Mohammed Abdul Hai, Hyderabad V. Income Tax Officer, Ward-4(1), Hyderabad

ITA 506/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0777 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT MUZUMDAR
• Assessee Lawyers: C SURESH
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Capital Gains
• Section: 50C; 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER IT A NO. 506 /H/20 1 8 ASSESSMENT YEAR: 2 007 - 08 MOHAMMED ABDUL HAI, HYDERABAD. PAN A AHPH 7905 G VS. INCOME - T AX OFFICER, WARD 4(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI C. SURESH REVENUE BY: SHRI ROHIT MUZUMDAR DATE OF HEARING: 16 /0 2 /2021 DATE OF PRONOUNCEMENT: 23 /0 2 /2021 O R D E R PER BENCH: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST CIT(A) 8 , HYDERABADS ORDER DATED 01 / 1 2 /2017 FOR AY 20 07 - 08 CHALLENGING THE REOPENING OF THE ASSESSMENT U/S 147 OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT) AND THE ADDITION ON ACCOUNT OF CAPITAL GAINS. I TA NO. 506 /HYD/ 18 MOHAMMED ABDUL HAI, HYD. : - 2 - : 2. AT THE OUTSET, THE LD. AR OF THE ASS ES SE E DID NOT PRESS THE LEGAL GROUNDS REGARDING CHALLENGING OF REOPENING OF ASSESSMENT U/S 147 OF THE ACT, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. 3. AS REGARDS THE ISSUE OF CAPITAL GAINS, THE BRIEF FACTS OF THE CASE ARE THAT AN INFORMATION WAS RECEIVED BY THE AO THAT THE ASSESSEE HAD SOLD PROPERTIES AND THE DETAILS OF WHICH ARE AS UNDER: S.NO. DOCUMENT NO. SELLER NAME SALE CONSIDERATION SRO VALUE 1 4 222/2006, DTD. 06/11/2006 MOHD. ABDUL HAI RS. 50,00,000/ - 1,52,98,800 2 1417/2006 DTD. 01/04/2006 MOHD. ABDUL HAI, UMATIYA, SADIA, MOHD. AHMED HUZAIFA 3.1 THE AO NOTIC ED THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME U/S 139 OF THE ACT AND, ACCORDINGLY, HE ISSUED NOTICE U/S 148 OF THE ACT ON 27/03/2014, WHICH WAS ISSUED AND SERVED BY AN AFFIXTURE AT THE LAST KNOWN ADDRESS OF THE ASSESSEE. HOWEVER, THERE WAS NO COM PLIANCE FROM THE ASSESSEE TO THE SAID NOTICE. ACCORDINGLY, THE AO COMPLETED I TA NO. 506 /HYD/ 18 MOHAMMED ABDUL HAI, HYD. : - 3 - : THE ASSESSMENT U/S 144 OF THE ACT BY COMPUTING THE LONG TERM CAPITAL GAINS AGAINST THE DOCUMENT NO. 4222/2006 AT RS. 1,52,98,800/ - WITHOUT GIVING ANY COST OF ACQUISITION TO THE A SSESSEE AND IN RESPECT OF PROPERTY NO. 1417/2006 THE SALE CONSIDERATION HAS TAKEN AT RS. 45,46,000/ - AND SINCE THERE WERE 5 PARTIES, ASSESSEES SHARE OF 1/5 TH ON RS. 45,46,000/ - COME TO RS. 9,07,700/ - . 4. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AO HAS NOT FOLLOWED THE PROVISIONS OF SECTI ON 50C FOR DETERMINING LONG TERM CAPITAL GAINS ON THE IMPUGNED PROPERTIES AS THE AO OUGHT TO HAVE REFERRED THE MATTER TO THE DVO BEFORE COMPUTING CAPITAL GAINS AND, THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE AO FOR RECONSIDERATION OF THE ISSUE AFRES H FOR DETERMINATION OF COST OF ACQUISITION I TA NO. 506 /HYD/ 18 MOHAMMED ABDUL HAI, HYD. : - 4 - : OF ASSETS AFTER REFERRING TO THE DVO AS PER SECTION 50C OF THE ACT. 6. THE LD. DR HAS NOT OBJECTED TO THE SUBMISSION OF THE LD. AR THAT THE MATTER MAY BE REMITTED BACK TO THE AO FOR RECONSIDERATION OF THE ISSUE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE REVENUE AUTHORITIES. WE FIND THAT WHILE COMPUTING CAPITAL GAINS, THE AO HAS NOT TAKEN THE COST OF ACQUISITION INTO CONSIDERATION . IT IS OBSERVED THAT WHILE DETERMINING THE TAXABLE CAPITAL GAINS ON SALE OF PROPERTY, THE OWNER IS ENTITLED TO THE BEN EFIT OF COST OF ACQUISITION, WHICH INCLUDES ALL THE EXPENSES WHICH ARE INCURRED BY THE OWNER IN PURCHASING SUCH CAPITAL ASSET. SINCE ASSESSEE HAS PROTESTED IN ADOPTING THE SRO VALUE, AO SHOULD HAVE REFERRED THIS MATTER TO THE DVO INSTEAD OF ADOPTING SRO VA LUE U/S 50C(2) OF THE ACT. IN OUR CONSIDERED VIEW, SRO VALUE CANNOT BE ACCEPTED AS MARKET VALUE UNLESS IT IS VERIFIED BY AN EXPERT VALUER. THEREFORE, WE REMIT THIS ISSUE I TA NO. 506 /HYD/ 18 MOHAMMED ABDUL HAI, HYD. : - 5 - : BACK TO THE FILE OF AO TO REDO THE ASSESSMENT DE - NOVO AFTER GETTING A REPORT FROM THE DVO. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 23 RD FEBRUARY , 2021 . SD/ - SD/ - ( S.S. GODARA ) (LAXMI PRASAD SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDE RABAD, DATED : 23 RD FEBRUARY , 20 2 1 . K V C OPY TO : 1 SHRI MOHAMMED ABDUL HAI, C/O M/S SEKHAR & SURESH, CAS., 133/4, RP ROAD, SECUNDERABAD 500 003 2 ITO, WARD - 4 (1), IT TOWERS, HYDERABAD. 3 C I T(A) 8 , HYDERABAD. 4 PR. CIT - I , HYDERABAD 5 ITAT, DR, HYDERABAD. 6 GUARD FILE.