P.Sudhakar Reddy (HUF), Hyd, Hyderabad V. ACIT, Circle-8(1), Hyderabad, Hyderabad

ITA 391/Hyd/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7693 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 17-08-2021
• Assessment Year: 1999-2000
• Appeal Filed On: 23-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A VENKATA RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Capital asset; Cost of acquisition; Fair market value; Block assessment; Set aside
• Section: 54F; 2(14); 64; 158BD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. BLOCK PERIOD / A.Y. APPELLANT RESPONDENT 377/HYD/16 1990-91 TO 1999-2000 P. RANGA REDDY (HUF) HYDERABAD [PAN: AAFHP4874G] ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-8(1), HYDERABAD 378/HYD/16 1999-2000 379/HYD/16 1999-2000 P.DHARMA REDDY (HUF) HYDERABAD [PAN: AAFHP4869P] 380/HYD/16 1990-91 TO 1999-2000 381/HYD/16 1990-91 TO 1999-2000 P.SRINIVASA REDDY (HUF) HYDERABAD [PAN: AAFHP4871D] 382/HYD/16 1999-2000 383/HYD/16 1999-2000 P.JANARDHAN REDDY (HUF) HYDERABAD [PAN: AAFHP4868N] 384/HYD/16 1990-91 TO 1999-2000 385/HYD/16 1990-91 TO 1999-2000 P.RAVINDER REDDY (HUF) HYDERABAD [PAN: AAFHP4870C] 388/HYD/16 1990-91 TO 1999-2000 P.SUDHAKAR REDDY (HUF) HYDERABAD [PAN: AAFHP4873B] 389/HYD/16 1999-2000 P.NARSIMHA REDDY (HUF) HYDERABAD [PAN: AAFHP4872A] 390/HYD/16 1990-91 TO 1999-2000 391/HYD/16 1999-2000 P.SUDHAKAR REDDY (HUF) HYDERABAD [PAN: AAFHP4873B] FOR ASSESSEE : SHRI S.RAMA RAO , FOR REVENUE : S HRI A.VENKATA RAO , DR ITA NOS. 377, 378, 379, 380, 381, 382, 383, 384, 385, 388, 389, 390 & 391/HYD/2016 :- 2 -: DATE OF HEARING : 17-08-2021 DATE OF PRONOUNCEMENT : 27-08-2021 O R D E R PER S.S.GODARA, J.M. : THE INSTANT BATCH OF THIRTEEN APPEALS FOR THE BLOCK PERIO D 1990-91 TO 1999-2000 AND AY.1999-2000 PERTAINS TO SEV EN ASSESSEES, S/SHRI P.RANGA REDDY, SHRI P.DHARMA REDD Y, SHRI P.SRINIVASA REDDY, SHRIP P.JANARDHAN REDDY, SHRI RA VINDER REDDY, P.SUDHAKAR REDDY AND SHRI P.NARSIMHA REDDY. THESE THIRTEEN APPEALS ARISE FROM THE CIT(A)-2, HYDERABADS SEPARATE ORDERS; ALL DT.30-11-2015 IN ITA NOS.0378, 0379, 038 5, 0384, 0376, 0373, 0388, 0377, 0387, 0386, 0380, 0381 & 0383/2010-11, INVOLVING PROCEEDINGS U/S.143(3) R.W. S.254 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]; RESPECTI VELY. HEARD ALL THE ASSESSEES REPRESENTED BY SHRI S.RAMA R AO, ADVOCATE AND THE DEPARTMENT THROUGH LEARNED DEPARTMENTAL REPRESENTATIVE SHRI A.VENKATA RAO. CASE FILES PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT ALL THESE ASSESSEES INSTANT APPEALS SUFFER FROM IDENTICAL 28 DAYS DELAY STA TED TO BE ATTRIBUTABLE TO THE REASON(S) BEYOND THEIR CONTROL AS PER CONDONATION PETITION(S)/AFFIDAVIT(S). NO REBUTTAL TO ALL THESE SOLEMN AVERMENTS HAVE COME FROM THE DEPARTMENTAL SIDE. THE IMPUGNED DELAY IS COND ONED THEREFORE. 3. LEARNED AUTHORISED REPRESENTATIVE SUBMITTED AT THE OUTSET THAT ALL THE INSTANT ENTIRE BATCH OF THIRTEEN CASES RA ISES IDENTICAL SUBSTANTIVE GROUNDS ON LAW AS WELL AS FACTS. AND ITA NOS. 377, 378, 379, 380, 381, 382, 383, 384, 385, 388, 389, 390 & 391/HYD/2016 :- 3 -: THAT THE ONLY DIFFERENCE IS THAT SEVEN OF THE APPEALS HE REIN ITA NOS.377, 380, 381, 384, 385, 388 AND 390/HYD/2016 I NVOLVED BLOCK ASSESSMENT YEARS FOLLOWED BY SECTION 148/147 R E- ASSESSMENT PROCEEDINGS (SUPRA). LEARNED COUNSEL THER EFORE URGED BEFORE US THAT WE OUGHT TO TREAT THE ASSESSEE/SHRI P.RANGA REDDY (HUF)S, ITA NO.377/HYD/2016 AS THE L EAD CASE RAISING THE FOLLOWING SUBSTANTIVE GROUNDS: 1.THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-T AX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT THE ASSESSMENT MADE U/S 158BD IS VALID INSPITE OF THE FACT THAT THERE IS NO UNDISCLOSED INCOME ASSESSABLE. THE LEAR NED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT NOTICE UNDER THE SAID SECTION WAS NOT ISS UED BEFORE COMPLETION OF ASSESSMENT OF THE SEARCHED PERSON AND , THEREFORE.. THE NOTICE IS INVALID. 3.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT DECIDING THE GROUNDS RAISED BEFORE HIM AT S.NO.2 , 3, 4, 6, 7 & 8, OF THE GROUNDS OF APPEAL, PARTICULARLY WHEN THE HON'BL E ITAT SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO RECONSIDER THE WHOLE ISSUE AFRESH AND DECIDE THE SAME IN ACCORDANCE WITH LAW. 4.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE, ACTION OF THE ASSESSING OFFICER IN TREATING THE AGRICULTURAL LANDS SOLD BY THE APPELLANT REPRESENT CAPITAL ASSET WITHIN THE MEANING OF SEC.2(14) OF THE I.T. ACT. 5.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN H OLDING THAT THE CAPITAL GAIN IS TAXABLE WHEN THERE IS NO COST OF AC QUISITION OF THE LANDS TO THE APPELLANT AS THE ASSET TRANSFERRED IS AN INAM LAND. 6.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN N OT ALLOWING DEDUCTION U/S. 54F OF THE I.T.ACT. 7.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING LEVY OF INTEREST U/S.158BFA(2). 4. WE NOTE DURING THE COURSE OF HEARING THAT THIS IS T HE SECOND ROUND OF PROCEEDINGS BETWEEN THE PARTIES BEFOR E US. LEARNED CO-ORDINATE BENCHS FORMER ROUNDS ORDER IN IT(SS)A ITA NOS. 377, 378, 379, 380, 381, 382, 383, 384, 385, 388, 389, 390 & 391/HYD/2016 :- 4 -: NO.43/HYD/2007 AND TWELVE OTHER CASES DT.31-03-2009 H AD ALREADY UPHELD THE VALIDITY OF INITIATION OF SECTION 1 58BD PROCEEDINGS SINCE THESE ASSESSEES/VENDORS ARE OTHER TH AN THE SEARCHED PERSON DR.SHAFEEUDIN AHMED DT.24-01-2001. T HERE IS FURTHER NO INDICATION IN SECTION 158BD SUPPORTED BY THE ASSESSEES DETAILED EVIDENCE THAT THE ASSESSING OFFICE RS CORRESPONDING SATISFACTION 158BD NOTICE DT.21-05-2004 S UFFERS FROM ANY ILLEGALITY OR IRREGULARITY; AS THE CASE MAY BE. WE THUS GO BY LEARNED CO-ORDINATE BENCHS EARLIER REASONING; WHICH HAS ATTAINED FINALITY, TO DECLINE THE ASSESSEES INSTANT FIRS T AND FOREMOST ARGUMENT IN TUNE WITH HIS PLEADINGS IN SECOND SUBSTANTIVE GROUND. 5. LEARNED AUTHORISED REPRESENTATIVES NEXT ARGUMENT IS THAT THE DEPARTMENTAL AUTHORITIES HEREIN HAVE ERRED IN LA W AND ON FACTS IN TREATING THE ASSESSEES INAM LAND AS CA PITAL ASSET(S) U/S.2(14) OF THE ACT. MR.RAMA RAO INVITED OUR ATTENTION TO THE FIRST ROUND ELABORATE REMAND DIRECTIONS (SUPRA) THAT THE ASSESSING OFFICER HAD TO DETERMINE STATUS OF THE ASSESSEES LANDS. WE FIND NO MERIT IN THE INSTANT SECO ND ARGUMENT AS WELL IT WAS THE ASSESSEES BOUNDEN DUTY TO FILE ON RECORD ALL THE CORRESPONDING DETAILED LAND RECORDS QUA MODE OF ACQUISITION OF THE IMPUGNED LANDS BY WAY OF INAM F ROM THE ERSTWHILE SOVEREIGN. HIS FAILURE TO THIS EFFECT ONLY A PPEARS TO HAVE LED THE LEARNED ASSESSING OFFICER TO CONDUCT FURTH ER ENQUIRIES FROM THE REVENUE DEPARTMENT WHEREIN NO SUFFI CIENT LIGHT COULD BE THROWN ON THE ISSUE OF STATUS OF THESE LA ND(S) SOLD. WE MAKE IT CLEAR THAT THERE IS NO DISPUTE ABOU T THE IMPUGNED LAND(S) TO BE SITUATED WITHIN THE PRESCRIBED L IMIT FROM THE MUNICIPAL AREA PRESCRIBED IN SECTION 2(14) O F THE ACT. ITA NOS. 377, 378, 379, 380, 381, 382, 383, 384, 385, 388, 389, 390 & 391/HYD/2016 :- 5 -: WE THUS SEE NO SUBSTANCE IN THE ASSESSEES INSTANT ENDEA VOUR TO SHIFT THE ONUS OF PROVING MODE OF ACQUISITION TO THE DEPARTMENT. THIS SECOND ARGUMENT RAISED AT ASSESSEES BEHEST ALSO STANDS DECLINED THEREFORE. 6. LEARNED COUNSELS THIRD ARGUMENT RAISES THE ISSUE O F COST OF ACQUISITION OF THE ASSESSEES CAPITAL ASSET(S) AS O N 01-04- 1981 CLAIMED TO BE @RS.45,000/- PER ACRE AND ACCEPTED TO THE TUNE OF RS.4,800/- IN THE COURSE OF ASSESSMENT AND UPH ELD IN THE CIT(A)S ORDER. IT IS AN ADMITTED FACT THAT THE ASSESSE E HAD FAILED TO FILE THE CORRESPONDING SUPPORTIVE EVIDENCE INDICATING FAIR MARKET VALUE OF THE CAPITAL ASSET(S) TO THE TUNE OF RS.45,000/- PER ACRE AS ON 01-04-1981. THE FACT ALS O REMAINS THAT THE LEARNED LOWER AUTHORITIES HAVE NOT CONSIDERED THE CLINCHING MARKET TREND INVOLVING MUCH LESSER STAMP PRI CE OF SUCH PROPERTIES SITUATED IN AND AROUND MUNICIPAL LIMI TS. WE THEREFORE DEEM IT APPROPRIATE TO APPLY THUMB RULE AND DI RECT THE LEARNED ASSESSING OFFICER TO ACCEPT THE ASSESSEES COST OF ACQUISITION @ RS.10,000/- PER ACRE AS ON 01-04-1981 TO BE FOLLOWED BY HIS NECESSARY COMPUTATION TO THIS EFFECT AS PER LAW. ORDERED ACCORDINGLY. 7. NEXT COMES THE LAST ISSUE OF PAYMENT(S) RS.7,90,000 /- (COLLECTIVELY MADE) CLAIMED AS THE COST OF IMPROVEMEN T IN TITLE U/S.48(II) OF THE ACT. LEARNED COUNSEL INVITED OUR ATTE NTION TO THE CORRESPONDING PAYMENT RECEIPTS IN PAGES 58-59 IN P APER BOOK. HE NEXT TOOK US TO THE ASSESSEES COMPROMISE DEED DT.17-02-1999 THAT THE IMPUGNED PAYMENTS HAD BEEN MADE TO THE ALLEGED CO-CLAIMANTS/FAMILY MEMBERS REGARDING TITL E OF THE LAND. LEARNED COUNSEL FAILS TO DISPUTE THAT THE SAID COMPROMISE DEED IN PAGES 60 TO 64 FOLLOWED BY THE FIN AL DECREE ITA NOS. 377, 378, 379, 380, 381, 382, 383, 384, 385, 388, 389, 390 & 391/HYD/2016 :- 6 -: IN PAGES 65-67 NOWHERE IMPOSED SUCH AN OBLIGATION ON THE ASSESSEE(S) TO PAY SUCH A COMPROMISE AMOUNT TO THEIR FA MILY MEMBER(S); AS THE CASE MAY BE. WE THUS DECLINE THE AS SESSEES INSTANT LAST ARGUMENT AS WELL. NO OTHER GROUND OR ARGUMENT HAS BEEN PRESSED BEFORE US. THIS FIRST AND FOREMOST ASSESSEES LEAD APPEAL ITA NO.377/HYD/2016 IS PARTLY ALLOWED IN FOREGOING TERMS. NECESSARY COMPUTATION SHALL FOLLOW AS PER LAW. 8. SAME ORDER TO FOLLOW IN THE REMAINING TWELVE APPE ALS AS WELL SINCE NEITHER ANY DISTINCTION ON FACTS OF LAW NO R ANY OTHER ARGUMENT HAS BEEN PRESSED BEFORE US. 9. TO SUM-UP, THESE SEVEN ASSESSEES THIRTEEN APPEAL S ITA NOS.377, 378, 379, 380, 381, 382, 383, 384, 385, 38 8, 389, 390 & 391/HYD/2016 ARE PARTLY ALLOWED IN FOREGOING TE RMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH AUGUST, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 27-08-2021 TNMM ITA NOS. 377, 378, 379, 380, 381, 382, 383, 384, 385, 388, 389, 390 & 391/HYD/2016 :- 7 -: COPY TO : 1.P.RANGA REDDY (HUF), C/O.SRI S.RAMA RAO, ADVOCATE , FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 2.P.DHARMA REDDY (HUF), C/O.SRI S.RAMA RAO, ADVOCAT E, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 3. P.SRINIVASA REDDY (HUF), C/O.SRI S.RAMA RAO, ADVOCA TE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 4.P.JANARDHAN REDDY (HUF), C/O.SRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO.9, HIMAYAT NAGAR, HYDERABAD. 5.P.RAVINDER REDDY (HUF), C/O.SRI S.RAMA RAO, ADVOC ATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 6.P.SUDHAKAR REDDY (HUF), C/O.SRI S.RAMA RAO, ADVOC ATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 7.P.NARSIMHA REDDY (HUF), C/O.SRI S.RAMA RAO, ADVOC ATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 8.THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE-8(1), HYDERABAD. 9.CIT(APPEALS)-2, HYDERABAD. 10.PR.CIT-2, HYDERABAD. 11.D.R. ITAT, HYDERABAD. 12.GUARD FILE.