P. Vijaya Kumar, Hyderabad V. ITO,Ward 6(3), Hyderabad

ITA 388/HYD/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4406 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 28-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Cost of acquisition
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 388/HYD/2014 ASSESSMENT YEAR: 2009-10 P. VIJAYA KUMAR HYDERABAD [PAN: ADYPP7273K] VS THE INCOME TAX OFFICER, WARD-6(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI A. SITARAMA RAO, DR DATE OF HEARING : 28-09-2016 DATE OF PRONOUNCEMENT : 30-11-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, HYDERABAD, DATED 13-12-2013. THE ISSUE IN THIS APPEAL IS WITH REFEREN CE TO COST OF IMPROVEMENT CLAIMED BY ASSESSEE TO AN EXTENT OF RS. 4 7,46,404/- SPENT IN TWO FINANCIAL YEARS WHICH WAS DISALLOWED BY THE ASSESSING OFFICER (AO). I.T.A. NO. 388/HYD/2014 P. VIJAYA KUMAR :- 2 -: 2. BRIEFLY STATED, ASSESSEE HAS SOLD A PROPERTY AT GAJULARAMARAM FOR RS. 1.05 CRORES AND CLAIMED COST O F ACQUISITION AND DEVELOPMENT EXPENSES AT RS. 99,96,854/-. AO HAS NOTED THAT ASSESSEE HAS CLAIMED COST OF ACQUISITION AT RS. 52,50, 000/- AND COST OF IMPROVEMENT IN FY. 2007-08 AT RS. 28,50,450/- AND IN FY. 2008-09 AT RS. 18,96,404/-. AO NOTED THAT THE LAND IS PLAIN AND ASSESSEE COULD NOT HAVE INCURRED SO MUCH OF EXPENDIT URE. HE VERIFIED THE GOOGLE MAPS OVER A PERIOD AND NOTED THAT L AND WAS OF PLAIN TERRAIN AND ALSO DEPUTED AN INSPECTOR TO EXAMINE AND REPORT. THE ITI CONDUCTED FILED ENQUIRY AND NOTED THAT THERE WAS A COMPOUND WALL ON THREE SIDES OF THE PROPERTY AND THE N EAREST HILL OR UP LAND WAS 1.5 KMS AWAY FROM THE PLOT. BY ENCLOS ING THE PHOTOS OF THE PLOT AS WELL AS GOOGLE EARTH MAPS, AO CON CLUDED THE CLAIM OF IMPROVEMENT IS NOT CORRECT. HOWEVER, HE HAS ALLOWED AN AMOUNT OF RS. 2,50,000/- TOWARDS CONSTRUCTION OF COMPO UND WALL AND FOR OTHER EXPENDITURE, THEREBY RE-WORKING OUT THE SHORT TERM CAPITAL GAIN. 3. WHEN CONTESTED BEFORE THE LD.CIT(A), LD.CIT(A) DID NOT TAKE INTO CONSIDERATION THE REPORT OF THE ITI AND THE GOOGLE MAPS ON THE REASON THAT THEY HAVE NEITHER ESTABLISHED NOR DISPROVED ASSESSEES CLAIM. HOWEVER, THE CIT(A) EXAMINED THE NATURE OF EXP ENDITURE VIDE PARA 4.4 AND NOTED THAT THE PAYMENTS WERE MADE OVER A PERIOD OF TIME AND ASSESSEE COULD HAVE SUBSTANTIATED THE EXPENDITURE. SINCE ASSESSEE FAILED TO DISCHARGE THE O NUS, THE ORDER OF AO WAS UPHELD. AGGRIEVED, THE PRESENT APPEAL. I.T.A. NO. 388/HYD/2014 P. VIJAYA KUMAR :- 3 -: 4. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N HOLDING THAT THE APPELLANT DID NOT INCUR EXPENDITURE ON DEVELOPMENT OF LAND. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ISALLOWING COST OF IMPROVEMENTS BY WAY OF DEVELOPMENT EXPENDITURE CLAI MED BY THE APPELLANT OF RS. 44,96,404/-. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ETERMINING THE CAPITAL GAIN AT RS. 55 LAKHS AS AGAINST RS. 5,03,14 6/-. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING LEVY OF INTEREST U/S. 234A, U/S. 234B AN D U/S. 234C OF THE I.T. ACT. GROUND NOS. 1 & 6 ARE GENERAL IN NATURE. 5. WE HAVE HEARD THE LD. COUNSEL AND LD. DR. 6. IN THE COURSE OF THE PRESENT PROCEEDINGS, ASSESSEE S COUNSEL WAS ASKED TO PLACE ON RECORD THE DETAILS OF RETURNS OF INCOME AND ENCLOSURES FILED WITH THE RETURNS OF INCOME IN EARLIER YEARS ALONG WITH COPIES OF SALE DEED AND PURCHASE DEED. IN THE PAPER BOOK FROM PAGES 76 TO 120, ASSESSEE HAS PLACED ON RECORD THE COPIES OF RETURNS OF INCOME ALONG WITH ENCLOSURES AND ALSO SALE DEED DOCUMENTS AND ONE PURCHASE AGREEMENT I.E., AGREEMENT O F SALE CUM GENERAL POWER OF ATTORNEY DT. 24-03-2007 FOR A CON SIDERATION OF RS. 10 LAKHS. 7. ON PERUSING THE ABOVE DOCUMENTS WHICH ARE PLACED A FTER HEARING OF THE CASE ON 28-09-2016, IT WAS NOTICED THAT ASSESSEE HAS SHOWN PURCHASE OF TWO PROPERTIES AT GAJULARAMARAM AND AS I.T.A. NO. 388/HYD/2014 P. VIJAYA KUMAR :- 4 -: PER THE BALANCE SHEET AS ON 31-03-2007, THE COST OF PRO PERTY WAS SHOWN AT RS. 10,52,150/- EACH. THE COST TALLEYS WITH T HE PURCHASE CUM SALE AGREEMENT PLACED ON RECORD FOR SURVEY NO. 2 06 EQUIVALLENT TO 42 GUNTAS (PART). WHETHER THIS AGREEMENT IS FOR THE WHOLE OF THE PROPERTY OR ONLY PART OF THE PROPERTY COU LD NOT BE VERIFIED AS ONLY THIS DOCUMENT INDICATING RS. 10 LAKHS COST WAS PLACED ON RECORD. AS PER THE BALANCE SHEET, THERE ARE TWO PROPERTIES COSTING ALMOST SAME PRICE AT RS. 10,52,150/- AND RS. 10,52,110/-. AS ON 31-03-2008, THE VALUE OF THE PROPERTY HAD DIFFERED. AS SEEN FROM THE BALANCE SHEET PLACED IN P G. 89, FOR THE YEAR ENDING 31-03-2008, THE LAND AT GAJULARAMARAM AT SURVEY NO. 206 WAS SHOWN AT RS. 81,00,450/- AND THE LAND AT GA JULARAMARAM IN SURVEY NOS. 335/A, 336, 337 AND 336 WAS SHOWN AT THE SAME COST OF RS. 10,52,110/-. THE ABOVE INDICATES THAT THE IMPUGNED LAND WHICH IS SOLD DURING THE YEAR WAS ONLY COSTING RS. 10,52,110/- AND THE VALUE HAS BEEN SHOWN AS ON 31-0 3-2008 AT RS. 81,00,450/-. ASSESSEES CLAIM OF COST OF LAND I NCLUDING IMPROVEMENTS AS PER THE AOS ORDER WAS AT RS. 99,96,85 4/-. SINCE THE COST OF LAND AND THE COST OF IMPROVEMENT SHOWN ON T HE PARTICULAR PIECE OF LAND IS AT VARIANCE WITH THAT OF V ALUES SHOWN IN THE ASSESSMENT ORDER, IN THE INTEREST OF JUSTICE, WE ARE OF THE OPINION THAT THE ENTIRE COST AS WELL AS COST OF IMPROVEME NT NEEDS VERIFICATION BY THE AO AFRESH, NOT ONLY ON THE BASIS OF THE RETURNS FILED BY ASSESSEE IN EARLIER YEAR BUT ALSO ON THE BA SIS OF THE BANK ENTRIES AND OTHER BOOK ENTRIES. IT IS NOTICED THAT ASSES SEE IS PARTNER IN A FIRM AND HAS VARIOUS INCOMES AND HAS BE EN FILING RETURNS REGULARLY. IN VIEW OF THAT, WE ARE OF THE OPIN ION THAT THIS FORUM CANNOT ARRIVE AT ANY DECISION WITHOUT EXAMINATIO N ON THE FACTS AND ACCORDINGLY, WE ARE OF THE OPINION THAT THE EN TIRE ISSUE I.T.A. NO. 388/HYD/2014 P. VIJAYA KUMAR :- 5 -: SHOULD BE RE-EXAMINED BY THE AO. FOR THIS PURPOSE, THE ORDERS OF THE AO AND CIT(A) ARE SET ASIDE AND ENTIRE ASSESSMENT F OR COMPUTATION OF SHORT TERM CAPITAL GAIN IS RESTORED TO THE FILE OF AO. THE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBE R HYDERABAD, DATED 30 TH NOVEMBER, 2016 TNMM COPY TO : 1. SHRI P. VIJAYA KUMAR, HYDERABAD. C/O. SRI S. RAM A RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, H.NO. 3- 6-643, ST. NO. 9, HIMAYATNAGAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-6(3), HYDERABAD. 3. THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, HYDE RABAD. 4. THE COMMISSIONER OF INCOME TAX-III, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.