Sri. K.M. Shashidhar, Chickmagalur V. ITO, Chickmagalur

ITA 327/BANG/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7731 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-04-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 25-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SARAVANAN
• Keywords: Cost of acquisition
• Section: 234B

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH A, BANGALORE BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO.327(BANG.)/2011 (ASSESSMENT YEAR : 2004-05) SRI K.M.SHASHIDAR, SHIVAGANGA ESTATE, MALLANDUR, CHICKMAGALUR-577 101 PAN NO.AALHS2797Q APPELLANT VS THE INCOME-TAX OFFICER, WARD-1, CHICKMAGLUR RESPONDENT ASSESSEE BY : SHRI RAGHAVENDRA CHAKRAVARTHY, CA REVENUE BY : SHRI B.SARAVANAN, JCIT DATE OF HEARING : 25-04-2012 DATE OF PRONOUNCEMENT : 25 -04-2012 O R D E R PER SMT. P. MADHAVI DEVI, JM; THIS APPEAL BY THE ASSESSEE RELATES TO ASSESSMENT Y EAR 2004-05. 2. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF 23 DAYS IN FILING OF THIS APPEAL BEFORE THE TRIBUNAL. THE ASSE SSEE HAS FILED AN APPLICATION ALONGWITH AN AFFIDAVIT SEEKING CONDONAT ION OF DELAY IN FILING OF THE APPEAL. IT IS STATED THAT THE DELAY IS DUE TO THE ILL HEALTH OF SHRI S.VENKATESAN, THE TAX CONSULTANT OF THE ASSESSEE DU E TO WHICH IT ITA NO.327(B)/2011 2 ESCAPED HIS ATTENTION AND THEREFORE, THERE IS A DEL AY OF 23 DAYS WHICH IS NEITHER WILLFUL NOR WANTON. 2.1 HAVING HEARD BOTH THE PARTIES, WE ARE INCLINED TO CONDONE THE DELAY OF 23 DAYS IN FILING OF THIS APPEAL. WE ACCORDINGLY, CONSIDER THE APPEAL ON MERITS. 3. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS; A) THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUIT Y, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. B) THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN COMPU TING THE CAPITAL GAINS ON THE SALE OF SHADE TREES AT RS.3,03,350/- AS AGAINST THE LOSS RETURNED OF RS.1,97,553/- SHOWN BY THE APPELLANT UNDER THE FACT S AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE. C) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE COST OF ACQUISITION OF THE SHADE TREES TAKEN BY TH E APPELLANT AT 30% OF THE GROSS SALE PRICE REALIZED B Y HIM WAS MOST REASONABLE AND THEREFORE, THE SAME OUGHT T O HAVE BEEN ACCEPTED. THE ESTIMATE OF THE COST OF ACQUISITION ON THE BASIS OF THE VALUE OF THE ESTATE DECLARED FOR WEALTH TAX PURPOSES IS HIGHLY UNJUSTIF IED AND CONSEQUENTLY, THE CAPITAL GAINS ARRIVED AT ON T HIS BASIS DESERVES TO BE DELETED. D) WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HONBLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABL E TO BE CHARGED TO INTEREST U/S 234B AND 234C OF THE ACT , ITA NO.327(B)/2011 3 WHICH UNDER THE FACTS AND IN CIRCUMSTANCES OF THE APPELLANTS CASE AND THE LEVY DESERVES TO BE CANCEL LED. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE HAD ARISEN IN THE ASSE SSEES OWN CASE FOR THE ASSESSMENT YEAR : 1997-98 AND THE ISSUE HAD GON E UPTO THE HONBLE HIGH COURT OF KARNATAKA AND THE HONBLE HIG H COURT VIDE ITS ORDER DATED 27-11-2007 HAS REMANDED THE ISSUE TO TH E FILE OF THE AO WITH THE FOLLOWING DIRECTIONS; 7. IT IS NOT IN DISPUTE THAT FOR THE PURPOSE OF CALCULATION OF THE COST OF TIMBER, IT WAS THE DUTY OF THE ASSESSING OFFICER OR THE COMMISSIONER OF INCOME-TAX TO FIND OUT WHAT WAS THE COST OF THE INVESTMENT AND OTHER EXPENDITURE INCURRED BY THE ASSESSEE FOR THE PURPOSE OF CALCULATION OF THE COST OF THE TIMBER. WHEN THE TRIBUNAL HAS ACCEPTED THAT THE PRINCIPLES LAID DOWN IN EMERALD VALLEY ESTATES LTD.,, IN 222 ITR 29 9, CANNOT BE MADE APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THIS CASE SINCE IN THE CASE OF EMERALD VALLEY ESTATES LTD., IT WAS A CASE OF PURCHASING THE ESTATE ALONGWITH THE SHADE TREES. WHEREAS IN THE INSTANT CASE, SHADE TREES WERE GROWN BY THE ASSESSEEE HIMSELF IN RESPECT OF ONE ESTATE A ND IN RESPECT OF THE TIMBER IN ANOTHER ESTATE THE SAID ESTATE WAS PURCHASED. THEREFORE, WHILE COMPUTING THE CAPITAL GAINS, IT WAS FOR THE ASSESSING OFFICER AND ALSO FOR THE OTHER AUTHORITIES TO FIND OUT THE COST VALUE OF THE TIMBER IN EACH OF THE ESTATE DEPENDING UPON THE ITA NO.327(B)/2011 4 CIRCUMSTANCES, NAMELY THE COST OF ACQUISITION OF TH E ESTATE IN REGARD TO THE ESTATE PURCHASED BY THE ASSESSEE AND THE COST INCURRED BY THE ASSESSEE TO GROW THE SHADE TREES IN RESPECT OF THE PLANTATION PLANTED BY HIM. 8. SINCE THESE FACTS ARE NOT CONSIDERED, W ARE OF T HE OPINION THAT THE MATTER IS REQUIRED TO BE RE-CONSID ERED AFRESH IN ACCORDANCE WITH LAW BY THE ASSESSING OFFICER. 4. IT IS THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ISSUE IS STILL ALIVE BEFORE THE AO FOR ADJ UDICATION IN THE LIGHT OF THE ABOVE DIRECTIONS FROM THE HONBLE HIGH COURT. 4.1 THE LEARNED DR WAS ALSO HEARD ON THIS ISSUE. 5. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE FIN D THAT BEFORE THE AO ALSO THE ASSESSEE HAD TAKEN THE CONTENTION THAT FOR THE AY: 1997- 98, ON SIMILAR ISSUE THE MATTER IS SUBJUDICE BEFOR E THE HONBLE HIGH COURT. HOWEVER, THE AO REFUSED TO CONSIDER THE SAM E AND FOLLOWED THE TRIBUNALS ORDER FOR THE ASSESSMENT YEAR 1997-98. NOW, FOR THE ASSESSMENT YEAR 1997-98, THE HONBLE HIGH COURT HAS REMANDED THE ISSUE TO THE FILE OF THE AO WITH CERTAIN DIRECTIONS . THEREFORE, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE O F THE AO FOR THIS ASSESSMENT YEAR ALSO WITH A DIRECTION T O RE-DO THE ITA NO.327(B)/2011 5 ASSESSMENT AS PER THE OBSERVATIONS OF THE HONBLE H IGH COURT FOR THE AY: 1997-98. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH APRIL, 2012. SD/- SD/- ( N.K. SAINI) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: BANGALORE DATED: 25-04-2012 AM* COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) BY ORDER AR, ITAT, BANGALORE