Sri.M.C.Mohammedkutty, Trichur V. ITO, Trichur

ITA 630/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69112 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2013
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: K KITTU
• Keywords: Opportunity of being heard; Principle of natural justice; Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 630/COCH/2013 ASSESSMENT YEAR : 2009-10 M.C. MOHAMMEDKUTTY, MEL CHERUVATH HOUSE, VI/277, MCP ENTERPRISES, PUZHAKKAL, PUNKUNNAM P.O. THRISSUR-680 002. [PAN: ASPPK 6732L] VS. THE COMMISSIONER OF INCOME-TAX, THRISSUR. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI K.KITTU, ADV. REVENUE BY SMT. LATHA V. KUMAR, JR. DR DATE OF HEARING 10/12/2013 DATE OF PRONOUNCEMENT 20/12/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE REVISION ORDER DATED 29-07-2013 PASSED BY LD CIT, THRISSUR U/S. 26 3 OF THE ACT. 2. THE ASSESSEE IS CHALLENGING THE VALIDITY OF THE REVISION ORDER PASSED BY THE LD. CIT. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE WAS ORIGINALLY COMPLETED ON 2 6-12-2011 U/S. 143(3) OF THE ACT. DURING THE COURSE OF ORIGINAL ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DEPOSITED A SUM OF RS . 47.00 LAKHS INTO HIS BANK ACCOUNT ON 08-09-2008. WHEN ENQUIRED ABOUT THE SOU RCES OF THESE DEPOSITS, THE I.T.A. NO. 630 /COCH/2013 2 ASSESSEE SUBMITTED THAT HE, ALONG WITH TWO OTHER PE RSONS, SOLD A LAND LOCATED AT AYYANTHOLE, THRISSUR FOR A CONSIDERATION OF RS. 1,4 6,25,000/- (WRONGLY MENTIONED AS RS.1,46,50,000/- IN SOME PLACES), BUT THE SALE V ALUE WAS SHOWN AT RS.18,75,000/- ONLY IN THE CONVEYANCE DEED. ACCOR DINGLY, THE ASSESSEE SUBMITTED THAT THE HE HAS USED HIS SHARE OF SALE PR OCEEDS FOR MAKING THE DEPOSIT CITED ABOVE. THE ASSESSEE ALSO SUBMITTED THAT THE SAID PROPERTY WAS PURCHASED FOR A SUM OF RS.65,25,000/- AS AGAINST THE DOCUMENT ED VALUE OF RS.9.00 LAKHS. ACCORDINGLY, THE ASSESSEE REQUESTED THE AO TO COMPU TE THE CAPITAL GAINS BY ADOPTING THE ACTUAL AMOUNTS OF PURCHASE AND SALE VA LUE AS DISCLOSED BY HIM. HOWEVER, THE ASSESSING OFFICER CHOSE TO COMPUTE THE CAPITAL GAIN BY ADOPTING THE AMOUNTS SHOWN IN THE CONVEYANCE DEEDS. SINCE T HE AO DID NOT ACCEPT THE SUBMISSION OF THE ASSESSEE WITH REGARD TO THE SALE VALUE OF LAND, HE ASSESSED THE BANK DEPOSIT AMOUNT OF RS.47.00 LAKHS AS INCOME OF THE ASSESSEE FROM UNEXPLAINED SOURCES. 4. IN THE APPELLATE PROCEEDINGS BEFORE LD. CIT(A), THE FIRST APPELLATE AUTHORITY DELETED THE ADDITION OF RS.47.00 LAKHS BY ACCEPTING THE CONTENTIONS OF THE ASSESSEE THAT THE ACTUAL SALE VALUE OF THE PROP ERTY WAS RS.1,46,25,000/-. ACCORDINGLY, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAIN BY ADOPTING THE SALE VALUE OF THE LAND AT ABOV E SAID FIGURE. THE ASSESSING OFFICER GAVE EFFECT TO THE ORDER OF THE LD. CIT(A) BY PASSING A CONSEQUENTIAL ORDER ON 29-04-2013 WHEREIN HE COMPUTED THE CAPITAL GAIN BY ADOPTING THE SALE VALUE OF RS. 1,46,25,000/- AND ALSO ADOPTED THE PUR CHASE VALUE OF THE LAND AT RS. 65,25,000/-, AS AGAINST RS.9.00 LAKHS ADOPTED B Y HIM IN THE ORIGINAL ASSESSMENT PROCEEDINGS. 5. ON EXAMINATION OF THE RECORD, THE LD. CIT NOTICE D THAT THE FIRST APPELLATE AUTHORITY HAS GIVEN DIRECTION, ONLY WITH REGARD TO THE SALE PRICE OF THE LAND, I.E., TO ADOPT THE SALES VALUE AT RS. 1,46,25,000/-, BUT DID NOT GIVE ANY DIRECTION ABOUT THE PURCHASE VALUE OF THE LAND. ACCORDINGLY, THE LD. CIT FELT THAT THE I.T.A. NO. 630 /COCH/2013 3 CONSEQUENTIAL ORDER DATED 29.4.2013 PASSED BY THE A SSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE, SINCE THE PURCHASE PRICE OF LAND HAS BEEN TAKEN BY THE AO AT RS.65,25, 000/- AS AGAINST RS.9.00 LAKHS WITHOUT ANY DIRECTION FROM THE LD CIT(A). AC CORDINGLY, THE LD. CIT SET ASIDE THE CONSEQUENTIAL ORDER WITH THE DIRECTION TO RE-DO THE SAME DE NOVA. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE IMPUGNED CONSEQUENTIAL ORDER WAS PASSED TO GIVE EFFECT TO THE ORDER PASSED BY THE LD. CIT(A). HE FURTHER SUBMITTED THAT THE DEPARTMENT, IN THE MEAN TIME, CHALLENGED THE ORDER OF LD CIT(A) BY FILING APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL, VIDE ITS ORDER DATED 18-10-2013, HAS SET ASIDE THE ORDER OF THE LD . CIT(A) AND HAS ALSO RESTORED THE MATTER TO THE FILE OF THE ASSESSING OF FICER WITH DIRECTION TO RE- CONSIDER THE MATTER AFRESH IN THE LIGHT OF THE MATE RIALS AVAILABLE ON RECORD. ACCORDINGLY, THE LD. AR SUBMITTED THAT THE CONSEQUE NTIAL ORDER PASSED BY THE AO, ON WHICH THE IMPUGNED REVISION ORDER HAS BEEN P ASSED BY THE LD. CIT, DOES NOT SURVIVE IN VIEW OF THE ORDER PASSED BY THE TRIB UNAL, IN WHICH CASE, THE REVISION ORDER PASSED BY THE LD. CIT ALSO DOES NOT SURVIVE. 7. ON THE OTHER HAND, THE LD D.R SUBMITTED THAT THE LD CIT(A) AS WELL AS THE TRIBUNAL HAS CONSIDERED THE QUESTION OF SALE VALUE OF THE LAND ONLY AND THE QUESTION OF PURCHASE VALUE OF LAND DID NOT ARISE BE FORE THEM AT ALL. ACCORDINGLY, THE LD D.R SUBMITTED THAT THE AO HAS COMMITTED AN E RROR IN ADOPTING THE PURCHASE COST OF LAND AT RS.65,25,000/- AS AGAINST THE DOCUMENTED PRICE OF RS.9.00 LAKHS WHILE PASSING THE CONSEQUENTIAL ORDER TO GIVE EFFECT TO THE ORDER OF LD CIT(A). ACCORDINGLY, THE LD D.R SUBMITTED THAT THE LD CIT WAS JUSTIFIED IN PASSING THE IMPUGNED REVISION ORDER. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY, THE IMPUGNED REVISION ORDER HAS BEEN PASSED FOR GIVING EFFECT TO THE ORDER DATED 26- I.T.A. NO. 630 /COCH/2013 4 12-2011 PASSED BY THE LD. CIT(A)-V, KOCHI. ADMITTE DLY, THE REVENUE HAS CHALLENGED THE ABOVE SAID ORDER PASSED BY THE LD. C IT(A) BY FILING APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL, VIDE ITS ORDER DATED 18-10-2013, HAS SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR RE-CONSIDERING THE MATTER AFRESH. SIN CE THE ORDER DATED 26.12.2011 PASSED BY LD CIT(A) HAS BEEN SET ASIDE BY THE TRIBU NAL, WE FIND MERIT IN THE CONTENTIONS OF LD A.R THAT THE CONSEQUENTIAL ORDER PASSED BY THE AO TO GIVE EFFECT TO THE ORDER OF LD CIT(A), REFERRED ABOVE, W ILL NOT SURVIVE. SINCE THE LD CIT HAS PASSED THE REVISION ORDER ON THE CONSEQUENT IAL ORDER, WHICH WE HAVE HELD AS NOT SURVIVING, THE SAID REVISION ORDER WILL ALSO AUTOMATICALLY WILL NOT SURVIVE. 8. HOWEVER, WE FIND MERIT IN THE SUBMISSIONS OF LD D.R THAT THE ISSUE OF PURCHASE VALUE OF LAND WAS NOT CONTESTED EITHER B EFORE THE LD CIT(A) OR BEFORE THE TRIBUNAL. ON A CAREFUL PERUSAL OF THE RECORD, O NE MAY NOTICE THAT THE LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO COMPUT E THE CAPITAL GAIN BY ADOPTING THE SALE VALUE OF THE LAND AT RS.1,46,25,000/- AND HE DID NOT GIVE ANY DIRECTION WITH REGARD TO THE PURCHASE COST OF THE LAND. A PE RUSAL OF THE ORDER PASSED BY THE TRIBUNAL WOULD ALSO SHOW THAT THE TRIBUNAL DID NOT MAKE ANY OBSERVATION ABOUT THE PURCHASE VALUE OF THE LAND. 9. THERE SHOULD NOT BE ANY DISPUTE THAT THE CAP ITAL GAIN CAN BE COMPUTED BY CONSIDERING BOTH THE SALES VALUE OF LAND AND PURCHA SE COST OF LAND. ACCORDING TO THE ASSESSEE, THE PRICE SHOWN IN THE CONVEYANCE DEE DS, BOTH AT THE TIME OF PURCHASE AND SALE, DID NOT REFLECT THE CORRECT VALU ES. WE HAVE ALREADY NOTICED THAT THE ISSUE RELATING TO SALES VALUE ONLY WAS CON SIDERED BY THE LD CIT(A) AS WELL AS THE TRIBUNAL. SINCE THE CAPITAL GAIN IS RE QUIRED TO BE COMPUTED BY CONSIDERING THE PURCHASE VALUE ALSO, IN THE INTERES T OF NATURAL JUSTICE, WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE WITH REGARD TO THE PURCHASE COST OF THE LAND ALSO WHILE COMPUTING THE CAPITAL GAIN AFTER MAKING I.T.A. NO. 630 /COCH/2013 5 NECESSARY ENQUIRIES IN THIS REGARD AND TAKE APPROPR IATE DECISION IN ACCORDANCE WITH LAW, AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS PARTLY ALLOWED. PRONOUNCED ACCORDINGLY ON 20-12-2013 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 20TH DECEMBER, 2013 GJ COPY TO: 1. M.C. MOHAMMEDKUTTY, MEL CHERUVATH HOUSE, VI/277, MCP ENTERPRISES, PUZHAKKAL, PUNKUNNAM P.O., THRISSUR-680 002. 2. THE COMMISSIONER OF INCOME-TAX(A)-V, KOCHI. 3. THE COMMISSIONER OF INCOME-TAX, THRISSUR. 4. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 5. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN