Nagi Reddy Kondakalla, Hyderabad, Hyderabad V. ITO, Ward-8(1), Hyderabad, Hyderabad

ITA 389/HYD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6083 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J PRABHAKAR ANAND
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Principle of natural justice; Revised return; Capital Gains
• Section: 2(14); 147; 148; 144

Judgement Text

ITA NO 389 OF 2017 K NAGI REDDY HYDERABAD.. PAGE 1 OF 5 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.389/HYD/2017 ASSESSMENT YEAR: 2008-09 SHRI K. NAGI REDDY HYDERABAD PAN:APHPK5517J VS. INCOME TAX OFFICER WARD 8 (1) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI T. CHAITANYA KUMAR REVENUE BY : SRI D.J.PRABHAKAR ANAND, DR DATE OF HEARING: 08/09/2020 DATE OF PRONOUNCEMENT: 10/09/2020 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2008-09 AGAIN ST THE ORDER OF THE CIT (A)-2, HYDERABAD, DATED 30.12. 2016. 2. THE CASE WAS TAKEN UP FOR HEARING THROUGH VIDEO- CONFERENCING AND BOTH THE PARTIES I.E. THE LEARNED COUNSEL FOR THE ASSESSEE AND THE LEARNED DR WERE HEARD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, DID NOT FILE ANY RETURN OF INCOME FOR T HE RELEVANT A.Y. THE AO RECEIVED INFORMATION THAT THE ASSESSEE, ALON G WITH ONE SHRI B. SURENDER REDDY, HAVE SOLD PROPERTIES IN MAN IKONDA VIDE SALE DEED NO.633/2007 FOR RS.66,00,00/- AND VIDE SA LE DEED ITA NO 389 OF 2017 K NAGI REDDY HYDERABAD.. PAGE 2 OF 5 NO.387/2008 FOR RS.72,60,000/-, BUT THE ASSESSEE HA S NOT OFFERED CAPITAL GAINS TO TAX BY FILING THE RETURN OF INCOME . AS THE ASSETS SOLD ARE SITUATED WITHIN THE MUNICIPAL LIMIT OF RAJ ENDRANAGAR MUNICIPALITY, AO TREATED THE SAID LAND TO BE CAPITA L ASSETS WITHIN THE MEANING OF SECTION 2(14) OF I.T. ACT. THE AO TH EREFORE, INITIATED PROCEEDINGS U/S 147 OF THE ACT BY ISSUING A NOTICE U/S 148. 3(A). IN RESPONSE TO THE NOTICE U/S.142(4) OF THE A CT, THE ASSESSEES AR APPEARED AND SUBMITTED THAT THE ASSES SEE HAD FILED HIS RETURN OF INCOME FOR THE A.Y 2008-09 ON 31.07.2 008 BY DECLARING AN INCOME OF RS.62,583/-. IT WAS ALSO SUB MITTED THAT THE ASSESSEE HAS FILED A REVISED RETURN FOR THE SAI D A.Y INCORPORATING THE TRANSACTION FROM WHICH CAPITAL GA INS HAS ARISEN. THE ASSESSEE FURTHER SUBMITTED THAT ALONG WITH SHRI B. SURENDER REDDY, THE ASSESSEE HAS PURCHASED A PROPERTY AT MAN IKONDA VIDE AGPA-CUM-SALE DEED NO.5905/2007 FOR AN AMOUNT OF RS.2,47,50,000/- AND THAT HE HAS SOLD ONE MORE PROP ERTY ALONG WITH SHRI B. SURENDER REDDY VIDE DOCUMENT NO.9335/2 007 FOR A CONSIDERATION OF RS.60,00,000/-. THE AO ISSUED A SH OW CAUSE NOTICE DATED 12.02.2016 PROPOSING TO ASSESS THE CAP ITAL GAINS AND ALSO UNEXPLAINED SOURCES TOWARDS ASSESSEES SHARE O F INVESTMENT IN PURCHASE OF LAND VIDE DOCUMENT NO.5905/2007. THE ASSESSEE, HOWEVER, DID NOT APPEAR THEREAFTER NOR DID HE FILE ANY DETAILS AND THEREFORE, THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE I.T. ITA NO 389 OF 2017 K NAGI REDDY HYDERABAD.. PAGE 3 OF 5 ACT BY BRINGING TO TAX A SUM OF RS.1,24,00,000/- TH E ASSESSEES SHARE OF INVESTMENT IN THE PROPERTY AT MANIKONDA PU RCHASED VIDE DOCUMENT NO.5905/2007. AS REGARDS THE PROPERTY SOL D BY THE ASSESSEE ALONG WITH SHRI B. SURENDER REDDY, THE AO TREATED THE GAIN ARISING THEREFROM AS SHORT TERM CAPITAL GAIN A ND BROUGHT THE SUM OF RS.52,70,606/- TO TAX. AGGRIEVED, THE ASSES SEE PREFERRED AN APPEAL BEFORE THE CIT (A). BUT SINCE THE ASSESS EE DID NOT APPEAR BEFORE THE CIT (A), THE CIT (A) DISMISSED TH E APPEAL OF THE ASSESSEE IN LIMINI AND THE ASSESSEE IS IN SECOND AP PEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) IS ERRONEOUS, ILLEGAL AND HELD CONTRARY TO THE FACT S OF THE INSTANT CASE. 2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER WITHOUT GIVING ANY OPPORTUNITY TO THE APPELLANT. 3) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER U/S 144 READ WITH SECTION 147 OF I T ACT WITHOUT CONSIDERING THE CONTENTIONS OF THE APPELLANT. 4) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ISSUING A NOTICE U/S 148 OF THE ACT. 5) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE TRANSACTION WAS SHAM TRANSACTION WITHOUT ANY SALE CONSIDERATION AND OUT TO HAVE HELD THAT THE SAME IS A SHAM TRANSACTION. 6) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE ENTIRE PURCHASE AND SAL E OF LAND TRANSACTIONS ARE BOGUS. 7) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DETERMINING THE LONG TERM CAPITAL GAIN OF RS.1,20,12,261/WITHOUT GIVING ANY OPPORTUNITY CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. ITA NO 389 OF 2017 K NAGI REDDY HYDERABAD.. PAGE 4 OF 5 8) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DETERMINING TOTAL INCOME AT RS.1,21,78,510 /- AGAINST THE INCOME ADMITTED OF RS.62,583/-. 9) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CHARGING INTEREST U/S 234A OF RS.3,56,330/ - U/S 2348 OF RS.26,03,950/- AND U/S 234C OF RS.1,0L,417/-. 10) ANY OTHER GROUNDS/GROUND MAY BE URGED AT THE TI ME OF HEARING. 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ALL THE RE LEVANT DETAILS BUT COULD NOT FURNISH THE SAME BEFORE THE LOWER AUT HORITIES AND PRAYED FOR AN OPPORTUNITY TO PRESENT HIS CASE BEFOR E THE AUTHORITIES BELOW. 5. THE LEARNED DR WAS ALSO HEARD WHO OPPOSED THE REMAND STATING THAT SUFFICIENT OPPORTUNITIES WERE G IVEN TO THE ASSESSEE BUT THE ASSESSEE FAILED TO AVAIL THE SAME. 6. ON HEARING BOTH THE PARTIES AND ALSO HAVING GONE THROUGH THE RECORDS, WE FIND THAT THE ASSESSEE HAS FILED A DETAILED STATEMENT OF FACTS BEFORE THE CIT (A) INCORPORATING HIS SUBMISSIONS BEFORE THE AO AND ALSO EXPLAINING THE N ATURE OF TRANSACTIONS AND THE LITIGATIONS PENDING AGAINST TH E PROPERTIES. NEITHER THE AO NOR THE CIT (A) HAVE CONSIDERED THE SAME. THEREFORE, IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, ITA NO 389 OF 2017 K NAGI REDDY HYDERABAD.. PAGE 5 OF 5 AND PURELY IN THE INTEREST OF JUSTICE, WE DEEM IT F IT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE AO FOR DE NOVO CONSIDERATION IN ACCORDANCE WITH LAW PROVIDED THE ASSESSEE IS ABLE T O FILE ALL THE NECESSARY DETAILS BEFORE THE AO. THE ASSESSEE IS DI RECTED TO COOPERATE WITH THE AO AND FILE ALL THE NECESSARY DE TAILS FOR EARLY COMPLETION OF THE ASSESSMENT. NEEDLESS TO MENTION T HAT THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARI NG. 7. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH SEPTEMBER, 2020. SD/- SD/- (D.S. SUNDER SINGH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 10 TH SEPTEMBER, 2020. VINODAN/SPS COPY TO: 1 SHRI K. NAGI REDDY C/O SHRI T. CHAITANYA KUMAR, A DVOCATE, FLAT NO.102, GOURI APARTMENT, URDULANE, HIMAYATHNAGAR, H YDERABAD 2 ITO WARD 8(1) HYDERABAD 3 CIT (A)-2 HYDERABAD 4 PR. CIT 2 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER