Datla Mallikarjuna Raju, Hyd, Hyderabad V. ITO, Ward-8(1), Hyderabad, Hyderabad

ITA 526/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2424 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 29-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2016
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: A V RAGHURAM
• Keywords: Cost of acquisition
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 526/HYD/2016 ASSESSMENT YEAR: 2009-10 SRI DATLA MALLIKARJUNA RAJU, HYDERABAD [PAN: ADMPD1476C] VS INCOME TAX OFFICER, WARD-8(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR FOR REVENUE : SMT U. MINICHANDRAN, DR DATE OF HEARING : 01-06-2017 DATE OF PRONOUNCEMENT : 07-06-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-9, HYDERABAD, DATED 29-02-2016. THE ISSUE IS WITH REFERENCE TO COMPUTATION OF CAPITAL GAINS. 2. BRIEFLY STATED, ASSESSEE HAS SOLD A RESIDENTIAL FLA T FOR A CONSIDERATION OF RS. 45,70,000/- AND AFTER CLAIMING INDEXED COST OF ACQUISITION AT RS. 16,42,634/-, ASSESSEE ARRIVED AT A CAPITAL GAIN OF RS. 29,27,366/- AND CLAIMED EXEMPTION U/S. 54 OF THE INCOME TAX ACT [ACT] BY INVESTING IN A NEW HOUSE AND DECLARED NI L INCOME UNDER THE CAPITAL GAINS. ASSESSING OFFICER (AO) NOTI CED THAT OUT OF RS. 43,04,412/- INVESTED IN THE NEW HOUSE, ASSESSEE WAS ELIGIBLE I.T.A. NO. 526/HYD/2016 SRI DATLA MALLIKARJUNA RAJU :- 2 - : FOR DEDUCTION U/S. 54 ONLY TO THE EXTENT OF RS. 10 LAK HS AND ACCORDINGLY BROUGHT TO TAX THAT THE CAPITAL GAIN OF RS. 1 9,27,366/-. 3. BEFORE THE LD.CIT(A), ASSESSEE, HOWEVER, FILED AD DITIONAL EVIDENCE THAT BY MISTAKE THE COST OF THE FLAT SOLD WAS NOT CONSIDERED FULLY, AS ASSESSEE HAS PURCHASED SUPER S TRUCTURE FOR AN AMOUNT OF RS. 12 LAKHS AND ENTERED INTO AGREEMENT FOR C OMPLETION OF SEMI-FURNISHED FLAT AT RS. 22 LAKHS AND FURTHER, AN AMOUNT OF RS. 1,71,000/- FOR OTHER FIXTURES ON THE HOUSE AND WI TH REGISTRATION CHARGES OF RS. 1,54,750/-, THE TOTAL COST WAS RS. 37, 25,750/- WHICH SHOULD HAVE BEEN ALLOWED AS COST OF ACQUISITION WITH INDEXATION WHILE COMPUTING THE CAPITAL GAIN. WITH REF ERENCE TO INVESTMENT U/S. 54 ALSO, ASSESSEE HAS FURNISHED DETAIL S OF AGREEMENTS ENTERED WITH M/S. OMEGA SHELTERS PVT. LTD., FOR PURCHASE OF LAND AT RS. 30,54,500/- AND CONSTRUCTION A GREEMENT FOR RS. 41,95,500/-. IT WAS THE SUBMISSION BEFORE THE CIT(A) THAT IF THE CORRECT COST OF ACQUISITION WAS ADOPTED AND ASSESSEE WAS ALLOWED DEDUCTION U/S. 54, THERE WILL BE NO CAPITAL GA INS LIABILITY. 4. AFTER REMANDING THE MATTER TO AO FOR EXAMINATION OF T HE COST OF ACQUISITION AND AFTER GETTING THE REPORT FROM THE AO, SURPRISINGLY, LD.CIT(A) DID NOT ALLOW THE SAME STATING THE FOLLOWING REASONS: 8. COMING TO THE ISSUE OF ASSESSEES FILING OF ADD ITIONAL EVIDENCE WITH REGARD TO THE COST OF ACQUISITION OF THE SAID PROPERTY, THE ASSESSING OFFICER OPINED IN THE REMAND REPORT T HAT SUCH A CLAIM WAS NOT MADE IN THE RETURN OF INCOME AND THE COMPUTATION OF CAPITAL GAINS FILED THEREIN. SECONDLY THE ASSESSEE COULD NOT EVEN SUBSTANTIATE HIS CONTENTION BEFORE THE ASSESSING OF FICER DURING THE REMAND PROCEEDINGS. THIRDLY THE ASSESSEE HAS NOT CO NTESTED THIS ISSUE IN THE GROUNDS OF APPEAL RAISED. THEREFORE T HIS CONTENTION OF THE ASSESSEE IS NOT CONSIDERED AND ACCEPTED. I.T.A. NO. 526/HYD/2016 SRI DATLA MALLIKARJUNA RAJU :- 3 - : 5. ASSESSEE HAS RAISED GROUNDS AS WELL AS ADDITIONAL GROUNDS SO THAT THESE ISSUES CAN BE CONSIDERED. SINCE THESE ARE LEGAL ISSUES, THE FACTS OF WHICH ARE ALREADY ON RECORD, THE ADDITIONA L GROUNDS ARE ADMITTED. 6. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE DOCUMENTS PLACED ON RECORD, INCLUDING THE COPIES OF R EMAND REPORT BEFORE THE LD.CIT(A), I AM OF THE OPINION THAT ASSESSEE HAS SUBSTANTIATED THE COST OF ACQUISITION OF THE FLAT SOLD AT R S. 37,25,750/-, THE DETAILS OF WHICH WERE ALREADY CONSI DERED BY THE CIT(A) IN PARA 6 OF THE ORDER. AS SEEN FROM THE REM AND REPORT OF THE AO ALSO, THERE IS EVIDENCE THAT ASSESSEE PAID AN AM OUNT OF RS. 22 LAKHS. AO DID NOT AGREE WITH THAT ONLY ON THE REASON THAT THE SOURCES WERE NOT EXPLAINED. IF THE SOURCES WERE NOT E XPLAINED, IT IS FOR THE AO TO EXAMINE IN THE YEAR OF INVESTMENT, BUT TH AT SHOULD NOT COME IN THE WAY OF ALLOWING THE CLAIM FOR THE P URPOSE OF COMPUTATION OF CAPITAL GAINS. SINCE ASSESSEE HAS PLAC ED NECESSARY EVIDENCES FOR INVESTING AN AMOUNT OF RS. 37,25,750/- , THE SAME HAS TO BE ALLOWED TO ASSESSEE. AS ASSESSEE HAS INVE STED MORE THAN THE CAPITAL GAINS IN THE NEW HOUSE, ASSESSEE IT SEEMS I S NOT CAREFUL ENOUGH TO MAKE CLAIMS ORIGINALLY. HOWEVER, THAT SHOULD NOT PREVENT ASSESSEE IN MAKING THE CORRECT CLAIMS WHEN THE FACTS ARE AVAILABLE ON RECORD. IN VIEW OF THAT, I DIRECT THE AO TO ACCEPT THE COST OF CONSTRUCTION OF RS. 37,25,750/- AND RE-WORK O UT THE CAPITAL GAINS AFTER GIVING DUE INDEXATION AS PER THE PROVISIO NS OF THE ACT. 7. LD. COUNSEL, HOWEVER, DID NOT PRESS THE ISSUES WIT H REFERENCE TO SECTION 54 AS THE AO HAS ALREADY ALLOWED PARTLY TO A N EXTENT OF I.T.A. NO. 526/HYD/2016 SRI DATLA MALLIKARJUNA RAJU :- 4 - : RS. 10 LAKHS. ACCORDINGLY, THE OTHER GROUNDS PERTAIN ING TO CLAIM OF 54 ARE CONSIDERED NOT PRESSED. 8. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JUNE, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 7 TH JUNE, 2017 TNMM COPY TO : 1. SRI DATLA MALLIKARJUNA RAJU, HYDERABAD. C/O. K. VASANT KUMAR, A.V. RAGHU RAM, P. VINOD, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-8(1), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-9, HYDERABAD . 4. THE PR. COMMISSIONER OF INCOME TAX-6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.