Mr.Mohammed Iqbal , Bangalore V. Deputy Commissioner of Income Tax Circle-5(2)(1), Bangalore

ITA 2351/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7715 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-04-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 09-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Fair market value; Set aside; Capital Gains
• Section: 143(3); 142(1); 234B; 250; 143(2); 55A; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 2351/BANG/2018 ASSESSMENT YEAR : 2015-16 MR. MOHAMMED IQBAL, NO. 18/10-3, I FLOOR, NO.10, DR. OOMER SHARIFF ROAD, BASAVANAGUDI, BENGALURU [PAN: AACPI1047D] VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(2)(1), BENGALURU APPELLANT RESPONDENT ASSESSEE BY : SHRI K.Y. NINGOJI RAO, C.A., REVENUE BY : SHRI D.K. JHA, ADDL.CIT DATE OF HEARING : 16-04-2019 DATE OF PRONOUNCEMENT : 25-04-2019 O R D E R PER PAVAN KUMAR GADALE, J.M : THE ASSESSEE HAS FILED THIS APPEAL, AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, BENGALUR U PASSED U/S. 143(3) AND 250 OF THE INCOME TAX ACT [AC T]. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE IMPUGNED ORDER IS LIABLE TO SET ASIDE IN SO FAR AS THE SAME IS ILLEGAL, UNLAWFUL, IMPROPER, IRREGULAR, ARB ITRARY, EXCESSIVE AND OPPOSED TO LAW AND FACTS AND CIRCUMST ANCES OF THE CASE. : 2 : ITA NO. 2351/BANG/2018 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE IMPUGNED ASSESSMENT MADE BY THE ASSESSING OFFICER ADOPTING THE FMV OF RS.45 PER SQU ARE FEET OF THE LAND IN NO.123/1, INFANTRY ROAD, BENGALURU W HILE COMPUTING THE LONG TERM CAPITAL GAINS ON SALE OF A RESIDENTIAL FLAT AT NO.123/1, INFANTRY ROAD AS AGAI NST THE FMV OF RS.200/- PER SQUARE FEET ADOPTED BY THE APPE LLANT WITH COMPLETE DISREGARD TO THE FACTS OF THE CASE. 3. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING TH E IMPUGNED ASSESSMENT WHEREIN THE AO ADOPTED THE FMV OF RS.45 PER SQUARE FEET OF SITE LAND IN NO.123/1 OF I NFANTRY ROAD, WHICH IS PURPORTED TO HAVE BEEN FURNISHED BY THE SUB- REGISTRAR, SHIVAJINAGAR DISREGARDING THE DECISIONS OF VARIOUS HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT . HENCE THE IMPUGNED ORDER IS LIABLE TO SET ASIDE. 4. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING TH E IMPUGNED ASSESSMENT WHEREIN THE AD REJECTED THE APPELLANT'S CLAIM OF FMV OF RS.200/- WITHOUT MAKING ANY REFERENCE TO THE VALUATION MACHINERY PROVIDED UNDER SECTION 55A OF THE ACT. HENCE THE IMPUGNED ASSESSME NT IS LIABLE TO SET ASIDE. 5. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING TH E IMPUGNED ASSESSMENT WHEREIN THE AO DISALLOWED THE APPELLANT'S CLAIM FOR DEDUCTION OF RS.14,97,088 U/S 48(II) OF THE IT ACT TOWARDS THE INDEXATION COST OF THE LA ND WHILE COMPUTING THE INCOME FROM LONG TERM CAPITAL GAINS. HENCE THE SAME IS LIABLE TO SET ASIDE. 6. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING TH E IMPUGNED ASSESSMENT WHEREIN AO ERRED IN ALLOWING DEDUCTION OF RS.3,36,845/ONLY U/S 48(II) OF THE IT ACT TOWARDS THE INDEXATION COST OF THE LAND RELYING UPON THE IN FORMATION RECEIVED FROM THE SUB-REGISTRAR AFTER THE LAST DATE OF HEARING WITHOUT AFFORDING AN OPPORTUNITY TO THE APP ELLANT TO REBUT AND TO CONTROVERT THE SAME. HENCE THE SAME IS LIABLE TO SET ASIDE. 7. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING TH E IMPUGNED ASSESSMENT WHEREIN AO ERRED IN NOT ADOPTIN G THE : 3 : ITA NO. 2351/BANG/2018 FMV OF THE LAND AS AT 27.11.1987, THE DATE ON WHICH THE PRECEDING OWNER (VIZ., THE APPELLANT'S MOTHER) ACQU IRED TITLED IN THE SAID LAND FOR DETERMINING THE INDEXAT ION COST U/S 48 (II) OF THE IT ACT DISREGARDING THE DECISION OF JURISDICTIONAL HON'BLE ITAT, B BENCH, BENGALURU RELIED ON BY THE A PPELLANT. HENCE THE SAME IS LIABLE TO SET ASIDE. 8. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING TH E DISALLOWANCE OF INTEREST PAYABLE TO THE APPELLANT U NDER SECTION 244 AND OTHER APPLICABLE SECTIONS OF THE AC T. 9. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING TH E LEVY OF INTEREST U/S 234A OF THE IT ACT EVEN THOUGH THE APP ELLANT IS NOT LIABLE FOR THE SAME. HENCE THE SAME IS LIABLE TO SE T ASIDE. 10. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING THE LEVY OF INTEREST U/S 234B OF THE IT ACT EVEN THOUGH THE APPELLANT IS NOT LIABLE FOR THE SAME. HENCE THE SAME IS LIABLE T O SET ASIDE. 11. THE APPELLATE COMMISSIONER ERRED IN UPHOLDING T HE LEVY OF INTEREST U/S 234C OF THE IT ACT EVEN THOUGH THE APPELLANT IS NOT LIABLE FOR THE SAME. HENCE THE SAME IS LIABLE T O SET ASIDE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS DERI VING INCOME FROM HOUSE PROPERTY, BUSINESS INCOME, CAPITAL GAINS AND OTHER SOURCES AND E-FILED THE RETURN OF INCOME F OR THE AY. 2015-16 ON 30-10-2015, DISCLOSING TOTAL INCOME OF RS. 63,60,180/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND NOTICES U/S. 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISSUED. 3. IN COMPLIANCE, LD.AR APPEARED FROM TIME TO TIME AND FURNISHED THE DETAILS. THE AO ON PERUSAL OF THE INFORM ATION FILED, FOUND THAT THE ASSESSEE HAS SOLD IMMOVEABLE PR OPERTY AT BENGALURU AND DECLARED INCOME FROM CAPITAL GAINS OF RS. : 4 : ITA NO. 2351/BANG/2018 25,33,076/-, AFTER CLAIMING COST INFLATION INDEXATION F OR LAND AND BUILDINGS, WHEREAS IN THE COURSE OF HEARING PROC EEDINGS, AO REQUIRED THE ASSESSEE TO FURNISH DOCUMENTARY PROOF OF VALUING LAND AS ON 01-04-1981 OF RS. 200/- PER SQ. FT., AND THE ASSESSEE FILED REPLY ON 04-10-2017. BUT THE AO WA S NOT SATISFIED WITH THE REPLY AS IT IS NOT SUPPORTED WITH ANY CORROBORATIVE EVIDENCE TO SUBSTANTIATE THE ESTIMATION. FURTHER, AO REQUESTED FOR THE VALUE WITH THE SRO AS ON 01-04- 1981 AND THE VALUE HAS WORKED OUT TO RS. 405/- PER SQ. YRD., AS PER SRO FOR RESIDENTIAL LAND AND ALSO WORKED OUT R S. 45/- PER SQ. FT. SUBSEQUENTLY, AO RE-CALCULATED THE CAPITAL GAINS AT RS. 45/- PER SQ. FT., DETERMINING THE TOTAL INCOME O F RS. 75,20,430/- AND PASSED THE ASSESSMENT ORDER U/S. 143( 3) OF THE ACT ON 20-12-2017. 3.1. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT(A). 4. IN THE APPELLATE PROCEEDINGS, LD.AR HAS REITERATE D THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND CIT( A), AFTER CONFIRMING THE GROUNDS OF APPEAL AND FINDINGS OF AO AT PARA NO. 5 OF HIS ORDER, CONCLUDED THAT THE ORDER OF A O IS IN ORDER AND CONFIRMED THE SAME AND DISMISSED THE APPEAL OF ASSESSEE. 4.1. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE PREF ERRED AN APPEAL BEFORE THE TRIBUNAL. : 5 : ITA NO. 2351/BANG/2018 5. AT THE TIME OF HEARING, LD.AR ARGUED ONLY THE GROUND WITH RESPECT TO VALUATION OF LAND AS ON 01-04-1981 AN D HAS NOT PROSECUTED OTHER GROUNDS OF APPEAL. LD.AR CONTENDE D THAT THE FAIR MARKET VALUE (FMV) WHICH HAS BEEN WORKED OUT BY AO, BASED ON SRO CANNOT BE ACCEPTED AS ASSESSEE H AS APPLIED THE VALUE AS ON 01-04-1981 BEING RS. 200/- P ER SQ. FT., WHICH IS THE PREVAILING RATE DURING THAT PERIOD. T HE CONTENTION OF LD.AR IS THAT THE AO HAS REDUCED THE FMV TO RS. 45/- BASED ON THE INFORMATION FROM SUB-REGISTRAR OFFIC E AND NEVER REFERRED THE DISPUTED ISSUE TO THE VALUATION OFFI CER UNDER THE PROVISIONS OF SECTION 55A OF THE ACT AND SUPP ORTED HIS ARGUMENTS WITH PAPER BOOK AND DECISIONS OF THE JURISDICTIONAL HIGH COURT AND PRAYED FOR ALLOWING THE APPEAL OF ASSESSEE. 6. CONTRA, LD.DR RELIED ON THE ORDER OF CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. THE ONLY DISPUTED ISSUE ENVISAG ED BY THE LD.AR IS WITH RESPECT TO VALUATION OF LAND AS ON 01-04 -1981. LD.AR HAS BEEN EMPHASIZED THAT THE AO HAS NOT REFERRED THE MATTER TO THE VALUATION OFFICER OR ANY OPPORTUNITY WAS PROVIDED TO ASSESSEE TO SUBSTANTIATE THAT THE VALUE OF THE SRO IS CORRECT. ON PERUSAL OF THE ASSESSMENT ORDER, WE F OUND THAT AO ONLY RELIED WITH SROS VALUE AS ON 01-04-1981 AND ALSO NO SUBMISSIONS FROM THE ASSESSEE ON THIS DISPUTED ISSUE W AS CONSIDERED. AS RIGHTLY POINTED OUT BY THE LD.AR, AO SHO ULD : 6 : ITA NO. 2351/BANG/2018 HAVE REFERRED THE MATTER TO THE VALUATION OFFICER UNDER THE PROVISIONS OF SECTION 55A OF THE ACT, WHICH IS NOT COMP LIED AND THE ASSESSEE SUBSTANTIATED HIS CASE WITH THE JUDICIAL DECISIONS OF HON'BLE HIGH COURTS FOR CONSIDERATION OF MARKET VAL UE AS ON 01-04-1981. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES AND THE VALUE ADOPTED BY THE AO, WE ARE OF THE SUBSTANTIATE OPINION THAT THE MATTER HAS TO BE VERIFIED A ND EXAMINED BY THE AO IN RESPECT OF THE VALUATION OF THE LA ND, BY APPLYING PROCEDURE ENVISAGED AS PER THE PROVISIONS O F THE INCOME TAX ACT. ACCORDINGLY, WE RESTORE THE ENTIRE DI SPUTED ISSUE TO THE FILE OF AO TO VERIFY AND EXAMINE THE VALU E ADOPTED BY THE ASSESSEE AND REFERENCE TO THE VALUATION OFFIC ER, REQUIRED. ACCORDINGLY, THE APPEAL OF ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF APRIL, 2019 SD/- SD/- (A.K. GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATE: 25 TH APRIL, 2019 TNMM : 7 : ITA NO. 2351/BANG/2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE