Nava Bharat Ventures Limited, Hyderabad V. Asst. Commissioner of Income Tax, Circle-16(1), Hyderabad

ITA 384/Hyd/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7224 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: V SHIVA KUMAR
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Difference of opinion; Validity of assessment; Revised return; Change of opinion; Reassessment proceedings; Set aside; Capital Gains
• Section: 92C; 143(3); 50C; 115JB; 144C; 148

Judgement Text

ITA NO 384 OF 2 018 NAV BHARAT VENTURES LTD PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ITA NO.384/HYD/2018 ASSESSMENT YEAR:2009-10 NAVA BHARAT VENTURES LTD HYDERABAD PAN:AAACN7327C VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(1) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI V. SHIVA KUMAR REVENUE BY : SMT. N. SWAPNA, DR DATE OF HEARING: 01/09/2020 DATE OF PRONOUNCEMENT: 04/09/2020 ORDER PER D.S. SUNDER SINGH, A.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10 AGAIN ST THE ORDER OF THE CIT (A)-4, HYDERABAD, DATED 29.01. 2018. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, HYDERABAD, DATED 29.01.2018 IS CONTRAR Y TO LAW AND FACTS OF THE CASE. 2. COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HA VE SEEN THAT RE-OPENING OF ASSESSMENT U/S.147 IS BAD I N LAW SINCE NO NEW INFORMATION CAME INTO THE POSSESSION O F THE ASSESSING OFFICER AFTER THE ASSESSMENT FOR THIS YEA R WAS COMPLETED U/S.143(3) AND DURING THE SAID PROCEEDING S COPY OF SALE DEED FOR LAND REGISTERED ON 23-7-2008 WAS SUBMITTED WHEREIN DETAILS OF MARKET VALUE OF LAND W AS MENTIONED IN AN ANNEXURE TO THE SALE DEED. HENCE RE - OPENING OF ASSESSMENT ON THE GROUND THAT INFORMATIO N REGARDING MARKET VALUE OF LAND WAS GATHERED AFTER T HE ORIGINAL ASSESSMENT WAS COMPLETED IS NOT BORNE OUT BY RECORD AND FOR FAR FROM TRUTH. HENCE RE-OPENING OF ASSESSMENT BASED ON THE INFORMATION ALREADY AVAILAB LE ON RECORD IS NOT PROPER AND CORRECT. ITA NO 384 OF 2 018 NAV BHARAT VENTURES LTD PAGE 2 OF 7 3. THE COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF ASSESSING OFF ICER IN SUBJECTING TO ASSESSMENT THE CAPITAL GAINS OF RS.2,71,89,574/- IN ASST. YEAR 2009-10 STATING THAT THERE IS NO DISPUTE WITH REGARD TO APPLICATION OF PROVISI ONS OF SEC.50C WHEN THE APPELLANT HAD IN DETAIL SUBMITTED ITS OBJECTIONS TO APPLICABILITY OF PROVISIONS OF SEC.50 C IN ASST. YEAR 2009-10. THE COMMISSIONER OF INCOME TAX (APPEA LS) OUGHT TO HAVE SEEN THAT THE LAND WAS TRANSFERRED BY THE APPELLANT IN THE FINANCIAL YEAR 1995-96 AS PER PROV ISIONS OF SEC.2(47) OF THE ACT. THEREFORE, THE ASSESSING O FFICER OUGHT TO HAVE SEEN THAT THE TRANSFER OF THE LAND BY THE APPELLANT HAD ALREADY TAKEN PLACE IN THE FINANCIAL YEAR 1995-96 RELEVANT TO THE ASSESSMENT YEAR 199697 AND IN ASSESSMENT YEAR 2009-10 ONLY SALE DEED WAS EXECUTED IN COMPLIANCE WITH UNDERSTANDING THAT TOOK PLACE IN TH E ASSESSMENT YEAR 1996-97. 4. FOR ALL OF THE ABOVE AND SUCH OTHER GROUNDS AS M AY BE URGED AT THE TIME OF HEARING IT IS MOST RESPECTFULL Y PRAYED THAT THIS HON'BLE TRIBUNAL MAY BE PLEASED TO ALLOW THE APPEAL AND DIRECT THE RESPONDENT HEREIN TO DELETE L ONG TERM CAPITAL GAINS OF RS.2,71,89,574/DETERMINED IN ASST. YEAR 2009-10 IN THE INTEREST OF JUSTICE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME FOR THE A.Y 2009-10 ADMITTING TOTAL INCOME OF RS.99,58,77,640/- ON 30.09.2009 AFTER CLAIMING D EDUCTION UNDER CHAPTER VIA AMOUNTING TO RS.374,22,35,801/- A ND DECLARED THE BOOK PROFIT, U/S 115JB OF THE ACT AT RS.550,85,90,513/-. LATER ON THE ASSESSEE COMPANY F ILED REVISED RETURN OF INCOME REVISING THE TOTAL INCOME TO RS.92 ,53,77,848/- AND THE ASSESSMENT WAS COMPLETED U/S 143 R.W.S. 92C A(3) AND SECTION 144C OF THE ACT DETERMINING THE TOTAL INCOM E OF RS.94,10,66,297/-. IN THE REASSESSMENT PROCEEDINGS, THE AO MADE THE ADDITION OF RS.2,71,89,574/- RELATING TO L ONG TERM CAPITAL GAINS INVOKING THE PROVISIONS OF SECTION 50 C OF INCOME TAX ACT. AGAINST WHICH THE ASSESSEE WENT ON APPEAL BEFO RE THE CIT (A) AND THE LD.CIT (A) DISMISSED THE APPEAL OF THE ASSE SSEE. HENCE THE ASSESSEE FILED THIS APPEAL BEFORE THE ITAT. ITA NO 384 OF 2 018 NAV BHARAT VENTURES LTD PAGE 3 OF 7 3. WHEN THE APPEAL WAS TAKEN UP FOR HEARING, ASSAI LING GROUND NO.2 REGARDING THE VALIDITY OF REOPENING OF THE ASSESSMENT THE LEARNED AR SUBMITTED THAT IN THE INSTANT CASE T HE ASSESSMENT WAS ORIGINALLY COMPLETED U/S 143(3) ON 30.03.2013 A ND THE NOTICE U/S 148 WAS ISSUED ON 4.11.2015 I.E BEYOND FOUR YEA RS FROM THE END OF THE RELEVANT A.Y. THE ISSUE INVOLVED FOR REO PENING OF THE ASSESSMENT WAS ASSESSMENT OF CAPITAL GAINS INVOKING THE PROVISIONS OF SECTION 50C OF THE I.T. ACT. TAKING R EFERENCE TO PAGE NO.9 OF THE PAPER BOOK, THE AR SUBMITTED THAT THE A SSESSEE SOUGHT FOR REASONS FOR REOPENING THE ASSESSMENT AN D IN PAGE NO.10 OF THE PAPER BOOK THE AR ENCLOSED THE REASONS SUPPLIED BY THE AO VIDE LETTER DATED 28.01.2016. ONE OF THE REA SONS FOR REOPENING THE ASSESSMENT IS WITH REGARD TO SALE OF PROPERTY SITUATED AT MALKAJAGIRI SRO FOR WHICH THE SRO VALUE WAS DETERMINED AT RS.2,71,97,000/- AGAINST THE ACTUAL C ONSIDERATION RECEIVED AT RS.8.00 LAKHS. ACCORDING TO THE AO, THE DIFFERENCE RESULTED IN SHORT COMPUTATION OF CAPITAL GAINS INCO ME WHICH PROMPTED THE AO TO REOPEN THE ASSESSMENT. IN THIS R EGARD, THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAS FURNISHE D THE ENTIRE INFORMATION BEFORE THE AO DURING THE ORIGINAL ASSES SMENT PROCEEDINGS AND NO NEW INFORMATION WAS RECEIVED BY THE AO. REFERRING TO PAGE NO.24 TO 28 OF THE PAPER BOOK, TH E AR SUBMITTED THAT THE ORIGINAL SALE DEED WAS PLACED BEFORE THE A O, WHEREIN THE COMPLETE DETAILS WERE FURNISHED WITH REGARD TO THE ACTUAL SALE CONSIDERATION AND THE MARKET VALUE OF THE PROPERTY. IN PAGE NO.28, THE MARKET VALUE OF THE PROPERTY WAS MADE A VAILABLE TO THE AO IN ANNEXURE-1(A) AND AS PER THE SALE DEED T HE ACTUAL SALE CONSIDERATION RECEIVED WAS STATED TO BE RS.8.00 LAK HS, AGAINST THE MARKET VALUE OF RS.2,71,97,000/-. THUS, ARGUED THAT SINCE, THE ENTIRE INFORMATION WAS PLACED BEFORE THE AO AND FOU R YEARS HAVE BEEN LAPSED FROM THE END OF THE RELEVANT A.Y AND NO FRESH ITA NO 384 OF 2 018 NAV BHARAT VENTURES LTD PAGE 4 OF 7 INFORMATION WAS RECEIVED BY THE AO, THE REOPENING O F THE ASSESSMENT IS BAD IN LAW AND ACCORDINGLY REQUESTED TO QUASH THE NOTICE ISSUED U/S 148 OF THE ACT. THE LEARNED AR FU RTHER SUBMITTED THAT THOUGH THE ASSESSEE HAS NOT SPECIFIC ALLY RAISED THE GROUND WITH REGARD TO VALIDITY OF ISSUE OF NOTICE U /S 148, IN GROUND NO.1 THE ASSESSEE CHALLENGED THE VALIDITY OF ASSESSMENT MADE UNDER SECTION 143(3) R.W.S 147 BEFORE THE CIT (A) AND MADE WRITTEN SUBMISSION CHALLENGING THE VALIDITY OF ISS UE OF NOTICE U/S 148 BEYOND 4 YEARS WITHOUT HAVING ANY FRESH INFORMA TION AND THE LEARNED CIT (A) HAS NOT DECIDED THE ISSUE AND SUMMA RILY REJECTED THE ASSESSEES CONTENTION. THEREFORE, THE LEARNED A R ARGUED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND NOTICE ISSUED U/S 148 IS REQUIRED TO BE QUASHED. 4. ON THE OTHER HAND, THE LD DR SUBMITTED THAT THE LD.CIT (A) HAS DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND OF REOPENING OF THE ASSESSMENT AND UPHELD THE REOPE NING OF ASSESSMENT. SINCE THERE IS NO SPECIFIC GROUND RAISE D BY THE ASSESSEE, BEFORE THE CIT (A), THE LD.CIT (A) RIGHTL Y DECIDED THE APPEAL AND HENCE THERE IS NO ERROR IN THE ORDER OF THE LEARNED CIT (A), THUS, REQUESTED TO UPHOLD THE ORDER OF THE LD.CIT(A) AND NO INTERFERENCE IS CALLED FOR. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. BEFORE THE CIT (A) THOUGH THERE WAS NO SPECIFIC GROUND RAISED BY THE ASSESSEE WITH REGARD TO VALIDITY OF REOPENING OF ASSESSMENT, THE ASSESSEE H AS MADE SUBMISSIONS ON REOPENING OF THE ASSESSMENT VIDE LET TER DATED 18.07.2016 WHICH WAS DISCUSSED BY THE LEARNED CIT ( A) IN PARA 4.2.OF HER ORDER WHICH READS AS UNDER: ITA NO 384 OF 2 018 NAV BHARAT VENTURES LTD PAGE 5 OF 7 4.2 DURING THE COURSE OF APPEAL PROCEEDINGS, WITH REGAR D TO ABOVE GROUND, THE APPELLANT COMPANY SUBMITTED AS UNDER: THE APPELLANT COMPANY SUBMITTED OBJECTIONS AGAINST REOPENING OF THE ASSESSMENT BY ITS LETTER DT. 18-07 -2016. AS PER PROVISO TO SEC.147, WHERE AN ASSESSMENT WAS ALREADY COMPLETED U/ S 143(3) SUCH ASSESSMENT CANNO T BE REOPENED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IN WHICH THE ASSESSMEN T WAS COMPLETED. THEREFORE, IN OUR CASE, SINCE OUR ASSESSMENT WAS COMPLETED U/ S 143(3). THE SAME CANN OT BE REOPENED AFTER FOUR YEARS OF THE RELEVANT ASSESS MENT YEAR I.E., THE ASSESSMENT CANNOT BE REOPENED BEYOND 31- 03-2014 UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON OUR PART IN DISCLOSING FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETION O F ASSESSMENT FOR THAT ASSESSMENT YEAR. WE SUBMIT THAT SINCE THE NOTICE U/S 148 WAS ISSUED ON 6-11-2015 WHICH IS AFTER FOUR YEARS OF A. Y. 2009-1 0, THE REOPENING OF ASSESSMENT IS BAD IN LAW. IN THIS CONNECTION WE RELY ON THE DECISION OF HON ' BLE SUPREME COURT IN THE CASE OF CIT VS. FORAMER FRANCE (264 ITR 566) AND DECISION OF ANDHRA PRADESH HIGH COURT IN THE CASE OF MAHALAKSHMI MOTORS LTD. VS. DCIT(265 IT R 53) ETC., THEREFORE, WE SUBMIT THAT SINCE ALL THE INFORMATION RELATING TO VARIOUS ISSUES NOTED IN REASONS RECORDE D FOR REOPENING THE ASSESSMENT WERE THERE BEFORE THE THEN ASSESSING OFFICER AT THE STAGE OF ORIGINAL AT AND T HERE WAS NO FAILURE ON OUR PART TO DISCLOSE FULLY AND TR ULY ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT. THEREFORE, WE SUBMIT THAT NO NEW MATERIAL WHICH WAS NOT FURNISHED BY US AT THE TIME OF ORIGINAL ASSESSM ENT WITH REGARD TO THE SAID ISSUES HAS COME ON RECORD A FTER THE ASSESSMENT IS COMPLETED AND THEREFORE REOPENING OF ASSESSMENT IS ONLY DUE TO MERE CHANGE OF OPINION AN D THAT TOO BEYOND THE TIME LIMIT AS SPECIFIED IN THE PROVISO TO SEC. 147 OF THE ACT WHICH IS BAD IN LAW. WE RELY ON THE FOLLOWING CASES. CIT VS. BHAVIJI LAVJI (79 ITR 582(SC)) CIT VS. KELVINATOR OF INDIA LTD. (256 ITR 1 (DELHI) (FB)) JCIT VS. GEORGE WILLIAMSON(ASSAM) LTD. (258 ITR 126(GAUHATI)), ETC. ITA NO 384 OF 2 018 NAV BHARAT VENTURES LTD PAGE 6 OF 7 WE THEREFORE SUBMIT THAT SINCE ALL DETAILS ARE AVAI LABLE ON RECORD TO THE THEN ASSESSING OFFICER, THERE IS N O OCCASION FOR REOPENING OUR ASSESSMENT FOR THE A. Y. 2009- 10 BEYOND FOUR YEARS FROM END OF SUCH ASSESSMENT YE AR AND REQUEST YOUR GOODSELVES TO CLOSE THE REASSESSME NT PROCEEDINGS INITIATED U/ S 148 AND OBLIGE FOR WHICH ACT OF KINDNESS WE SHALL BE THANKFUL TO YOU. 4.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND SUBMISSIONS OF THE APPELLANT. IT IS OBSERVED THAT T HE ASSESSING OFFICER DURING THE COURSE OF REASSESSMENT PROCEEDINGS, AS PER THE 50C DATA COLLECTED BY THE DEPARTMENT, COMMUNICATED THE DETAILED REASONS FOR REOPENING OF THE ASSESSMENT. AS PER 50C DATA, THE MARKET VALUE OF THE PROPERTY SOLD WAS MUCH HIGHER T HAN THE SALE CONSIDERATION ADMITTED BY THE APPELLANT COMPANY. THEREFORE, THE ASSESSING OFFICER IS CORREC T IN REOPENING OF THE ASSESSMENT AND HENCE, THE GROUND RAISED BY THE APPELLANT COMPANY IN THIS REGARD DISMISSED. 6. THE LEARNED CIT (A) HAS SUMMARILY REJECTED THE CONTENTIONS OF THE ASSESSEE WITHOUT CONSIDERING THE DETAILED WRITTEN SUBMISSION AND THE FACTS PLACED BEFORE HER. IT IS THE OBLIGATION OF THE LEARNED CIT(A) TO CONSIDER ALL TH E FACTS AND DECIDE THE ISSUE IN SPEAKING ORDER. IN THE INSTANT ORDER THE LD.CIT(A) HAS NOT DISCUSSED THE FACTS PLACED BEFORE HER AND THE REASONING FOR REJECTION OF ASSESSEES CONTENTION RE GARDING THE VALIDITY OF REOPENING THE ASSESSMENT. THEREFORE, W E, ARE OF THE CONSIDERED VIEW THAT THE ISSUE WITH REGARD TO THE V ALIDITY OF THE REOPENING OF THE ASSESSMENT NEEDS TO BE ADDRESSED B Y THE LEARNED CIT (A) IN THE LIGHT OF THE FACTS PLACED BY THE ASS ESSEE IN ITS WRITTEN SUBMISSIONS. HENCE, WE SET ASIDE THE MATTER TO THE FILE OF THE CIT (A) WITH A DIRECTION TO CONSIDER ALL THE FA CTS AND SUBMISSIONS MADE BY THE ASSESSEE AND THE EVIDENCE P LACED BEFORE THE CIT (A) AND DECIDE THE ISSUE AFRESH ON MERITS A FTER GIVING OPPORTUNITY TO THE ASSESSEE. ITA NO 384 OF 2 018 NAV BHARAT VENTURES LTD PAGE 7 OF 7 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2020. SD/- SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER (D.S.SUNDAR SINGH) ACCOUNTANT MEMBER HYDERABAD, DATED 4 TH SEPTEMBER, 2020. VINODAN/SPS COPY TO: 1 NAV BHARAT VENTURES LTD, 6-3-1109/1 NAVA BHARAT C HAMBERS, RAJ BHAVAN ROAD, SOMAJIGUDA, HYDERABAD 500082 2 ACIT, CIRCLE 16(1) HYDERABAD 3 CIT (A)-4 HYDERABAD 4 PR. CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER