Anjali Dhiraj Abhyankar, Mumbai, Hyderabad V. ITO, Ward-12(1), Hyderabad, Hyderabad

ITA 274/HYD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8138 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 20-08-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 20-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Earning of tax free income; Cost of acquisition; Set aside; Capital Gains
• Section: 50C; 2(14); 2(A)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.A. NO. 274/HYD/2017 ASSESSMENT YEAR: 2011-12 ANJALI DHIRAJ ABHYANKAR, MUMBAI [PAN: AFKPA5749M] VS INCOME TAX OFFICER, WARD-12(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI T.CHAITANYA KUMAR, AR FOR REVENUE : SHRI NILANJAN DEY, DR DATE OF HEARING : 20-08-2020 DATE OF PRONOUNCEMENT : 21-08-2020 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS ASSESSEES APPEAL FOR THE AY.2011-12, DIREC TED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, HYDERABAD, DATED 03-11-2016. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, FILED HER RETURN OF INCOME FOR THE AY.201 1-12 ON 24-08-2011, DECLARING A TOTAL INCOME OF RS.1,87,900/- . THE SAME WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT [ ACT] ON 02-03-2012. SUBSEQUENTLY, THE CASE WAS SELECTED FOR S CRUTINY UNDER CASS AND DURING THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT, THE AO OBSERVED THAT AS PER AIR INFORMATION, THE ASSESSEE HAS SOLD IMMOVEABLE PROPERT Y VALUED ITA NO. 274/HYD/2017 :- 2 -: AT RS.1,06,80,000/- ON 17-06-2010. THEREFORE, THE AO REQUIRED THE ASSESSEE TO FURNISH INFORMATION WITH REGAR D TO THE IMMOVEABLE PROPERTY SOLD BY HER. THE ASSESSEE FURNI SHED COPIES OF PURCHASE AND SALE DEEDS OF THE PROPERTY SO LD. FROM THE SALE DEEDS, THE AO OBSERVED THAT THE ASSESSEE HAS TRANSFERRED LAND ADMEASURING 1335.00 SQ. METERS IN NA GPUR MUNICIPAL CORPORATION IN FAVOUR OF M/S.SWAMI SAMARTH INFRASTRUCTURE PRIVATE LIMITED FOR A CONSIDERATION OF RS.51,00,000/- ON 17-06-2010, WHEREAS THE MARKET VALU E OF THE PROPERTY WAS RS.1,06,80,000/-. FURTHER, HE OBSER VED THAT THE ASSESSEE HAD PURCHASED THE PROPERTY FOR A CONSID ERATION OF RS.90,000/- ONLY ON 19-07-2005. 2(A) THEREFORE, THE AO WAS OF THE OPINION THAT THOUGH TH E GAIN FROM THE TRANSFER IS CHARGEABLE TO INCOME TAX UNDE R THE HEAD LONG TERM CAPITAL GAIN, THE ASSESSEE HAS NOT DE CLARED ANY CAPITAL GAIN NOR HE HAS FURNISHED ANY COMPUTATION OF CAPITAL GAIN AS REQUESTED IN THE NOTICE ISSUED U/S.142 (1) OF THE ACT. THE AO, THEREFORE ISSUED A NOTICE FOR HEARING OF THE CASE ON 10-02-2014 AND CALLED FOR ASSESSEES OBJECTIONS, IF ANY, TO THE COMPUTATION OF LONG TERM CAPITAL GAIN BY HIM AT RS.1,04,63,238/-. HOWEVER, THERE WAS NO RESPONSE FR OM THE ASSESSEE NOR WAS ANY EXPLANATION FILED BY HIM. THER EFORE, THE AO CONSIDERED THE FULL VALUE OF CONSIDERATION AS RS.1,06,80,000/- BEING THE MARKET VALUE OF THE PROPER TY AND AFTER ALLOWING INDEXED COST OF ACQUISITION OF RS.2,16, 762/-, HE ARRIVED AT THE LONG TERM CAPITAL GAIN OF RS.1,04,63,23 8/-. ITA NO. 274/HYD/2017 :- 3 -: 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), CONTENDING THAT THE TRANSACTION OF SALE OF PROPERTY, IS OF AGRICULTURAL LAND AND THEREFORE, CAPITAL GAIN THEREFRO M IS NOT TAXABLE. THE ASSESSEE ALSO SUBMITTED THAT THE FULL CONSIDERATION RECEIVED BY HER IS ONLY RS.51,00,000/- AND NOT RS.1,06,80,000/-. THE CIT(A), HOWEVER, DID NOT ACCEP T THE CONTENTION OF ASSESSEE ON THE GROUND THAT THE ASSESSEE H AS NOT OFFERED ANY AGRICULTURAL INCOME IN THE PREVIOUS YEARS . HE ALSO OBSERVED THAT AT THE TIME OF SALE IN THE MONTH OF JUNE , 2010, THE AREA COMES WITHIN THE JURISDICTION OF NAGPUR MUNIC IPAL CORPORATION AND THAT THE PROPERTY HAS BEEN SOLD TO A BU ILDER, AND THEREFORE, IT CANNOT BE SAID TO BE AGRICULTURAL LAN D. THUS, THE CIT(A) CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS: 1. IN LAW, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, ME LD. CIT(A) HAS GROSSLY ERRED IN NOT CONSIDERING THE APP ELLANT'S SUBMISSIONS MADE BEFORE HIM AS SUCH THE ORDER IS AG AINST PRINCIPLE OF NATURAL JUSTICE, BAD IN LAW AND DESERVES TO BE CANC ELLED. 2. IN LAW, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN UPHOLDING THE ADDITION MADE BY THE AO OF RS. 1,04,63,238/- TOWARDS LONG TERM CAPITAL GAINS U/S 5 0C OF THE ACT. 3. THE LD.CIT(A) ERRED IN UPHOLDING THE ADDITION OF AO WITHOUT APPRECIATING THE FACT THAT THE AO HAS NOT FOLLOWED THE PROCEDURE LAID DOWN U/S.50C OF THE ACT. 4. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE PROPERTY SOLD BY THE ASSESSEE IS AN AGRICULTURAL LAND AS PER SECTION 2(14)(III) OF THE ACT. 5. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE LAND SOLD BY THE ASSESSEE BEING AGRICULTURAL IN NATURE CANNOT BE CONSIDERED TO BE A CAPITAL ASSET WITHIN THE MEANING OF SEC. 2(14) OF THE ACT., AND ACCORDINGLY NO CAPITAL GAIN CAN BE COMPUTED ON THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE ON SALE OF S UCH LAND. ITA NO. 274/HYD/2017 :- 4 -: 6. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THE NON DISCLOSURE OF EXEMPT INCOME DOES NOT TANTAMOUNT TO WITHDRAWAL OF EXEMPTION. 7. WITHOUT PREJUDICE TO THE ABOVE, IN LAW, ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) ERRED IN CONFIRMING THE A CTION OF THE AO TOWARDS ENHANCING THE VALUE OF LAND FROM RS. 51,00, 000/- TO RS. 1,06,80,000/-. 8. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT MERELY BECAUSE FOR THE PURPOSE OF STAMP DUTY, PROPERTY IS VALUED AT HIGHER COST, IT CANNOT BE SAID THAT ASSESSES HAS MADE MORE PAYMENT THAN WHAT IS STATED IN THE SALE DEED. 9. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE AO HAS NO EVIDENCE ON RECORD THAT THE CONSIDERATION OVER A ND ABOVE THAN WHAT HAS BEEN RECORDED IN THE SALE DEED HAS BEEN RE CEIVED BY THE ASSESSEE AND IN THE ABSENCE OF THE SAME, NO ADDITIO N CAN BE MADE BY ESTIMATING AND SUBSTITUTING THE MARKET VALUE. 10. THE LD.CIT(A) OUGHT TO HAVE REDUCED FROM THE SA LE CONSIDERATION, THE INDEX COST OF ACQUISITION OF THE FAIR MARKET VA LUE OF THE LAND AS ON 01.04.1981 FOR DETERMINING THE CAPITAL GAIN. 11. THE ASSESSEE CRAVES SPACE TO ADD, ALTER, AMEND ANY GROUND OR SUBMISSION MADE BEFORE OR AT THE TIME OF PROCEEDING S BEFORE THE ITAT. 4. THE CASE IS TAKEN UP FOR HEARING ON 20-08-2020 THR OUGH VIDEO CONFERENCING AND BOTH THE PARTIES WERE HEARD. 5. LD.COUNSEL FOR THE ASSESSEE REITERATED THAT THE LAND SOLD BY THE ASSESSEE IS AGRICULTURAL LAND AND THE DETAILS O F THE SAME COULD NOT BE PRESENTED BEFORE THE AO AS THE ASSESSEE DI D NOT APPEAR BEFORE THE AO. HE SUBMITTED THAT THOUGH THE OBJECT IONS WERE RAISED BEFORE THE CIT(A), THE CIT(A) HAS NOT CONS IDERED THE SAID CONTENTIONS OF THE ASSESSEE IN A PROPER PERSP ECTIVE AND THEREFORE PRAYED FOR REMANDING THE ISSUE TO THE FI LE OF AO, SO THAT THE ASSESSEE CAN FILE HER OBJECTIONS TO THE COMPU TATION ITA NO. 274/HYD/2017 :- 5 -: OF CAPITAL GAIN AND ALSO THE ADOPTION OF THE MARKET VALU E U/S. 50C OF THE ACT FOR COMPUTATION OF CAPITAL GAIN. 6. LD.DR WAS ALSO HEARD, WHO DEFENDED THE ORDERS OF THE AUTHORITIES BELOW. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT THERE WAS NO REPRESENTATION OF ASSE SSEE BEFORE THE ASSESSING AUTHORITY AND BEFORE THE CIT(A), THE ASSESSEE PLEADED THAT THE LAND SOLD IS AGRICULTURAL LA ND. HOWEVER, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE B EFORE THE CIT(A) TO PROVE THE EXACT NATURE OF THE AGRICULTURAL LAND AND ALSO HAS NOT RAISED ANY OBJECTION AS TO WHY THE S ALE CONSIDERATION SHOULD NOT BE ADOPTED AT RS.1,04,63,238/ -. SINCE THE ASSESSEE PLEADED THAT PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE AND ONLY IN THE INTEREST OF JUST ICE TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO FURNISH ALL THE RELEV ANT MATERIAL IN SUPPORT OF HER CLAIM, WE DEEM IT FIT AND PR OPER TO SET ASIDE THE ORDER OF THE CIT(A) AND REMAND THE ISSUE TO THE FILE OF AO FOR DENOVO CONSIDERATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVEN A F AIR OPPORTUNITY OF HEARING AND SHALL ALSO BE PERMITTED TO F URNISH RELEVANT MATERIAL TO PROVE HER CASE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2020 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 21-08-2020 TNMM ITA NO. 274/HYD/2017 :- 6 -: COPY TO : 1. ANJALI DHIRAJ ABHYANKAR, MUMBAI. C/O. SHRI T.CHA ITANYA KUMAR, ADVOCATE, FLAT NO.102, GOURI APARTMENTS, URD U LANE, HIMAYAT NAGAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-12(1), HYDERABAD. 3. CIT(APPEALS)-1, HYDERABAD. 4. THE PR.CIT-1, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.