Reddipydithalli Naidu, Visakhapatnam V. The Income Tax Officer, Ward-5(1), , Visakhapatnam

ITA 39/VIZ/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0472 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 26-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Capital Gains
• Section: 147; 148; 50C; 143(1)

Judgement Text

आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्ि ू रु आर एऱ रेड्डी, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No.39/Viz/2020 (ननधधारण वषा / Assessment Year :2011-12) Sri ReddiPydithalli Naidu, S/o. Sri Demudi, Pendurthi, Visakhapatnam. PAN: AHJPR 0703 K Vs. The Income Tax Officer, Ward-5(1), Visakhapatnam. (अऩीऱधथी/ Appellant) (प्रत्यथी/ Respondent) अऩीऱधथी की ओर से/ Appellant by : None प्रत्यधथी की ओर से / Respondent by : Sri SPG Mudaliar, Sr. AR स ु नवधई की तधरीख / Date of Hearing : 30/05/2022 घोषणध की तधरीख/Date of Pronouncement : 10/06/2022 O R D E R PER DUVVURU RL REDDY, Judicial Member : This appeal filed by the assessee is against the order of the Ld. CIT (A)-2, Visakhapatnam in appeal No. 10408/2015-16/ITO, W-5(1), VSP/VSP/2019-20, dated 27/11/2019 passed U/s. 143(3) r.w.s 147 and U/s. 250(6) of the Act for the AY 2011-12. 2. The assessee has raised the following grounds: 2 “1. That on the f acts and circumstances of the case the order passed by the Ld. CIT(A) and the Ld. AO are erroneous and bad in law. 2. That on the f acts and circumstances of the case, the Ld. AO is not correct in making an addition of Rs. 2,54,58,822/- taxable under the head ‘income from capital gains’. 2. Brief facts of the case are that the assessee is an individual engaged in the business activity of consultancy in Real Estate, filed his return of income on 27/03/2012 declaring an income of Rs. 4,24,275/- which includes capital gains of Rs. 2,14,469/-. The return was processed u/s. 143(1) of the Act and since the assessee has not completely offered the capital gains, the assessment was reopened by issue of notice U/s. 148 of the Act. In response the assessee filed a letter stated that the return originally filed on 27/03/2012 may be treated the return in response to notice U/s. 148 of the Act. Therefore, notice U/s. 142(1) of the Act was issued to the assessee along with a questionnaire and the assessee furnished the information through the assessee’s representative. During the assessment proceedings, it is the submission and contention of the assessee before the Ld. AO that since the sale deeds have been cancelled in the subsequent financial year, the question of capital gains does not arise. In this regard, the Ld. AO observed that during 3 the previous year relevant to the AY under consideration, the assessee sold three properties, which were acquired jointly with Sri Gandi Babji in FY 2003-04, for a total consideration of Rs.3,90,59,000/- as per the provisions of section 50C of the Act wherein the assessee’s share worked out to Rs. 1,95,29,500/-. Thereafter, the Ld. AO computed the LTCG at Rs. 1,83,66,480/- and Rs. 85,60,492/- on sale of property-1 & 2 respectively and the capital loss of Rs. 3,18,150/- on property-3. Accordingly, the income from capital gains was worked out to Rs. 2,54,58,822/- and added the same to the total income of the assessee determining the assessed income at Rs. 2,56,68,630/-. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). On appeal, none appeared on behalf of the assessee to represent the case before the Ld. CIT(A). Therefore, the Ld. CIT(A) after carefully considering the facts of the case was of the opinion that since the neither appeared before the First Appellate Authority nor produced any substantial evidence in support of the assessee’s claim during the course of appeal proceedings. Accordingly, the Ld. CIT(A) sustained the addition of Rs. 2,54,68,822/- made by the Ld. AO under the head LTCG and dismissed the appeal. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 4 3. At the time of hearing none appeared before us on behalf of the assessee. It is apparent from the order sheet that on various occasions the case was adjourned as none appeared to represent the assessee’s case. Therefore, we are going to adjudicate the appeal on merits based on the material available on record. 4. The Ld. DR relied on the orders of the Ld. Revenue Authorities and argued in support of the same. The Ld. DR submitted that as per section 45(1) is a charging section of the Act in respect of the capital gains tax which stipulates that the profits arising from the transfer of the capital asset is chargeable under the capital gains and shall be deemed to be the income of the previous year in which the transfer took place. In the instant case, as per section 45(1) r.w.s 2(47) of the Act, the transfer of properties have already been taken place during the AY 2011-12 the sale consideration having been received by the assessee and possession was handed over to the purchasers simultaneously, the instance of capital gains arises in the AY 2011-12 itself. The Ld. DR also submitted that inspite of opportunities since there was no representation before the Ld. CIT(A), the CIT(A) has no other option except the adjudicate the appeal as per the material available on record and therefore the pleaded that the order of 5 the Ld. AO and CIT (A) do not call for any interference and their decision may be upheld. 5. We have heard the Ld. DR and gone through the material available on record as well as the orders of the Ld. Revenue Authorities. In this case the assessee has sold certain properties and did not disclose the capital gains arising out of the sale transactions. During the assessment proceedings the Ld. AO provided sufficient opportunities to furnish the evidence in support of the assessee claim. However, it is the contention of the assessee that since the sale deeds pertaining to the sale transaction have been cancelled in the subsequent financial year, the capital gains will not arise. Section 45(1) of the Act clearly stipulates that the profits arising from the transfer of the capital asset is chargeable under the capital gains and shall be deemed to be the income of the previous year in which the transfer took place. In the instant case, as per section 45(1) r.w.s 2(47) of the Act, the transfer of properties have already been taken place during the AY 2011-12 the sale consideration having been received by the assessee and possession was handed over to the purchasers simultaneously, the instance of capital gains arises in the AY 2011-12 itself. In the instant case, it is also clear that 6 the transfer of property as per section 45(1) r.w.s 53A of the Transfer of Property Act, the possession of the property was handed over to the purchasers and the sale consideration was received by the assessee. Considering all these facts, we are of the considered view that the Ld. AO has rightly computed the capital gains and made addition under the head LTCG. If the assessee files an appeal against the decision of Ld. AO, the onus is on the assessee to pursue it before the Appellate Authority and provide the documentary evidence in support of the claim or material contradicting the decision of the Ld. AO. All this is lacking in the instant case. The assessee has neither appeared before the Ld. CIT(A) though sufficient opportunities were given to the assessee nor made any submissions. Even before us, there was no representation on behalf of the assessee on various occasions. Considering all these facts and circumstances of the case, we have no hesitation to come to a conclusion that the decision taken by the Ld. AO while making the addition and sustained by the Ld. CIT(A) is in accordance with law and therefore, we do not see any infirmity in the orders of the Ld. Revenue Authorities and does not call for any interference. It is ordered accordingly. 7 6. In the result, appeal filed by the assessee is dismissed. Pronounced in the open Court on the 10 th June, 2022. Sd/- Sd/- (एस बाऱाक ृ ष्णन) (द ु व्ि ू रु आर.एऱ रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) ऱेखा सदस्य/ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER Dated : 10.06.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधधाररती/ The Assessee – Sri ReddiPydithalli Naidu S/o. Sri Demudi, 8-106, Nalla Quarry Colony, Pendurthi, Visakhapatnam, Andhra Pradesh – 530047. 2. रधजस्व/The Revenue –Income Tax Officer, Ward-5(1), Visakhapatnam, Andhra Pradesh – 530017. 3. The Principal Commissioner of Income Tax-2, Visakhapatnam. 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax (Appeals)-2, Visakhapatnam. 5. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशधखधऩटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईऱ / Guard file आदेशधन ु सधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam