SMT. RENU AGARWAL, CHENNAI V. ITO, NCW - 10(5), CHENNAI

ITA 271/CHNY/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8704 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 03-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G SRINIVASA RAO
• Assessee Lawyers: J PRABHAKAR
• Keywords: Set aside
• Section: 143(3); 54F; 250; 54; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , , , # BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBE R ./ ITA NO.271/CHNY/2020 /ASSESSMENT YEAR: 2014-15 SMT. RENU AGARWAL, NO.17/12, OMKAR APARTMENTS, RAJARATNAM STREET, KILPAUK, CHENNAI 600 010. [PAN: AACPA 7597C] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD-10(5) CHENNAI. ( /APPELLANT) ( %&( /RESPONDENT) ( / APPELLANT BY : MR. J. PRABHAKAR, C.A %&( /RESPONDENT BY : MR. G. SRINIVASA RAO, CIT /DATE OF HEARING : 24.06.2021 / DATE OF PRONOUNCEMENT : 27.07.2021 / O R D E R PER SHRI V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX-3, CHENNAI IN C NO.3033(13)/PCIT-3/2018-19 DATED 22.03.2019 RELEVAN T TO THE ASSESSMENT YEAR 2014-15. 2. THERE IS A DELAY OF 250 DAYS IN FILING THE APPEA L, FOR WHICH, THE ASSESSEE HAS FILED AFFIDAVIT FOR CONDONATION OF DEL AY, WHEREIN HE HAS SUBMITTED REASONS AS UNDER: I.T.A NO.271/CHNY/2020 :- 2 -: 2. YOUR PETITIONER ON RECEIPT OF THE AFORESAID ORD ER ON 30/3/2019 APPROACHED HER AUDITOR WHO ADVISED THAT THE MATTER BEING SET ASIDE, PROPER EXPLANATIONS CAN BE RENDERED BEFORE THE ASSE SSING OFFICER WITH THE AID OF COLLABORATIVE PROOF ALREADY IN DEPARTMEN T'S RECORD. 3. IN VIEW OF THE ADVICE GIVEN, YOUR PETITIONER DID NOT PURSUE THE MATTER SO AS TO AWAIT THE OPPORTUNITY BEFORE THE ASSESSING OF FICER IN SET ASIDE PROCEEDINGS. 4. THE ASSESSING OFFICER TOOK UP THE REASSESSMENT A ND WITHOUT VERIFYING THE ENDORSEMENT ON THE REGISTERED LAND DOCUMENT AS TO WHETHER ANY EXCESS STAMP DUTY WAS COLLECTED, OBTAINED INFORMATI ON ON ALLEGED GUIDELINE VALUE UNILATERALLY FROM THE SRO AND MADE HUGE ADDITIONS WITHOUT OPPORTUNITY TO THE APPELLANT, VIDE ORDER DA TED 30/12/2019. 5. ON RECEIPT OF THE CONSEQUENTIAL ORDER, THE APPEL LANT WAS LEGALLY ADVISED THAT AN APPEAL AGAINST THE SAME MAY NOT FAV OUR THE PETITIONER SINCE NO APPEAL CONSEQUENT TO A CIT'S DIRECTION UND ER SECTION 263 CAN BE DECIDED BY THE FIRST APPELLATE AUTHORITY CONTRARY T O THE DIRECTIONS IF IT TRAVEL INTO THE MERITS OF THE CLAIM IN ORIGINAL ASSESSMENT AND REMEDY LIES ONLY BY ASSAILING THE DIRECTIONS OF THE CIT'S ORDER UNDER S ECTION 263. 6. THE TAX CONSULTANT WHO PERUSED THE ORDER OF CIT UNDER SECTION 263 WELL AS THE CONSEQUENTIAL ORDER THERETO OPINED THAT THERE ARE FACTUAL AND LEGAL FLAWS IN THE APPROACH OF THE CIT TO TREAT THE LAND SOLD AS BUSINESS ASSET, MERELY ON THE BASIS OF DISCLOSURE PER-SE IN THE BALANCE SHEET, WITHOUT EX-FACIE REVEALING THE NATURE OF BUSINESS A CTIVITY BEING CARRIED THEREON, ESPECIALLY IT BEING CLASSIFIED AS AGRICULT URAL LANDS. 7. IN VIEW OF THE ABOVE, YOUR APPELLANT'S FAILURE T O QUESTION THE VIRES OF PROCEEDINGS UNDER SECTION 263 IS ON ACCOUNT OF GENU INE ADVISE OF THE PETITIONER'S AUDITOR TO AWAIT THE HEARING BEFORE TH E ASSESSING OFFICER AND SHE COULD NOT CONTEMPLATE THAT THE CONSEQUENT ASSES SMENT WILL BE A ONE SIDED AND JAUNDICED VERSION ON IMPROPER VERIFICATIO N OF ADMITTED FACTS AT THE THRESHOLD DURING REGULAR ASSESSMENT. 8. THE REASON FOR DELAY IN FILING THE APPEAL AGAINS T THE ORDER UNDER SECTION 263 AS EXPLAINED HEREINABOVE BEING REASONABLE AND G ENUINE, THE DELAY IN FILING THE APPEAL MAY KINDLY BE CONDONED AND THE APPEAL BE ADMITTED ON RECORD FOR DISPOSAL ON MERITS OF THE CASE. 9. THERE IS A DELAY OF 250 DAYS IN FILING THE APPEA L WHICH OUGHT TO HAVE BEEN FILED ON OR BEFORE 30/5/2019, CONSIDERING THE DATE OF RECEIPT OF ORDER ON 31/3/2019. 10. AN AFFIDAVIT IN SUPPORT OF THE DELAY IN FILING THE APPEAL IS ENCLOSED ALONG WITH THIS PETITION. 11.THE HON'BLE ITAT MAY BE PLEASED TO CONDONE THE D ELAY OF 2-52)DAYS IN FILING THE APPEAL AGAINST ORDER UNDER SECTION 26 3 DATED 22/3/2019, BY ADMITTING THE APPEAL ON RECORD AND DISPOSING THE CA SE ON MERITS OF THE ISSUES INVOLVED. I.T.A NO.271/CHNY/2020 :- 3 -: 3. FROM THE ABOVE, IT IS CLEAR THAT THERE IS A DELA Y IN FILING OF THE APPEAL ON THE BASIS OF WRONG ADVICE GIVEN BY THE CH ARTERED ACCOUNTANT. IN OUR OPINION, IN THE AFFIDAVIT THE A SSESSEE IS ABLE TO EXPLAIN THAT THERE IS A SUFFICIENT CAUSE TO CONDONE THE DELAY. ACCORDINGLY, THE DELAY IS CONDONED. 4. SO FAR AS THE MERITS OF THE CASE IS CONCERNED, T HE LD. PRINCIPAL COMMISSIONER OF INCOME TAX (HEREAFTER PCIT) WHILE EXERCISING THE POWERS CONFERRED ON HIM BY S. 263 OF THE INCOME TAX ACT, 1961 (HEREAFTER THE ACT) PASSED ORDER DATED 22.03.2019 DIRECTED THE A.O TO RE-DO THE ASSESSMENT. 5. THE LD. PCIT INVOKED S. 263 OF THE ACT ON TWO GR OUNDS. THE FIRST GROUND IS THAT AS PER THE PROFIT AND LOSS ACCOUNT F OR ASSESSMENT YEAR 2014-15 AN AMOUNT OF RS. 5,68,85,940/- HAS BEEN ADM ITTED AS BUSINESS PROFIT ON SALE OF LAND AT NALLUR. ON PERU SAL OF THE DEED IN DOCUMENT NO.14320/2013 DATED 02.12.2013, IT IS SEEN THAT THE PROPERTY VALUED AT RS. 6,81,69,559/- AS PER THE SRO VALUE. HENCE, THE VALUE OF CONSIDERATION RECEIVED ON TRANSFER OF BUSINESS ASSE T IS LESS THAN THE VALUE ADOPTED BY THE SRO FOR THE PURPOSE OF STAMP D UTY, WHICH IS NOT IN ACCORDANCE WITH THE PROVISIONS OF S.43CA OF THE ACT IS AT RS. 2,50,05,694/- WHICH FAILED TO BRING TO TAX. FAILURE TO ASSESS THIS HAS RENDERED THE ASSESSMENT IS ERRONEOUS AND PREJUDICIA L TO THE INTERESTS I.T.A NO.271/CHNY/2020 :- 4 -: OF REVENUE. BEFORE THE A.O, IT WAS SUBMITTED BY TH E ASSESSEE THAT THE SALE PRICE IS RS. 6,81,69,559/- LESS COST PRICE IS AT RS. 1,12,83,619/- AND PROFIT ON SALE OF LAND IS AT RS. 5,68,85,940/- AND THE SAME IS OFFERED FOR TAXATION AND THEREFORE, THE PROVISIONS OF S.43CA OF THE ACT WILL NOT APPLY. 6. THE SECOND GROUND IS THAT THE ASSESSEE HAS CLAIM ED EXEMPTION U/S. 54 OF THE ACT AT RS. 85,10,946/- BY SHOWING IN VESTMENT OF RS. 1,37,61,744/- ON FLAT IN M/S. METROZONE PROJECT P. LTD. THE A.O HAS NOTED THAT THE LEDGER ACCOUNT OF M/S. METROZONE PRO JECT P. LTD. SHOWS THAT A SUM OF RS. 1,09,47,655/- HAVE BEEN PAID TOWA RDS THE FLAT AND SALE AGREEMENT DATED 30.10.2012 SHOWS THAT THE FLAT HAS BEEN JOINTLY ALLOTTED. THE A.O OUGHT TO HAVE CONSIDERED ONLY 50 % OF INVESTMENT AMOUNT AS RECORDED IN THE LEDGER FOR DEDUCTION U/S. 54F OF THE ACT. THE EXCESS EXEMPTION ALLOWED U/S. 54F OF THE ACT HAS RE NDERED THE ASSESSMENT IS ERRONEOUS AND PREJUDICIAL TO THE INTE RESTS OF REVENUE. ON THIS GROUND, THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT HAS ENTIRELY PAID BY THE ASSESSEE BUT THE ASSESSEE BEIN G AN OLD AGED WOMAN FOR PRECAUTIONARY MEASURE HER DAUGHTER NAVITA BIHANI NAME WAS ADDED IN THE AGREEMENT. 7. THE LD. PCIT AFTER CONSIDERING THE EXPLANATION O F THE ASSESSEE, HE CAME TO THE CONCLUSION THAT THE A.O HAS NOT EXAM INED PROFIT ON SALE I.T.A NO.271/CHNY/2020 :- 5 -: OF LAND AT NALLUR DECLARED BY THE ASSESSEE AND ALSO THE CLAIM OF THE ASSESSEE U/S. 54F OF THE ACT WITHOUT EXAMINING THE DETAILS SIMPLY PASSED THE ASSESSMENT ORDER DATED 30.12.2019 WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 8. BEFORE US, THE COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT THE A.O HAS EXAMINED ALL THE DETAILS FILED BY THE ASSES SEE. ACCORDINGLY, THE ASSESSMENT HAS COMPLETED U/S. 143(3) OF THE ACT ON 30.12.2019. HENCE, THE ORDER PASSED BY THE LD. PCIT IS TO BE CA NCELLED. HE FURTHER SUBMITTED THAT THE ORDER PASSED BY THE A.O AS NEITH ER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF THE REVENUE THEREFO RE, THE ORDER PASSED BY THE A.O HAS TO BE SUSTAINED. 9. ON THE OTHER HAND, THE LD. D.R HAS SUBMITTED THA T THE A.O WITHOUT EXAMINING THE ISSUES SIMPLY PASSED THE ASSESSMENT O RDER WHICH IS ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF THE RE VENUE. 10. WE HAVE HEARD BOTH THE SIDES THROUGH VIDEO CONF ERENCING, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 11. IN THIS CASE, THE A.O HAS COMPLETED ASSESSMENT U/S. 143(3) OF THE ACT DATED 30.12.2019. THE SAME WAS TAKEN UP BY THE LD. PCIT FOR EXAMINATION U/S. 263 OF THE ACT AND FOUND THAT THE A.O HAS NOT I.T.A NO.271/CHNY/2020 :- 6 -: EXAMINED IN RESPECT OF BUSINESS PROFITS ON SALE OF LAND AT NALLUR, WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF RE VENUE. HE HAS ALSO POINTED OUT THAT THE CLAIM OF ASSESSEE U/S. 54F OF THE ACT IS FULLY ALLOWED, WHERE ONLY 50% HAS TO BE ALLOWED. WE HAVE GONE THROUGH THE ORDER OF THE LD. PCIT, WE FOUND THAT THERE ARE TWO ISSUES AS POINTED OUT BY THE LD. PCIT. IN OUR OPINION, THE A.O HAS NO T MADE ANY ENQUIRY/INVESTIGATION TO COMPLETE THE ASSESSMENT U/ S. 143(3) OF THE ACT. THUS, THE LD. PCIT RIGHTLY SET ASIDE THE ORDER PASS ED BY THE A.O AND DIRECTED THE A.O TO PASS FRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW. HENCE, WE FIND THAT NO INTERFERENCE IS CALLED FOR IN THIS CASE. ACCORDINGLY, WE DISMISS THE APPEAL FILED BY THE ASS ESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 27 TH JULY, 2021 IN CHENNAI. SD/ - SD/ - ( . ) (S. JAYARAMAN ) /ACCOUNTANT MEMBER ( ) (V. DURGA RAO) /JUDICIAL MEMBER /CHENNAI, /DATED: 27 TH JULY, 2021 . EDN/- /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF