Smt. M.D. Savithramma, Hassan V. DCIT, Hassan

ITA 223/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60739 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-05-2012
• Assessment Year: 1996-1997
• Appeal Filed On: 03-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SRINIVASAN
• Keywords: Question of law; Cost of acquisition; Fair market value; Revised return; Reassessment proceedings
• Section: 143(3); 234B; 260A; 154; 15

Judgement Text

PAGE 1 OF 8 ITA NO.223/ BANG/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI GEORGE GEORGE K, J.M AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.223/BANG/2011 (ASSESSMENT YEAR 1996-97) SMT. M D SAVITHRAMMA, COFFEE PLANTER, AL&ML ESTATES, BALLUPET, SAKLESHPUR TALUK, HASSAN DISTRICT. PA NO.BMNPS 9120H VS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, HASSAN. (APPELLANT) (RESPONDENT) DATE OF HEARING : 28.05.2012 DATE OF PRONOUNCEMENT : 30.05.2012 APPELLANT BY : SHRI SRINIVASAN, C.A. REVENUE BY : SHRI SARAVANAN B., JCIT OR DER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECTED AGAINST THE CIT(A)S ORDER DATED 15.12.2010. THE RELEVANT ASSE SSMENT YEAR IS 1996-97. 2. THE ASSESSEE HAS RAISED 5 GROUNDS OF APPEAL. T HE 1 ST AND THE 5 TH GROUNDS ARE GENERAL IN NATURE AND NO SPECIFIC ADJU DICATION IS CALLED FOR AND HENCE, THE SAME ARE DISMISSED. PAGE 2 OF 8 ITA NO.223/ BANG/2011 2 3. GROUND NO.4 RELATES TO LEVY OF INTEREST UNDER SE CTION 234B OF THE ACT. LEVY OF INTEREST UNDER SECTION 234B OF THE ACT IS MANDATORY AND CONSEQUENTIAL IN NATURE. HENCE, THIS GROUND IS DIS MISSED. 4. GROUND NO.3 WAS NOT PRESSED DURING THE COURSE O F HEARING BY THE LEARNED COUNSEL FOR THE ASSESSEE AND THE SAME I S DISMISSED AS NOT PRESSED. 5. THE SOLITARY SURVIVING GROUND, NAMELY, GROUND NO. 2 READS AS FOLLOWS:- 2. THE LEARNED CIT(A) IS NOT JUSTIFIED IN REJECTING THE CONTENTION RELATING TO THE QUANTUM OF SALE CONSIDERATION TO BE ADOPTED FOR COMPUTING THE CAPITAL GAINS ON THE SALE OF SHADE TREES AT RS.13,50,000/- ACTUALLY RECEIVED BY THE APPELLANT AS AGAINST A SUM OF RS.30,00,000/- RECEIVABLE UNDER THE AGREEMENT THAT WAS LATER CANCELLED, WHICH HAS BEEN ERRONEOUSLY ADOPTED BY THE ASSESSING OFFICER WHILE COMPUTING THE CAPITAL GAINS UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE. 6. THE BRIEF FACTS IN RELATION TO THE ABOVE GROUND ARE AS FOLLOWS:- THE ASSESSEE IS A COFFEE PLANTER. ORIGINAL ASSES SMENT IN THIS CASE WAS COMPLETED ON 15.12.98 UNDER SECTION 143(3) OF THE ACT. IN THE ASSESSMENT COMPLETED, COMPUTATION OF CAPITAL GAINS ON SALE OF SHADE TREES WAS INVOLVED. THE ASSESSING OFFICER ADOPTED THE CO ST OF ACQUISITION AS ON 1/4/1981 AT RS.81,150/- BEING 10% OF THE ESTATE VAL UE OF RS.8,11,500/- SHOWN BY THE ASSESSEE IN HER WEALTH TAX RETURN FOR T HE ASSESSMENT YEAR PAGE 3 OF 8 ITA NO.223/ BANG/2011 3 1981-82 ( I.E. THE VALUATION DATE BEING 31/3/1981), INSTEAD OF 35% OF SALE CONSIDERATION ADOPTED BY THE ASSESSEE. 6.1 THE ASSESSMENT WAS DISPUTED BEFORE THE CIT(A). THE CIT(A) VIDE ORDER DATED 12/7/1999 DIRECTED THE ASSESSING O FFICER TO ADOPT 30% OF THE SALE VALUE AS COST OF ACQUISITION AS ON 1/4/ 1981. THE CIT(A) ALSO DIRECTED THAT THE SALE CONSIDERATION ACTUALLY RECEIV ED SHOULD BE VERIFIED AND ADOPTED. THE CIT(A)S DIRECTION VIDE HIS ORDER DAT ED 12/7/99 WITH REFERENCE TO VERIFICATION OF THE SALE CONSIDERATION RECEIVED READS AS FOLLOWS:- THE NEXT GROUND OF APPEAL IS WITH REGARD TO THE SA LE CONSIDERATION OF THE STANDING TREES TAKEN AT RS.30,00,000/- BY THE ASSESSING OFFICER. THE REPRESENTATIVE STATED THAT EVEN THOUGH THERE WAS AN AGREEMENT TO SELL THE TREES FOR RS.30,00,000/-, THE ACTUAL SALE PRICE RECEIVED DURING THE YEAR BY THE APPELLANT WAS ONLY RS.10,00,000/-. HERE, THE ASSESS ING OFFICER IS DIRECTED TO VERIFY THE ACTUAL SUM RECEIVE D IN RESPECT OF SALE OF TREES FOR THE FINANCIAL YEAR REL EVANT TO THE ASSESSMENT YEAR 1996-97 AND RE-COMPUTE THE CAPIT AL GAINS ACCORDINGLY. 6.2 THE ORDER OF THE CIT(A) (DATED 12/7/99) WAS CO NTESTED BY THE DEPARTMENT BEFORE THE ITAT. THE SOLITARY ISSUE THAT RAISED BEFORE THE TRIBUNAL WAS WHETHER THE CIT(A) WAS JUSTIFIED IN DI RECTING THE ASSESSING OFFICER TO ADOPT 30% OF SALE CONSIDERATION AS THE F AIR MARKET VALUE OF THE SHADE TREES AS ON 1/4/1981. A CROSS OBJECTION WAS ALSO FILED BY THE ASSESSEE IN SUPPORT OF THE CIT(A)S ORDER. THE TRIB UNAL ALLOWED THE DEPARTMENTS APPEAL AND DISMISSED THE ASSESSEES CR OSS OBJECTION. PAGE 4 OF 8 ITA NO.223/ BANG/2011 4 7. ON FURTHER APPEAL BY THE ASSESSEE BEFORE THE HON BLE HIGH COURT, THE HONBLE HIGH COURT IN ITA NO.216 OF 2004 DATED 13/12/2007, REMANDED THE MATTER TO THE ASSESSING OFFICER FOR FR ESH CONSIDERATION. SUBSEQUENT TO REMAND OF THE MATTER BY THE HONBLE HI GH COURT, THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THA T THE COST OF ACQUISITION OF THE SHADE TREES BE ADOPTED AT 35% OF THE SALE CONSIDERATION. THE ASSESSEE ALSO RAISED THE ISSUE THAT SHE HAS REC EIVED ONLY SALE CONSIDERATION OF A SUM OF RS.13,50,000/- AS AGAINST THE SUM OF RS.30 LAKHS RECEIVABLE UNDER THE AGREEMENT, WHICH WAS LATER CAN CELLED. THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER UNDER SECTION 1 43 R.W.S. 260A (DATED 17/7/2008), WHEREIN IT WAS HELD THAT THE CONSIDERAT ION RECEIVED ON ACCOUNT OF SALE OF SHADE TREES WAS RS.30 LAKHS INSTEAD OF R S.13.5 LAKHS AND THE COST OF ACQUISITION AS ON 1/4/1981 IS TO BE ADOPTED AT 2 0% OF THE SALE PRICE AND WORKED OUT THE CAPITAL GAINS AS UNDER:- PROCEEDS RECEIVED/RECEIVABLE FROM SALE OF: A) JUNGLE AND RESERVE WOOD 400 TREES RS.10,00,00 0/- B. DO- - 750 TREES RS.20,00,000/- RS.30,00,000/- 20% OF THE SALE PRICE IS TREATED AS COST OF ACQUISITION AS ON 1/4/1981 : THEN INDEXED COST : RS.6,00,00 0 X 281/100 RS.16,86,000/ - BALANCE INCOME RS.13,14,000/- LESS : LOSS OF COFFEE PLANTS : 1150X5X100 RS. 5,75,000/ - CAPITAL GAINS RS.7,39,000/- 8. THE RELEVANT CONCLUSION OF THE ASSESSING OFFICE R WITH REFERENCE TO WHAT IS THE SALE CONSIDERATION THAT IS RECEIVED BY THE ASSESSEE, WHETHER IT IS RS.30 LAKHS OR RS.13.5 LAKHS ARE AS F OLLOWS:- PAGE 5 OF 8 ITA NO.223/ BANG/2011 5 6. WHAT WOULD BE THE SALE CONSIDERATION TO BE ADOPTED WHETHER THE VALUE AS PER RETURN AND REVISED RETURN FILED BY ASSESSEE AT THE AGGREGATE OF RS.30 LAKHS, OR AT RS.13.50 AS NOW CLAIMED? THIS ISSUE AROSE ONLY DURING THE APPELLATE PROCEEDIN GS BEFORE THE CIT(A). THE CIT(A) DIRECTED THAT THE MAT TER MAY BE VERIFIED. HOWEVER, EXCEPT CONTENDING THAT TH E ACTUAL CONSIDERATION RECEIVED THROUGH CHEQUES WHICH AMOUNTED TO RS.13.50 LAKHS, AS PER A STATEMENT FURNISHED, THERE IS NO OTHER MATERIAL TO SAY THAT TH E SALES AS PER THE ABOVE SAID TWO AGREEMENTS FOR SALE OF 750 + 400 TREES FOR A TOTAL CONSIDERATION OF RS.30 LAKHS (RS.20 LAKH + RS.10 LAKHS) DID NOT TAKE PLACE, NOR THE CONSIDERATION WAS RECEIVED IN ANY OTHER MODE. THE ASSESSEES REQUEST WAS CONSIDERED AND REJECTED IN T HE ORDER UNDER SECTION 154 MADE BY ME ON 27/5/2007, TAKING THE VIEW THAT WHEN THE SALE CONSIDERATION RE ALIZED WAS CLEARLY KNOWN WHEN FILING THE ORIGINAL RETURN IT SELF, WHY THE ASSESSEE ADOPTED THE FIGURE AT RS.30 LAKH AN D NOT RS.13.5 LAKH, EVEN IN THE REVISED RETURN FILED ON 18/11/1998, AS NOW CLAIMED. THIS RECTIFICATION ORD ER IS TAKEN IN AN APPEAL BEFORE THE CIT(A), MYSORE. IT IS ALSO EXPLAINED THAT THERE HAS NOT BEEN ANY OTHER SALE THA N UNDER THE SAID AGREEMENTS, WHICH INDICATES, THERE W ERE NO STOCK OF TIMBER FIT FOR SALE, AFTER THE SAID SAL ES. 9. ON FURTHER APPEAL, THE CIT(A) DISMISSED THE CLA IM OF THE ASSESSEE THAT THE ACTUAL SALE CONSIDERATION RECEIVE D WAS ONLY RS.13.5 LAKHS. THE RELEVANT PORTION OF THE IMPUGNED ORDER OF THE C IT(A) READS AS FOLLOWS:- 6. THE OTHER GROUND OF APPEAL RELATES TO ADOPTION OF SALE VALUE OF TIMBER. THE FACTS OF THE CASE IN THI S REGARD ARE THAT THE APPELLANT HAD DISCLOSED SALE CONSIDERA TION OF RS.30 LAKHS IN THE RETURN OF INCOME FILED. THE APP ELLANT HAD WORKED OUT CAPITAL GAIN/LOSS ON THIS SALE CONSIDERATION. HOWEVER, AFTER COMPLETION OF THE OR IGINAL PAGE 6 OF 8 ITA NO.223/ BANG/2011 6 ASSESSMENT, THE APPELLANT RAISED A GROUND BEFORE TH E CIT(A) THAT THE ACTUAL SALE CONSIDERATION RECEIVED WERE ONLY RS.13.5 LAKHS. THE CIT(A) DIRECTED THE ASSESSI NG OFFICER TO VERIFY THE MATTER. THE ASSESSING OFFICER AFTER VERIFICATION REJECTED THE APPELLANTS CLAIM. 6.1 IT CAN BE SEEN FROM THE TRIBUNALS ORDER THAT T HE ISSUE REGARDING THE ACTUAL SALE CONSIDERATION WAS N OT CONTESTED FURTHER. THERE IS NOTHING IN THE HIGH CO URTS ORDER ALSO REGARDING THIS ISSUE. THE HONBLE COURT S ORDER IS VERY CLEAR THAT THE ONLY QUESTION OF LAW REF ERRED TO THE COURT WAS REGARDING DETERMINATION OF THE FMV OF THE TIMBER AS ON 1/4/1981. AS THE ISSUE OF THE SAL E PRICE OF THE TIMBER WAS NOT CONTESTED BEFORE THE TRIBUNAL OR BEFORE THE HONBLE HIGH COURT, IT CANNOT BE ACCEPTE D THAT THE ASSESSING OFFICER SHOULD HAVE RECONSIDERED THE ISSUE OF ACTUAL SALE CONSIDERATION ALSO IN THE REASSESSMENT PROCEEDINGS. I FELT HAT THE ISSUE OF ACTUAL QUANTUM OF SALE CONSIDERATION HAD BECOME FINAL WHEN THE ASSESSING OFFICER PASSED THE ORDER UNDER SECTION 15 4 SUBJECT TO OUTCOME OF THE APPEAL AGAINST THAT ORDER . HOWEVER, IN THE SET ASIDE ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER DID NOT HAVE JURISDICTION TO REVI SIT THIS ISSUE. IN SUCH CIRCUMSTANCES, THE GROUNDS OF APPEA L RAISED BY THE APPELLANT CANNOT BE ENTERTAINED. THE SAME IS, THEREFORE, DISMISSED. 10. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE US. 11. THE LEARNED AR HAS FILED A PAPER BOOK OF 67 PA GES, INTER ALIA, CONTAINING COPY OF THE ORIGINAL ASSESSMENT ORDER, CO PY OF THE CIT(A)S ORDER DATED 12/7/99, THE ORDER DT.20/8/99 GIVING EFFECT T O THE APPELLATE ORDER ETC. THE LEARNED AR SUBMITTED THAT IN THE ORDER OF THE CIT(A) DATED 12/7/99, THE CIT(A) HAD CATEGORICALLY DIRECTED THE A SSESSING OFFICER TO PAGE 7 OF 8 ITA NO.223/ BANG/2011 7 CONSIDER & DETERMINE WHAT IS THE ACTUAL SALE CONSID ERATION RECEIVED IN RESPECT OF SALE OF SHADE TREES, WHETHER IT IS RS.30 LAKHS OR RS.13.5 LAKHS. THE ABOVE APPELLATE ORDER WAS GIVEN EFFECT TO BY TH E ASSESSING OFFICER ON 20/8/99, WHEREIN THE SALE CONSIDERATION WAS RECEIV ED WAS TAKEN AS RS.30 LAKHS, WITHOUT CALLING FOR OBJECTION OF THE ASSESSE E. IT WAS SUBMITTED THAT THE ASSESSEE HAD PREFERRED A RECTIFICATION APPLICAT ION AGAINST THE ORDER GIVING EFFECT TO THE APPELLATE ORDER, WHICH WAS DIS POSED OFF VIDE ORDER DATED 28/5/2007. AS AGAINST THE ORDER PASSED UNDER SECTION 154 OF THE ACT REJECTING THE ASSESSEES CLAIM THAT THE ACTUAL CONSIDERATION RECEIVED IS ONLY RS.13.5 LAKHS INSTEAD OF RS.30 LAKHS, THE ASSES SEE HAD FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHICH IS PENDI NG ADJUDICATION. THE LEARNED AR SUBMITTED THAT TO AVOID MULTIPLICITY OF P ROCEEDINGS WHEN THE MATTER WAS REMITTED BACK BY THE HONBLE HIGH COURT T O THE ASSESSING OFFICER, THE ASSESSEE HAD TAKEN UP THIS ISSUE BEFOR E THE ASSESSING OFFICER AND IN THE INTEREST OF JUSTICE, THE MATTER NEEDS TO BE CONSIDERED IN THIS PROCEEDINGS RATHER THAN A PROCEEDING SPRINGING FROM AN ORDER PASSED UNDER SECTION 154 OF THE ACT. 12. THE LEARNED DR PRESENT WAS DULY HEARD. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD. AS RIGHTLY POINTED OUT BY THE FIRST APPEL LATE AUTHORITY, THE ONLY ISSUE BEFORE THE HONBLE HIGH COURT, WAS WITH REFER ENCE TO THE DETERMINATION OF FAIR MARKET VALUE OF THE SHADE TRE ES AS ON 1/4/1981. THE ACTUAL SALE CONSIDERATION WHICH WAS RECEIVED ON SAL E OF SHADE TREES WAS NOT A SUBJECT MATTER NEITHER BEFORE THE TRIBUNAL NOR BEFO RE THE HONBLE HIGH COURT, THEREFORE, IT CANNOT BE SAID THAT THE ASSESS ING OFFICER OUGHT TO HAVE PAGE 8 OF 8 ITA NO.223/ BANG/2011 8 CONSIDERED THE ISSUE OF ACTUAL SALE CONSIDERATION A LSO IN THE ASSESSMENT COMPLETED PURSUANT TO THE HONBLE HIGH COURTS JUDG EMENT DATED 13/12/2007. THE ISSUE REGARDING THE ACTUAL QUANTU M OF SALE CONSIDERATION RECEIVED ARISES FROM THE FIRST CIT(A)S ORDER DATED 12/7/1999, WHICH WAS GIVING EFFECT BY THE ORDER DATED 20/8/99. THEREAFT ER, THE ASSESSEE MOVED 154 APPLICATION AGAINST THE ORDER OF THE ASSESSING OFFICER DATED 20/8/99, WHICH HAD GIVEN EFFECT TO CIT(A)S ORDER DATED 12/7 /99. SINCE THE ASSESSEE HAD NOT SUCCEEDED IN HIS 154 APPLICATION, THE ASSESSEE HAS FILED FURTHER APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHEREIN THIS ISSUE IS TO BE CONSIDERED. THEREFORE, AS RIGHTLY POINTED OUT IN THE CIT(A)S ORDER IN THE SET ASIDE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT HAVE THE JURISDICTION TO REVISIT THIS ISSUE. HENCE, THE GROUND OF APPEAL RAISED BY THE ASSESSEE CANNOT BE ENTERTAINED AND THEREFORE, T HE SAME IS REJECTED. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF MAY, 2012 SD/- SD/- (JASON P BOAZ) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE C IT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/ BY ORDER SENIOR PRIVATE SECRETARY, ITAT, BANGALOR E.