AT RS. 31,04,950/ - AGAINST THE RETURNED INCOME OF RS. 2,09,623/ - . AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). 6. ON APPEAL, THE LD. CIT (A) PARTLY ALLOWED THE APPEAL AND GRANTED RELIEF TO THE ASSESSEE IN RESPECT OF RS. 12,00,000/ - DEPOSITED IN HIS BANK ACCOUNT. HOWEVER, THE LD. CIT (A) SUSTAINED THE ADDITION OF RS.17,91,460/ - MADE BY THE LD. AO DISALLOWING THE ASSESSEES CLAIM FOR EXEMPTION U/S. 54 OF THE ACT BY OBSERVING AS UNDER: 12. THE MATERIAL AVAILABLE ON RECORD HAS BEEN CONSIDERED. THE APPELLANT FAILED TO FURNISH COPY OF APPROVAL , OBTAINED FROM THE LOCAL AUTHORITY, FOR THE PURPOSE OF CONSTRUCTION AND COMPLETION OF THE PROPERTY FOR WHICH EXEMPTION CLAIMED FROM INCOME TAX U/S. 54. COPY OF THE CERTIFICATE ISSUE BY THE ENGINEER IS UNDATED AND CANNOT SUBSTITUTE THE STATUTORY APPROVAL OF THE LOCAL GOVERNMENT. THIS CERTIFICATE IS ALSO NOT TREATED AS GENUINE AND RELIABLE. 12.1. IN SUPPORT OF THE CLAIM, THE APPELLANT FURNISHED RENTAL AGREEMENTS, SAID TO BE IN RESPECT OF THE NEW PROPERTY CONSTRUCTED, AND BOTH THE AGREEMENTS WERE ENTERED IN THE YEAR 2006 WHILE THE PROPERTY WAS SOLD IN THE YEAR 2011 . BEFORE THE AO, THE APPELLANT STATED THAT WHAT WAS CONSTRUCTED WAS GROUN D FLOOR AND FIRST FLOOR AND IN THE APPEAL PROCEEDINGS, IT HAS BEEN ARGUED THAT WHAT WAS CONSTRUCTED IS SECOND AND THIRD FLOORS . 12.2. THE DECISIONS RELIED UPON BY THE APPELLANT ARE NOT APPLICABLE AS THE FACTS IN THE PRESENT CASE ARE ENTIRE DIFFERENT. 12.3. IN VIEW OF THE ABOVE, THE AO WAS JUSTIFIED IN DENYING THE EXEMPTION U/S. 54. ACCORDINGLY, THE GROUND OF APPEAL NO.3 IS DISMISSED. 7. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE ME THAT THE ASSESSEE COULD NOT PRODUCE CERTAIN EVIDENCE BEFORE THE LD. REVENUE AUTHORITIES DUE TO PAUCITY OF TIME . IT WAS FURTHER SUBMITTED THAT N OW THE ASSESSEE 4 IS READY TO PRODUCE THE EVIDENCE IN SUPPORT OF HIS CLAIM OF EXEMPTION U/S. 54 OF THE ACT. IT IS THEREFORE PRAYED THAT THE EVIDENCE PRODUCED BEFORE THE TRIBUNAL MAY BE ADMITTED AND THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD. AO TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE OTHERWISE GREAT I NJUSTICE WILL BE INFLICTED TO THE ASSESSEE . THE LD. DR ON THE OTHER HAND VEHEMENTLY OPPOSED TO THE SUBMISSIONS OF THE LD. A R AND STRONGLY RELIED UPON THE ORDERS OF THE LD. REVENUE AUTHORITIES. 9. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. ON EXAMINING THE ORDERS OF THE ORDERS OF THE LD. AO AND THE LD. CIT (A) , IT IS APPARENT THAT THE ASSESSEES CLAIM OF EXEMPTION U/S. 54 OF THE ACT WAS NOT ALLOWED BY THE LD. REVENUE AUTHORITIES BECAUSE THERE WAS NO COGENT DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM. BEFORE THE TRIBUNAL THE ASSESSEE HAS FILED A PAPER BOOK COMPRISING COPY OF SALE DEED , PHOTOGRAPHS OF THE CONSTRUCTED BUILDING, COP Y OF THE PROPERTY TAX PAID, COPY OF REGULARIZATION APPLICATION MADE TO GHMC AND THE LD. AR PLEADED THAT IF AN OPPORTUNITY IS PROVIDED BEFORE THE REVENUE , ASSESSEE WILL BE ABLE TO SUBSTANTIATE HIS CLAIM . CONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE AN D KEEPING IN VIEW OF THE DOCUMENTARY EVIDENCE FURNISHED BY THE ASSESSEE, IN THE INTEREST OF JUSTICE, THE ISSUE IS REQUIRED TO BE REMITTED BACK TO THE FILE OF THE LD. AO FOR FRESH CONSIDERATION. ACCORDINGLY , I HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. AO IN ORDER TO CONSIDER 5 THE ISSUE ADJUDICATED AGAINST THE ASSESSEE BY THE LD.CIT(A) AFRESH A ND THEREAFTER DECIDE THE MATTER IN ACCORDANCE WITH LAW AND MERITS AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I ALSO HEREBY CAUTION THE ASSESSEE TO PROMPTLY CO - OPERATE BEFORE THE LD. REVENUE AUTHORITIES IN THE IR PROCEEDINGS FAILING WHICH THE LD. REVENUE AUTHORITIES SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER S IN ACCORDANCE WITH LAW AND MERITS B ASED ON THE MATERIALS ON THE RECORD. IT IS ORDERED ACCORDINGLY. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREINABOVE. PRONOUNCED IN THE OPEN COURT ON THE 28 TH SEPTEMBER, 2021. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 28 TH SEPTEMBER, 2021. OKK COPY TO: - 1) MOHAMMED NASEERUDDIN, C/O. PULIGILLA SRINIVAS, CHARTERED ACCOUNTANT, PLOT NO.152 SOUTH PART, TELEPHONE COLONY, KOTHAPET, HYDERABAD, TELANGANA - 500102. 2) INCOME TAX OFFICER (INTERNATIONAL TAXATION) - II, AYAKAR BHAVAN, HYDERABAD, TELANGANA 500 053. 6 3) THE CIT (A) - 10, HYDERABAD . 4) (I) THE COMMISSIONER OF INCOME TAX - (IT & TP), HYDERABAD. (II) THE CHIEF COMMISSIONER OF INCOME TAX (IT) (S Z), BANGALURU. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE