Income Tax Officer, Kadapa V. Sri I. Venkateswara Reddy, Bangalore

ITA 474/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2792 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: M CHANDRAMOULESWARA RAO
• Keywords: Opportunity of being heard; Cost of acquisition
• Section: 54B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 474/HYD/12 ASST. YEAR: 2008-09 INCOME TAX OFFICER, WARD 1, KADAPA. V/S. SRI I. VENKATESWARA REDDY, BANGALORE. (PAN AADP16938G) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. AMISHA S. GUPT RESPONDENT BY : SHRI M. CHANDRAMOULESWARA RAO DATE OF HEARING 25-04-2013 DATE OF PRONOUNCEMENT 25-04-2013 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A), DATED 11/01/2012 HYDERABAD PASSED IN APP EAL NO. ITA NO. 0182/CIT(A)/GNT/10-11. 2. THE GRIEVANCE OF THE DEPARTMENT IN THE PRESENT A PPEAL IS WITH REGARD TO THE ORDER PASSED BY THE CIT(A) IN DE LETING THE ADDITION OF RS. 22,43,110/- ON ACCOUNT OF SHORT TER M CAPITAL GAIN. 3. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPU TE ARE THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM HOUS E PROPERTY AND INCOME FROM REIKI AND HEALING PRACTICES. FOR TH E YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 29/06/2009 2 ITA NO. 474/H/12 SHRI I. VENKATESWARA REDDY DECLARING TOTAL INCOME OF RS. 1,97,680/-. INITIALLY THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, HOWE VER, THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY ASSESSMEN T. IN COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTE D THAT THE ASSESSEE HAD SOLD AGRICULTURAL LAND TO THE EXTENT OF 5 ACRES 20 GUNTAS IN SURVEY NO. 5 & 6 AT MANASANDHRA VILLAGE, HARAHALLI HUBLI IN RURAL BANGALORE ON 11/09/2007 FOR A CONSID ERATION OF RS. 55.00 LAKHS. THE ASSESSEE CLAIMED EXEMPTION U/S 54B IN RESPECT OF CAPITAL GAINS ARISING FROM THE TRANSFER OF AGRIC ULTURAL LAND BY PURCHASING AGRICULTURAL LAND BEFORE THE DUE DATE F OR FILING THE RETURN OF INCOME. THE DETAILS OF AGRICULTURAL LAND PURCHASED ARE DISCLOSED BY THE ASSESSEE AS UNDER: DATE OF PURCHASE COST OF NEW AGRICULTURAL LAND (RS.) REGISTRATION CHARGES (RS.) STAMP DUTY (RS.) TOTAL COST AS ELIGIBLE U/S 54B 22/07/2008 500000 35935 301390 837325 22/04/2008 500000 17205 143540 660745 03/04/2008 587500 13735 112540 713775 14/03/2008 500000 13245 110040 623245 TOTAL COST OF AGRL. LANDS ELIGIBLE FOR EXEMPTION U/S 54B 2835130 4. THE AO ON VERIFICATION OF THE STATEMENT OF INCOM E, NOTED THAT THE ASSESSEE HAD CLAIMED THE COST OF NEW AGRIC ULTURAL LAND BOUGHT FROM SMT. CHUDAMMA ON 22/07/2008 AS RS. 35,4 4,000/- AS AGAINST RS. 5,00,000/- MENTIONED IN THE REGISTER ED SALE DEED NO. I 2078/08-09, THOUGH THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE LAND WAS RS. 35,44,000/ -. WHEN THE AO ASKED THE ASSESSEE TO EXPLAIN THE DISCREPANCY, T HE ASSESSEE SUBMITTED THAT ALTHOUGH HE HAD PAID AN AMOUNT OF RS . 35,44,000/- TOWARDS THE COST OF LAND, IT WAS MENTIO NED AS RS. 5,00,000/- AT THE INSTANCE OF THE SELLER. IN SUPPO RT OF HIS CONTENTION, THE ASSESSEE SUBMITTED COPIES OF FOUR V OUCHERS BEARING LEFT THUMB IMPRESSION OF SMT. CHUDAMMA AS A TOKEN OF 3 ITA NO. 474/H/12 SHRI I. VENKATESWARA REDDY RECEIPT OF THE FOLLOWING AMOUNTS: S.NO. VOUCHER DATE AMOUNT PAID (RS.) MODE OF PAYMENT CHEQUE NO. IF ANY 1 22/07/2008 500000 BY CHEQUE 839942 2 22/07/2008 2700000 BY CHEQUE 839943 3 22/07/2008 100000 BY CASH - 4 22/07/2008 244000 BY CASH - 5. THE AO, THOUGH, ACCEPTED THAT THERE IS EVIDENCE OF PAYMENT OF RS. 35,44,000/- TOWARDS PURCHASE OF 1 ACRE 23 GU NTAS OF LAND AT SURVEY NO. 79/2 OF HOSAKATE, HE NEVERTHELESS REJ ECTED THE CONTENTION OF THE ASSESSEE ON THE REASONING THAT ST AMP VALUATION AUTHORITY BEING APPROPRIATE AUTHORITY, THE AMOUNT O F RS. 5,00,000/- MENTIONED AS SALE CONSIDERATION IN THE R EGISTERED SALE DEED HAS TO PREVAIL. ACCORDINGLY, THE AO WORKED OUT THE SHORT TERM CAPITAL GAIN BY REDUCING THE EXEMPTION CLAIME D U/S 54B OF THE ACT TO RS. 28,35,130/-, THEREBY DETERMINING THE SHORT TERM CAPITAL GAIN AT RS. 22,43,110/-, WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE. 6. THE ASSESSEE BEING AGGRIEVED OF THE SHORT TERM C APITAL GAIN DETERMINED BY THE AO, PREFERRED AN APPEAL BEFORE T HE CIT(A). 7. IN THE COURSE OF THE HEARING OF THE APPEAL BEFOR E THE CIT(A), THE ASSESSEE APART FROM REITERATING THE STAND TAKEN BEFORE THE AO SUBMITTED THAT THOUGH THE ASSESSEE HAS ACTUALLY PAI D AN AMOUNT OF RS. 35,44,000/- TO SMT. CHUDAMMA TOWARDS SALE CO NSIDERATION OF AGRICULTURAL LAND TO THE EXTENT OF 1 ACRE AND 23 GUNTAS IN SURVEY NO. 79/2 BUT THE SALE CONSIDERATION HAS BEEN WRONGLY QUOTED AS RS. 5,00,000/- IN THE REGISTERED DOCUMENT IN STEAD OF ACTUAL SALE CONSIDERATION OF RS. 35,44,000/-. HE SU BMITTED THAT THIS IS CLEARLY EVIDENT FROM THE FACT THAT EVEN THO UGH IN THE REGISTERED DOCUMENT THE SALE CONSIDERATION HAS BEEN MENTIONED 4 ITA NO. 474/H/12 SHRI I. VENKATESWARA REDDY AT RS. 5,00,000/-, BUT, THE STAMP VALUATION AUTHORI TY HAS ASSESSED THE REGISTRATION CHARGES ON THE AMOUNT OF RS. 35,44,000/- AND WHICH WAS ALSO PAID BY THE ASSESSEE . IN SUPPORT OF HIS CONTENTION, THE ASSESSEE ALSO SUBMITTED A SW ORN AFFIDAVIT OF SMT. CHUDAMMA WHEREIN SHE AFFIRMED THAT SHE HAD SOL D HER AGRICULTURAL LAND IN SURVEY NO. 79/2, HOSAKATE VILL AGE ADMEASURING 1 ACRE 23 GUNTAS TO THE ASSESSEE FOR A SALE CONSIDERATION OF RS. 35,44,000/- AND RECEIVED RS. 3 2,00,000/- THROUGH CHEQUE AND BALANCE OF RS. 3,44,000/- BY CAS H ON 22/07/2008. IT WAS FURTHER STATED IN THE AFFIDAVIT THAT SHE HAS ISSUED RECEIPTS DULY SIGNED BY HER AS A TOKEN OF RE CEIPT OF RS. 35,44,000/- FROM THE PURCHASER, I.E., THE ASSESSEE. THE CIT(A) AFTER CONSIDERING THE CONTENTIONS RAISED ON BEHALF OF THE ASSESSEE DELETED THE ADDITION MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN BY OBSERVING AS UNDER: 6.2.2 IN AS MUCH AS THE ISSUE OF NOT TAKING THE ACT UAL PRICE PAID VIS-A-VIS THE ONE APPEARING IN THE DEED IS CONCERNED, IT REQUIRES A LITTLE BACKGROUND TO BE ME NTIONED. IT IS THAT THE APPELLANT HAS SOLD AGRICULTURAL LANDS A DMEASURING 5 ACRES AND 20 GUNTAS IN RURAL BANGALORE ON 11/09/2 007 FOR A CONSIDERATION OF RS. 55,00,000/- AND CLAIMED EXEM PTION U/S 54B BY PURCHASING AGRICULTURAL LANDS BEFORE THE DUE DATE FOR FILING RETURN U/S 139(1), I.E., BEFORE 30/07/20 08. AS REGARDS TO SUCH PURCHASES, PURCHASE OF AGRICULTURAL LANDS FROM SMT. CHUDAMMA ON 22/07/2008 IS ONE OF THE TRANSACTIONS. THE AMOUNT PAID AS PER RECEIPTS PRODU CED AND ALSO THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUT Y BY THE REGISTRATION AUTHORITIES WAS RS. 35,44,000/-. BUT, HOWEVER THIS AMOUNT WAS MENTIONED AS RS. 5,00,000/- IN THE SALE (PURCHASE FOR THE APPELLANT) DEED, AS REQUESTED BY THE PERSON WHO SOLD THE LANDS, I.E., SMT. CHUDAMMA. THI S SITUATION WAS NOT CONVINCING TO THE ASSESSING OFFIC ER, WHO HAS BELIEVED THAT ACTUAL AMOUNT INVOLVED IS RS. 5,0 0,000/- ONLY BUT NOT RS. 35,44,000/- AND ACCORDINGLY REWORK ED THE CAPITAL GAINS AT RS. 22,43,110/- AND BROUGHT THE SA ME TO TAX DISREGARDING THE EXPLANATIONS OFFERED AT THE TIME O F ASSESSMENT PROCEEDINGS. IT IS SEEN THAT THE ASSESSI NG OFFICER HAS REJECTED THE EVIDENCE PRODUCED BY THE APPELLANT WITHOUT ASSIGNING ANY REASONS. THUS, THE ADDITION MADE BY T HE ASSESSING OFFICER WITHOUT MENTIONING ANY COGENT REA SONS OR 5 ITA NO. 474/H/12 SHRI I. VENKATESWARA REDDY BRINGING ANY COGENT MATERIAL ON RECORD IS NOT SUSTA INABLE. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO D ELETE THE SAME. 8. BEING AGGRIEVED OF THE AFORESAID ORDER OF CIT(A) , THE REVENUE IS IN APPEAL BEFORE US. 9. THE LEARNED DR SUBMITTED BEFORE US THAT THE REGI STERED SALE DEED HAVING CLEARLY MENTIONED THE FACT THAT THE PRO PERTY IN QUESTION WAS PURCHASED AT RS. 5,00,000/-, THE CIT(A ) WAS NOT JUSTIFIED IN IGNORING THE REGISTERED SALE DEED AND ACCEPTING THE ASSESSEES CLAIM THAT THE PROPERTY WAS PURCHASED FO R A CONSIDERATION OF RS. 35,44,000/-. SHE FURTHER SUBMI TTED THAT THOUGH THE ASSESSEE SUBMITTED THE AFFIDAVIT OF THE SELLER OF THE PROPERTY FOR THE FIRST TIME BEFORE HIM, THE CIT(A) WITHOUT CALLING FOR A REMAND REPORT OF THE AO TO EXAMINE THE VERACI TY OF THE STATEMENT MADE IN THE AFFIDAVIT HAS ACCEPTED THE SA ME WHICH IS CONTRARY TO THE ACCEPTED PROCEDURE IN ADMITTING ADD ITIONAL EVIDENCE. 10. THE LEARNED AR SUPPORTING THE ORDER PASSED BY T HE CIT(A) SUBMITTED THAT APART FROM THE AFFIDAVIT SUBMITTED B EFORE THE CIT(A) THE OTHER EVIDENCES PRODUCED BEFORE THE AO C LEARLY ESTABLISHES THE FACT THAT THE ASSESSEE HAD PURCHASE D THE AGRICULTURAL LAND FROM SMT. CHUDAMMA FOR A CONSIDER ATION OF RS. 35,44,000/- AND NOT RS. 5,00,000/-. HE SUBMITTED T HAT THE PAYMENTS MADE THROUGH CHEQUES CLEARLY BEAR TESTIMON Y TO THIS FACT. IT WAS FURTHER SUBMITTED THAT IN FACT THE ASS ESSEE IS TAKING STEPS FOR CORRECTION OF THE AMOUNT MENTIONED IN THE REGISTERED SALE DEED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE 6 ITA NO. 474/H/12 SHRI I. VENKATESWARA REDDY MATERIAL ON RECORD. IT IS A FACT ON RECORD THAT THE REGISTERED SALE DEED FOR PURCHASE OF 1 ACRE 23 GUNTAS OF LAND AT SU RVEY NO. 79/2 MENTIONS THE SALE CONSIDERATION AS RS. 5,00,000/-. THE REGISTERED SALE DEED IS MOST AUTHENTIC DOCUMENT TO SHOW THE AC TUAL SALE CONSIDERATION FOR WHICH THE PROPERTY IS SOLD. THERE FORE, WHEN THE REGISTERED SALE DEED MENTIONED THE SALE CONSIDERATI ON AT RS. 5,00,000/- IT IS FOR THE ASSESSEE TO SUBSTANTIATE B Y PRODUCING CLINCHING EVIDENCE THAT THE ACTUAL SALE CONSIDERATI ON PAID WAS RS. 35,44,000/- AND NOT RS. 5,00,000/- AS MENTIONED IN THE REGISTERED SALE DEED. IT IS ALSO A FACT THAT THE AF FIDAVIT FROM THE SELLER OF THE AGRICULTURAL LAND WAS SUBMITTED FOR T HE FIRST TIME BEFORE THE CIT(A) AND THE AO NEVER HAD ANY OPPORTU NITY TO EXAMINE THE VERACITY OF STATEMENT MADE IN THE AFFID AVIT. THE SELLER OF THE PROPERTY SMT. CHUDAMMA WAS ALSO NOT P RODUCED FOR EXAMINATION EITHER BEFORE THE AO OR BEFORE THE CIT( A). IN THESE CIRCUMSTANCES, THE CIT(A) WAS NOT CORRECT IN ACCEPT ING THE CLAIM OF THE ASSESSEE BY IGNORING THE AMOUNT MENTIONED IN THE REGISTERED SALE DEED. THEREFORE, AFTER CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E ENTIRE ISSUE REQUIRES TO BE CONSIDERED AFRESH BY THE AO. ACCORDI NGLY, WE SET ASIDE THE ORDER PASSED BY THE CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE AO WHO SHALL DECIDE THE ISSUE AF RESH AFTER CONSIDERING ALL THE MATERIALS AND EVIDENCES ON RECO RD AND ANY FURTHER MATERIAL OR EVIDENCES WHICH MAY BE PRODUCED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM. THE AO MAY ALSO, IF NECESSARY, CONSIDER EXAMINING THE SELLER SMT. CHUDAMMA FOR ARR IVING AT A DEFINITE CONCLUSION AS TO WHAT IS THE EXACT AMOUNT RECEIVED BY HER FROM THE ASSESSEE TOWARDS SALE CONSIDERATION OF THE AGRICULTURAL LAND IN QUESTION. THE AO SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. 7 ITA NO. 474/H/12 SHRI I. VENKATESWARA REDDY 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 25 TH APRIL, 2013. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT/- 25 TH APRIL, 2013. KV COPY FORWARDED TO: 1. INCOME-TAX OFFICER, WARD-1, SIMHAPURI COLONY, KADAP A 516 001. 2. SRI I. VENKATESWARA REDDY, O-101, MANTRI PARADISE, BANNERGATTA ROAD, AREKERE GATE, BANGALORE 560 076 . 3. CIT(A), GUNTUR. 4. CIT, TIRUPATHI 4. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD.