M/s Sri Varaha Laxmi Nrusimha Swamy Devasthanam, Visakhapatnam V. The ITO Ward-6(3), Visakhapatnam, Visakhapatnam

ITA 375/VIZ/2012

• Counselvise Citation: 37525314 RSA 2012
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 15-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARISH KUMAR
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH : VISAKHAPATNAM BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.374, 375 & 376/VIZAG/2012 ASSESSMENT YEARS 2008-2009, 2009-2010 & 2010-2011 SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM. PAN AAALS1522P VS. THE INCOME TAX OFFICER WARD 6(3) VISAKHAPATNAM (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. G.V.N. HARI FOR REVENUE : MR. SARISH KUMAR DATE OF HEARING : 25.02.2015 DATE OF PRONOUNCEMENT : 04.03.2015 ORDER PER J. SUDHAKAR REDDY, A.M. ALL THESE APPEALS ARE FILED BY THE ASSESSEE AND A RE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE COM MISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM DATED 28.06. 2012 FOR THE ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-2011 . 2. ON APPEAL, THE FIRST APPELLATE AUTHORITY PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE INGR EDIENTS WHICH ARE REQUIRED FOR THE APPLICATION OF PROVISIONS OF S ECTION 194LA ARE FULFILLED AND HENCE, THE ASSESSEE WAS DUTY BOUND TO DEDUCT TAX ON THE PAYMENTS MADE AS PER SECTION 194LA OF THE I. T. ACT. AGGRIEVED, ASSESSEE IS IN APPEAL ON THE FOLLOWING G ROUNDS : 1. THE PETITIONER/APPELLANT HAS FILED THE APPEAL ON 15.10.2012 AFTER REMITTING A SUM OF RS.500 TOWARDS TRIBUNAL FEES IN ACCORDANCE WITH THE PROVISIONS OF SECTION 263(6)D. 2. THE PETITIONER/APPELLANT HAS BEEN ADVISED BY THE OF FICE OF ITAT TO REMIT A SUM OF RS.9500 SINCE THE FEES PAID WAS SHORT BY RS.9500. 2 ITA.NO.374, 375 & 376/VIZAG/2012 SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM. 3. THE PETITIONER/APPELLANT WOULD LIKE TO SUBMIT THAT THE APPEAL WAS FILED AGAINST THE ORDER OF THE LD. CIT(A ) WHO HAS UPHELD THE ORDER PASSED BY THE ITO, TDS, WARD 6 (3) OF VISAKHAPATNAM CONSEQUENT TO DEMANDS U/S.201(1), 201(1A) RAISED BY ITO, TDS, WARD 6(3), VISAKHAPATNA M. 4. THE PETITIONER/APPELLANT WOULD LIKE TO SUBMIT THAT THE TRIBUNAL FEES PAID AS PER SECTION 253(6)D. ACCORDIN G TO WHICH THE FILING FEES STOOD AT RS.500 ONLY. THE PETITIONER/APPELLANT WOULD LIKE TO SUBMIT THAT THE DEMANDS RAISED WERE NOT WITH REFERENCE TO ASSESSABL E INCOME AND AS SUCH THE PETITIONER/APPELLANT WAS COR RECT IN REMITTING A SUM OF RS.500 TOWARDS TRIBUNAL FEES. 5. THE PETITIONER/APPELLANT WOULD LIKE TO SUBMIT THAT EVEN THE INCOME ASSESSED AS PER THE ORDER OF THE LD. CIT (A) THE INCOME ASSESSED STOOD AT NIL. 6. THE PETITIONER/APPELLANT WOULD LIKE TO SUBMIT THAT IN FORM NO.36 THE PETITIONER/APPELLANT ERRONEOUSLY MENTIONED IN COLUMN NO.3B THE TOTAL INCOME AT RS.1,77,97,910. IN FACT, NO INCOME WAS ASSESSED AT RS.1,77,97,910 AND ACTUALLY THE SAID SUM REPRESENTS COMPENSATION PAID BY THE DEVASTHANAM U/S.194LA OF THE I.T. ACT. ACTION WAS TAKEN BY THE ITO, TDS, WAR D 6(3), VISAKHAPATNAM ERRONEOUSLY FOR NOT DEDUCTING TAX U/S . 194LA OF THE IT ACT ON THE COMPENSATION PAID. 7. THE PETITIONER/APPELLANT IS NOW SUBMITTING A REVISE D FORM NO.36 RECTIFYING THE MISTAKE, WHICH MAY KINDLY BE ADMITTED. 8. THE PETITIONER/APPELLANT REQUESTS THE HONBLE MEMBE RS OF THE TRIBUNAL TO CONSIDER SYMPATHETICALLY AND ADMIT THE APPEAL. 3. LEARNED COUNSEL FOR THE ASSESSEE MR. GVN. HARI SUBMITTED THAT THE ASSESSEE WANTED TO DEVELOP A D IVYAKSHETRAM AND IN THAT PROCESS HAD PAID COMPENSATION TO SOME O F THE PERSONS WHO HAVE ILLEGALLY OCCUPIED AND ENJOYING TH E LAND BELONGING TO THE ASSESSEE SO AS TO GET THEM VACATED . HE SUBMITTED THAT VALUATION REPORTS WERE OBTAINED AND IT WAS ONLY THROUGH NEGOTIATION THAT THE PROPERTY BELONGING TO THE ASSESSEE WAS CLEARED OF ILLEGAL ENCROACHMENTS AND OCCUPATION . HE 3 ITA.NO.374, 375 & 376/VIZAG/2012 SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM. EMPHASIZED THAT THERE IS NO LEGISLATION PASSED AND HENCE, IT IS NOT THE CASE OF COMPULSORY ACQUISITION. HE VEHEMENT LY CONTENDED THAT THE LAND BELONGS TO THE ASSESSEE DEVASTHANAM A ND THAT THERE IS NO TITLE WHATSOEVER WITH THE ILLEGAL OCCUP ANTS AND HENCE, THE QUESTION OF ACQUIRING ONES OWN LAND COMPULSORI LY OR OTHERWISE, DOES NOT ARISE. HE REFERRED TO THE G.OS. PASSED BY THE GOVERNMENT OF ANDHRA PRADESH IN THIS REGARD AND SUB MITTED THAT THIS GOVERNMENT ORDER WAS ONLY AN ENABLING ORDER TO PAY THE COMPENSATION AND NOT A LEGISLATION. HE TOOK US THRO UGH SECTION 194LA AND SUBMITTED THAT THIS SECTION GOVERNS ONLY THOSE CASES WHERE COMPULSORY ACQUISITION OF LAND TAKES PLACE. H E RELIED ON THE FOLLOWING CASE LAWS I.E., (I) NAYA RAIPUR DEVEL OPMENT AUTHORITY VS. ITO (2014) 61 SOT 244( II) ORDER OF H ONBLE HIGH COURT OF BILASPUR IN THE CASE OF ITO (TDS), RAIPUR C.C. VS. NAYA RAIPUR DEVELOPMENT AUTHORITY IN TAX CASE NO. 36 OF 2013 DATED 11 TH JULY, 2014 (III) METRO RAILWAY KOLKATA VS. ITO (20 13) 87 DTR (KOL.) (TRIBU.) 33. 4. LEARNED D.R. MR. SARISH KUMAR ON THE OTHER HAND , OPPOSED THE CONTENTION OF THE ASSESSEE AND SUBMITTE D THAT SECTION 194LA REFERS TO COMPENSATION PAID FOR ANY I MMOVABLE PROPERTY. HE ARGUED THAT IT IS NOT RIGHT TO SAY THA T THE PERSONS TO WHOM COMPENSATION WAS PAID, DID NOT HAVE ANY RIGHTS . HE SUBMITTED THAT THESE PERSONS HAVE CERTAIN RIGHTS AN D IT IS ONLY FOR ACQUIRING THOSE RIGHTS THAT COMPENSATION HAS BEEN P AID. HE RELIED ON THE ORDER OF THE ASSESSING OFFICER AS WEL L AS LD. CIT(A) AND SUBMITTED THAT THE WORDS USED ARE COMPENSATIO N OR CONSIDERATION ON ACCOUNT OF COMPULSORY ACQUISITIO N UNDER ANY LAW AND THIS INCLUDE COMPENSATION PAID FOR IMMOVABL E PROPERTY BEING A STRUCTURE, RESIDENTIAL STRUCTURE ETC., HE A RGUED THAT THE INGREDIENTS PRESCRIBED IN SECTION 194LA ARE SATISFI ED IN THIS CASE. 4 ITA.NO.374, 375 & 376/VIZAG/2012 SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM. 5. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERA TION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND PERU SAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS CITED, WE HOLD AS FOLLOWS : 1. THE UNDISPUTED FACT IS THAT THE COMPENSATION THAT H AS BEEN PAID WAS TOWARDS PRIVATE HOUSES CONSTRUCTED ON THE LAND BELONGING TO THE ASSESSEE. THESE PERSONS T O WHOM COMPENSATION WAS PAID, DID NOT HAVE ANY TITLE IN THE SAID LAND. THERE WAS NO LEGISLATION PASSED FOR ACQUIRING ANY PROPERTY. THE GOVERNMENT G.O.MS.NO. 413 DATED 01.04.2006 CONSTITUTED A COMMITTEE FOR SHIFTING THE RESIDENTS OF THE TOTAL HOUSES AT UPHIL L TO DOWNHILL AND MAKE PAYMENTS TO THE RESIDENTS. SECTIO N 194LA READS AS UNDER : PAYMENTS IN RESPECT OF WHICH TAX IS TO BE DEDUCTED : PAYMENT TO A RESIDENT OF ANY SUM, BEING IN THE NATU RE OF COMPENSATION OR THE ENHANCED COMPENSATION OR THE CONSIDERATION OR THE ENHANCED CONSIDERATION ON ACCO UNT OF COMPULSORY ACQUISITION, UNDER ANY LAW FOR THE TI ME BEING IN FORCE, OF ANY IMMOVABLE PROPERTY (OTHER TH AN AGRICULTURAL LAND INCLUDING LAND SITUATE IN URBAN A REA REFERRED TO IN SECTION 2(14)(III)(A)/(B). NO DEDUCTION SHALL BE MADE WHERE THE AMOUNT OF SUCH PAYMENT OR, AS THE CASE MAY BE, THE AGGREGATE AMOUN T OF SUCH PAYMENTS TO A RESIDENT DURING THE FINANCIAL YE AR DOES NOT EXCEED ONE HUNDRED THOUSAND RUPEES. TIME OF DEDUCTION OF TAX : AT THE TIME OF PAYMENT OR AT THE TIME OF CREDIT, WH ICHEVER IS EARLIER. 2. THE BILASPUR BENCH OF ITAT IN THE CASE OF NAYA RAIP UR DEVELOPMENT AUTHORITY (SUPRA) CONSIDERED THIS SECTI ON AND ON APPEAL BY THE REVENUE, THE HONBLE HIGH COUR T 5 ITA.NO.374, 375 & 376/VIZAG/2012 SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM. OF CHATTISGADH AT BILASPUR IN TAX CASE NO. 36 F 201 3 JUDGMENT DATED 11 TH JULY, 2014 HELD AS FOLLOWS : ITAT HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. IT IS WELL SETTLED THAT THE PRO VISIONS CONCERNING COLLECTION OR LEVY OF TAX HAS TO BE CONS TRUED STRICTLY AND THERE IS NO ROOM FOR ASSUMPTIONS. THE IT ACT IS A SELF-CONTAINED CODE AND WHEREVER THE LEGISLATURE, I N ITS WISDOM, SOUGHT TO ASSUME THE STATE OF AFFAIRS CONTR ARY TO THE PLAIN MEANING OF THE PROVISIONS THE SAME IS ACHIEVE D BY INSERTING A SUB-CLAUSE/PROVISION/ EXPLANATION. IF T HE LEGISLATURE HAS RIOT BROUGHT ANY AMENDMENT TO THE S TATUTE ONE HAS TO GO BY THE PLAIN LANGUAGE OF THE ACT. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE CGNTGIMA, 1973 HAS NO POWER TO COMPULSORILY ACQUIRE THE LAND AND IN FACT, THE BAN ON TRANSFERS IN THE SPECIFIED ZONE IS NOT A DIRECTI VE GIVEN BY THE ASSESSEE HEREIN BUT IT IS THE ACT OF THE STATE GOVERNMENT AND THE ASSESSEE HAS NO ROLE TO PLAY. IN SUCH AN EV ENT OF THE MATTER, IT MAY BE INAPPROPRIATE TO ASSUME THAT THE TRANSACTION IN QUESTION AMOUNTS TO COMPULSORY ACQUI SITION OF LAND. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL , APPEARING ON BEHALF OF THE ASSESSEE, COMPULSORY ACQ UISITION OF LAND IS PERMITTED ONLY UNDER THE SPECIFIC ENACTM ENT WHEREAS, THE ASSESSEE HEREIN HAS NO POWER TO ACQUIR E THE LAND UNDER ANY LAW FOR THE TIME BEING IN FORCE. IF THE POWER OF ACQUISITION IS VESTED IN THE DISTRICT COLLECTOR THE ASSESSEE CANNOT BE INDIRECTLY ASSUMED TO HAVE BEEN VESTED WI TH SUCH POWERS INASMUCH AS THE DISTRICT COLLECTOR, IN HIS C APACITY AS A STATE REPRESENTATIVE, CANNOT BE ASSESSED TO TAX U NDER THE IT ACT WHEREAS, THE ASSESSEE IN ITS STATUS AS 'LOCA L AUTHORITY 1 CAN SUFFER TAX. HAVING REGARD TO THE DISTINCTION CREATED BETWEEN THE TWO SETS OF 'PERSONS', IT HAS T O BE TAKEN INTO ITS LOGICAL CONCLUSION TO HOLD THAT THE ASSESS EE HAS NO POWER TO ACQUIRE THE LAND; ITS DUTY IS LIMITED TO E NTERING INTO MUTUAL SETTLEMENTS WHICH CANNOT BE EQUATED TO COMPU LSORY ACQUISITION OF LAND. UNDER THESE CIRCUMSTANCES, ITA T HOLD THAT THE AO AS WELL AS THE CIT(A) WERE NOT JUSTIFIE D IN HOLDING THAT PROVISIONS OF S. 194LA ARE APPLICABLE IN THE INSTANT CASE. CONSEQUENTLY, THE ASSESSEE LOCAL AUTH ORITY CANNOT BE TREATED TO BE IN DEFAULT UNDER S. 201(1} OF THE IT ACT, 1961. ITAT, THEREFORE, DIRECT THE AO ACCORDING LY. SINCE THE PROVISIONS OF S. 194LA ARE HELD TO BE NOT APPLI CABLE TO THE IMPUGNED TRANSACTIONS ON THE GROUND THAT THE TRANSACTIONS CANNOT BE EQUATED TO COMPULSORY ACQUIS ITION OF LAND, THE ALTERNATIVE SUBMISSIONS MADE BEFORE ITAT NEED NOT BE GONE INTO SINCE THEY ARE ACADEMIC IN NATURE. 6 ITA.NO.374, 375 & 376/VIZAG/2012 SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM. CONCLUSION:. IF POWER OF ACQUISITION WAS VESTED IN DISTRICT COLL ECTOR, ASSESSEE COULD NOT BE INDIRECTLY ASSUMED TO HAVE BE EN VESTED WITH SUCH POWERS, DISTRICT COLLECTOR, IN HIS CAPACITY AS STATE REPRESENTATIVE, COULD NOT BE ASSESSED TO T AX BUT ASSESSEE IN ITS STATUS AS 'LOCAL AUTHORITY' COULD S UFFER TAX. 6. THE REVENUE COULD NOT CITE ANY CONTRARY JUDGMEN TS. HENCE, WE RELY ON THE SOLE JUDGMENT OF THE HONBLE HIGH COURT OF CHATTISGADH, BILASPUR BENCH IN THE CASE OF ITO (TDS ), RAIPUR C.C. VS. NAYA RAIPUR DEVELOPMENT AUTHORITY (SUPRA). IN THESE CIRCUMSTANCES, WE UPHOLD THE CONTENTION OF THE ASSE SSEE AND QUASH THE ORDERS PASSED BY THE ASSESSING OFFICER AS CONFIRMED BY THE FIRST APPELLATE AUTHORITY ON THE GROUND THAT SE CTION 194LA DOES NOT APPLY TO THE FACTS AND CIRCUMSTANCES OF TH IS CASE FOR THE REASON THAT THERE IS NO COMPULSORY ACQUISITION UNDE R ANY LAW FOR THE TIME BEING IN FORCE OF ANY IMMOVABLE PROPERTY B Y THE ASSESSEE. 7. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03 .2015. SD/- SD/- (SAKTIJIT DEY) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM, DATED 4 TH MARCH, 2015. VBP/- 7 ITA.NO.374, 375 & 376/VIZAG/2012 SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM. COPY TO 1. SRI VARAHA LAXMI NRUSIMHA SWAMY DEVASTHANAM, SIMHACHALAM, C/O. M/S. ROWE & PAL, CHARTERED ACCOUNTANTS, 14-36-1, KRISHNA NAGAR, VISAKHAPATNAM. 2. INCOME TAX OFFICER, WARD 6(3), VISAKHAPATNAM. 3. CIT(A), VISAKHAPATNAM 4. CIT-(TDS), HYDERABAD 5. ADDL. COMMISSIONER OF INCOME TAX, RANGE-6, VISAKHAPATNAM. 6. D.R. ITAT, VISAKHAPATNAM BENCH, VISAKHAPATNAM. 7. GUARD FILE. DESCRIPTION DATE 1. DRAFT DICTATED ON 25.02.15 SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR 26.02.15 SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR. P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER //BY ORDER // ASST. REGISTRAR ITAT, VISAKHAPATNAM.