Kilim Pydi Reddy (INDL), Srikakulam V. The ITO, Srikakulam

ITA 495/VIZ/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8737 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P S MURTHY
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value
• Section: 50C; 147; 148

Judgement Text

ITA NO.495/VIZAG/2016 KILIM PYDIREDDY (INDL), SRIKAKULAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . .. . . . . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.495/VIZAG/2016 ( / ASSESSMENT YEAR: 2008-09) KILIM PYDIREDDY (INDIVIDUAL) SRIKAKULAM ITO, WARD - 2, SRIKAKULAM [PAN NO. AEQPK8787C ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI P.S. MURTHY, DR / DATE OF HEARING : 21.02.2018 / DATE OF PRONOUNCEMENT : 28.02.2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, VISAKHAPATN AM VIDE ITA NO.38 & 39/2015-16/CIT(A)/2/W-2/SKLM/2016-17 DATED 1.9.2016 FOR THE ASSESSMENT YEAR 2008-09. ITA NO.495/VIZAG/2016 KILIM PYDIREDDY (INDL), SRIKAKULAM 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, VISAKHAPATNAM IS CONTRARY TO THE FACTS AND ALSO THE LAW APPLICABLE TO THE FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE HELD THAT THE ASSESSMENT DONE IS BEYOND THE SCOPE O F S.147 OF THE INCOME TAX ACT, 1961. 3. WITHOUT PREJUDICE TO THE ABOVE, A. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN DENYING THE EXISTENCE OF HUF AND IN UPHOLDING THE ASSESSMENT OF CAPITAL GAINS IN THE INDIVIDUAL STATU S OF THE APPELLANT. B. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN SUSTAINING THE ACTION OF THE ASSESSING OFFICER IN COMPUTING THE CAPITAL GAINS UNDER THE PROVISIONS OF S.50C OF THE ACT AT RS 28,71,214/- AS AGAINST RS.22,55,114/A DMITTED BY THE APPELLANT IN HUF STATUS. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F APPEAL HEARING. 3. GROUND NOS.1 & 4 ARE GENERAL IN NATURE, WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 4. GROUND NO.2 IS RELATED TO THE VALIDITY TO REOPENING OF ASSESSMENT WHICH IS NOT PRESSED BY THE ASSESSEE, HENCE THIS GR OUND IS DISMISSED AS NOT PRESSED. 5. GROUND NO.3 IS RELATED TO THE ASSESSMENT OF HUF INC OME IN INDIVIDUAL STATUS AND TAXING THE CAPITAL GAINS BY I NVOKING THE PROVISIONS U/S 50C OF THE ACT. IN THIS CASE, THE ASSESSEE FIL ED RETURN OF INCOME IN THE CAPACITY OF HUF ADMITTING CAPITAL GAINS OF ` 22,55,114/- ON 31.7.2008. DURING THE RELEVANT ASSESSMENT YEAR, TH E ASSESSEE HAD SOLD A PROPERTY CONSISTING OF VACANT HOUSE SITE ADMEASUR ING 444.44 SQ.YDS. ITA NO.495/VIZAG/2016 KILIM PYDIREDDY (INDL), SRIKAKULAM 3 WITH SURVEY NO.2 OF MADDILAPALEM AND SURVEY NO.7 OF RESAPUVANIPALEM VIDE REGISTERED DOCUMENT NOS.3413/07, 3414/07 & 341 5/07 DATED 30.4.2007 FOR A TOTAL CONSIDERATION OF ` 62,67,000/- AND THE MARKET VALUE OF THE SAME WAS ` 66,69,000/- IN HUF STATUS. SINCE THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME IN THE INDIVIDUA L STATUS, THE ASSESSING OFFICER REOPENED THE ASSESSMENT U/S 147 OF THE ACT BY ISSUING NOTICE U/S 148 OF THE ACT AND HELD THAT THE IMPUGNED PROPERTY WAS BELONGING TO THE ASSESSEE IN INDIVIDUAL CAPACITY AND THE PROPERT Y WAS NOT ACQUIRED BY THE HUF, HENCE, HELD THAT THE ADMISSION OF INCOME B Y THE ASSESSEE IN HUF STATUS IS INCORRECT. THE AO WAS OF THE VIEW THA T THE INCOME RESULTING IN SALE OF IMMOVABLE PROPERTY SHOULD HAVE BEEN ADMITTED AS CAPITAL GAINS IN THE HANDS OF THE ASSESSEE IN INDIV IDUAL CAPACITY. ACCORDINGLY, THE A.O. REOPENED THE ASSESSMENT AND C OMPLETED THE REASSESSMENT BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT AND COMPLETED THE ASSESSMENT ON TOTAL INCOME OF ` 36,26,725/- IN INDIVIDUAL CAPACITY BUT DID NOT ALLOW THE CREDIT FOR THE TAXES PAID IN HUF STATUS. 6. ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) UPHELD THE ASSESSMENT MADE BY THE A.O. IN INDIVIDUA L CAPACITY AND DIRECTED THE A.O. TO GIVE CREDIT FOR THE TAXES PAID IN HUF STATUS WHILE DETERMINING TAX LIABILITY IN INDIVIDUAL HANDS. HOW EVER, WHILE GIVING EFFECT TO THE CONSEQUENTIAL ORDER, THE LD. A.O. DID NOT ALLOW THE CREDIT AS ITA NO.495/VIZAG/2016 KILIM PYDIREDDY (INDL), SRIKAKULAM 4 PER THE DATES OF PAYMENTS OF THE TAX IN HUF STATUS AND THE CREDIT WAS ALLOWED IN THE CONSEQUENTIAL ORDER WHICH RESULTED I N HUGE TAX BURDEN DUE TO INTEREST IN THE CASE OF INDIVIDUAL. HENCE, THE ASSESSEE IS AGGRIEVED AND FILED APPEAL BEFORE THIS TRIBUNAL. 7. DURING THE APPEAL HEARING, THE LD. A.R. OF THE ASSE SSEE SUPPORTED THE RETURN OF INCOME FILED IN HUF CAPACITY AND ARGU ED THAT THE ASSESSMENT SHOULD BE MADE IN THE HANDS OF THE HUF B UT NOT IN THE HANDS OF INDIVIDUAL, SINCE THE PROPERTY WAS ACQUIRE D BY THE FATHER OF THE ASSESSEE IN HUF STATUS. PER CONTRA THE LD. D.R. SUP PORTED THE ORDER OF THE LOWER AUTHORITIES. 8. WE HAVE CONSIDERED THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD AND GONE THRO UGH THE ORDERS OF THE AUTHORITIES AS WELL AS RETURNS FILED BY THE ASS ESSEE IN THE CAPACITY OF HUF AS WELL AS INDIVIDUAL. THE ASSESSEE HAS PAID T HE TAXES IN HUF CAPACITY ON VARIOUS DATES. FOR A QUERY FROM THE BE NCH, THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS PAID ADVANCE TAXES IN HUF STATUS, IF THE SAME IS ALLOWED CREDIT IN THE HANDS OF THE INDIVIDU AL WHILE DETERMINING THE TAX LIABILITY HE WOULD NOT PRESS THE REMAINING GROUNDS. WE ARE OF THE CONSIDERED OPINION THAT THE PRAYER OF THE LD. A.R I S REASONABLE AND MEET THE ENDS OF JUSTICE. AS PER LAW PAYMENT OF TAXES SH OULD BE GIVEN THE CREDIT AS PER THE DATES OF THE PAYMENT OF TAX. IN THE INSTANT CASE, THE ITA NO.495/VIZAG/2016 KILIM PYDIREDDY (INDL), SRIKAKULAM 5 ASSESSEE HAS PAID THE ADVANCE TAX IN HUF STATUS. S INCE THE ASSESSMENT WAS MADE IN INDIVIDUAL STATUS THE CREDIT SHOULD BE ALLOWED IN INDIVIDUAL STATUS AS PER THE ORIGINAL DATES OF PAYMENT. ACCORD INGLY, WE DIRECT THE A.O. TO ALLOW THE PREPAID TAXES AS PER THE DATES OF PAYMENT WHILE DETERMINING THE TAX LIABILITY IN THE INDIVIDUAL HAN DS. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS MODIFIED AND THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 28 TH FEB18. SD/- SD/- ( . ) ( . .. . . . . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 28.02.2018 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT KILIM PYDI REDDY (INDL), D.NO.7- 10-2/5, SAIBULU THOTA, SRIKAKULAM-532 001. 2. / THE RESPONDENT THE ITO, WARD-2, SRIKAKULAM 3. + / THE CIT-2, VISAKHAPATNAM 4. + ( ) / THE CIT (A)-2, VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM ITA NO.495/VIZAG/2016 KILIM PYDIREDDY (INDL), SRIKAKULAM 6 SL. NO. DESCRIPTION DATE INITIALS 1. DATE OF DICTATION BY THE AUTHOR 22.02.2018 SR.P S 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 23.02.2 018 SR.PS 3. DRAFT PLACED BEFORE THE SECOND MEMBER SR. PS 4. DRAFT APPROVED BY THE SECOND MEMBER SR. PS 5. DATE OF APPROVED ORDER COMES TO THE SR. PS SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER SR. PS 7. DATE OF FILE SENT TO THE BENCH CLERK SR. PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK HD. C LK 9. DATE OF DISPATCH OF ORDER SR. PS