Sri. T.V. Prabhu, Bangalore V. CIT, Bangalore

ITA 555/BANG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8686 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G R REDDY I
• Assessee Lawyers: C RAMESH
• Keywords: Search and seizure
• Section: 54F; 133A; 153A; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.555/BANG/2013 ASSESSMENT YEAR : 2008-09 SHRI T.V. PRABHU, NO.17, 3 RD CROSS, JOURNALIST COLONY, BANGALORE 560 002. PAN: ADTPP 8594J VS. THE COMMISSIONER OF INCOME TAX, KARNATAKA (CENTRAL), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI C. RAMESH, CA RESPONDENT BY : SHRI G.R. REDDY, CIT(DR-I) DATE OF HEARING : 19.01.2016 DATE OF PRONOUNCEMENT : 20.01.2016 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEE DIRECTED AGAINST TH E ORDER DATED 22.03.2013 PASSED BY THE COMMISSIONER OF INCOME TAX , KARNATAKA (CENTRAL), BANGALORE U/S. 263 OF THE INCOME-TAX ACT , 1961 [THE ACT] . 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED ON SRI R.V. DEVRA J ON 6.1.2009. IN THIS CONNECTION, RESIDENCE OF THE ASSESSEE WAS ALSO SEAR CH ON 6.1.2009 AND A ITA NO.555/BANG/2013 PAGE 2 OF 7 SURVEY U/S. 133A WAS CARRIED OUT IN THE OFFICE OF T HE ASSESSEE AT NO.17, JOURNALIST COLONY, BANGALORE. NO BOOKS/DOCUMENTS W ERE IMPOUNDED DURING THE COURSE OF SURVEY. 3. BASED ON THE DOCUMENTS FOUND AND SEIZED DURING T HE COURSE OF SEARCH ON 6.1.2009 AT THE OFFICE PREMISES OF M/S. M OOKAMBIKA PROMOTERS VIDE A/MKP/02 AND A/MKP/12, SATISFACTION WAS DRAWN FOR ACTION U/S. 153A OF THE ACT AND ACCORDINGLY NOTICE US/. 153A R.W.S. 153C OF THE ACT DATED 31.5.2010 WAS ISSUED AND SERVED ON THE ASSESSEE ON 5.6.2010. 4. THE ASSESSEE WAS A CORPORATOR AT SUDHAMANAGAR CO NSTITUENCY FROM THE YEAR 2002 TO 2007. HE WAS A PARTNER IN M/ S. MOOKAMBIKA ASSOCIATES, M/S. MOOKAMBIKA PROMOTERS, M/S. MOOKAMB IKA FINANCE AND M/S. R V T V RESIDENCY. 5. THE ASSESSEE FILED RETURN FOR AY 2008-09 FOR THE FIRST TIME IN RESPONSE TO NOTICE US/. 153C ON 23.9.2010 DECLARING TOTAL INCOME OF RS.7,51,235 COMPRISING INCOME FROM OTHER SOURCES. AGRICULTURAL INCOME OF RS.2,17,000 WAS DECLARED FOR THE YEAR. 6. DURING THE COURSE OF ASSESSMENT, THE AO NOTED TH AT THE ASSESSEE HAD SOLD AGRICULTURAL LAND AT HULUVENHALLI VILLAGE FOR A CONSIDERATION OF RS.41,50,000 VIDE SALE DEED DATED 30.5.2007 AND INV ESTED THE ENTIRE PROCEEDS IN PURCHASE OF RESIDENTIAL PROPERTY AT NO. 136/3, OLD MISSION COMPOUND, LALBAGH ROAD, SUDHAMANAGAR, BANGALORE VID E SALE DEED ITA NO.555/BANG/2013 PAGE 3 OF 7 DATED 14.6.2007 AND THEREBY CLAIMED DEDUCTION U/S. 54F. THE AO ALLOWED DEDUCTION U/S. 54F CLAIMED BY THE ASSESSEE AND COMP LETED THE ASSESSMENT OBSERVING AS UNDER:- 5. DURING THE YEAR, THE ASSESSEE HAD SOLD AGRICULT URAL LAND AT HULUVENHALLI VILLAGE FOR A CONSIDERATION OF RS.41,5 0,000/- VIDE SALE DEED DATE 30-5-2007 AND INVESTED THE ENTIRE PR OCEEDS IN PURCHASE OF RESIDENTIAL PROPERTY AT NO.136/3, OLD M ISSION COMPOUND, LALBAGH ROAD, SUDHAMANAGAR, BANGALORE, VI DE SALE DEED DATED 14-6-2007 AND THEREBY CLAIMED EXEMPTION U/S. 54F. THE RELEVANT PROPERTY DOCUMENTS HAVE BEEN VERIFIED AND PLACED ON RECORD. FURTHER DETAILS SUCH AS CONFIRMATION FR OM CREDITORS ETC., FILED HAVE BEEN VERIFIED. WITH THIS THE ASSES SMENT COMPLETED AS UNDER: 7. THE CIT IN EXERCISE OF HIS JURISDICTION U/S. 263 OF THE ACT WAS OF THE VIEW THAT DEDUCTION U/S. 54F OF THE ACT CLAIMED BY THE ASSESSEE WAS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, AS THE A SSESSEE WAS HAVING MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET. NOTICE U/S. 263 OF THE ACT WAS ISSUED. IN REPLY, THE ASSESSEE STATED THAT AS PER STATEMENT OF AFFAIRS FILED ALONG WITH THE RETURN, THE ASSESSEE WAS IN POSSESSION OF THE F OLLOWING THREE PROPERTIES AS ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET:- (A) THE IMMOVABLE PROPERTY AT NO.136/6, LALBAGH RO AD, BANGALORE IS AN OLD RESIDENTIAL HOUSE. (B) THE IMMOVABLE PROPERTY AT SIDDAIAH ROAD, BANGAL ORE IS A COMMERCIAL PROPERTY, ON WHICH M/S. RVTV RESIDENCY O F WHICH ASSESSEE IS A PARTNER, CONSTRUCTED A HOTEL BUILDING . THE INVESTMENT IN THIS BUILDING WAS A SUBJECT MATTER OF ASSESSMENT FOR ITA NO.555/BANG/2013 PAGE 4 OF 7 AYS 2006-07 AND 2007-08. THE HOTEL BUILDING WAS CO MPLETE AS ON 31.3.2007 RELEVANT TO AY 2007-08. (C) THE SITE AT NO.22, 1 ST CROSS, SUDHAMANAGAR, BANGALORE IS A VACANT SITE. 8. THE ASSESSEE CONTENDED BEFORE THE CIT THAT HE WA S IN POSSESSION OF ONLY ONE RESIDENTIAL HOUSE AND SUB-CLAUSE (I) OF CLAUSE (A) TO PROVISO TO SECTION 54F OF THE ACT PROVIDED THAT PROVISIONS OF SECTION 54F SHALL NOT APPLY TO THE ASSESSEE WHO OWNS MORE THAN ONE RESIDE NTIAL HOUSE, OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER OF THE O RIGINAL ASSET. IT WAS THEREFORE ARGUED THAT THERE WAS NO ERROR IN THE ASS ESSMENT ORDER PASSED BY THE AO. 9. THE LD. CIT, AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, OBSERVED THAT THE AO NEVER CALLED FOR AND EXAMINED THE NATURE OF ABOVE PROPERTIES SHOWN IN THE BALANCE SHEET BEFORE ARRIVI NG AT A CONCLUSION AS TO WHETHER SUB-CLAUSE (I) OF CLAUSE (A) TO PROVISO TO SECTION 54F OF THE ACT IS APPLICABLE OR NOT. HE WAS OF THE VIEW THAT THE AO HAD NOT OBTAINED NECESSARY EVIDENCES AND CONDUCTED DETAILED INVESTIG ATION TO ASCERTAIN THE NATURE OF PROPERTIES TO ARRIVE AT A CORRECT CONCLUS ION. THE LD. CIT THEREFORE HELD THE ORDER PASSED BY THE AO WAS ERRONEOUS AND P REJUDICIAL TO THE INTERESTS OF THE REVENUE AND DIRECTED THE AO TO CON DUCT NECESSARY INVESTIGATION AND ARRIVE AT A FRESH CONCLUSION REGA RDING THE DEDUCTION U/S. 54F CLAIMED BY THE ASSESSEE. ITA NO.555/BANG/2013 PAGE 5 OF 7 10. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 11. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE CIT. ON THE OTHER HAND, THE LD. DR SUP PORTED THE ORDER OF THE LD. CIT. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. INFOSYS TECHNOLOGIES LTD., 341 ITR 293 (KAR) HAS HELD AT PARAS 27 & 28 OF THE JUDGMENT AS FOLLOWS:- 27. THE ASSESSING AUTHORITY PERFORMS A QUASI-JUDI CIAL FUNCTION AND THE REASONS FOR HIS CONCLUSIONS AND FINDINGS SH OULD BE FORTHCOMING IN THE ASSESSMENT ORDER. THOUGH IT IS U RGED ON BEHALF OF THE ASSESSEE BY ITS LEARNED COUNSEL THAT REASONS SHOULD BE SPELT OUT ONLY IN A SITUATION WHERE THE ASSESSING AUTHORI TY PASSES AN ORDER AGAINST THE ASSESSEE OR ADVERSE TO THE INTERE STS OF THE ASSESSEE AND NO NEED FOR THE ASSESSING AUTHORITY TO SPELL OUT REASONS WHEN THE ORDER IS ACCEPTING THE CLAIM OF TH E ASSESSEE AND THE LEARNED COUNSEL SUBMIT THAT THIS IS THE LEGAL P OSITION ON AUTHORITY, WE ARE AFRAID THAT TO ACCEPT A SUBMISSIO N OF THIS NATURE WOULD BE TO GIVE A FREE HAND TO THE ASSESSING AUTHO RITY, JUST TO PASS ORDERS WITHOUT REASONING AND TO SPELL OUT REAS ONS ONLY IN A SITUATION WHERE THE FINDING IS TO BE AGAINST THE AS SESSEE OR ANY CLAIM PUT FORTH BY THE ASSESSEE IS DENIED. 28. WE ARE OF THE CLEAR OPINION THAT THERE CANNOT BE ANY DICHOTOMY OF THIS NATURE AS EVERY CONCLUSION AND FI NDING BY THE ASSESSING AUTHORITY SHOULD BE SUPPORTED BY REASONS, HOWEVER BRIEF IT MAY BE, AND IN A SITUATION WHERE IT IS ONL Y A QUESTION OF COMPUTATION IN ACCORDANCE WITH THE RELEVANT ARTICLE S OF A DOUBLE TAXATION AVOIDANCE AGREEMENT AND THAT SHOULD BE CLE ARLY INDICATED ITA NO.555/BANG/2013 PAGE 6 OF 7 IN THE ORDER OF THE ASSESSING AUTHORITY, WHETHER OR NOT THE ASSESSEE HAD GIVEN PARTICULARS OR DETAILS OF IT. IT IS THE D UTY OF THE ASSESSING AUTHORITY TO DO THAT AND IF THE ASSESSING AUTHORITY HAD FAILED IN THAT, MORE SO IN EXTENDING A TAX RELIEF TO THE ASSE SSEE, THE ORDER DEFINITELY CONSTITUTES AN ORDER NOT MERELY ERRONEOU S BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND, TH EREFORE, WHILE THE COMMISSIONER WAS JUSTIFIED IN EXERCISING THE JU RISDICTION UNDER SECTION 263 OF THE ACT, THE TRIBUNAL WAS DEFI NITELY NOT JUSTIFIED IN INTERFERING WITH THIS ORDER OF THE COM MISSIONER IN ITS APPELLATE JURISDICTION. 13. FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF CIT V. INFOSYS TECHNOLOGIES LTD. (SUPRA) , WE FIND THAT THERE IS NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT U/S. 263 OF THE ACT AND DISMISS THE ASSESSEES APPEAL. 14. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS D ISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF JANUARY, 2016. SD/- SD/- ( INTURI RAMA RAO ) (ASHA VIJAYARAGHAVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 20 TH JANUARY, 2016. /D S/ ITA NO.555/BANG/2013 PAGE 7 OF 7 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.