Sri Konchada Sreeram, Visakhapatnam V. The ITO, Ward-1(1), Visakhapatnam

ITA 275/VIZ/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50149 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 04-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Keywords: Opportunity of being heard
• Section: 2(14); 133A

Judgement Text

ITA NO 275 OF 2010 KONCHADA SREERAM VISAKHAPATNAM PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.275/VIZAG/2010 ASSESSMENT YEAR: 2004-05 KONCHADA SREERAM, VISAKHAPATNAM VS. ITO WARD-1, VISAKHAPATNAM (APPELLANT) PAN NO: AKOPK 5989 R (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI J. SIRI KUMAR, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE EX-PARTE ORDER DATED 02-02-2010 PASSED BY LD CIT(A), VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2004-05. THE ASSESSEE IS ASSAILING THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF CAPITAL GAIN OF RS.4,15,536/- IN THE HANDS OF THE ASSESSEE. 2. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE RECORD. THE ASSESSEE, HIS FATHER AND OTHER FAMILY MEMBERS H AVE SOLD AGRICULTURAL LANDS ON 27.12.2003 FOR RS.9.04 LAKHS, IN WHICH 1/5 TH SHARE OF LAND WAS SHOWN AS BELONGING TO THE ASSESSEE. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED THAT THE SAID AGRICULTURAL LAND IS NOT A CA PITAL ASSET WITHIN THE MEANING OF SEC. 2(14) OF THE ACT AND ACCORDINGLY DI D NOT COMPUTE THE CAPITAL GAIN. THE DEPARTMENT CARRIED A SURVEY OPER ATION U/S 133A OF THE ACT IN THE HANDS OF BROTHER OF THE ASSESSEE NAMED S HRI KONCHADA BADRINATH ON 07.02.2008. THE ABOVE SAID SHRI KONCHADA BADRIN ATH IS ALSO ONE OF THE CO-VENDOR OF THE AGRICULTURAL LANDS CITED ABOVE. I N THE STATEMENT TAKEN DURING THE COURSE OF SURVEY, SHRI BADRINATH ADMITTE D THAT THE ACTUAL SALE ITA NO 275 OF 2010 KONCHADA SREERAM VISAKHAPATNAM PAGE 2 OF 3 CONSIDERATION WAS RS.33.00 LAKHS AND NOT RS.9.04 LA KHS AS SHOWN IN THE SALE DEEDS. BASED ON THIS INFORMATION, THE ASSESSI NG OFFICER COMPUTED 1/5 TH SHARE OF THE ASSESSEE BY TAKING THE SALE CONSIDERA TION OF AGRICULTURAL LANDS AT RS.33.00 LAKHS AND ACCORDINGLY ARRIVED AT THE LONG TERM CAPITAL GAIN OF RS.4,15,536/-. THE SAID WORKINGS WERE CONF IRMED BY LD CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE CONTENTIONS OF THE LD A.R ARE:- (A) THE ASSESSING OFFICER SHOULD NOT HAVE TAKEN C OGNIZANCE OF STATEMENT GIVEN BY THE BROTHER OF THE ASSESSEE WITH OUT CONFRONTING THE SAME TO HIM. (B) IF THE BROTHER OF THE ASSESSEE, SHRI BADRINATH HAD ADMITTED ANY EXCESS SALE CONSIDERATION, THE POSSIBILITY IS THAT HE MIGHT HAVE POCKETED THE EXCESS MONEY AND THE ASSESSEE IS NO WAY CONCERNED W ITH THE EXCESS RECEIPT, IF ANY. (C) THE DEPARTMENT HAS NOT TAKEN ANY ACTION ON T HE BUYER OF THE PROPERTY AND HENCE EXCESS RECEIPT OF SALE CONSIDERA TION IS NOT CONCLUSIVELY PROVED. (D) THE PROPERTY WAS ORIGINALLY PURCHASED JOINTLY BY THE FATHER AND PATERNAL UNCLE OF THE ASSESSEE BY USING JOINT FAMI LY FUNDS. THE ASSESSEE HAS ONLY JOINED AS A CO-VENDOR AND HENCE THE CAPITA L GAIN, IF ANY, IS NOT TAXABLE IN HIS HANDS. (E) THE AGRICULTURAL LANDS WERE SOLD IN THE YEAR 2003 BEFORE THE FORMATION OF GREATER VISAKHAPATNAM MUNICIPAL CORPO RATION (GVMC) AND HENCE THE ASSESSING OFFICER IS NOT CORRECT IN ADOPT ING THE GVMC LIMITS FOR TREATING THE IMPUGNED AGRICULTURAL LANDS AS CAPITA L ASSET U/S 2(14) OF THE ACT. 4. THE CONTENTIONS RAISED BY LD A.R WOULD SHOW THAT THE IMPUGNED ISSUE NEEDS TO BE EXAMINED AFRESH IN THE LIGHT OF S AID CONTENTIONS, SINCE THE ASSESSING OFFICER HAS DETERMINED THE CAPITAL GA INS WITHOUT VERIFYING THE ITA NO 275 OF 2010 KONCHADA SREERAM VISAKHAPATNAM PAGE 3 OF 3 VARIOUS FACTS SURROUNDING THE ISSUE. THE LEARNED D.R ALSO DID NOT OBJECT TO THE SAID PROPOSAL. ACCORDINGLY, WE SET ASIDE TH E ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF TH E ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE VARIOUS FACTS SURROUNDING THE ISSUE AND ALSO TO CONSIDER THE OBJECTIONS RAISED BY THE ASSESSEE AND THEREAFTER DETERMINE THE TAXABILITY OF CAPITAL GAIN ON THE IMPUGNED SALE OF AGRICULTURAL LANDS IN ACCORDANCE WITH THE LAW. NEEDLESS TO MENTION, THE ASSESSEE SHOULD BE GIVEN NECESSARY OF OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH APRIL, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:12-04-2011 COPY TO 1 SHRI KONCHADA SREERAM, 25-1-12 NR READING ROOM, O LD TOWN, VISAKHAPATNAM 2 THE ITO WARD-1(1) VISAKHAPATNAM 3 4. THE CIT 1, VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM