M/s. SSJV Projects Pvt Ltd, Bengaluru V. Income Tax Officer, Ward-6(1)(3), Bengaluru

ITA 2196/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6770 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-04-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 13-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N PRAKASH
• Keywords: Sale consideration of property below Jantri Value; Depreciation
• Section: 143(3); 50C; 142(1); 250; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI A.K GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.2195 & 2196/BANG/2018 ASSESSMENT YEARS : 2013-14 & 2014-15 M/S SSJV PROJECTS PVT. LTD., VAINATHEYA, #64, 1 ST MAIN, ST BED, KORAMANGALA, BENGALURU-560 034. PAN AAACU 3698 R. VS. THE INCOME-TAX OFFICER, WARD 6(1)(3), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI NARENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI T.N PRAKASH, ADDL. CIT DATE OF HEARING : 2.4.2019 DATE OF PRONOUNCEMENT : 22.4.2019 O R D E R PER SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER : THE ASSESSEE HAS FILED APPEALS AGAINST THE DIFFEREN T ORDERS IN THE ITA NO.2196/BANG/2018 IS APPEAL AGAINST THE OR DER OF THE CIT(A), BENGALURU PASSED U/S 143(3) AND 250 OF THE INCOME-TAX ACT AND ITA NO.2195/BANG/ 2018 IS AGAINST THE ORDE R OF CIT(A) PASSED U/S 154 AND 250 OF THE ACT. 2 ITA NO.2195 & 2196/B/2018 2. WE TAKE UP THE ASSESSEES APPEAL NO.2196/BA NG/2018 WHERE THERE IS A DELAY IN FILING THE APPEAL BEFORE THE CI T(A). THE LD AR SUBMITTED THAT THERE IS A DELAY OF 67 DAYS IN FILIN G THE APPEAL BEFORE THE CIT(A) AND THE CIT(A) HAS NOT CONDONED THE DELA Y. THE LD AR EMPHASIZED THAT THE DELAY IS NOT WANTON OR WILLFUL BUT DUE TO CERTAIN BONAFIDE IMPRESSION IN RESPECT OF VALUATION. WE FOU ND THAT THE CIT(A) HAS DISMISSED THE APPEAL WITHOUT CONDONING T HE DELAY BUT CONSIDERING THE FACTS AND SUBMISSIONS MADE BY THE L D AR, WE CONSIDER IT APPROPRIATE TO CONDONE THE DELAY AND F OR WHICH THE LD DR HAS NO SERIOUS OBJECTION. ACCORDINGLY, WE CONDO NE THE DELAY IN FILING THE APPEAL BEFORE THE LD CIT(A). SINCE THE A PPEAL FILED BY THE ASSESSEE BEFORE THE CIT(A) WAS DISMISSED FOR DELAY IN FILING THE APPEAL AND THE CIT(A) HAS NOT DEALT ON THE MERITS, THEREFORE, WE RESTORE THIS DISPUTE ISSUE TO THE FILE OF THE CIT(A ) TO ADJUDICATE AFRESH AND THE ASSESSEE SHALL COOPERATE IN SUBMITT ING THE INFORMATION AND DETAILS EXPEDITIOUSLY FOR EARLY DI SPOSAL OF THE APPEAL AND ALLOW THE GROUND OF ASSESSEE FOR STATIS TICAL PURPOSE. IN THE RESULT, THE ASSESSEE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. WE NOW TAKE UP THE APPEAL NO.2195/BANG/2018 3. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL:- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E- TAX [APPEALS] PASSED UNDER SECTION 250 OF THE ACT I N SO 3 ITA NO.2195 & 2196/B/2018 FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LA W, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSE SSED ON A TOTAL INCOME OF RS. 7,13,76,500!- BEFORE SET- OFF OF CARRY FORWARD LOSSES AS DETERMINED BY THE LEARNED ASSESSING OFFICER AS AGAINST THE TOTAL INCOME OF RS . 5,63,60,500!- BEFORE SET-OFF OF CARRY FORWARD LOSSE S AS RETURNED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT[A] IS NOT JUSTIFIED IN PASS ING AN EX-PARTE ORDER AND CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER UNDER THE HEAD OF CAPITAL GAINS OF RS. 1,50,16,000/- OVER AND ABOVE THE CAPIT AL GAINS INCOME DECLARED BY THE APPELLANT UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE. 4. THE CIT[A] FAILED TO APPRECIATE THE FACT TH AT THE APPELLANT HAD RECEIVED SUBSTANTIAL AMOUNT AS ADVANC E THROUGH ACCOUNT TRANSFER BEFORE THE DATE OF ENTERIN G INTO THE MEMORANDUM OF UNDERSTANDING WHICH HAS A BEARING ON THE ENTIRE ISSUE ON HAND ON THE FACTS AND CIRCUMSTANCES OF THE CASE 5. THE CIT[A] FAILED TO APPRECIATE THAT THE GUIDELINE VALUE OF THE PROPERTY ON THE DATE OF MEMORANDUM OF UNDERSTANDING WAS MUCH LESS THAN THE SALE CONSIDERA TION AND CONSEQUENTLY THE PROVISIONS OF SECTION 50C ARE NOT ATTRACTED TO THE FACTS OF THE CASE. 6. THE CIT[A] FAILED TO APPRECIATE THAT THE PR OVISIO 1 AND 2 TO SECTION 50C ARE CLEAR IN AS MUCH AS THE GUIDEL INE VALUATION ON THE DATE OF MEMORANDUM HAS TO BE TAKEN INTO ACCOUNT IF THE ADVANCE HAS BEEN TAKEN THROUGH BANKI NG CHANNELS ON WHICH THERE IS NO DOUBT AND WHICH FACTU AL POSITION IS ADMITTED ON THE FACTS OF THE APPELLANT CASE AND CONSEQUENTLY THE LOWER AUTHORITIES OUGHT TO HAVE TA KEN NOTE OF THIS CLARIFICATORY AMENDMENT AND NOT MADE A NY 4 ITA NO.2195 & 2196/B/2018 ADDITION UNDER SECTION 50C ON THE FACTS AND CIRCUMS TANCES OF THE CASE. 7. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIE D IN LAW IN MAKING ADDITION A SUM OF RS. 1,50,16,000!- UNDER TH E HEAD INCOME FROM CAPITAL GAINS AS PER THE PROVISIONS OF SECTION 50C OF THE ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. WITHOUT PREJUDICE, THE VALUATION MADE BY THE VALUATION OFFICER IS ERRONEOUS IN LAW AND ON FACTS FOR THE FO LLOWING GROUNDS: [I] THE VALUATION IS HIGHLY EXCESSIVE AND IS LIABL E TO BE MODIFIED ON THE FACTS OF THE CASE. [II] THE VALUATION OFFICER ERRED IN NOT ADOPTING TH E GUIDELINE VALUE ON THE DATE OF THE MEMORANDUM OF UNDERSTANDING ON THE FACTS AND CIRCUMSTANCES OF THE CASE. [III] THE VALUATION OFFICER IS NOT JUSTIFIED IN ADO PTING [AND RATE AT RS. 2,700!- PER SQUARE FEET WHEN ON THE VERY DATE OF MEMORANDUM OF UNDERSTANDING THE VALUATION OFFICER HAS TAKEN NOTE OF A DOCUMENT IN THE VERY CAMPUS OF THE APPELLANT AT RS. 2,319/- PER SQUARE FEET AND CONSEQUENTLY THE ADOPTION OF RS. 2,700/- IS HIGHLY ARBITRARY AND DISCRIMINATORY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. [IV] THE VALUATION OFFICER HAS IGNORED THE COMPARABLE CASE OF RS. 2,000/- NEAR THE VICINITY MUCH LATER THAN THE DATE OF MEMORANDUM OF UNDERSTANDING WITHOUT ASSIGNING ANY VALID REASONS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. [V] THE VALUATION OF THE BUILDING BY ADOPTING CPWD RATES INSTEAD OF PWD RATES IS CONTRARY TO LAW ON THE FACTS AND CIRCUMSTANCES OF THE CASE. [VI] THE VALUATION ON THE BASIS OF PRESENT REPRODUCTION COST MINUS DEPRECIATION OF THE EXPIRED PERIOD OF LIFE OF 9 YEARS IS NOT IN 5 ITA NO.2195 & 2196/B/2018 ACCORDANCE WITH LAW AS THE SAID METHOD CANNOT BE ADOPTED FOR THE PRESENT VALUATION AS NO WILLING BUYER WILL CONSIDER THE SAME. [VII]THE VALUATION OFFICER IS NOT CORRECT IN GRANTI NG ONLY 10 % REBATE FOR THE VARIOUS PROBLEMS OF THE PROPERTY LIKE BANK AND ATTACHMENT ETC ON THE FACTS OF THE CASE. THE SAME HAS TO BE ENHANCED TO ATLEAST 33% AS NO WILLING BUYER WILL BUY LITIGATED PROPERTY AT HIGH PRICE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. [VIII] THE VALUATION OFFICER IS NOT JUSTIFIED IN GRANTING ONLY 5% FOR RESTRICTED USE OF THE LAND WHICH IS VERY LOW AND CONTRARY TO THE COMMERCIAL PRACTICE IN VOGUE IN AS MUCH AS IT SHOULD BE ONLY 1/3 OF THE VALUE AND MORE SO AS THE SAID LAND CAN ONLY BE USED AS GARDEN AND NO CONSTRUCTION CAN BE MADE THE GRANTING OF REBATE IT VERY AND REQUIRES TO BE ENHANCED SUBSTANTIALLY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN ESTI MATING THE VALUE OF THE PROPERTY FOR SECTION 50C PURPOSES AT A VALUE DIFFERENT FROM THE REGISTERED SALE DEED ON TH E FACTS AND CIRCUMSTANCES OF THE CASE. THE ADDITION OF RS. 1,50,16,000/- IS NEITHER SUSTAINABLE IN LAW OR ON F ACTS AND CONSEQUENTLY THE SAME IS LIABLE TO BE DELETED ON TH E FACTS AND CIRCUMSTANCES OF THE CASE. 10. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS ] ERRED IN HOLDING THAT THE APPELLANT WAS NOT INTERES TED IN PURSUING ITS OWN APPEAL AND THAT NONE RESPONDED TO THE NOTICES OF HEARING AND THAT NO ADJOURNMENT WAS SOUG HT PERSONALLY ON THE FACTS AND CIRCUMSTANCES OF THE CA SE. 11. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBST ITUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGE D ABOVE. 12. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DUR ING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUITY AND JUS TICE. 6 ITA NO.2195 & 2196/B/2018 4. THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESEEE IS ENGAGED IN THE BUSINESS OF INFRASTRUCTURE DEVELOPMENT AND FILE D THE RETURN OF INCOME ELECTRONICALLY ON 30/9/2013 WITH NIL INCOME AND THE RETURN OF INCOME WAS PROCESSED U/S 143(1). SUBSEQUENTLY NO TICE U/S 143(2) AND 142(1) WERE ISSUED, WHEREAS IN COMPLIANCE, THE LD AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED THE D ETAILS . THE AO FOUND THAT THE ASSESSEE HAS SOLD PROPERTIES AND CLA IMED THE EXEMPTION OF CAPITAL GAINS. FURTHER ON THE INFORM ATION SUBMITTED BY THE ASSESSEE IN RESPECT OF THE SALE CONSIDERATIO N AND THERE IS A VARIANCE AS PER THE PROVISION OF SEC. 50C OF THE A CT. THEREFORE, THE AO DETERMINED THE TOTAL INCOME AND AFTER SET OFF OF BROUGHT FORWARD LOSS HAS DETERMINED TOTAL INCOME AS NIL AND PASS ED U/S 143(3) DATED 31/3/2016. 5. AGGRIEVED BY THE ORDER OF THE AO, THE ASSE SSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) ISSUED NOTICE S OF HEARING ON 16/6/2017, 4/12/2107 AND 5/1/2018 AND POSTED THE CASE ON 11/7/17 14/12/17 AND 22/1/18 AND ALSO PROVIDED FINA L OPPORTUNITY ON 24/1/2018. SINCE THERE WAS NO RESPONSE, THE CIT (A) BASED ON THE INFORMATION AVAILABLE ON RECORD AND HAS CONFIR MED THE ACTION OF THE AO AND DISMISSED THE ASSESSEES APPEAL. 6. AGGRIEVED BY THE ORDER OF THE CIT(A) ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 7. THE AR SUBMITTED THAT THE CIT(A) HAS DISMISS ED THE APPEAL WITHOUT CONSIDERING THE INFORMATION AVAILABLE AND T HE ASSESSEE 7 ITA NO.2195 & 2196/B/2018 COULD NOT APPEAR DUE TO CHANGE OF ADDRESS AND PRAYE D FOR AN OPPORTUNITY TO REPRESENT THE CASE. CONTRA LD DR OBJECTED TO THE SUBMISSIONS OF THE LD AR AND SAID THAT THE CIT(A) H AS PROVIDED ADEQUATE OPPORTUNITIES OF HEARING BUT THE ASSESSEE FAILED TO APPEAR AND SUPPORTED THE ORDER OF THE CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. WE FOUND THAT THE CIT(A) HAS GRANTED THE OPPORTUNITIES FOR HEARING ON THE DATES AS REFERRED IN THE APPELLA TE ORDER AND THE SUBMISSIONS OF THE LD DR THAT THE CIT(A) HAS GRANTE D SUFFICIENT OPPORTUNITIES CANNOT BE DISPUTED. WHEN A QUERY WAS RAISED TO THE LD AR FOR REASONS FOR NON APPEARANCE, THE EXPLANAT ION OF THE LD AR ARE NOT SATISFACTORY AND ARE NOT SUPPORTED WITH ANY EVIDENCE. THEREFORE, CONSIDERING THE PRINCIPLES OF NATURAL JU STICE AND REASONS ENVISAGED BY LD AR WHICH ARE NOT SUPPORTIVE WE CONS IDERED IT APPROPRIATE TO RESTORE THE ENTIRE DISPUTED ISSUE TO THE FILE OF THE CIT(A) BUT CONSIDERING THE FACTS ON RECORD WITH RES PECT TO NON APPEARANCE OF THE ASSESSEE OR LD AR IN SPITE OF IS SUING NOTICES IN THE APPELLATE PROCEEDINGS AND THE ASSESSEE CHOSE NO T TO APPEAR WHICH CANNOT BE OVER LOOKED. THEREFORE ,WE ARE OF T HE SUBSTANTIVE OPINION THAT THE ASSESSEE SHOULD BE PROVIDED AN O PPORTUNITY OF HEARING BUT WITH A PAYMENT OF COST OF RS.5000/- TO THE INCOME-TAX DEPARTMENT WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF THE ORDER AND SUBJECT TO PAYMENT OF ABOVE COST, WE RESTORE T HE ENTIRE DISPUTED ISSUE TO THE FILE OF THE CIT(A) TO CONSIDE R THE MATTER AFRESH AND ADJUDICATE ON MERITS AND ASSESSEE SHALL SUBMIT PROOF OF 8 ITA NO.2195 & 2196/B/2018 PAYMENT OF COST THROUGH CHALLAN COPY WITH TRIBUNAL AND APPELLATE AUTHORITY AND IT IS NEVERTHELESS TO MENTION THAT T HE CIT(A) SHOULD PROVIDE REASONABLE OPPORTUNITY TO THE ASSESSEE TO F ILE EVIDENCES AND DOCUMENTS IN SUPPORT OF THE CASE AND ALSO ASSESSEE SHALL COOPERATE IN SUBMITTING THE INFORMATION AS EXPEDITIOUSLY FOR EARLY DISPOSAL OF THE APPEAL AND WE ORDER ACCORDINGLY. 9. IN THE RESULT, ASSESSEES APPEAL IN ITA NOS.2195 & 2196/BANG/2018 ARE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2019 . SD/- SD/- (A.K GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED : 22 /4/2019 VMS 9 ITA NO.2195 & 2196/B/2018 COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE. 10 ITA NO.2195 & 2196/B/2018 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..