Late Devarasetti Venkata Subbarao, Rep. LR Deverasetti Ravi Kumar, Satthenapalli V. The Pr. CIT, Guntur

ITA 499/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6546 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 16-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T S N MURTHY
• Assessee Lawyers: A CHINNA GANGAIAH
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Valuation report
• Section: 143(3); 263

Judgement Text

ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 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.NOS.499 & 500/VIZAG/2016 ( / ASSESSMENT YEARS: 2007-08 & 2008-09) DEVERASETTY VENKATA SUBBA RAO (LATE) REP L/R DEVERASETTY RAVI KUMAR, GUNTUR DIST. PRINCIPAL CIT GUNTUR [ PAN NO. ASBPD9432C ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI A. CHINNA GANGAIAH, AR / RESPONDENT BY : SHRI T.S.N. MURTHY, DR / DATE OF HEARING : 31.10.2017 / DATE OF PRONOUNCEMENT : 08.11.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX,(PR.CIT), GUNTUR VIDE ORDER DATED 20.10.2016 FOR THE ASSESSMENT YEAR 2007-08 AN D 2008-09. ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 2 ITA NO.499/VIZAG/2016 A.Y. 2007-08: 2. ALL THE GROUNDS OF APPEAL OF THE ASSESSEE ARE AG AINST THE ORDER PASSED BY THE PRINCIPAL CIT GUNTUR U/S 263 OF THE I NCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). IN THIS CASE, T HE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT BY A N ORDER DATED 30.12.2011 ON TOTAL INCOME OF ` 6,38,737/- WHICH INCLUDES LONG TERM CAPITAL GAIN ON TRANSFER OF GODOWN SITE OF ` 2,94,660/-. SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR REVISION U/S 263 OF THE A CT AND THE LD. COMMISSIONER OF INCOME TAX (CIT), GUNTUR HAS PASSED AN ORDER U/S 263 OF THE ACT. THE LD. CIT HAS OBSERVED THAT THE ASSE SSEE HAD SOLD A GODOWN ON 21.12.2006 FOR A SUM OF ` 21,50,116/- AND ANOTHER GODOWN FOR A SUM OF ` 25 LAKHS ON 21.9.2006 AND THE MARKET VALUE OF THE SAID GODOWN WAS DETERMINED BY THE SRO AT ` 25,34,000/- AND ` 64,18,000/- RESPECTIVELY AGGREGATING TO THE MARKET VALUE OF ` 89,52,000/-. BUT THE ASSESSEE HAS SHOWN PROFIT ON SALE OF GODOWN AT ` 61,50,810/- AND CREDITED THE SAME TO THE CAPITAL ACCOUNT INSTEAD OF ACTUAL PROFIT OF RS.18,48,926/- AND THE DIFFERENCE OF ` 43,01,884/- REMAINED UNEXPLAINED. THE LD. CIT FURTHER NOTICED THAT THE ASSESSEE ALSO CLAIMED THE INDEXED COST OF ACQUISITION WRONGLY AT ` 84,69,451/- AS AGAINST THE CORRECT AMOUNT OF ` 60,42,097/-. THE CIT FURTHER OBSERVED THAT THE BENEFIT OF INDEXATION FOR THE COST OF CONSTRUCTION OF GODOWNS CLAIMED ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 3 WAS FROM THE FINANCIAL YEARS 1990-91, 1991-92 & 199 2-93 INSTEAD OF CORRECTLY CLAIMING THE SAME FROM THE FINANCIAL YEA RS 1994-95, 1995-96 & 1996-97. AS PER THE NARRATION GIVEN IN THE REGIS TERED SALE DEEDS DATED 31.9.2006 AND 21.12.2006 THE AGE OF THE GODOW NS WERE 10 YEARS OLD. THE CIT(A) OBSERVED THAT SINCE THE CONSTRUCTI ON OF GODOWNS WAS STATED TO HAVE BEEN SPREAD OVER FOR 3 FINANCIAL YEA RS THE INDEXED COST OF CONSTRUCTION SHOULD HAVE BEEN ALLOWED BY THE A.O. F ROM THE FINANCIAL YEARS 1994-95, 1995-96 & 1996-97 INSTEAD OF F.YS 19 90-91, 1991-92 & 1992-93 AS CLAIMED BY THE ASSESSEE. THE CIT WORKED OUT THE COST OF ACQUISITION AND CORRECT INDEXED COST AS UNDER: DESCRIPTION OF THE PROPERTY COST OF CONSTRUCTION/ ACQUISITION AS CLAIMED BY THE ASSESSEE CORRECT COMPUTATION YEAR OF CONSTRUCTION INDEXED COST OF CONSTRUCTION YEAR OF CONSTRUCTION INDEXED COST OF CONSTRUCTION SITE 27,190 1989-90 82.044 1989.90 82,044 GODOWN 9,22,000 1990-91 26,29,220 1994-95 18,47,560 -DO- 16,29,600 1991-92 42,50,062 1995-96 30,09,831 -DO- 6,48,000 1992-93 15,08,125 1996-97 11,02,662 TOTAL 84,69,451 60,42,097 3. THE CIT ACCORDINGLY WORKED OUT THE EXCESS CLAIM OF INDEXED COST OF ACQUISITION TO THE EXTENT OF ` 24,74,534/- AS ABOVE AND ISSUED THE SHOW CAUSE NOTICE. THE ASSESSEE SUBMITTED HIS EXPL ANATION AND AFTER EXAMINING THE EXPLANATION OF THE ASSESSEE, THE CIT HELD THAT THE ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 4 ASSESSMENT ORDER PASSED BY THE A.O. WAS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY DIRECTE D THE A.O. TO MODIFY THIS ASSESSMENT AS PER THE DIRECTIONS GIVEN IN THE LD. CIT AS UNDER: THE ASSESSEES CLAIM OF MENTIONING LESSER AMOUNT O F SALE PRICE FOR ACCOMMODATING THE PURCHASER OF GODOWNS AND RECEIPT OF A VERY HIGH AMOUNT ON SALE OF THE GODOWNS HAS NO EVIDENCE WHATS OEVER. THE SALE DEED CONTAINS THE CONSIDERATION THAT HAS PASSED HAN DS AND THE CONSIDERATION FIXED BY THE SUB REGISTRAR FOR FIXATI ON OF STAMP VALUE OF THE TRANSACTION. AS SUCH, THE ASSESSEES CLAIM THAT THE Y RECEIVED HIGHER AMOUNT THAN WHAT WAS MENTIONED IN THE SALE DEED IS NOT TENABLE. AS REGARDS INDEXATION OF COST OF CONSTRUCTION, THE ASSESSEE CLAIM TO HAVE INDEXED THE SAME AS PER THE PERIOD OF CONSTRUC TION AND COST OF CONSTRUCTION ACCOUNTED FOR. THE PERIOD OF CONSTRUC TION ARE STATED TO BE 1990-91 TO 1992-93. A PERUSAL OF THE RECORD INDICA TES THAT A VALUATION REPORT WAS FILED BEFORE THE ASSESSING OFFICER DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. THE PERIODICITY OF THE CON STRUCTION AND THE COST OF CONSTRUCTION INCURRED IN EACH YEAR WERE MENTIONE D BY THE VALUER. THIS VALUATION REPORT CAN BE USED AS A BASIS FOR WORKING OUT THE COST OF CONSTRUCTION AND PERIODICITY OF THE CONSTRUCTION FO R THE PURPOSE OF INDEXATION OF THE COST OF CONSTRUCTION. HOWEVER, T HE A.O. HAS NOT MADE ANY MENTION OF THIS VALUATION REPORT AND NOR EXAMIN ED THE INDEXATION MADE BY THE ASSESSEE FOR THE COST OF CONSTRUCTION F OR WORKING OUT THE LONG TERM CAPITAL GAIN. 4. CONSEQUENT TO THE ORDER OF THE LD.CIT U/S 263 OF THE ACT, THE A.O. PASSED CONSEQUENTIAL ORDER U/S 143(3) R.W.S. 263 OF THE ACT ON 16.9.2014 GIVING EFFECT TO THE CITS ORDER U/S 263 OF THE ACT DATED 28.2.2014 AND COMPLETED THE ASSESSMENT ACCEPTING TH E INCOME ASSESSED EARLIER AS PER THE ORDER DATED 30.12.2011 WITHOUT MAKING ANY ADDITIONS. 5. SUBSEQUENTLY, THE LD PR.CIT HAS TAKEN U P THE CASE FOR REVISION U/S 263 OF THE ACT IN THE SECOND ROUND AND OBSERVED THAT THE A.O. WHILE ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 5 COMPUTING THE LONG TERM CAPITAL GAINS FOR SALE OF G ODOWNS ALLOWED INCORRECT BENEFIT OF INDEXATION, THE ASSESSEE HAS C LAIMED THE BENEFIT FROM THE YEARS 1990-91, 1991-92 & 1992-93 AS PER THE RECITALS IN REGISTERED SALE DEEDS DATED 21.9.2006 AND 31.12.200 6, THE GODOWNS WERE TEN YEARS OLD AND ACCORDINGLY INDEXATION BENEF IT REQUIRED TO HAVE BEEN ALLOWED FROM THE F.Y. 1994-95, 1995-96 & 1996- 97, SINCE THE CONSTRUCTION OF GODOWNS WAS STATED TO HAVE BEEN SPR EAD OVER THREE FINANCIAL YEARS. ACCORDINGLY, THE CORRECT AMOUNT OF INDEXED COST OF ACQUISITION WAS ` 60,42,097/- AS AGAINST ` 84,69,451/- WRONGLY ALLOWED BY THE AO. HENCE, EXCESS CLAIM OF INDEXED COST OF ACQUISITION AMOUNTING TO ` 24,27,534/- ( ` 84,69,451 - ` 60,42,097/-) RESULTED IN UNDER ASSESSMENT OF LTCG, AS WELL AS TOTAL INCOME O F THE ASSESSEE. ACCORDINGLY THE PR.CIT HELD THAT ORDER PASSED U/S 1 43(3) R.W.S. 263 OF THE I.T. ACT, 1961 ON 16.9.2014 WAS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF REVENUE HENCE PASSED ORDER UNDER SECTIO N 263 DIRECTING THE AO TO MODIFY THE ORDER AS PER THE FOLLOWING DIRECTI ONS: FURTHER, REGARDING THE EXCESS CLAIM OF INDEXED COST OF ACQUISITION OF ` 24,27,534/-, OTHER THAN THE NARRATION GIVEN IN THE REGISTERED SALE DEEDS REGARDING THE AGE OF THE GODOWNS SOLD BY THE ASSESS EE, THERE IS NO OTHER EVIDENCE AVAILABLE ON RECORD TO ESTABLISH THE AGE O F THE GODOWNS. THE VALUATION REPORTS DATED 15.9.2011 WERE OBTAINED ONL Y DURING THE COURSE OF ASSESSMENT PROCEEDINGS REGARDING THE ESTIMATED VALU E OF THE COST OF CONSTRUCTION OF THE GODOWNS DURING EACH OF THE FINA NCIAL YEARS 1990-91, 1991-92 & 1992-93 CANNOT BE REGARDED AS EVIDENCING THE AGE OF THE GODOWNS, SINCE THE VALUATION APPEARS TO HAVE BEEN C ARRIED OUT BY THE ENGINEER AS PER THE INFORMATION FURNISHED TO HIM BY THE ASSESSEE. IN THE ABSENCE OF ANY OTHER CONTEMPORANEOUS EVIDENCE, THE AGE OF THE GODOWNS ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 6 AS MENTIONED N THE REGISTERED SALE DEEDS WOULD HAVE TO BE ADOPTED AS THE BASIS OF IDENTIFYING THE FINANCIAL YEARS DURING WHICH THE GODOWNS WERE CONSTRUCTED FOR THE PURPOSE OF INDEXING THE COST OF CONSTRUCTION. 6. AGGRIEVED BY THE ORDER OF THE LD. PR.CIT, THE AS SESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. APPEARING FOR THE ASSESSEE, THE LD. A.R. ARGUED THAT WHILE GIVING EFFECT TO THE CIT ORDER, THE A.O. HAS VERIFIED THE COST OF CONSTRUCTION, AGE OF THE GODOWNS, AND GIVEN EFFECT TO THE ORDER OF THE CIT CORRECTLY. SINCE THE A.O. HAS VERIFIED THE ISS UE IN DETAIL AND TAKEN A CONSCIOUS DECISION, THERE IS NO CASE FOR REVISION U /S 263 OF THE ACT AND THE LD. A.R. VEHEMENTLY ARGUED THAT THE ORDER PASSE D BY THE PRINCIPAL CIT BEYOND THE JURISDICTION, WHICH REQUIRE TO BE QU ASHED. 7. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE OR DER OF THE PRINCIPAL CIT. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. IN THIS CASE, THE ASSESSEE HAS SOLD THE PROPERTIES FOR A CO NSIDERATION OF ` 21,50,116/- AND ` 25 LAKHS AGGREGATING TO ` 46,50,116/-AND SHOWN THE PROFIT ON SALE OF GODOWNS AT ` 61,50,810/- AS UNDER: SALE CONSIDERATION - ` 89,52,000/- LESS:COST OF GODOWN - ` 28,01,190/- PROFIT ON SALE OF GODOWN- ` 61,50,810/- ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 7 8.1 THE ACTUAL PROFIT ON SALE OF GODOWNS WORKS OUT TO ` 18,48,926/- AS UNDER: SALE CONSIDERATION - ` 46,50,116/- LESS: COST OF GODOWN - ` 28,01,190/- PROFIT ON SALE OF GODOWN- ` 18,48,926/- 8.2 THE CIT FURTHER OBSERVED THAT THE DIFFERENCE AM OUNT OF ` 43,01,884/- CREDITED TO CAPITAL ACCOUNT REMAINED UN EXPLAINED. FURTHER, IN SALE DEED DATED 21.9.2006 AND 21.12.2006, THE AS SESSEE HAS WRIITEN THAT THE GODOWNS WERE CONSTRUCTED 10 YEARS BACK I.E . THE AGE OF THE GODOWNS WAS 10 YEARS OLD. ACCORDING TO THE RECITAL S OF THE SALE DEED, THE GODOWNS WOULD HAVE BEEN CONSTRUCTED IN F.Y.1994 -95, 1995-96 & 1996-97 AS RIGHTLY OBSERVED BY THE CIT. ACCORDING TO THE RECITALS OF THE SALE DEED AND THE VALUE DECLARED IN THE OFFICE OF T HE SUB REGISTRAR IN SALE DOCUMENT F THE CIT HAS WORKED OUT THE INDEXED COST OF ACQUISITION AT ` 60,42,097/- AND EXCESS CLAIM AT ` 24,27,534/- AND DIRECTED THE A.O. TO RE WORK THE CAPITAL GAINS. THE A.O. WHILE GIVIN G EFFECT TO THE ORDER U/S 263 OF THE ACT, PRESUMED THAT THE AGE OF GODOWN S WAS 10 YEARS OLD WAS INCORRECT. FURTHER OBSERVED THAT THE NARRATION GIVEN IN THE REGISTERED SALE DEED WAS FALSE AS THE PLAN APPROVAL WAS GIVEN IN 1992 AND ALSO PRESUMED THAT IT WAS A REGULAR PRACTICE OF THE DOCUMENT WRITERS WHILE DRAFTING THE DOCUMENT AND THERE IS NO SANCTITY FOR THE RECITALS OF THE SALE DEED, ACCORDINGLY, REWORKED TH E CAPITAL GAINS AS CLAIMED BY THE ASSESSEE FOR 1990-91, 1991-92 & 1992 -93. FROM THE ORDER OF THE A.O., IT IS VERY CLEAR THAT THE A.O. I GNORED THE RECITALS OF THE SALE DEED DOCUMENT WHICH WAS SIGNED AND REGISTERED BY THE ASSESSEE AND ACCEPTED BY THE PURCHASER BEFORE 2 WITNESSES. THE REGISTERED ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 8 DOCUMENT IS A FINAL DOCUMENT, WHICH IS A VALID PIEC E OF EVIDENCE UNLESS OTHERWISE IT IS PROVED WRONG AS HELD BY HONBLE PUN JAB & HARYANA HIGH COURT IN [2010] 195 TAXMAN 273 (PUNJ. & HAR.) PARAMJIT SINGH .V.INCOME-TAX OFFICER ON SIMILAR FACTS HELD THAT IT IS A WELL-KNOWN PRINCIPLE THAT NO ORAL EVIDENCE IS ADMISSIBLE ONCE THE DOCUMENT CONTAINS ALL THE TERMS AND CONDITIONS. SEC TIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT, 1872 INCORPORATE THE AFORESAID PRINCI PLE. ACCORDING TO SECTION 91, WHEN TERMS OF A CONTRACT, GRANTS OR OTHER DISPOSITI ONS OF PROPERTY HAVE BEEN REDUCED TO THE FORM OF DOCUMENTS, THEN NO EVIDENCE IS PERMISSIBLE TO BE GIVEN IN PROOF OF ANY SUCH TERMS OF SUCH GRANT OR DISPOSITIO N OF THE PROPERTY EXCEPT THE DOCUMENT ITSELF OR THE SECONDARY EVIDENCE THEREOF. ACCORDING TO SECTION 92, ONCE THE DOCUMENT IS TENDERED IN EVIDENCE AND PROVED AS PER THE REQUIREMENTS OF SECTION 91, THEN NO EVIDENCE OF ANY ORAL AGREEME NT OR STATEMENT WOULD BE ADMISSIBLE AS BETWEEN THE PARTIES TO ANY SUCH INSTR UMENT FOR THE PURPOSES OF CONTRADICTING, VARYING, ADDING TO OR SUBTRACTING FR OM ITS TERMS. THEREFORE, IT FOLLOWS THAT NO ORAL AGREEMENT CONTRADICTING/VARYIN G THE TERMS OF A DOCUMENT CAN BE OFFERED. ONCE THE AFORESAID PRINCIPAL IS CLEAR, THEN IN THE INSTANT CASE, OSTENSIBLE SALE CONSIDERATIONDISCLOSED IN THE SALE DEED HAD TO BE ACCEPTED AND IT COULD NOT BE CONTRADICTED BY ADDUCING ANY ORAL EVID ENCE. THEREFORE, THE ORDER OF THE TRIBUNAL DID NOT SUFFER FROM ANY LEGAL INFIRMIT Y IN REACHING TO THE CONCLUSION THAT THE AMOUNT SHOWN IN THE REGISTERED SALE DEED W AS RECEIVED BY THE VENDORS AND DESERVED TO BE ADDED TO THE GROSS INCOME OF THE ASSESSEE. [PARA 4]. 9. IN THE INSTANT CASE, THE ASSESSEE HAS NOT PRODU CED ANY EVIDENCE BEFORE THE A.O. TO SHOW THAT THE RECITALS OF THE DO CUMENTS OF SALE DEED WERE INCORRECT AND THE ASSESSEE HAS NOT FILED ANY A FFIDAVIT BEFORE THE REGISTERING AUTHORITY FOR MODIFICATION OF THE SALE DEED RECITALS AND NO MODIFICATION ORDER WAS PASSED BY THE REGISTERING AU THORITY. THEREFORE, WE HOLD THAT THERE IS NO REASON TO DISBELIEVE THE R ECITALS OF SALE DEED AND TO ADOPT THE SALE DEEDS RECITALS FOR WORKING OU T THE INDEXED COST OF ACQUISITION. ACCORDINGLY, WE ARE OF THE VIEW THAT THE A.O. HAS SIMPLY DISBELIEVED THE RECITALS OF THE SALE DEED AND DID N OT FOLLOW THE DIRECTIONS OF THE CIT AND PASSED THE ORDER WITHOUT MAKING ANY FURTHER VERIFICATIONS OR GETTING FRESH EVIDENCE WITH REGARD TO THE DATE O F CONSTRUCTION OF THE ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 9 GODOWNS. THEREFORE, THE ORDER PASSED BY THE A.O. W AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE LD. PRINCIPAL CIT HAS RIGHTLY TAKEN UP THE CASE FOR REVISION AND WE UPHOL D THE ORDER OF THE LD. PRINCIPAL CIT PASSED U/S 263 OF THE ACT AND DISMISS THE APPEAL OF THE ASSESSEE. ITA 500/VIZAG/2016 A.Y. 2008-09: 10. IN THIS APPEAL ALSO ALL THE GROUNDS OF APPEAL A RE AGAINST THE ORDER PASSED U/S 263 OF THE ACT ON 20.10.2016 BY THE PR.C IT, GUNTUR. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 143 R.W.S. 1 47 OF THE ACT ON 30.12.2011 AND THE A.O. HAS COMPUTED THE LONG TERM CAPITAL GAINS AT ` 82,002/-. THE LD.CIT HAS TAKEN UP THE CASE FOR REV ISION U/S 263 OF THE ACT AND OBSERVED THAT THE ASSESSEE HAS SOLD GODOWNS ON 7.12.2007 FOR ` 9.00 LAKHS. MARKET VALUE OF THE GODOWN WAS ` 19,04,000/- AS DETERMINED BY THE SRO. BUT IN CAPITAL ACCOUNT, THE PROFIT ON SALE OF GODOWNS WAS SHOWN AT ` 13,02,467/- IN SPITE THE SALE CONSIDERATION OF THE GODOWN WAS ` 9.00 LAKHS. THE ACTUAL PROFIT ON SALE OF GODOWN WORKED OUT TO ` 2,98,467/- I.E. { ` 9 LAKHS (-) ` 6,01,533/-}, AGAINST WHICH THE ASSESSEES CAPITAL ACCOUNT WAS CREDITED W ITH THE PROFIT OF ` 13,02,467/- RESULTING IN EXCESS CREDIT OF ` 10,04,000/-. HENCE, THE LD.CIT, GUNTUR HAS ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE CALLING FOR HIS OBJECTIONS FOR REVISION OF THE ORDER. THE ASSE SSEE FILED HIS OBJECTIONS ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 10 AND AFTER CONSIDERING THE OBJECTIONS, THE LD.CIT P ASSED AN ORDER U/S 263 DIRECTING THE A.O. TO MODIFY THE ASSESSMENT OR DER BY MAKING THE ADDITION OF ` 10,04,000/- TO THE ASSESSED INCOME. THE A.O. HAS PASSED CONSEQUENTIAL ORDER U/S 143(3) R.W.S. 263 ON 16.9.2004 ACCEPTING THE INCOME ASSESSED AS EARLIER WITHOUT MA KING ANY ADDITION TO THE INCOME ALREADY ASSESSED. WHILE GIVING EFFECT T O THE ORDER U/S 263 OF THE ACT, THE A.O. DID NOT CARRY OUT THE DIRECTIONS GIVEN IN THE REVISION ORDER U/S 263. THEREFORE, THE LD.CIT HAS TAKEN UP T HE CASE FOR REVISION U/S 263 OF THE ACT IN THE SECOND ROUND AND PASSED O RDER U/S 263 OF THE ACT AND OBSERVED AS UNDER: 4. THE SUBMISSIONS MADE BY THE ASSESSEE CONSIDERED CAREFULLY. IN THE REPLY, THE THE SUBMISSIONS MADE BY THE ASSESSEE CONSIDERED CA REFULLY. IN THE REPLY, THE STATEMENT OF LEGAL REPRESENTATIVE OF THE ASSESSE THAT 'THE PROPERTIES SOLD ON 07.12,2009 FOR RS.19,04,000 /- AND THE VALUE ADOPTED BY THE SRO ARE ALSO SAME' IS NOT CORRECT. I N THE SALE DEED NO.6650/2007 DATED 07.12.2007, IT WAS CLEARLY MENTI ONED THAT THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS RS.9 ,00,000/- AS AGAINST THE MARKET VALUE OF RS.19,04,000/-. THOUGH, THE MARKET VALUE OF THE GODOWN AS ASSESSED BY THE STAMP DUTY A UTHORITIES IS REQUIRED TO BE ADOPTED AS THE FULL VALUE OF THE GOD OWN AS SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAINS AS PER THE PROVISIONS OF SEC.50C OF THE I.T. ACT, THE SAME CANNOT BE TREATED AS THE ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE FOR THE PURPOSE OF ARRIVING AT THE PROFIT DERIVED FROM SALE OF GODOWN IN THE BOOKS OF ACCOUNT. THE SALE CONSIDE RATION WHICH IS MENTIONED IN THE REGISTERED SALE DEED IS THE ACTUAL CONSIDERATION WHICH IS RECEIVED BY THE ASSESSEE AND THE SAME NEED S TO BE ADOPTED FOR COMPUTING THE PROFIT FROM THE SALE OF G ODOWN TO BE CREDITED TO THE ASSESSEE'S CAPITAL ACCOUNT. THERE I S NO EXPLAINABLE SOURCES IN THE RECORD FOR THE EXCESS AMOUNT CREDITE D OF RS.10,04,000/- TO THE CAPITAL ACCOUNT. 3 ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 11 11. ACCORDINGLY THE LD. PR. CIT, GUNTUR PASSED AN O RDER U/S 263 SETTING ASIDE THE ASSESSMENT ORDER U/S 143(3) R.W.S .263 DATED 16/09/2014 AND DIRECTED THE AO TO REDO THE ASSESSME NT ON THE LINES OF DIRECTIONS GIVEN IN THE REVISIONAL ORDER D ATED 20/10/201. AGAINST THE ORDER PASSED U/S 263 OF THE ACT DATED 20/10/2016, THE ASSESSEE FILED APPEAL BEFORE THIS T RIBUNAL. DURING THE APPEAL HEARING THE LD.AR VEHEMENTLY OPPOSED AND HAS REITERATED THE ARGUMENTS MADE IN APPEAL NO.499/2016 DISCUSSED IN PARA NO.6 OF THIS ORDER. ON THE OTHER HAND THE LD. D.R. RELIED ON THE ORDERS OF THE PRINCIPAL CIT. 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT IN HIS ORDER U/S 263 OF THE ACT DIRECTED THE A.O. TO ADOPT THE SALE CONSIDERATION AT ` 9 LAKHS AND RE-COMPUTE THE CAPITAL GAINS BY MAKING ADDITION OF ` ` 10,04,000/-. THE LD. CIT HAS GIVEN A CLEAR FINDING THAT THE ASSESSE HAS EXCESS CREDITED TO THE CAPITAL ACCOUNT TO THE EXTENT OF ` 10,04,000/- AS THE SALE CONSIDERATION WAS ` 9 LAKHS AGAINST WHICH THE ASSESSEE HAS TAKEN A SALE CONSIDERATION AT ` 19,04,000/-. THE ASSESSEE HAS ADOPTED THE MARKET VALUE OF THE PROPERTY FOR WORKING OUT TH E PROFIT WITHOUT EXPLAINING THE SOURCE. IN FACT AS PER THE SALE DEE D, THE ASSESSEE ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 12 HAD RECEIVED A SUM OF ` 9.00 AND THE PROFIT WAS ` 2,98,467/- SINCE THE COST OF GODOWN WAS ` 6,01,533/-. THE CIT DID NOT SET ASIDE THE ORDER AND INSTEAD DIRECTED THE A.O. TO MODIFY T HE ASSESSMENT ORDER MADE U/S 143(3) R.W.S. 147 OF THE ACT BY MAKI NG ADDITION OF ` 10,04,000/- FOR WHICH THE SOURCE WAS NOT EXPLAINED . THEREFORE, THE A.O. HAS NO BUSINESS EXCEPT TO CARRY OUT THE DI RECTIONS OF THE LD.CIT MUTATIS MUTANDIS AND NO FURTHER ENQUIRY/ VER IFICATION REQUIRED TO BE MADE. CAREFUL VERIFICATION OF THE A SSESSMENT ORDER, REVEALS THAT THE A.O. ALSO DID NOT MAKE ANY VERIFIC ATION AND SIMPLY ADOPTED THE SALE CONSIDERATION AT ` 19,04,000/- AS AGAINST THE ACTUAL SALE CONSIDERATION OF ` 9.00 LAKHS. AS HELD BY HONBLE PUNJAB & HARYANA HIGH COURT IN [2010] 195 TAXMAN 273 (PUNJ. & HAR.) PARAMJIT SINGH .V.INCOME-TAX OFFICER, THE SALE CONS IDERATION RECORDED IN THE REGISTERED SALE DEED CONSTRUED TO BE FINAL UNLE SS OTHERWISE IT IS PROVED TO BE WRONG. THEREFORE, THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 263 OF THE ACT IS ERRONE OUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE PRINCIPAL CIT HAS RIGHTLY TAKEN UP THE CASE FOR REVISION U/S 263 OF T HE ACT. ACCORDINGLY, WE UPHOLD THE ORDER PASSED BY THE PRIN CIPAL CIT AND DISMISS THE APPEAL OF THE ASSESSEE. ITA NO.499 & 500/VIZAG/2016 LATE DEVERASETTY VENKATA SUBBARAO, LR DEVERASETTY R AVI KUMAR, GUNTUR DIST. 13 13. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E IN ITA NOS.499 & 500/VIZAG/2016 ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 8 TH NOV17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 8.11.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT LATE DEVERASETTY VENKATA SUBBA R AO, LR DEVERASETTY RAVI KUMAR, 18-1-41, SATTENAPALLI-522 403, GUNTUR D IST. 2. / THE RESPONDENT THE PRINCIPAL CIT, GUNTUR 3. + / THE PRINCIPAL CIT, GUNTUR 4. + ( ) / THE CIT (A), GUNTUR 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM