The ITO., Tenali V. Sri Viswanadhapalli Venkateswara Rao, Nizampatnam

ITA 232/VIZ/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6604 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Capital asset; Revision of order
• Section: 80C; 143(3); 2(14)

Judgement Text

ITA NO.232/VIZAG/2017 VISWANADHAPALLI VENKATESWARA RAO, NIZAMPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.232/VIZAG/2017 ( / ASSESSMENT YEAR: 2009-10) ITO, WARD - 1, TENALI VISWANADHAPALLI VENKATESWARA RAO, NIZAMPATNAM [PAN NO. ADAPV9922B ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI M.K. SETHI, DR / RESPONDENT BY : SHRI D.L. NARASIMHA RAO, AR / DATE OF HEARING : 04.10.2017 / DATE OF PRONOUNCEMENT : 11.10.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, {CIT(A)}, G UNTUR VIDE ITA NO.36/15-16/CIT(A-1)/GNT DATED 23.2.2017 FOR THE AS SESSMENT YEAR 2009-10. ITA NO.232/VIZAG/2017 VISWANADHAPALLI VENKATESWARA RAO, NIZAMPATNAM 2 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE AS SESSMENT MADE U/S 143(3) R.W.S. 263 OF THE INCOME TAX ACT, 1961 (HERE INAFTER CALLED AS 'THE ACT') BY AN ORDER DATED 25.3.2015 ON TOTAL INCOME O F ` 54,44,112/-. 3. THE ASSESSEE FILED THE RETURN OF INCOME DECLARIN G TOTAL INCOME OF ` 1,96,340/- AFTER CLAIMING THE DEDUCTION U/S 80C OF THE ACT OF ` 1.00 LAKH BESIDES AGRICULTURAL INCOME OF ` 1,50,000/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE ACT ON TOTAL INCOME OF ` 51,39,808/- IN ADDITION TO AGRICULTURAL INCOME OF ` 1,50,000/- BY AN ORDER DATED 27/12/2011. DURING TH E ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE SOLD HIS LAND TO M/S. VANPIC (P) LTD. AND RECEIVED THE CASH CONSIDERATION OF ` 50,75,280/- AND CLAIMED THAT THE LANDS SOLD WERE AGRICULTURAL LANDS AND FURNISHED CERTIFICATES FROM VRO. THE ASSESSING OFFICER CONDUCTED THE ENQUIRIES THROUGH INCOME TAX INSPECTOR AND CONCLUDED THAT THE LANDS IN QUESTION WERE CAPITAL A SSETS AND EXIGIBLE TO CAPITAL GAINS TAX. ACCORDINGLY, THE A.O. BROUGHT T HE SALE PROCEEDS OF AGRICULTURAL LAND UNDER THE HEAD LONG TERM CAPITAL GAINS AND COMPLETED THE ASSESSMENT. THE MATTER TRAVELLED TO THE TRIBU NAL AND THE TRIBUNAL VIDE ITS ORDER NO.296/VIZAG/2012 DATED 11.12.2015 D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSE, HOLDING THE LANDS IN QUESTI ON WERE AGRICULTURAL LANDS AND NOT CAPITAL ASSETS WITHIN THE MEANING OF SECTION 2(14) OF THE ITA NO.232/VIZAG/2017 VISWANADHAPALLI VENKATESWARA RAO, NIZAMPATNAM 3 ACT AND ACCORDINGLY DISMISSED THE REVENUES APPEAL. MEAN WHILE THE COMMISSIONER OF INCOME TAX , GUNTUR HAS TAKEN UP TH E CASE FOR REVISION U/S 263 AND HELD THAT THE CASH RECEIVED IN RESPECT OF SALE OF THE LANDS ARE TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCE S AND ACCORDINGLY, DIRECTED THE A.O. TO ASSESS THE SALE CONSIDERATION OF ` 50,75,280/- AS INCOME FROM OTHER SOURCES BY ORDER DATED 18.3.2014 U/S 263 OF THE ACT. THE ASSESSEE CARRIED THE MATTER TO THE ITAT AND THE ITAT VISAKHAPATNAM IN ITS ORDER NO.414/VIZAG/2014 DATED 23.12.2016 SET ASIDE THE ORDER OF THE LD. CIT AND ALLOWED THE APPE AL OF THE ASSESSEE OBSERVING THAT THE A.O. HAS TAKEN ONE OF THE PLAUSI BLE VIEW, AND THERE IS NO CASE FOR REVISION U/S 263 OF THE ACT. FOR READY REFERENCE, WE EXTRACT RELEVANT PARAGRAPH OF THE ORDER OF ITAT CITED (SUPR A), WHICH READS AS UNDER: HAVING HEARD BOTH THE PARTIES AND CONSIDERED THE MA TERIAL ON RECORD, WE FIND THAT THE ISSUE OF TAXATION OF CONSI DERATION RECEIVED TOWARDS TRANSFER OF LANDS HAS BEEN CONSIDERED BY TH IS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.296/VIZ/2012 DATED 11. 12.2015 AND HELD THAT THE LANDS TRANSFERRED BY THE ASSESSEE ARE AGRI CULTURAL LANDS USED FOR AGRICULTURAL PURPOSES CANNOT BE CONSIDERED AS CAPIT AL ASSETS WITHIN THE MEANING OF SECTION 2(14) OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE COMMISSIONER OF INCOME TAX WAS ERRED IN ASSUMING THE JURISDICTION TO REVISE THE ASSESSMENT ORDER UNDER THE PROVISIONS OF SECTION 263 OF THE ACT, AS THE ASSESSMENT ORDER PASSED BY THE ASSESSIN G OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE. THE ASSESSING OFFICER HAS CONSIDERED THE CONSIDERATION RECEIVED T OWARDS TRANSFER OF LANDS UNDER THE HEAD CAPITAL GAINS, WHICH IS, IN OU R OPINION, IN ACCORDANCE WITH LAW. SINCE THE ASSESSING OFFICER HAS TAKEN ON E OF THE PLAUSIBLE VIEW, WHICH WAS EXAMINED BY THIS TRIBUNAL AND TAKEN A VIE W THAT THE LANDS ARE AGRICULTURAL LANDS NOT LIABLE FOR TAX, THERE IS NO PREJUDICE CAUSED TO THE REVENUE. HENCE, WE SET ASIDE THE ORDER PASSED BY T HE COMMISSIONER OF ITA NO.232/VIZAG/2017 VISWANADHAPALLI VENKATESWARA RAO, NIZAMPATNAM 4 INCOME TAX UNDER SECTION 263 OF THE ACT AND ALLOW TH E APPEAL OF THE ASSESSEE. 4. DURING THE PENDENCY OF APPEAL AGAINST THE ORDER U/S 263 BEFORE THE TRIBUNAL, THE A.O. HAS GIVEN EFFECT TO THE ORDE R U/S 263 OF THE ACT BY PASSING THE ASSESSMENT ORDER U/S 143(3) R.W.S. 263 OF THE ACT BY AN ORDER DATED 25.3.2015 AND ASSESSED THE AMOUNT OF ` 50,75,280/- UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSEE W ENT ON APPEAL AND THE LD. CIT(A), GUNTUR HAS CANCELLED THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER U/ S 263. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE FILED THE APPE AL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. IN THIS CASE, THE LD. CIT HAS PASSED AN ORDER U/S 263 OF TH E ACT ON 18.3.2014 AND THE SAME WAS SET ASIDE BY THIS TRIBUNAL BY AN O RDER DATED 11.12.2015 AND THUS THERE IS NO VALID ORDER IN FORC E TO GIVE EFFECT. SINCE THIS TRIBUNAL HAS ALREADY SET ASIDE THE ORDER OF THE CIT AND THERE IS NO VALID ORDER PENDING FOR GIVING CONSEQUENTIAL EFFECT AND THE ASSESSMENT ORDER PASSED BY THE A.O. DATED 25.3.2015 IS INFRUCTUOUS, AND ACCORDINGLY THE SAME IS ANNULLED. ITA NO.232/VIZAG/2017 VISWANADHAPALLI VENKATESWARA RAO, NIZAMPATNAM 5 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 11 TH OCT17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 11.10.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO, WARD-1, TENALI 2. / THE RESPONDENT SRI VISNADHAPALLI VENKATESWARA RAO, S/O BULLI ANJAIAH, OPP. TELEPHONE EXCHANGE, NIZAMPATNAM POST & MANDAL. 3. + / THE CIT, GUNTUR 4. + ( ) / THE CIT (A)-1, GUNTUR 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM