Andela Sattaiah, Hyd, Hyderabad V. ITO, Ward-6(1), Hyd, Hyderabad

ITA 615/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6244 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 28-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: S RAMA RAO
• Keywords: Sale consideration of property below Jantri Value; Period of limitation; Cost of acquisition; Assessment record; Time period of passing order; Reassessment proceedings; Ignorance of law
• Section: 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 615/HYD/2016 ASSESSMENT YEAR: 2005-06 ANDELA SATTAIAH, HYDERABAD PAN AIBPT 2676 F VS. INCOME TAX OFFICER, WARD 6(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SMT. SUMAN MALIK DATE OF HEARING 30-11-2016 DATE OF PRONOUNCEMENT 18-01-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-9, HYDERABAD, DATED 23/12/2015 FOR AY 200 5-06. 2. ON PERUSAL OF RECORD, WE FIND THAT THE ASSESSEE FILED THE APPEAL WITH A DELAY OF 9 DAYS. TO THIS EFFECT, THE ASSESSE E FILED A PETITION REQUESTING FOR CONDONATION OF THE SAID DELAY. HE AL SO FILED AN AFFIDAVIT AFFIRMING THE REASONS MENTIONED IN THE PETITION. IN THE PETITION, THE ASSESSEE, INTER-ALIA, STATED THAT HE IS AGED ABOUT 90 YEARS AND DUE TO ILL HEALTH, HE WAS UNABLE TO FILE THE APPEAL WIT HIN THE STIPULATED TIME AS HE IS COMPLETELY DEPENDED ON HIS SON, THEREFORE, THE REASONS ARE BEYOND THE CONTROL OF THE ASSESSEE AND IS NOT INTEN TIONAL. HE, THEREFORE, SUBMITTED THAT THE DELAY MAY BE CONDONED AND ADMITTED AND THE APPEAL FOR HEARING. 3. AFTER PERUSING THE REASONS SUBMITTED FOR DELAY I N FILING THE APPEAL, WE ARE OF THE VIEW THAT ASSESSEE IS PREVENT ED BY SUFFICIENT 2 ITA NO. 615/H/16 ANDELA SATTAIAH REASONS TO FILE THE APPEAL BELATEDLY, THEREFORE, TH E DELAY IS CONDONED AND ADMITTED THE APPEAL FOR HEARING AND ADJUDICATIO N. 4. THE BRIEF FACTS OF THE CASE ARE, INFORMATION WA S RECEIVED BY THE ASSESSING OFFICER THAT DURING THE F.Y. 2004-05 RELE VANT TO A.Y. 2005- 06 THE ASSESSEE HAD INVESTED AN AMOUNT OF RS. 46,15 ,635/- IN THE PURCHASE OF IMMOVABLE PROPERTY. ON VERIFICATION OF THE DOCUMENT IN RESPECT OF THIS PROPERTY, IT WAS NOTICED BY THE ASS ESSING OFFICER THAT THE TRANSACTION WAS SALE OF PROPERTY AND NOT PURCHA SE OF PROPERTY. ACCORDINGLY THE ASSESSING OFFICER OBTAINED COPIES O F SALE DEEDS AND IT WAS NOTICED THAT IT IS IN RESPECT OF A SALE OF A PROPERTY BEARING NO 6- 3-903/1 ON PLOT NO.4 IN SURVEY NO.1 9 SITUATED AT S OMAJIGUDA WHICH WAS EXECUTED BY ASSESSEE AND HIS FOUR SONS, A. NARS ING RAO, A. PRABHAKAR, A. VENKTESH, AND A. RAMAKRISHNA ON 18.12 .2004 VIDE REGISTERED SALE DEED NO. 223/2005. DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE PROOF FOR INVESTMENT MADE IN PURCHASE OF PROPERTY AND THE BASIS FOR ADOPTING THE COST OF ACQUISITION AT RS. 480/- PER S Q. YRD. THE ASSESSING OFFICER ADOPTED THE COST OF ACQUISITION A T RS. 50 SQ.YRD AS ON 01.04.1981 AND ACCORDINGLY COMPLETED THE ASSESSM ENT. 5. AGGRIEVED WITH THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT HE IS A SMALL MILK VENDOR AND HE IS A KARTA OF HUF AND THAT HIS HUF IS THE JO INT OWNER OF THE LAND ALONG WITH HIS FOUR SONS, WHO SOLD THE SAID LA ND FOR RS. 22,00,000/- AND RECEIVED HIS SHARE AMOUNTING TO RS. 4,40,000/-. A REMAND REPORT WAS CALLED FOR BY THE THEN CIT (APPEA LS)-IV VIDE LETTER DT. 19.06.2014 FROM THE CONCERNED ASSESSING OFFICER . IN RESPONSE ITO, WARD 6(1), HYDERABAD VIDE LETTER DT. 14.07.201 4 SUBMITTED AS FOLLOWS: 'IN CONNECTION WITH SUBMISSION OF REMAND REPORT IN THE CASE OF THE ABOVE MENTIONED ASSESSEE AND FOR VERIFICATION A ND EXAMINATION OF ASSESSEE'S CLAIM MADE BEFORE CIT(APP EALS)-IV, 3 ITA NO. 615/H/16 ANDELA SATTAIAH HYDERABAD, THE ABOVE ASSESSEE ARE AFFORDED AN OPPOR TUNITY OF BEING HEARD AND THE LETTER ISSUED TO THE ABOVE ASSE SSEE IS RETURNED UNSERVED. HOWEVER, ON PERUSAL OF THE COPY OF SALE DEED BEARING DOC. NO. 22/3/2005, IT IS EVIDENT THAT THE SUBJECT PROPERTY SOLD IS HUF PROPERTY AND NOT INDIVIDUAL PROPERTY. FURTHER, THE ASSESSMENT WERE MADE IN THE ABOVE CASE S U/S 144 OF THE IT ACT, 1961 BY ASSESSING INCOME TREATING TH E TRANSACTIONS ONE OF PURCHASE WHEREAS THE TRANSACTION INVOLVED IS THAT OF SALE, HOWEVER, THE ABOVE ASSESSEE'S FILED RETURNS OF INCO ME ON 31.12.2007 TREATING THE ABOVE PROPERTY SOLD AS THEI R INDIVIDUAL PROPERTY INSTEAD OF HUF PROPERTY. FROM THE PERUSAL OF THE ASSESSMENT RECORDS, IT IS F OUND THAT THE ASSESSING OFFICER COULD HAVE INITIATED THE REASSESS MENT PROCEEDINGS IN THE HANDS OF HUF IF THE ASSESSEE HAD FURNISHED CORRECT PARTICULARS DURING THE COURSE OF REASSESSME NT PROCEEDINGS INITIATE IN THE HANDS OF RESPECTIVE IND IVIDUALS. IN VIEW OF THE FOREGOING, IT IS REQUESTED THAT WHILE D ISPOSING OF THE ABOVE APPEALS, A CLEAR CUT FINDING OR DIRECTION MAY BE GIVEN TO THE EFFECT THAT THE CAPITAL GAINS ARISING ON THE TR ANSFER OF SUBJECT PROPERTY HAD TO BE ASSESSED IN THE HANDS OF ANDELA SATTAIAH (HUF) AND ANDELA RAMA KRISHAN UNDER EXPLANATION 3 T O SECTION 153 R.W.S. 150(2) OF THE IT ACT, 1961 SO AS TO ENAB LE THE UNDERSIGNED TO INITIATE REASSESSMENT PROCEEDINGS U/ S 147 IN THE HANDS OF ANDELA SATTAIAH (HUF) AND ANDELA RAMAKRISH NA (HUF).' 5.1 A COPY OF THE REMAND REPORT WAS FORWARDED TO T HE ASSESSEE FOR HIS COMMENTS BY THE CIT(A). IN RESPONSE, THE ASSESS EE VIDE LETTER DT. 06.08.2014 CONTENDED THAT THE SALE TRANSACTION WAS INDEED BETWEEN HUF AND SMT. G YASHODA DEVI BUT THE PROCEEDINGS WER E INITIATED BY THE DEPARTMENT IN THE HANDS OF THE INDIVIDUAL. THE ASSESSEE FURTHER CONTENDED THAT THOUGH THE DEPARTMENT RECEIVED INFOR MATION ABOUT THE SALE TRANSACTION, THE ASSESSING OFFICER IS NOT CORR ECT IN MENTIONING THAT SUCH INFORMATION WAS NOT AVAILABLE. THE ASSESS EE FURTHER CONTENDED THAT THE LAND WAS TRANSFERRED BY WAY OF A DEVELOPMENT AGREEMENT TO VASAVI CONSTRUCTIONS WHO CONSTRUCTED T HE BUILDING BUT DID NOT HANDOVER THE CONSTRUCTED AREA TO THE ASSESS EE. THUS HE SUBMITTED THAT WHAT WAS TRANSFERRED IS ONLY TERRACE RIGHTS AND NOT THE VACANT LAND. IT WAS ALSO CONTENDED THAT THE ASSESSI NG OFFICER IS NOT 4 ITA NO. 615/H/16 ANDELA SATTAIAH CORRECT IN ADOPTING THE VALUE FIXED BY THE SUB REGI STRAR WITHOUT APPLYING THE PROVISIONS OF SECTION 50C(2). 5.2 AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE AS WELL AS THE REMAND REPORT OF THE AO, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES BY OBSERVING AS U NDER: 4.4 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER, THE SUBMISSIONS OF THE ASSESSEE, THE FACTS OF THE CASE AND ALSO THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER. I HAVE ALSO PERUSED THE SALE DEED IN QUESTION I.E. THE DEED DT. 18.12.2004 VIDE REGISTERED DEED NO. 223/2005 AND IT IS OBSERVE D THAT AS AVERRED BY BOTH THE ASSESSEE AND THE ASSESSING OFFI CER THE SUBJECT PROPERTY SOLD IS HUF PROPERTY AND NOT INDIV IDUAL PROPERTY. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT IN I NDIVIDUAL CAPACITY INSTEAD OF HUF CAPACITY AS THE ASSESSEE FI LED RETURN OF INCOME ON 31.12.2007 BY TREATING THE SAID PROPERTY AS INDIVIDUAL PROPERTY. 4.5 FURTHER, THE ASSESSEE'S CONTENTIONS THAT WHAT WAS TRANSFERRED IS ONLY TERRACE RIGHTS AND NOT VACANT L AND IS NOT ADJUDICATED UPON AS THE ASSESSEE HAS NOT RAISED THI S ISSUE IN THE GROUNDS OF APPEAL. HOWEVER, SINCE THE SAID PROPERTY RELATES TO HUF AND NOT INDIVIDUAL, THE ASSESSMENT OUGHT TO HAV E BEEN MADE IN THE CAPACITY OF HUF. HENCE, THE ADDITION MA DE IN THE INDIVIDUAL CAPACITY IS NOT SUSTAINABLE AND IS HEREB Y DELETED. BUT THE ASSESSING OFFICER IS DIRECTED TO TAKE NECESSARY ACTION IN BRINGING THIS INCOME TO TAX IN THE HANDS OF SRI A. SATTAIAH HUF. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJUDIC IAL TO THE ASSESSEE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THERE IS NO GAIN WITH REFERENCE TO T HE IMPUGNED TRANSACTION AND THAT NO CAPITAL GAIN AROSE TO THE A SSESSEE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT NOT TO HAVE DIRECTED THE ASSESSING OFFICER TO TAKE ACTI ON IN THE CASE OF HUF PARTICULARLY WHEN NO INCOME ESCAPED ASSESSME NT EVEN IN THE ASSESSMENT OF THE HUF. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE HELD THAT NO CAPITAL GAIN AROSE TO THE ASSESSE E. 5 ITA NO. 615/H/16 ANDELA SATTAIAH 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE HELD THAT THE CONSIDERATION AND THE COST OF AC QUISITION WERE NOT CORRECTLY ADOPTED BY THE ASSESSING OFFICER. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE DIRECTION TO ASSESS THE INCOME I N ANOTHER CASE CANNOT BE GIVEN BY THE APPELLATE AUTHORITY AND THAT SUCH A DIRECTION IS NOT LEGALLY VALID. 7. LD. AR SUBMITTED THAT CIT(A) GAVE DIRECTION FOR ASSESSMENT IN HUF INSTEAD OF INDIVIDUAL CASE. HE FURTHER SUBMIT TED THAT THE PROVISIONS OF SECTION 150 DO NOT APPLY IN THIS CASE AND RELIED ON THE CASE GAURI SHANKAR CHOUDHARY VS. ACIT & OTHER, 234 ITR 865 (PATNA). HE SUBMITTED THAT THE DIRECTION MUST RELAT E TO THE ASSESSEE IN QUESTION AND CIT(A) CANNOT GIVE ANY DIRECTION OR ASSESSMENT IN THE CASE OF ANY OTHER ASSESSEE OR IN A PROCEEDING IN WH ICH THE ASSESSEE IN QUESTION IS NOT A PARTY. 8. LD. DR RELIED ON THE ORDERS OF REVENUE AUTHORITI ES. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. ON PERUSAL OF THE LD. CIT(A)S ORDER, C IT(A) HAS DIRECTED THE AO TO TAKE NECESSARY ACTION IN BRINGING THE INC OME TO TAX IN THE HANDS OF HUF. FOR THIS DIRECTION, THE COUNSEL FOR T HE ASSESSEE MADE AN OBJECTION THAT SUCH DIRECTION CANNOT BE GIVEN IN THE CASE OF THE ASSESSEE, AS THE HUF AND THE ASSESSEE ARE TWO DISTI NCT AND DIFFERENT PERSONS FOR THE INCOME TAX PURPOSES. WE NOTE THAT A SSESSEE HAS RAISED A SPECIFIC GROUND BEFORE THE CIT(A) THAT TH IS INCOME CANNOT BE TAXED IN THE HANDS OF ASSESSEE, BUT, SHOULD BE ASSE SSED IN THE HANDS OF HUF. THE LD. CIT(A) HAS, THUS, ACCEPTED THE AS SESSEES CONTENTION AND ACCORDINGLY DIRECTED THE AO. 9.1 LD. AR HAS OBJECTED TO SUCH DIRECTION BEFORE US AND RELIED ON THE DECISION IN THE CASE OF GAURI SHANKAR CHOUDHARY VS. ACIT & OTHER (SUPRA) IN SUPPORT OF HIS CONTENTION. WE FIN D THAT THE FACTS OF 6 ITA NO. 615/H/16 ANDELA SATTAIAH THIS CASE ARE DIFFERENT AS THE HONBLE PATNA HIGH C OURT HELD THAT THE APPEAL, REFERENCE OR REVISION OR ANY OTHER PROCEED INGS BEFORE A COURT MUST RELATE TO THE ASSESSEE IN QUESTION AND NOT ANY DIRECTION OR ASSESSMENT MADE IN APPEAL, REFERENCE, OR REVISION I N THE CASE OF ANY OTHER ASSESSEE OR IN A PROCEEDING IN WHICH THE ASSE SSEE IN QUESTION IS NOT A PARTY. THIS DECISION WAS HELD IN THE CONTE XT OF REASSESSMENT MADE PURSUANT TO A DIRECTION OF THE SETTLEMENT COMM ISSION AND THE ABOVE OBSERVATION IS NOT OBITER DICTA AS THE ISSUE THEREIN WAS LIMITATION PERIOD ONLY. 9.2 WE HAVE NOTICED THAT THE CIT(A) HAS GIVEN DIREC TION ACCORDING TO THE FACTS OF THE CASE AND IN CONSEQUENCE OF CIT( A)S ORDER THERE IS NO LIABILITY OR CASE PENDING AGAINST THE ASSESSEE. AS SUCH THERE CAN BE NO GRIEVANCE TO THE ASSESSEE. IT IS PREMATURE T O ADJUDICATE IN THE CASE OF HUF. IN THE CASE OF HUF, THE ISSUES THAT MAY ARISE ARE THAT THE RETURN OF INCOME WAS FILED BY THE INDIVIDUAL IN STEAD OF HUF DUE TO IGNORANCE OF LAW BY THE ASSESSEE AND WHETHER THE REOPENING IN THE CASE OF HUF WAS WITHIN THE TIME LIMIT. ALL THESE ARE THE ISSUES THAT MAY ARISE IN THE CASE OF HUF BEFORE THE AO AND THER E CANNOT BE ANY GRIEVANCE TO THE ASSESSEE BEFORE US IN THESE PROCEE DINGS. THEREFORE, THE PRESENT APPEAL IS NOT MAINTAINABLE. ACCORDINGL Y, IT IS DISMISSED AS NOT MAINTAINABLE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON JANUARY, 2017. (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: JANUARY, 2017 KV 7 ITA NO. 615/H/16 ANDELA SATTAIAH COPY TO:- 1) SHRI ANDELA SATTAIAH, C/O. SHRI S. RAMA RAO, ADV OCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREE T NO. 9, HIMAYAT NAGAR, HYDERABAD 500 029. 2) ITO, WARD 6(1) IT TOWERS, AC GUARDS, HYDERABAD 3) CIT(A) - 9, HYDERABAD 4 PR. CIT 6, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE