Andhra Pradesh Housing Board, Hyd, Hyderabad V. ACIT, Circle-5(1), Hyderabad, Hyderabad

ITA 631/HYD/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3375 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-04-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DIPAK
• Assessee Lawyers: KASINA PRABHAVATI
• Keywords: Business income
• Section: 195

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 630/HYD/16 2006-07 M/S.ANDHRA PRADESH HOUSING BOARD, HYDERABAD [PAN: AAAAA5028R] ASST.COMMISSIONER OF INCOME TAX, CIRCLE-5(1), HYDERABAD 631/HYD/16 2007-08 736/HYD/16 2010-11 FOR ASSESSEE : SMT.KASINA PRABHAVATI, AR FOR REVENUE : SHRI R.DIPAK, DR DATE OF HEARING : 26-04-2021 DATE OF PRONOUNCEMENT : 10-06-2021 O R D E R PER S.S.GODARA, J.M. : THESE THREE ASSESSEES APPEALS FOR AYS.2006-07, 2007 -08 AND 2010-11 ARISE AGAINST CIT(A)-4, HYDERABADS SEPA RATE ORDERS; DATED 04-12-2015 IN FORMER TWO AND DT.22-03-2 016 IN THIRD ASSESSMENT YEAR IN CASE NOS.0557, 0559 & 0414/ACIT,CIR.5(1)/14-15/CIT(A)-4/HYD/15-16; INVOL VING PROCEEDINGS U/S.143(3) R.W.S. 254 IN FORMER TWIN AN D U/S.144 R.W.S.147 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE A CT] IN THE LAST ASSESSMENT YEAR; RESPECTIVELY. HEARD BOTH THE PARTIES. CASE FILES PERUSED. ITA NOS. 630, 631 & 736/HYD/2016 :- 2 -: 2. IT TRANSPIRES AT THE OUTSET THAT THESE ASSESSEES FORME R TWO APPEALS ITA NOS.630 & 631/HYD/2016 SUFFER FROM IDENTICAL 53 DAYS DELAY STATED TO BE ATTRIBUTABLE TO THE REASON(S) BEYOND ITS CONTROL AS PER CONDONATION PETITION/AFFIDAVIT DT.02-05-2016. NO REBUTTAL HAS COME F ROM THE DEPARTMENTAL SIDE. THE IMPUGNED DELAY IS CONDONED THEREFORE. 3. THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN ITS FIRST AND FOREMOST APPEAL ITA NO.630/ HYD/2016 (AY.2006-07): 1. THE LEARNED CIT (A) FAILED TO APPRECIATE THAT T HE APPELLANT BOARD WAS CONSTITUTED UNDER THE STATE ACT IN THE YEAR 195 6 AND IS AN EXTENDED ARM OF THE GOVERNMENT TO SERVE THE PEOPLE BY PROVIDING HOUSING FACILITIES INCLUDING THE POOR, HENCE ITS IN COME CANNOT BE TAXED UNDER THE HEAD 'BUSINESS INCOME' OR ANY OTHER HEAD. 2. THE LEARNED CIT (A) ERRED IN HOLDING THAT THE AP PELLANT BOARD IS NOT AN AGENT OF THE STATE GOVERNMENT AND THE INCOME ACC RUED IS NOT THE INCOME OF THE STATE GOVERNMENT. 3. THE LD. CIT (A) ERRED IN CONFIRMING THE ORDER OF ASSESSMENT IGNORING THE FACT THAT THE SURPLUS AMOUNT VESTS IN AND IS TR ANSFERRED TO THE CONSOLIDATED FUND OF STATE OF ANDHRA PRADESH AND AS SUCH THE SAID INCOME CANNOT BE TAXED IN THE HANDS OF THE APPELLAN T. 4. THE LEARNED CIT (A) ERRED IN COMPARING THE APPEL LANT WITH COMMERCIAL ORGANIZATION DEALING IN REAL ESTATE AND IN NOT HOLDING THAT THE APPELLANT IS A NON-PROFIT ORGANIZATION WHICH AI MS AT PROVIDING AFFORDABLE ACCOMMODATION TO THE PEOPLE. 5. THE LEARNED CIT (A) ERRED IN HOLDING THAT THE AP PELLANT IS NOT AN INSTRUMENTALITY OF THE STATE AS CONTEMPLATED U/S.28 9 OF THE CONSTITUTION OF INDIA WITHOUT ANALYZING THE PREVAIL ING FACTS AND CIRCUMSTANCES OF THE CASE. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT (A) ERRED IN HOLDING THAT THE SURPLUS FUNDS TRANSFE RRED TO THE CONSOLIDATED FUND OF STATE OF AP IS NOTHING BUT APP LICATION OF ITS INCOME WITHOUT APPRECIATING THE FACT THAT BY OPERAT ION OF LAW THE SURPLUS VESTS IN THE STATE AND THE APPELLANT HAS NO RIGHT OF DISPOSAL. ON THE CONTRARY THE LEARNED CIT (A) SHOULD HAVE HEL D THAT THERE IS A DIVERSION BY OVERRIDING TITLE AND THE INCOME AT ITS INCEPTION DOES NOT ITA NOS. 630, 631 & 736/HYD/2016 :- 3 -: BELONG TO THE APPELLANT. IN THE ABSENCE OF SUCH RI GHT OF DISPOSAL, THE FINDING THAT IT IS APPLICATION OF INCOME IS PERVERS E. 7. THE LD. CIT (A) OUGHT TO HAVE HELD THAT IN VIEW OF THE AMENDED PROVISION OF SECTIONS 58 AND 59 OF ANDHRA PRADESH H OUSING BOARD ACT, 1956 NO INCOME ACCRUED TO THE APPELLANT AND TH AT NO INCOME CAN BE TAXED IN THE HANDS OF THE APPELLANT. 8. THE LEARNED CIT (A) ERRED IN REJECTING THE CLAIM OF APPELLANT U/S. 289 OF THE CONSTITUTION OF INDIA BASING ON THE EARL IER ORDERS OF HON'BLE ITAT WHICH HAVE BEEN PASSED PLACING RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF APSRTC (52 ITR 524) AND DECISION OF BOMBAY HIGH COURT IN THE CASE OF VIDARB HA HOUSING BOARD V. ITO (92 ITR 430). 9. THE LEARNED CIT (A) ERRED IN DISALLOWING THE CLA IM OF APPELLANT U/S. 80-IB OF THE ACT FOLLOWING THE CONSEQUENTIAL ORDER DATED 30-01-2015. 10. THE LEARNED CIT(A) ERRED IN ADDING RS. 7,17,44, 973/- CONSIDERING IT AS INCOME OTHER THAN FROM SINGAPORE PROJECT PLAC ING RELIANCE ON THE CONSEQUENTIAL ORDER PASSED BY THE ASSESSING OFFICER . 11. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 3.1. THERE IS NO DISPUTE BETWEEN THE PARTIES THAT THE ON LY DIFFERENCE IN ASSESSEES PLEADINGS IN THE LATTER TWO A SSESSMENT YEARS QUA THE AMOUNTS INVOLVED OF RS.81,23,12,607/- IN AY.2007-08 AND SUBJECTING ITS GROSS DEPOSITS IN BANK DEPOSITS @ 6% IN AY.2010-11; RESPECTIVELY. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIV AL PLEADINGS AGAINST AND IN SUPPORT OF THE CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION TO THE FOREGOING EFFECT. IT E MERGES THAT ALL THE CIT(A)S ORDERS UNDER CHALLENGE HAVE BEEN P ASSED EX- PARTE WITHOUT EVEN INDICATING THE FACT AS TO WHETHER THE ASSESSEE HAD BEEN ACTUALLY SERVED THE CORRESPONDING HEARING NOTICE(S) OR NOT? LEARNED COUNSEL AT THIS STAGE SOUGHT TO HIGHLIGHT THE FA CT THAT THE ASSESSEE IS ALSO SUPPOSED TO FILE ITS ADDITIONAL GROUND ITA NOS. 630, 631 & 736/HYD/2016 :- 4 -: ON LEGALITY AS WELL AS ON MERITS OF THE CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION RAISING THE IMPUGNED DEMANDS . 4.1. FACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE TH AT LARGER INTEREST OF JUSTICE WOULD BE MET IN CASE ALL THE ASSESSEES SUBSTANTIVE GROUNDS RAISED IN THE INSTANT THREE APPEALS ARE RESTORED BACK TO THE CIT(A) FOR HIS AFRESH ADJUDICATIO N ON MERITS AS PER LAW. WE ORDER ACCORDINGLY. IT IS MADE CLEAR THAT THE ASSESSEE OR ITS AUTHORISED REPRESENTATIVE SHALL APP EAR BEFORE THE CIT(A) ON OR BEFORE 30-09-2021 IN THE CONS EQUENTIAL PROCEEDINGS WITH THE DETAILED SUPPORTIVE EVIDENCE; AT I TS OWN RISK AND RESPONSIBILITY TO BE FOLLOWED BY THREE EFFE CTIVE OPPORTUNITIES OF HEARING. IT SHALL BE FURTHER AT LIBE RTY TO RAISE ALL ADDITIONAL GROUNDS AS PER LAW; IF SO ADVISED. 5. THESE ASSESSEES APPEALS ARE TREATED AS ALLOWED FO R STATISTICAL PURPOSES IN ABOVE TERMS. A COPY OF THIS CO MMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 10-06-2021 TNMM ITA NOS. 630, 631 & 736/HYD/2016 :- 5 -: COPY TO : 1.M/S.ANDHRA PRADESH HOUSING BOARD, C/O.CH.PUSHYAM KIRAN, ADVOCATE, FLAT NO.D, 1 ST FLOOR, UMA ENCLAVE, RD.NO.9, BANJARA HILLS, HYDERABAD. 2.THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE-5(1), HYDERABAD. 3.CIT(APPEALS)-4, HYDERABAD. 4.PR.CIT-4, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.