Praphull Raj Singh, Hyderabad V. Dy.CIT, Central Circle-5, Hyderabad

ITA 39/HYD/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6008 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-05-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 08-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Assessee Lawyers: V RAGHAVENDER RAO
• Keywords: Sale consideration of property below Jantri Value; Document seized; Documents seized
• Section: 143(3); 50C; 54F

Judgement Text

ITA NO 39 O F 2014 PRAPHULL RAJ SINGH HYDERABAD. PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.39/HYD/2014 (ASSESSMENT YEAR: 2006-07) SHRI PRAPHULL RAJ SINGH HYDERABAD PAN: ABN PS7473H VS DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5 HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. RAGHAVENDER RAO FOR REVENUE : SHRI J. SIRI KUMAR, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2006-07 AGAIN ST THE ORDER OF THE LEARNED CIT (A)-VII, HYDERABAD, DA TED 23.10.2013. THE ASSESSEE HAS RAISED THE FOLLOWING C ONCISE GROUNDS OF APPEAL: 1. LEARNED CIT (A) VII, HYDERABAD HAS ERRED ON FACT S AND IN LAW. 2(A) LEARNED CIT (A) HAS ERRED IN HOLDING THAT THE PROCEEDING U/S 153C ARE VALID IN LAW. COPY OF THE DOCUMENT SEIZED DID NOT BELONG TO THE ASSESSEE; IT ONLY PROVIDED INFORMATION ABOUT TRANSACTION. (B) PROCEEDINGS U/S 153C ARE NOT VALID IN LAW AS SATISFACTION AND THE DATE OF RECEIPT OF THE SEIZED ITEMS BELONGING TO THE ASSESSEE AS REQUIRED UNDER THAT SE CTION ARE NOT SPECIFIED. 3. LEARNED CIT (A) HAS ERRED IN HOLDING THAT THE DEVELOPMENT AGREEMENT IN RESPECT OF 1 AC 21 GTS COM ES DATE OF HEARING: 21.05.2018 DATE OF PRONOUNCEMENT: 3 1 . 0 5 .2018 ITA NO 39 O F 2014 PRAPHULL RAJ SINGH HYDERABAD. PAGE 2 OF 6 UNDER DEFINITION OF TRANSFER U/S 2(47) OF THE I.T. ACT. ASSESSEE DID NOT RECEIVE ANY CONSIDERATION FOR THE LAND EITHER IN CASH OR IN KIND, EITHER IN FULL OR IN PAR T. RATIO OF THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF N KARUNA VS. APPROPRIATE AUTHORITY (251 ITR 230 (A.P) HAS NOT BEEN FOLLOWED. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, 4(A) LEARNED CIT (A) HAS ERRED IN LAW IN NOT APPLYI NG PROVISIONS OF SECTION 50C FOR ASCERTAINING THE DEEM ED CONSIDERATION. (B) LEARNED CIT (A) HAS ERRED IN ADOPTING AS CONSIDERATION THE ESTIMATED FUTURE COST OF CONSTRUC TION OF THE RECEIVABLE CONSTRUCTED AREA. (C) LEARNED CIT (A) HAS FURTHER ERRED IN NOT DISCOU NTING THE FUTURE VALUE ON THE BASIS OF MARKET RATE OF INTERES T. 5. LEARNED CIT (A) IS NOT JUSTIFIED IN NOT GRANTING DEDUCTION U/S 54F CLAIMED BEFORE HIM. 2. IN ADDITION TO THE ABOVE GROUNDS, THE ASSESSEE H AS RAISED ADDITIONAL GROUNDS OF APPEAL ALONG WITH A PR AYER OF ADMISSION OF ADDITIONAL GROUNDS OF APPEAL WHICH ARE AGAINST THE MERITS OF THE ADDITIONS MADE BY THE AO. 3. AS REGARDS GROUND NO.2, WHICH IS A LEGAL GROUND, AGAINST THE VALIDITY OF THE PROCEEDINGS U/S 153C OF THE ACT, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RE WAS NO INCRIMINATING MATERIAL FOUND RELATING TO THE ASSESS EE DURING THE COURSE OF SEARCH CONDUCTED IN THE CASE OF VENIGALLA ANANDA PRASAD AND M/S. BHAVYA CONSTRUCTIONS PVT. LTD, EXCE PT FOR THE DEVELOPMENT AGREEMENT EXECUTED BY THE ASSESSEE IN F AVOUR OF M/S. BHAVYA CONSTRUCTIONS (P) LTD. HE SUBMITTED THA T THE AO OF THE PERSONS SEARCHED, NOR THE AO OF THE ASSESSEE, H AVE RECORDED SATISFACTION THAT INCOME RELATING TO THE DOCUMENTS FOUND AND ITA NO 39 O F 2014 PRAPHULL RAJ SINGH HYDERABAD. PAGE 3 OF 6 SEIZED BELONG TO THE ASSESSEE. HE SUBMITTED THAT IN THE ABSENCE OF SUCH SATISFACTION, THE PROCEEDINGS U/S 153C OF THE ACT ARE NOT VALID. IN VIEW OF THIS GROUND OF APPEAL, THE SATISF ACTION NOTE OF THE AO OF THE PERSONS SEARCHED WERE CALLED FOR. THE AO VIDE LETTER DATED 22.03.2018 HAS SUBMITTED AS UNDER: OFFICE OF THE DY.COMMISSIONER OF INCOME TAX, CIRCLE 12(1) 1 ST FLOOR, ROOM NO.106, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD PHONE [phone] F.NO.DCIT/12( 1)/2017-18 DATE: 22.03.2018 TO THE COMMISSIONER OF INCOME-TAX [D.R.1 INCOME-TAX APPELLATE TRIBUNAL, HYDERABAD. SIR, SUB: APPELLATE PROCEEDINGS BEFORE HON'BLE !TAT IN T HE CASE OF SRI PRAFUL RAJ SINGH - A.Y.2006-07 - REG. *** IN CONNECTION WITH THE ABOVE CASE 1 SUBMIT MY REPOR T AS UNDER: AS VERIFIED FROM THE MASTER FOLDER OF ASSESSEE MAINTAINED BY DCLT, CENTRAL CIRCLE-I( 2), HYDERABAD NO SATISFACTORY NOTE IS AVAILABLE IN RESPECT OF THE AB OVE ASSESSEE FOR THE A. Y. 2006-07. IN THIS CONNECTION A REPORT WAS SUBMITTED TO THE PR. CLT -1, HYDERABAD V IDE THIS OFFICE LETTER DATED 02-03-2017 STATING THE SAM E. COPY IS PLACED ON FILE FOR YOUR KIND PERUSAL. SD/- DY. COMMISSIONER OF INCOME-TAX, CIRCLE-12(1), HYDERABAD. COPY SUBMITTED TO THE PR. COMMISSIONER OF INCA ME- TAX - 1, HYDERABAD. COPY SUBMITTED TO THE ADDL. COMMISSIONER OF INCOME- TAX, RANGE-12, HYDERABAD . 4. THE ENCLOSURE TO THIS LETTER IS AS UNDER: OFFICE OF THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 12(1) HYDERABAD ITA NO 39 O F 2014 PRAPHULL RAJ SINGH HYDERABAD. PAGE 4 OF 6 DATED 2.3.2017 TO THE PR. COMMISSIONER OF INCOME TAX-I, HYDERABAD THROUGH PROPER CHANNEL SIR, SUB: APPELLATE PROCEEDINGS IN THE CASE OF SRI PRAFU LRAJ SINGH VS. DCIT FOR AY '2006-07 IN ITA NO. 39/H/14- NON- AVAILABILITY SATISFACTION NOTE - REQUEST FOR WITHDR AWAL OF APPEAL - REG. REF: LETTER OF CIT(DR)/ITA NO.39/H/14/14 DATED 17.0 2.17 KIND REFERENCE IS INVITED TO THE ABOVE. IN THIS CONNECTION, I SUBMIT THAT THIS OFFICE HAS O BTAINED MASTER FOLDER IN THE CASE OF SHRI: PRAFUL RAJ SINGH FROM IRON MOUTAIN. AS VERIFIED FROM THE MASTER FOLDER OF THE ASSESSEE, MAINTAINED BY DCIT CENTRAL CIRCLE 1(2), HYDERABAD, NO SATISFACTION NOTE IS AVAILABLE IN RES PECT OF ASSESSEE FOR, THE ASS: YEAR 2006-07. FURTHER, IT IS SUBMITTED THAT THIS OFFICE HAS NOT RECEIVED ANY SEI ZED MATERIAL BELONGING TO SRI. PRAFUL RAJ SINGH AND SHR I VENEGELLA ANANDA PRASAD & OTHERS, HYDERABAD. I AM, ENCLOSING TRANSFER PROFORMA AS PER WHICH NO SEIZED MATERIAL WAS RECEIVED IN THIS OFFICE. IN VIEW OF THE ABOVE, I MAY BE PERMITTED TO WITHDRA WAL THE APPEAL ON THE ABOVE CASE AS PER THE BOARD CIRCULAR NO, 24/2015 DATED 31.12.2015. YOURS FAITHFULLY, SD/- ENCL: AS ABOVE (S. A. FAZULULLA) DY. COMMISSIONEF OF INCOME TAX, CIRCLE 12(1) HYDERA BAD COPY TO ADDL.CIT, RANGE-12,HYD . 5. THUS, IT IS CLEAR THAT THERE WAS NO MATERIAL BEL ONGING TO THE ASSESSEE FOUND DURING THE COURSE OF SEARCH N OR WAS ANY SATISFACTION RECORDED FOR INITIATING PROCEEDINGS U/ S 153C OF THE ACT. THE HON'BLE DELHI HIGH COURT IN THE CASE OF PE PSI INDIA HOLDINGS PVT. LTD VS. ACIT IN W.P. NO.414 OF 2014 AND C.M. NO.822 OF 2014 DATED 14.8.2014 HAS HELD THAT THE PR EREQUISITE FOR ITA NO 39 O F 2014 PRAPHULL RAJ SINGH HYDERABAD. PAGE 5 OF 6 ISSUANCE OF A NOTICE U/S 153C IS THAT THE SATISFACT ION NOTE MUST PROVIDE THE BASIS FOR CONCLUSION OF AOS SATISFACTI ON THAT THE SEIZED DOCUMENT BELONGS TO PERSON OTHER THAN SEARCH ED PERSON AND THAT THERE SHOULD BE COGENT MATERIAL AVAILABLE WITH AO TO ARRIVE AT SATISFACTION THAT THE SEIZED DOCUMENTS DO ES NOT BELONG TO SEARCHED PERSON, BUT TO SOMEBODY ELSE, AND THE SLP FILED BY THE REVENUE AGAINST THIS JUDGMENT WAS DISMISSED BY THE APEX C OURT. FURTHER, IN A CATENA OF OTHER DECISIONS, IT HAS BEE N HELD THAT SUCH ASSESSMENT PROCEEDINGS ARE NOT VALID AND THEREFORE, IN OUR OPINION, THE PROCEEDINGS U/S 153C IN THE CASE BEFOR E US ARE ALSO NOT VALID. THUS, GROUND OF APPEAL NO.2 IS ALLOWED. 6. SINCE WE HAVE SET ASIDE THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 153C OF THE ACT, WE DO NOT SEE ANY RE ASON TO DISCUSS AND ADJUDICATE THE OTHER GROUNDS OF APPEAL RAISED U NDER THE CONCISE GROUNDS OF APPEAL OR IN THE ADDITIONAL GROU NDS OF APPEAL AT THIS STAGE AS IT WOULD ONLY RESULT IN AN ACADEMI C EXERCISE. 7. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2018. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST MAY 2018. VINODAN/SPS ITA NO 39 O F 2014 PRAPHULL RAJ SINGH HYDERABAD. PAGE 6 OF 6 COPY TO: 1 SHRI PRAPHULL RAJ SINGH, A-56 HILL RIDGE VILLA, G ACHIBOWLI, HYDERABAD 500032 2 DY.CI T CENTRAL CIRCLE - 5, AAYAKAR BHAVAN, HYDERABAD 3 CIT (A)-VII HYDERABAD 4 CIT CENTRAL, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER