Asst.CIT., Warangal V. Sri V Raji Reddy (HUF), Warangal

ITA 324/HYD/2013

• Counselvise Citation: 32422514 RSA 2013
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K HARITA
• Assessee Lawyers: K V CHALAMAIAH
• Keywords: Income from undisclosed sources; Reasonable cause
• Section: 143(3); 131; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.324/HYD/2013 ASSTT. YEAR 2006-07 ACIT, CIR-1, -V- SRI V. RAJI REDDY (HUF), WARANGAL. WARANGAL. PAN:AAEHV 5335F (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. K. HARITA RESPONDENT BY: SRI K.V. C HALAMAIAH DATE OF HEARING: 2 3-01-2014 DATE OF PRONOUNCEMENT: 12 -03- 2014. ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAIN ST THE ORDER DATED 6-11-2012 OF CIT (A)-VI, HYDERABAD PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. THERE IS A DELAY OF ELEVEN DAYS IN FILING THE APPE AL. UPON CONSIDERING THE SUBMISSION OF THE LEARNED DR, WE ARE SATISFIED THAT THERE WAS A 2 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME. T HEREFORE, WE ARE INCLINED TO CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARIN G ON MERITS. ONLY ISSUE IN THE APPEAL OF THE DEPARTMENT IS WITH REGARD TO TH E ACTION OF THE CIT (A) IN DELETING ADDITION OF RS.1,48,47,787/- MADE BY THE ASSE SSING OFFICER ON ESTIMATING THE PROFIT ON SALE OF PLOTS. 3. BRIEFLY STATED THE FACTS ARE, THE ASSESSEE HUF FILED IT S RETURN OF INCOME FOR THE ASST. YEAR UNDER DISPUTE ON 15-3-2007 DECLARIN G INCOME OF RS.15,40,320/- WHICH INCLUDED INCOME FROM SHORT TERM CAPI TAL GAIN OF RS.15,33,587. IN COURSE OF THE SCRUTINY ASSESSMENT PROCEED ING THE ASSESSING OFFICER NOTED THAT THE ASSESSEE ALONG WITH THREE OTHERS HAS CARRIED OUT REAL ESTATE BUSINESS BY CONTRIBUTING THEIR LA NDS. HE NOTED THAT OUT OF TOTAL EXTENT OF LAND OF 343 GUNTAS ASSESSEES SHARE BEING 236.875 GUNTAS WHICH IS EQUAL TO 69.06%, THE SHARE OF THE ASSESSEE IN TOTAL SALE PROCEEDS RECEIVED SHOULD BE 69.06% AND NOT 25% AS SHOWN B Y THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT. HOWEVER, THE CIT EXERCISING HIS POWERS U/S 263 OF THE ACT SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSI NG OFFICER TO REDO THE ASSESSMENT AFTER VERIFYING THE COPIES OF THE SALE DEEDS AND ENCUMBRANCE CERTIFICATES BY VERIFYING THE CORRECT RATES REG ISTERED THEREIN AND TO BRING IT TO TAX. 4. IN PURSUANCE TO THE ORDER PASSED U/S 263 OF THE ACT, THE ASSESSING OFFICER TOOK UP THE ASSESSMENT PROCEEDINGS AGAIN. THE ASSESSI NG OFFICER ISSUED SUMMONS U/S 131 OF THE ACT TO THE THREE PERSONS WITH WHOM THE ASSESSEE HAD JOINED TOGETHER FOR SELLING THE PLOTTED LAN DS. AS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DESPITE SUMMONS U/S 1 31 NO ONE APPEARED. HE FURTHER NOTED THAT AS THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS AND SALE DEEDS IN RESPECT OF PLOTS SOLD PERTAINING TO THE ASSESSMENT YEAR 2006-07, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. 3 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED T HE INCOME TAX RETURN COPIES OF THE THREE PERSONS FOR THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEE ALSO FURNISHING THE DETAILS OF LAND SOLD STATED THAT, AS PER THE LAY OUT APPROVED BY KUDA, OUT OF AC.17.24 GUNTAS OF L AND THE PLOTTED LAND WORKED OUT TO 173 NUMBERS AFTER EXCLUDING THE AREA FOR OPEN SPACE AND ROADS. THE DETAILS OF LAY OUT AS PER KUDA WAS STATED TO BE AS UNDER:- PLOTTED AND 49,999.62 SQ. YARDS ROADS 25,064.00 SQ. YARDS OPEN SPACE 8,350.00 SQ. YARDS ----------------- -------- TOTAL 83,413.00 SQ. YARDS. --------- ---------------- THE ASSESSEE FURTHER SUBMITTED THAT OUT OF THE TOTAL SALE PROCEEDS OF RS.1,09,66,786 FROM SALE OF PLOTS DURING THE YEAR ASSESSEE S 25% SHARE COMES TO RS.27,41,697. THE ASSESSEE SUBMITTED THAT OUT OF THE 25% SHARE, PROPORTIONATE COST OF LAND OF RS.7,62,900/- IS ALSO REQU IRED TO BE DEDUCTED. 5. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENT IONS OF THE ASSESSEE. HE OBSERVED THAT RETURN OF INCOME OF PARTNERS D O NOT CONTAIN ACKNOWLEDGEMENT NUMBERS. HE ALSO OBSERVED THAT THOUGH THE ASSESSEE AND ITS PARTNERS SOLD PLOTTED LAND OF 49,999.60 SQ. YAR DS DURING THE RELEVANT FINANCIAL YEAR BUT THE ASSESSEE FAILED TO PRODUCE THE COM PLETED SALE DEEDS SO AS TO ARRIVE AT THE CORRECT VALUE OF SALE CONSIDERATION RECEIVED BY THEM. THE ASSESSING OFFICER THEREAFTER PROCEEDED TO COMPUTE THE INCOM E OF THE ASSESSEE BY APPLYING THE RATE OF RS.430 PER SQ. YARD TO P LOTTED LAND OF 49,999.62 SQ. YARDS TO ARRIVE AT THE TOTAL SALE CONSIDER ATION OF RS.2,14,99,837 WHICH WAS TREATED AS RECEIPTS FROM BUSINESS. THE ASSESSING 4 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. OFFICER FURTHER HELD THAT SINCE OUT OF TOTAL EXTENT O F LAND OF 343 GUNTAS ASSESSEES SHARE WORKED OUT TO 236.875 GUNTAS WHICH COMES TO 69.06%, HENCE, ASSESSEES SHARE IN THE SALE PROCEEDS WILL ALSO BE 69. 06% AND NOT 25% AS CLAIMED BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OF FICER WORKED OUT THE ASSESSEES SHARE IN SALE PROCEEDS AT RS.1,48,47,787/- AND DETERMINED THE TOTAL INCOME AT RS.1,46,86,477/-. BE ING AGGRIEVED OF THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT (A). 6. BEFORE THE CIT (A), IT WAS CONTENDED BY THE ASSESSEE THAT HE ALONG WITH THREE OTHERS NAMELY S/SRI NARASIMHA REDDY, M . SURRENDER REDDY AND CH. PRADEEP REDDY HAD PURCHASED VACANT LANDS TO THE EXT ENT OF 19 ACRES 3 GUNTAS AT WADDEPALLY AND OBTAINED LAY OUT SANCTION F ROM KUDA FOR PLOTTING THEM INTO 173 PLOTS OF VARYING SIZES AFTER SET OFF FOR ROADS AND OPEN SPACES AS PER KUDA NORMS FOR PURPOSE OF SALE. IT WAS SUBMITTED THAT THE LANDED AREA IN RESPECT OF 173 PLOTS WORKED OUT TO 49,999.62 SQ . YARDS. SO FAR AS ASSESSEES SHARE IN THE AFORESAID PLOTTED AREA OF 49,999.6 2 SQ. YARDS IS CONCERNED, THE ASSESSEE SUBMITTED THAT IT HAD ONLY 25% OF THE SHARE OF THE PLOTTED AREA AND NOT 69.06% AS HELD BY THE ASSESSING OFF ICER. IT WAS SUBMITTED BY THE ASSESSEE THAT, ON ITS OWN THE ASSESSEE HAD PURCHASED 5 ACRES 01.5 GUNTAS OF LAND AND 3 ACRES 21.5 GUNTAS ALONG W ITH OTHER THREE PERSONS AND THE OTHER THREE PERSONS HAVE INDIVIDUALLY B OUGHT 3 ACRES 21- 1/5 GUNTAS EACH. THUS, THE TOTAL LAND AVAILABLE FO R PLOTTING WAS TO THE EXTENT OF 19 ACRES 3 GUNTAS. HOWEVER, ONLY 17 ACRES 23 AND 1/2 GUNTAS HAVE BEEN UTILISED FOR PLOTTING AS 1 ACRE 20 GUNTAS OF LAND PURCHASED BY THE ASSESSEE IS A HILL LOCK HENCE, COULD NOT BE PLOTTED. THE PR OCEEDINGS OF KUDA DATED 21-2-2004 ALSO SHOW THAT THE SURVEY NUMBER 823 WHEREIN THE LAND OF 1 ACRE 20 GUNTAS BELONGING TO THE ASSESSEE IS SITUATED WAS NOT INCLUDED IN THE PROCEEDING. THUS, TOTAL AREA OF LAND APPLIED FO R PLOTTING WAS 83,413 SQ. YARDS AND FROM OUT OF THIS AREA, SPACE FOR ROADS TO THE EXTENT OF 25,064 SQ. YARDS AND OPEN SPACE AREA OF 10% I.E., 8,350 SQ. YARDS HAD BEEN DEDUCTED 5 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. BY KUDA AND APPROVAL FOR 49,999.62 SQ. YARDS FOR 173 PLOTS HAD BEEN GRANTED VIDE ORDER IN DP NO.10/2004 IN THE NAMES O F FOUR PERSONS. 7. IT WAS SUBMITTED THAT AS PER THE PERMISSION OF KUD A, THE LAND AVAILABLE FOR SALE WAS 49,999.62 SQ. YARDS. IT WAS CONTE NDED BY THE ASSESSEE THAT LAND PURCHASED BY THE OTHER PERSONS AND PU T TO SALE JOINTLY WAS NOT CONSIDERED BY THE ASSESSING OFFICER AT ALL AND THUS WRONGLY DETERMINED THE SHARE OF THE ASSESSEE AT 69.06%. AFTER CON SIDERING THE FACT THAT LAND TO THE EXTENT OF 1 ACRE 20 GUNTAS BELONGING TO THE ASSESSEE WAS NOT PLOTTED, THE SHARE OF THE ASSESSEE IN 49,999.62 SQ. YARDS COMES TO 25% ONLY. IN SUPPORT OF SUCH CONTENTION, THE ASSESSEE SUBMITTE D THE COPIES OF THE SALE DEEDS, ECS, AND THE APPROVAL AND SANCTION OF KU DA. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT THE ASSESSING OFFICER WAS TOTA LLY MISTAKEN IN TAKING THE ENTIRE SALE CONSIDERATION IN THE IMPUGNED A SSESSMENT YEAR AS ALL THE 173 PLOTS WERE NOT SOLD DURING THE RELEVANT FINAN CIAL YEAR. IT WAS SUBMITTED THAT WHATEVER AMOUNT RECEIVED FOR THE PLOT S SOLD WAS TAKEN INTO CONSIDERATION AND ADMITTED AS INCOME IN THE RETURNS FIL ED BY THE ASSESSEE FOR DIFFERENT ASSESSMENT YEARS. IN SUPPORT OF SUCH CONTENTION, THE ASSESSEE ALSO SUBMITTED THE COPIES OF RETURNS FILED FOR THE ASSESSMENT YE ARS 2005-06 TO 2010-11. IT WAS THEREFORE CONTENDED BY THE ASSESSEE THA T DURING THE IMPUGNED ASSESSMENT YEAR, THE TOTAL PLOTS SOLD WAS TO THE EXTENT OF 25,562 SQ. YARDS AGAINST THE TOTAL SALE CONSIDERATION OF RS.1,09 ,66,786/- AT THE AVERAGE RATE OF RS.430/- PER SQ. YARD. ON THE AFORESA ID SALE CONSIDERATION, THE ASSESSEES SHARE AT 25% WORKS OUT TO RS.27,41,697 AND A FTER DEDUCTING THE DEVELOPMENT EXPENSES, THE NET PROFIT OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR WORKS OUT TO RS.11,28,797/-. THE CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE VIS V VIS THE MATERIALS AVA ILABLE ON RECORD HELD THAT THE ASSESSEES SHARE IN THE LAND AS PER THE KUDA LAY OUT WAS ONLY TO THE EXTENT OF 25%, HENCE THE ASSESSEES PROFIT ALSO SHOU LD BE TO THAT EXTENT IN THE TOTAL SALE CONSIDERATION RECEIVED FOR TH E IMPUGNED ASSESSMENT 6 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. YEAR. HE FURTHER HELD THAT THE ASSESSING OFFICER WAS WRON G IN CONCLUDING THAT THE ENTIRE SALE OF PLOTS HAS TAKEN PLACE IN THE IMPUGN ED ASSESSMENT YEAR. ON THE AFORESAID BASIS, THE CIT (A) DELETED THE ADDITI ON OF RS.1,48,47,787/- WITH THE FOLLOWING OBSERVATION:- 5.8 THE TOTAL SALE CONSIDERATION RECEIVED ON ACCOU NT OF SALE OF PLOTS WAS NO DOUBT STANDS AT RS. 2,14,99,837/- BEING THE AVERAGE RATE OF RS. 490/- PER SQ. YD. HOWEVER, THE QUESTION REMAINS H ERE IS THAT WHETHER THE CONSIDERATION WAS RECEIVED IN THE SINGL E YEAR AS PRESUMED BY THE A.O. AS PER THE RETURNS OF INCOME FILED BY T HE APPELLANT, THE FOLLOWING ARE THE DETAILS OF SALES MADE IN THE RELE VANT AND RESPECTIVE ASST. YEARS, ON THE BASIS OF REGISTRATION OF PLOTS: . SI,NO .. A.Y. NO. OF PLOTS AREA IN SQ. YARDS. 1 2005- 06 52 15,289 2 2006- 07 90 25,562 3 2007- 08 26 7,400 4 2008- 09 5 534 5 2009- 10 - 269 6 2010- 11 - 752 TOTAL 173 49,806 SINCE, THE APPELLANT FURNISHED THE RETURN OF INCOME INCORPORATING THE PROFITS ARISEN FROM SALE OF PLOTS IN RESPECTIVE ASST . YEARS TO THE EXTENT OF HIS SHARE, IT APPEARS, THERE IS NO GROUND FOR TH E AO TO PRESUME THE ENTIRE SALE CONSIDERATION RECEIVED IN ONE YEAR. 5.9. AS COULD BE SEEN FROM THE INFORMATION BROUGHT ON RECORD, IN THE FORM OF ENCUMBRANCE CERTIFICATE OBTAINED FROM SRO, THE RAT E AT WHICH THE PLOTS REGISTERED HAS BEEN CONFIRMED AT RS. 430/- PER SQ. YD. ON AN AVERAGE AND THERE IS NO DISPUTE IN THIS REGARD. IT HAS BEEN THU S OBSERVED THAT THE DIFFERENCE IN THE QUANTUM OF INCOME ADOPTED BY THE A.O AND THE APPELLANT ARISEN ON ACCOUNTING THE PRESUMPTION OF THE A.O THAT APPELLAN T HAS 69.06% OF THE LANDS CONTRIBUTED, SO AS TO QUANTIFY HIS SHARE OF INCOME AT SAME RATIO. IN THIS CONTEXT, IT IS OBSERVED THAT THE A.O HAS ADOPTED THE INCORRE CT FIGURES/STATISTICS AS REGARD TO THE AREA OF THE LAND CONTRIBUTED AND QUANTIFICAT ION OF SALE CONSIDERATIONS, 7 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. SIMULTANEOUSLY. WHILE ADOPTING THE PLOTTED AREA AT 343 GUNTAS, WHICH WOULD BE EQUIVALENT TO 41.503 SQ. YDS WHICH IS EQUI VALENT TO 343 GUNTAS @ 121 SQ. YDS., FOR GUNTA, THE A.O HAS TAKEN THE SALE CONSIDERATION AT RS. 2,14,99,837/-, CALCULATED ON 49,999 SQ. YDS. HAVING TAKEN THE LAND AT 343 GUNTAS, THE CORRESPOND ING AREA OF PLOTS FOR SALE WOULD BE MUCH LESS THAN 49,999 SQ. YDS WHI CH IS IN FACT EQUIVALENT TO 690 GUNTAS I.E., 17 ARES 10 GUNTAS, S HOWN TO BE THE TOTAL AREA OF PLOTTING. THE TOTAL. AREA UNDER DEVELOPMENT HAS BEEN WORKED OUT AS UNDER: _ .. _-. 1 V.RAJI REDDY 5 ACRES 1.5 GUNTAS 201.5 GUNTAS -- .--~ 2 M.SURENDER REDDY 3 ACRES 21.5 GUNTAS 141.5 GU NTAS 3 CH. NARSIMHA REDDY 3 ACRES 21.5 GUNTAS 141.5 GUNTAS 4 CH. PRADEEP REDDY 3 ACRES 21.5 GUNTAS 141.5 GUNTAS 5 JOINT PROPERTY 3 ACRES 21.5 GUNTAS 141.5 GUN TAS TOTAL ACRES 19.07 GUNTAS 767.5 GUNTAS LESS - HILLOCK IN THE ACRES 1.20 GUNTAS LANDS OF V. RAJI REDDY ACRES 17.27 GUNTAS 707.5 GUNTAS THE APPROVAL GRANTED BY KUDA, THE AUTHORITY FOR GRA NTING APPROVAL FOR LAYOUT, THE AREA IS MENTIONED AS 17.10 ACRES AND CO NVERTED INTO SQ. YDS., SUCH LAND WAS PUT AT 83,413 SQ. YDS., AND THE NET AREA FOR SALE PUT AT 49,999 SQ. YDS (173 PLOTS) WITH AREA FOR OPEN SPACE , ROADS ETC., TAKEN OUT. 5.10 THE SHARE OF SRI V.RAJI REDDY IN TOTAL AREA OF LAND CONTRIBUTED WORKS OUT TO 25.28%, WITH HIS SHARE OF LAND CONTRIB UTED WORKED OUT TO 176.86 GUNTAS, ON EXCLUSION OF 60 GUNTAS ( 1 ACRE 2 0 GUNTAS) FROM THE TOTAL AREA ON ACCOUNT OF HILLOCK, FALLING IN HIS SH ARE OF LAND. THUS, THERE IS NO GROUND FOR THE A.O TO ADOPT THE SHARE O F PROFITS FOR APPELLANT AT 69.06%, WHICH HAS BEEN WORKED OUT BASE D ON THE ASSUMPTION THAT TOTAL AREA CONTRIBUTED IS 343 GUNTA S AND ASSESSEE'S SHARE SHOWN AT 236.875 GUNTAS. ACCORDINGLY, THERE I S NO BASIS FOR ALLOCATING / DETERMINATION OF PROFIT OF RS. 1,48,47 ,787/- TO THE SHARE OF THE APPELLANT OUT OF THE TOTAL SALE CONSIDERATION O F RS. 2,14,99,837/- AS QUANTIFIED BY THE A.O FOR THE ASSESSMENT YEAR UN DER REFERENCE. 5.11 REGARDING THE SHARE OF INCOMES OFFERED BY THE OTHER THREE PARTNERS/CO-OWNERS, THE INFORMATION BROUGHT ON RECO RD INDICATE THAT THEY HAVE FILED THEIR RETURNS OF INCOME, INCORPORATING THEIR SHARE OF PROFITS FRO M THE PROJECTS, AND THE COPIES OF THE RETURNS OF INCO ME FILED INDICATE THE 8 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. ACKNOWLEDGMENT OF FILING OF RETURNS ON THE BACK SID E OF THE ITR AND PROVES THE FACT TO THE EXTENT. EVEN OTHERWISE, THE NON FILING OF RETURNS OF INCOME BY OTHER PARTNERS/CO-OWNERS, WILL NOT MAKE THE ASSESSEE UNDE R REFERENCE LIABLE FOR SUCH INCOMES. THE SAID INFORMATION BROUG HT ON THE RECORD ABSOLVES THE APPELLANT, FROM BEING RESPONSIBLE FOR OTHERS' SHARE OF INCOMES. THE ASSESSING OFFICER IS FREE TO CAUSE ENQ UIRIES AND COME TO THE CONCLUSION ACCORDINGLY. THUS, BASED ON THE FACTS IT IS HELD THAT THE BASIS ADOPTED BY THE ASSESSING OFFICER IN APPORTIONING TH E SALE CONSIDERATION TO THE APPELLANT @ 69.06% IS FOUND TO BE ON WRONG PREMISES / WRONG FAC TS AS SUCH, THERE IS NO SCOPE FOR ALLOCATING INCOMES ON SUCH BA SIS. HENCE, THE QUANTIFICATION OF INCOME 'QT'-(HE APPELLANT AT RS. 1,48,47,787/- AMOUNTED TO ESTIMATION WITHOUT ANY BASIS AND AS SUCH QUANTIFICA TION AS UNACCOUNTED INCOME IS NOT JUSTIFIED. HENCE, THE ADDITION OF RS. 1,48,47,787/- IS DELETED. BEING AGGRIEVED OF THE AFORESAID ORDER OF THE CIT (A ), THE DEPARTMENT IS IN APPEAL BEFORE US. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVA NT MATERIALS PLACED ON RECORD. AS WOULD BE APPARENT FROM THE FACTS EMANATING FROM RECORD AND ALSO THE CONTENTIONS OF THE PARTIES, THE ONLY DISPUTE IS WITH REGARD TO THE ASSESSEES SHARE IN T HE PLOTTED LAND AS WELL AS CONSEQUENT SALE CONSIDERATION RECEIVED ON SALE OF THOSE LANDS. AS CAN BE SEEN IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, THE ASSESSING OF FICER HAS ALSO TAKEN THE VIEW THAT THE ASSESSEES SHARE IN THE LAND IS TO THE EXTENT OF 69.06%. IT IS FURTHER EVIDENT FROM THE ORDER PASSED U/ S 263 OF THE ACT THAT IN COURSE OF REVISION PROCEEDINGS ALSO, THE ASSESSEE HAD CAT EGORICALLY SUBMITTED THAT THE ASSESSEES SHARE IN THE TOTAL LAY OUT A REA OF AC.17.10 GUNTAS APPROVED BY THE KUDA IS ONLY TO THE EXTENT OF AC.4.12 GUNTAS WHICH WORKED TO 25% OF THE TOTAL AREA. IT FURTHER EMANAT ES FROM RECORD, AGAINST THE ORIGINAL ASSESSMENT ORDER, THE ASSESSEE HAD FILED AN APPEAL BEFORE THE CIT (A) AND THE CIT (A) HAD CALLED FOR A REMAND REPO RT ON THE AFORESAID ISSUE FROM THE ASSESSING OFFICER. IT IS THE CONTENTION OF T HE LEARNED AR THAT ALL THE RELEVANT MATERIALS LIKE COPIES OF THE SALE DEED S, EC, SANCTION/APPROVAL OF KUDA WAS SUBMITTED BEFORE THE ASSESSING OFFICER TO SHO W THAT THE 9 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. ASSESSEES SHARE IN THE APPROVED LAY OUT IS ONLY TO THE EX TENT OF 25% AS AC.1.20 GUNTAS OF LAND BELONGING TO THE ASSESSEE WAS EXCLUD ED FROM THE LAYOUT. AS CAN BE SEEN FROM THE DETAILS OF LAND AS GIVE N IN TABULAR FORM IN PARA 5.9 AT PAGE-11 OF THE CIT (A)S ORDER, THE TOTA L LAND AVAILABLE TO ALL FOUR PERSONS WAS TO THE EXTENT OF AC.19.07 GUNTAS OUT OF WHI CH LAND TO THE EXTENT OF AC.1.20 GUNTAS WAS EXCLUDED FROM THE LAY OU T AS IT IS A HILLOCK. 9. THEREFORE, THE LAND FOR WHICH KUDA APPROVED/GRA NTED LAYOUT WAS TO THE EXTENT OF AC.17.27 GUNTAS OR 707.05 GUNTAS. FROM THE AFORESAID AC.17.27 GUNTAS AFTER SET OFF OF AREA TOWARDS OPEN SPACE AND RO ADS, THE BALANCE AREA REMAINING FOR PLOTTING IS 49,999 SQ. YARDS WHICH IS AS P ER THE KUDA APPROVED LAY OUT AND THERE CANNOT BE ANY DISPUTE ABOU T THIS FACTUAL POSITION. HENCE, IT BECOMES CLEAR THAT THE ASSESSEES SHARE IN THE TOTA L LAND AS PER THE APPROVED LAY OUT OF 17.10 ACRES IS TO THE EXTENT OF 4.12 ACRES WHICH IS ROUGHLY 25% OF THE TOTAL EXTENT OF LAND AS PER THE L AY OUT. IN AFORESAID VIEW OF THE MATTER, THE FINDING OF THE ASSESSING OFFICER THAT ASSESSEES SHARE IN THE TOTAL LAND IS 69.06% IS CONTRARY TO THE MATERIAL S ON RECORD HENCE, CANNOT BE ACCEPTED. THAT APART, THE ASSESSING OFFICER I S ALSO UNJUSTIFIED IN INFERRING THAT 173 PLOTS WERE SOLD DURING THE IMPUGN ED ASSESSMENT YEAR. IT IS A FACT ON RECORD THAT THE ASSESSEE HAS FILED RETURNS OF I NCOME DISCLOSING SALE OF PLOTS FOR THE ASSESSMENT YEARS 2005-06 TO 2008-09. EVEN THE OTHER CO-OWNERS HAVE ALSO FILED THEIR RETURNS OF INCOME ADMIT TING INCOME FROM SALE OF PLOTS WHICH IS CLEARLY PROVED FROM THE RETURN COPIES SUBMITTED IN THE PAPER BOOK. ON PERUSAL OF COPIES OF SALE DEED AND ECS AS WELL AS APPROVAL LETTER OF KUDA IT IS VERY MUCH CLEAR THAT THE LAY OUT APPROVAL IS FOR A TOTAL EXTENT OF LAND OF AC.17.27 GUNTAS EXCLUDING THE ASSESSEE S LAND ADMEASURING AC.1.20 GUNTAS. ON THE FACE OF SUCH FACTS AN D MATERIALS ON RECORD WHICH CLEARLY INDICATE THAT THE ASSESSEES SHARE ON TH E PLOTTED AREA IS TO THE EXTENT OF 25%, THE ASSESSING OFFICERS FINDING THA T THE ASSESSEE WILL BE TAXED ON 69.06% OF THE SALE CONSIDERATION IS NOT ACCEP TABLE. 10 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. 10. SO FAR AS THE CONTENTION OF THE DEPARTMENT THAT T HE CIT (A) OUGHT TO HAVE CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICE R IS CONCERNED, WE ARE NOT CONVINCED WITH THE ARGUMENT OF THE LEARNED DR . AS REITERATED EARLIER, THE LEARNED AR HAS CONTENDED BEFORE US THAT I N COURSE OF THE APPEAL PROCEEDINGS BEFORE THE CIT (A) AGAINST THE ORIGINAL ASSE SSMENT ORDER, THE CIT (A) HAD CALLED FOR A REMAND REPORT FROM THE ASSESSI NG OFFICER. IN COURSE OF REMAND PROCEEDINGS, THE ASSESSEE HAD PRODUCED ALL RELEV ANT DOCUMENTS BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE ITS CLAIM THAT ASSESSEES SHARE IN THE PLOTTED LAND IS ONLY TO THE EXTENT OF 25%. THE DOCUMENTS SUBMITTED BEFORE THE ASSESSING OFFICER HAVE BEEN CLEARLY MENTIONED IN PARA 5.4 OF THE CIT (A)S ORDER. THIS CONTENTION OF THE LEARNED AR RE MAINS UNCONTROVERTED BY THE DEPARTMENT. IN AFORESAID VIEW OF THE MATTER , IT CANNOT BE SAID THAT OPPORTUNITY WAS NOT GIVEN TO THE ASSESSING OFFICER TO VER IFY THE FACTS. THAT BESIDES, ALL SUCH DOCUMENTS WERE ALL ALSO PRODUCED BEFORE THE CIT IN COURSE OF REVISION PROCEEDINGS. IN AFORESAID CIRCUMSTANCES, WE HAV E TO CONCUR WITH THE FINDING OF THE CIT THAT THE ASSESSEE IS THE OWNER O F 25% OF THE PLOTTED LAND, HENCE PROFIT TO THE EXTENT OF 25% FROM THE SALE CONSIDERATION RECEIVED FOR THE IMPUGNED ASSESSMENT YEAR IS TAXABLE AT THE HANDS OF THE ASSESSEE. HOWEVER, WE MAY POINT OUT THAT THERE IS SOME CONFUSION W ITH REGARD TO THE AMOUNT OF RS.1,48,47,787/-DELETED BY THE CIT (A), AS IN GROUNDS OF APPEAL OF THE DEPARTMENT THE AMOUNT DELETED BY THE CIT (A ) IS MENTIONED AS RS.1,31,72,157/-. FROM A PERUSAL OF THE ASSESSMENT ORDER, IT IS SEEN THAT THE ASSESSING OFFICER HAS TAKEN THE ASSESSEES SHARE OF SALE CON SIDERATION AT RS.1,48,47,787/ AND AFTER DEDUCTING AN AMOUNT OF RS.2, 50,000/- TOWARDS DEVELOPMENT EXPENSES HAS TAKEN THE PROFIT OF THE ASSESSEE FROM SALE OF PLOTS AT RS.1,45,97,787/- . FROM THE COMPUTATION OF INCOME FILED ALONG WITH RETURN FOR THE IMPUGNED ASSESSMENT YEAR, A COPY OF WHICH IS AT PAGE-7 OF THE PAPER BOOK, IT CAN BE SEEN THAT THE ASSESSEE HIMSE LF HAD SHOWN SHORT TERM CAPITAL GAINS OF RS.15,33,587.19. EVEN DURING T HE ASSESSMENT 11 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. PROCEEDINGS AS WELL AS BEFORE THE FIRST APPELLATE AUTHOR ITY, THE ASSESSEE HAS ADMITTED THAT HIS SHARE OF INCOME FOR THE IMPUGNED A SSESSMENT YEAR IS RS.27,41,697 AND AFTER ALLOWING DEVELOPMENT EXPENSES O F RS.7,62,900 AND COST OF LAND ETC., THE NET PROFIT WOULD WORK OUT TO RS.11,28,797/-. THEREFORE, IT BECOMES CLEAR THAT THE SALE CONSIDERATION CO NSIDERED BY THE ASSESSING OFFICER AT THE HANDS OF THE ASSESSEE AT RS.1,48,47, 787 ALSO INCLUDES THE AMOUNT ADMITTED BY THE ASSESSEE IN THE RETUR N OF INCOME. HENCE, PROFIT TO THAT EXTENT HAS TO BE CONSIDERED AT TH E HANDS OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. WHEREAS THE CI T (A) HAS DELETED THE ENTIRE SALE CONSIDERATION OF RS.1,48,47,787 /- WHICH ALSO INCLUDES THE AMOUNT DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. IN THE AFORESAID CIRCUMSTANCES, WE DIRECT THE ASSESSING OFFICER TO RETAIN THE INCOME OFFERED BY THE ASSESSEE FROM SALE OF PLOTS IN THE RETURN FILED FOR THE IMPUGNED ASSESSMENT YEAR AND DELETE THE REST OF THE ADDI TION. HENCE, THE ORDER OF THE CIT (A) IS MODIFIED TO THAT EXTENT. 11. IN THE RESULT, THE APPEAL IS ALLOWED IN PART. ORDER PRONOUNCED IN THE COURT ON 12-03-2014. SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY ) JUDICIAL MEMBER HYDERABAD, DATED THE 12 TH MARCH, 2014. JMR* 12 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL. COPY TO:- 1) ACIT, CIR-1, WARANGAL. 2) SRI V. RAJI REDDY (HUF), 2-8-593, BHAVANI NAGAR, WARANGAL. 3) CIT (A)-VI, HYDERABAD. 4) CIT-VI, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. 13 ITA NO.324 OF 2013 V. RAJI REDDY (HUF), WARANGAL.