Rajeswari Infrastructure Ltd., CHENNAI V. ACIT, CHENNAI

ITA 3307/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4949 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 07-12-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Reopening of assessment; Capital asset; Business income
• Section: 143(3); 147

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 3307 /MDS/2016 / ASSESSMENT YEAR :20 07 - 08 M /S. RAJESWARI INFRASTRUCTURE LTD., 18/23, 2 ND CROSS ST., EAST CIT NAGAR, NANDANAM, CHENNAI 600 035. [PAN: A AACR1628N ] VS. THE ASSISTANT COMMISSIONER OF INC OME TAX , CORPORATE RANGE 5, C HENNAI . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI V.S. JAYAKUMAR , A DVOCATE / RESPONDENT BY : S HRI SUPRIYO PAL , J CIT / DATE OF HEARIN G : 05 . 0 1 .201 7 / DATE OF P RONOUNCEMENT : 03 . 0 4 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) 3 , C H ENNAI DATED 3 0 . 09 .201 6 RELEVANT TO THE ASSESSMENT YEAR 20 07 - 08 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1) THE ORDER OF THE CIT(A) IS CONTRARY TO THE LAW, FACTS AND CIRCUMSTANCES OF THE CASE. I.T.A. NO . 3307 / M/ 1 6 2 2) REOPENING OF ASSESSMENT MADE UNDER SEC 147: ( I) THE CIT(A) ERRED IN CONFIRMING THE REASSESSMENT MADE ON THE APPELLANT COMPANY UNDER SEC 147 OF THE INCOME TAX ACT, 1961. (II) THE CIT(A) ERRED IN NOT NOTICING THAT THERE IS NO FAILURE ON THE PART OF THE APPELLANT COMPANY TO DISCLOSE ALL THE RELEVANT MATERIALS AT THE STAGE OF INITIAL ASSESSMENT. (III) THE APPELLANT SEEKS TO RAISE THIS SPECIFIC GROUNDS OF APPEAL THOUGH NOT RAISED BEFORE THE CIT(A) AS THE ASSUMPTION OF JURISDICTION GOES TO THE VERY ROOT OF THE MATTER WHICH DOES NOT INVOLVE ANY INVEST IGATION OF FACTS. (IV) IT IS SUBMITTED THAT THE REASSESSMENT IS INVALID IN LAW AND THE REASSESSMENT MADE UNDER SEC 147 BEYOND THE PERIOD OF 4 YEARS IS NOT JUSTIFIED IN AS MUCH AS THE APPELLANT HAS DISCLOSED ALL THE RELEVANT DETAILS AND MATERIALS AT THE ORIGINAL ASSESSMENT STAGE ITSELF AS STATED EARLIER. 3) ADDITION MADE UNDER THE HEAD INCOME FROM CAPITAL GAINS: . 1.92.28.660/ - (I) THE CIT(A) ERRED IN UPHOLDING THE ORDER OF THE AO IN REJECTING THE CLAIM OF THE APPELLANT THAT THE ADOPTION OF RS.57/ - PER SQUARE FEET TOWARDS THE CONVERSION OF CAPITAL ASSET INTO STOCK IN TRADE IS REASONABLE AND CORRECT. (II) THE CIT(A) FAILED TO NOTE THAT THE APPELLANT COMPANY HAS CONVERTED THE FACTORY PREMISES WHICH COMPRISES LAND AND BUILDING INTO STOCK IN TRADE AF TER DEMOLISHING THE BUILDING FOR ITS CONSTRUCTION BUSINESS. (III) THE CIT(A) FAILED TO NOTE THAT THE APPELLANT ADOPTED UNIFORM PRICE OF RS. 57 PER SQ. FT. FOR THE PREVIOUS YEAR 2003 - 04 TO 06 - 07 IN TERMS OF SEC. 48 OF THE ACT. (IV) THE CIT(A) FAILED T O NOTE THAT THE APPELLANT HAS ADOPTED THE GUIDELINE VALUE PREVALENT DURING THE RELEVANT PERIOD. I.T.A. NO . 3307 / M/ 1 6 3 (V) THE CITCA) SHOULD HAVE APPRECIATED THAT THE AO HAS ARBITRARILY FIXED THE VALUE BY SIMPLY TAKING THE TOTAL SALES OF THE APPELLANT COMPANY OF VARIOUS DIFFE RENT PROJECTS, DIFFERENT LAND COST , APART FROM DIFFERENT CONSIDERATION COST OF DIFFERENT WHICH HAVE NO NEXUS, RATIONALE TO THE PROJECT IN QUESTION VIZ . (VI) THE CITCA) ERRED IN NOT ADJUDICATING THE SPECIFIC GROUNDS OF APPEAL RAISED BEFORE HIM IN WHICH THE APPELLANT HAS POINTED OUT THAT THE AO HAS ERRONEOUSLY ARRIVED AT THE MARKET OF THE VALUE OF THE LAND BY ADOPTING THE FIGURES FROM THE PROFIT AND LOSS ACCOUNT OF THE COMPANY, WHICH INCLUDED THE PROJECTS IN DIFFERENT PLACES NOT PERTAINING TO THE SURVEY NUMBER OF THE CONVERTED PROPERTY AND WHICH HAVE NOTHING TO DO WITH THE PROJECTS IN QUESTION. 4) THE APPELLANT CRAVES LEAVE TO ADDUCE ADDITIONAL GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. ON PERUSAL OF THE GROUNDS OF APPEAL FILED BY THE ASSESSEE AND THE APPELLATE ORDER PASSED BY THE LD. CIT(A) ARISING OUT OF THE ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT], WE FIND THAT THE ASSESSEE HAS RAISED THE LEGAL GROUND WITH REGARD TO REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT FOR THE FIRST TIME BEFORE THE TRIBUNAL. SINCE THE ISSUE HAS NOT BEEN RAISED BEFORE THE LD. CIT(A), BEING A LEGAL GROUND, WE DIRECT THE LD. CIT(A) TO ADJUDICATE THE GROUND WITH REGARD TO REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT AND PASS FRESH APPELLATE ORDER AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE WE HAVE REMITTED THE LEGAL GROUND RAISED BY THE ASSESSEE TO THE FILE OF THE LD. CIT(A) FO R I.T.A. NO . 3307 / M/ 1 6 4 ADJUDICATION, WE ARE NOT INCLINED TO ADJUDICATE OTHER ISSUES RAISED BY THE ASSESSEE ON MERITS. 3. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 03 RD APRIL , 201 7 AT CHENNAI. SD/ - SD/ - (C HANDRA POOJARI) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 03 . 0 4 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.