Sulekha Polavarapu Kumar, USA, Hyderabad V. ADIT,(INT. TAXN)-1, Hyderabad

ITA 350/Hyd/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9799 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 24-10-2022
• Assessment Year: 2019-2020
• Appeal Filed On: 10-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHASKAR REDDY
• Keywords: Gift; Transfer pricing; Cost of acquisition; Valuation report; Set aside; Capital Gains
• Section: 143(3)

Judgement Text

आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”, HYDERABAD BEFORE SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA Nos. निर्धारण वर्ा / A.Y. अपीलधर्थी / Appellant प्रत् यर्थी / Respondent 349/Hyd/2022 2019-20 Dr. (Mrs.) Renuka Lingam Kumar, East Mequon, Wisconsin 53092 (USA) [PAN: CWKPK5605H] ADIT (Int.Taxn)-1, Hyderabad 350/Hyd/2022 2019-20 Dr. Sulekha Polavarapu Kumar, Texas, USA [PAN: CFZPK7545E] निर्धाररती द्वधरध / Assessee by: Shri Y. Ratnakar, AR रधजस् व द्वधरध / Revenue by: Shri Bhaskar Reddy, CIT-DR स ु िवधई की तधरीख/Date of hearing: 25/10/2022 घोर्णध की तधरीख/Pronouncement on: 25/10/2022 आदेश / ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the order dated 07/07/2022, passed by the learned ADIT (Int. Taxn)-1, Hyderabad (“Ld. AO”) in the cases of Smt. Renuka ITA Nos. 349 & 350/Hyd/2022 Page 2 of 5 Lingam Kumar and Smt. Sulekha Polavarapu Kumar (“the assessees”) for the assessment year 2019-20, under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (for short “the Act”), consequent to the directions of Hon'ble Dispute Resolution Panel, Bengaluru (“DRP”), assessees filed these appeals. 2. Brief facts of the case are that both the assessees are non-resident Indians for over four decades. They received as gift from their father each 1/3 rd share in the property bearing M.No. 8-2-293/82/A/196, Road No. 13, Jubilee Hills admeasuring 1363.40 Sq. Yds of land and 4000 sq. ft. of structure under Gift Deed dated 27/02/1999. They sold the said property on 02/01/2019 for a total consideration of Rs. 12.75 crores wherein each of the assessees got Rs. 4.25 crores. They have taken the cost of acquisition basing on the value of the land at Rs. 16,500 per sq. yard vide report dated 19/10/2018 to reach the indexed cost of acquisition at Rs. 2,21,15,332/- each whereas the learned Assessing Officer referred the matter to the valuation officer and basing on the report of the SRO to the effect that the guidance value was Rs. 3,500/- per sq. yard as on 01/04/2001 to determine the indexed cost of acquisition at Rs. 55,72,537/-. This resulted in the capital gains of Rs. 2,01,50,264/- according to the assessee and Rs. 3,69,27,463/- according to the learned Assessing Officer. 3. Assessees filed objections before the learned DRP but the learned DRP rejected the objections on the ground that the assessees have not rebutted the guideline value even during the DRP proceedings and no instances of sale in the vicinity of the transferred land wherein the sale value was more than Rs. 3,500/- per sq. yard was shown. Consequently, assessment orders dated 07/07/2022 were passed in the case of both the assessees. Aggrieved by such an action of the authorities, assessees preferred these appeals. 4. At the outset, it is the submission on behalf of the assessees that the assessees are non-resident Indians for over four decades, they are not ITA Nos. 349 & 350/Hyd/2022 Page 3 of 5 aware of the conditions prevailing in Hyderabad in respect of land rates and, therefore, they could not obtain the relevant information like copy of valuation report etc., before the closure of the proceedings by the learned DRP. Learned AR submitted that having obtained the relevant documents having a bearing on the merits of the issue, the assessees now filed the objections with sufficient material by way of additional evidence. He prayed that if an opportunity is granted, the assessees are ready to furnish the required material to substantiate their cases in respect of valuation of the indexed cost of acquisition. 5. Though the Learned DR did not concede the arguments raised by the Learned AR, he submits that when the assessees got the property by way of gift from their father, the gift must have been valued at market value and, therefore, if such gift deed is available, there will not be much difficulty to calculate the indexed cost of acquisition. According to him, it is the crucial document that requires to be produced in this matter. 6. Be that as it may, even if the gift deed is produced, the facts need verification at the end of the learned Assessing Officer. Since the assessees are producing the relevant material to be considered by the learned Assessing Officer which they could not produce at earlier point of time in view of the fact that being the non-resident Indians for over forty decades, they do not know the state of affairs at Hyderabad and the relevant documents to be obtained to prove their case, we are of the considered opinion that the matter requires factual verification. Above all, all our endeavor is to determine the correct tax liability of the assessees. 7. With this view of the matter, we set aside the impugned orders and restore the issue(s) to the file of the learned Assessing Officer for fresh factual verification of the matter and to take appropriate view according to law. Assessees are directed to produce all the relevant material before learned Assessing Officer in support of their contentions without any ITA Nos. 349 & 350/Hyd/2022 Page 4 of 5 undue delay. Grounds are accordingly treated as allowed for statistical purposes. 8. In the result, both the appeals of the assessees are treated as allowed for statistical purposes. Order pronounced in the open court on this the 25 th day of October, 2022 Sd/- Sd/- (RAMA KANTA PANDA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 25/10/2022 TNMM ITA Nos. 349 & 350/Hyd/2022 Page 5 of 5 Copy forwarded to: 1. Dr. (Mrs.) Renuka Lingam Kumar, C/o. Vinay Kumar Kabra, Chartered Accountant, 3-3-925/A, Kutbiguda, Hyderabad. 2. Dr. Sulekha Polavarapu Kumar, C/o. Vinay Kumar Kabra, Chartered Accountant, 3-3-925/A, Kutbiguda, Hyderabad. 3. ADIT (Int. Taxn)-1, Hyderabad. 4. The Dispute Resolution Panel (DRP), Bengaluru. 5. The Director of Income Tax (IT & TP), Hyderabad. 6. The Addl. Commissioner of Income Tax (Transfer Pricing), Hyderabad. 7. DR, ITAT, Hyderabad. 8. GUARD FILE TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD