M/s Mahesshwari Plaza Resorts Ltd, Hyderabad V. DCIT, Hyderabad

ITA 571/HYD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3167 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 20-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA SINHA
• Assessee Lawyers: C P RAMASWAMY
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A NO.571/HYD/2010 ASSESSMENT YEAR : 2006-07 M/S. MAHESHWARI PLAZA RESORTS LTD., HYDERABAD PAN: AABCM6346D VS DY. CIT, CIRCLE-16(2) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.P. RAMASWAMY RESPONDENT BY : SMT. VASUNDHARA SINHA O R D E R PER: N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V, HYDERABAD DATED 19.3.2010 AN D PERTAINS TO ASSESSMENT YEAR 2006-07. 2. SHRI C.P. RAMASWAMY, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AFTER FILING THE APPEAL, TH E ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS WITH REG ARD TO FAMILY ARRANGEMENT MADE FOR THE PURPOSE OF SETTLING THE FAMILY DISPUTES. THE LEARNED COUNSEL SUBMITTED THA T THERE WAS A DISPUTE IN THE FAMILY OF THE PROMOTERS OF THE ASSESSEE COMPANY AND A FAMILY SETTLEMENT WAS ENTERE D INTO BY WHICH CERTAIN ARRANGEMENTS WERE AGREED FOR TRANSFER OF THE ASSETS/PROJECTS. ACCORDING TO THE LEARNED COUNSEL THE ARRANGEMENT MADE IN ORDER TO SETTLE THE FAMILY DISPUTES CANNOT BE CONSTRUED TO BE A TRANSFE R, THEREFORE, IT CANNOT BE SUBJECT MATTER FOR TAXATION . THE ITA NO.571/HYD/2010 M/S MAHESHWARI PLAZA RESORTS LTD. ============================ 2 2 LEARNED COUNSEL FOR THE ASSESSEE PLACED HIS RELIANC E ON THE JUDGEMENT OF THE APEX COURT IN THE CASE OF MATURI P ULLAIAH & ANR. VS. MATURI NARSIMHA & ANR. (1966) SC 1836 AN D ALSO IN THE CASE OF KALE VS. DY. DIRECTOR OF CONSOL IDATION, AIR (1976) SC 807. PLACING RELIANCE ON THE JUDGEME NT OF THE APEX COURT IN THE CASE OF CIT VS. V. MR. P. FIR M, MUAR, 56 ITR 67 AND IN THE CASE OF ALAPATI VENKATAR AMIAH VS. CIT, 57 ITR 185, THE LEARNED COUNSEL FOR THE AS SESSEE SUBMITTED THAT MERELY BECAUSE THE ASSESSEE HAS ADMI TTED CERTAIN RECEIPTS AS INCOME ON THE WRONG ADVICE OF T HE TAX EXPERT IT CANNOT BE SUBJECTED TO TAX IN CASE THE AS SESSEE WAS LEGALLY LIABLE TO PAY TAX. ACCORDING TO THE LE ARNED COUNSEL FOR THE ASSESSEE THE ASSESSEE WAS NOT LIABL E TO PAY TAX IN RESPECT OF RECEIPTS CONSEQUENT TO THE FA MILY ARRANGEMENT ENTERED INTO. THEREFORE, MERELY BECAUS E THE ASSESSEE OFFERED THE INCOME IN THE RETURN THAT CANN OT BE THE REASON FOR LEVYING TAX. 3. ON A QUERY FROM THE BENCH WHETHER THIS ASPECT WA S CONSIDERED BY THE LOWER AUTHORITIES, THE LEARNED CO UNSEL FOR THE ASSESSEE FAIRLY SUBMITTED THAT THE LOWER AU THORITIES HAD NO OCCASION TO CONSIDER THIS ISSUE. THEREFORE, HE HAS NO OBJECTION TO REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION. THE LEARNED C OUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT SINCE THE I SSUE RAISED IN THE ADDITIONAL GROUNDS REGARDING ASSESSAB ILITY OF THE INCOME DUE TO FAMILY ARRANGEMENT GOES TO THE VE RY ROOT OF THE MATTER, THE OTHER ISSUES RAISED BY THE ASSESSEE IN THE GROUNDS APPEAL MAY ALSO BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. ITA NO.571/HYD/2010 M/S MAHESHWARI PLAZA RESORTS LTD. ============================ 3 3 4. WE HAVE ALSO HEARD SMT. VASUNDHARA SINHA, THE LEARNED DEPARTMENTAL REPRESENTATIVE. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION TO REM IT BACK THE MATER TO THE FILE OF THE ASSESSING OFFICER SINCE THE LOWER AUTHORITIES HAD NO OCCASION TO CONSIDER T HE ISSUE OF FAMILY ARRANGEMENT SAID TO BE ENTERED INTO BY TH E ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO SUBMITTED THAT SINCE THE ISSUE OF FAMILY ARRANGEMEN T MAY GO TO THE ROOT OF THE MATTER, SHE HAS NO OBJECTION TO REMIT THE OTHER ISSUES ALSO RAISED BY THE ASSESSEE IN THE APPEAL TO THE FILE OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIALS AVAILABLE ON RE CORD. THE ASSESSEE NOW CLAIMS BEFORE THIS TRIBUNAL THAT T HE TRANSFER WAS MADE DUE TO FAMILY ARRANGEMENT IN ORDE R TO SETTLE THE FAMILY DISPUTES. THE LEARNED COUNSEL FO R THE ASSESSEE ALSO PLACED HIS RELIANCE ON VARIOUS JUDGEM ENTS OF THE APEX COURT. AS RIGHTLY SUBMITTED BY THE LEARNE D COUNSEL FOR THE ASSESSEE AND THE LEARNED DEPARTMENT AL REPRESENTATIVE, THE LOWER AUTHORITIES HAD NO OCCASI ON TO CONSIDER THIS ISSUE. BOTH THE COUNSELS, FOR THE AS SESSEE AND THE DEPARTMENT, HAVE NO OBJECTION TO REMIT BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. IN OU R CONSIDERED OPINION, SINCE THE LOWER AUTHORITIES HAD NO OCCASION TO CONSIDER THIS ISSUE, THE MATTER NEEDS T O BE CONSIDERED BY THE ASSESSEE AT THE FIRST INSTANCE. SINCE THE ISSUE OF FAMILY ARRANGEMENT GOES TO THE ROOT OF THE MATTER, THE OTHER ISSUES RAISED BY THE ASSESSEE IN THE APPEAL HAVE ALSO TO BE RECONSIDERED BY THE ASSESSIN G OFFICER. ITA NO.571/HYD/2010 M/S MAHESHWARI PLAZA RESORTS LTD. ============================ 4 4 6. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND REMIT BACK THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL CON SIDER THE ISSUE ON THE BASIS OF THE MATERIALS THAT MAY BE FIL ED BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE IN ACCORDA NCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO T HE ASSESSEE. WE MAKE IT CLEAR THAT WE ARE NOT EXPRESS ING ANY OPINION ON THE MERIT OF THE APPEAL. THE ASSESS ING OFFICER HAS TO RECONSIDER THE ENTIRE ISSUE IN ACCOR DANCE WITH LAW WITHOUT BEING INFLUENCED BY ANY OF THE OBSERVATIONS MADE BY THIS TRIBUNAL IN THIS ORDER OR OF THE CIT(A) IN THE IMPUGNED ORDER. 7. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH JUNE, 20 10. SD/- CHANDRA POOJARI SD/- N.R.S. GANESAN ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED THE 28TH JUNE, 2010. COPY FORWARDED TO: 1. M/S. MAHESHWARI PLAZA RESORTS LTD., C/O. DR. C.P . RAMASWAMI, ADVOCATE, FLAT NO. 303, GITANJALI APTS., PLOT NO. 108, SRINAGAR COLONY, HYDERABAD-500 072 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE-16(2), HYDERABAD. 3. CIT(A)-V, HYDERABAD. 4. CIT-IV, HYDERABAD 5. THE D.R., B-BENCH, ITAT, HYDERABAD. TPRAO