P Indumathi, Shankarpalli, R.R.Dist, Hyderabad V. ITO, Ward-1, Vikarabad, Vikarabad

ITA 633/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2735 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 24-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 03-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Principle of natural justice; Benefit of exemption
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A. NO. 633/HYD/2016 ASSESSMENT YEAR: 2010-11 SMT. P. INDUMATHI, SHANKARPALLI [PAN: AEJPP6507L] VS INCOME TAX OFFICER, WARD-1, VIKARABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR FOR REVENUE : SMT. N. SWAPNA, DR DATE OF HEARING : 01-08-2017 DATE OF PRONOUNCEMENT : 02-08-2017 O R D E R PER CHANDRA POOJARI, A.M. : THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD, DATED 22-01-2016. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE DECLARED INCOME FROM BUSINESS OF PARTNERSHIP. DURING THE ASSESSMENT YEAR, THE ASSESSEE SOLD A PROPERTY AND INVESTED THE SAME IN NE W RESIDENTIAL PROPERTY FOR SELF-OCCUPATION AND NOT DECLARED ANY CAP ITAL GAIN. ACCORDING TO THE ASSESSEE, THE INCOME IS BELOW THE TA XABLE LIMIT. THE ASSESSEE ALSO PURCHASED A RESIDENTIAL HOUSE FOR AN AMOUNT OF RS. 5.16 LAKHS AND THEREAFTER, ASSESSEE SAID TO BE SP ENT I.T.A. NO. 633/HYD/2016 :- 2 - : RS. 21.88 LAKHS FOR RE-MODELLING THE SAME SO AS TO M AKE TO HABITABLE. BEFORE THE AO, ASSESSEE HAS NOT MADE ANY CLAIM U/S. 54F OF THE ACT, HOWEVER, MADE THE SAME CLAIM BEFORE THE CIT(A) WHICH WAS REJECTED BY THE CIT(A) BY OBSERVING AS FOL LOWS: 7. I HAVE GONE THROUGH THE ABOVE AND I AM OF THE C ONSIDERED VIEW THAT THE ACTION OF THE AO IS JUSTIFIED IN REJECTING ASSESSEES CLAIM MADE U/S. 54F AS THE ASSESSEE EVEN DURING APPEAL PROCEED INGS ALSO HAS NOT SUSTAINED ITS SUBMISSIONS WITH ANY CONCLUSIVE EVIDE NCE. THEREFORE, THE AOS ACTION IS CONFIRMED. AS A RESULT, THE GROUNDS RAISED ARE DISMISSED. 3. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS: REVISED GROUNDS OF APPEAL: 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDE R OF THE ASSESSING OFFICER BY DISALLOWING THE BENEFIT OF EXEMPTION UND ER S.54F WITHOUT APPRECIATING THE FACT THAT SALE PROCEEDS WERE INVES TED IN THE RECONSTRUCTION OF THE HOUSE PROPERTY. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE EXPENDITURE WAS INCURRED TO MAKE THE NEWLY PURCHASED PROPERTY HABIT ABLE AS IT WAS PURCHASED IN DILAPIDATED CONDITION AND OUGHT TO HAV E HELD THAT COST INCURRED IN MAKING HOUSE HABITABLE SHOULD BE CONSID ERED AS INVESTMENT IN RESIDENTIAL HOUSE. 4. THE LEARNED CIT(A) HAS FAILED DRAW A DISTINCTION BETWEEN EXPENDITURE INCURRED ON MAKING THE HOUSE HABITABLE AND EXPENDIT URE ON RENOVATION. 5. THE LEARNED CIT(A) HAS NOT PASSED A SPEAKING ORD ER EXCEPT RETRACTING THE ORDER OF AO. NO REASONS WERE LAID DOWN BY THE L D. CIT(APPEALS) IN ITS ORDER FOR REJECTING THE APPELLANT' CONTENTION AND T O ARRIVE SUCH AN ADVERSE CONCLUSION. 6. THE LEARNED CIT(A) OUGHT TO HAVE GIVEN RELIEF UN DER S. 54F OF THE INCOME TAX ACT, 1961 SINCE IT WAS PLEADED AS ADDITIONAL CL AIM BEFORE HIM. I.T.A. NO. 633/HYD/2016 :- 3 - : 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR OPINION, THE ORDER PAS SED BY THE CIT(A) IS VERY CRYPTIC AS SEEN FROM PARA 7 OF THE ORDER. TH E RULE OF NATURAL JUSTICE INTER-ALIA REQUIRES THAT EVERY JUDICIAL OR QUASI-JUDICIAL AUTHORITY MUST PASS A REASONED ORDER REFLECTING THE AP PLICATION OF MIND BY THE AUTHORITY TO THE ISSUE AND POINTS RAISED BE FORE HIM. THE REQUIREMENT OF RECORDING OF REASONS AND ALSO COM MUNICATION THEREOF TO THE CONCERNED PARTIES IS AN INTEGRAL PART OF C ONCEPT FAIR PROCEDURE. IN OUR OPINION, GIVING THE REASONS WHI LE PASSING THE ORDER BECOMES NECESSARY TO MEET THE REQUIREMENTS OF RUL E, WHICH IS ONE OF THE CORNER STONES OF, JUDICIAL SET UP. HENCE, IT IS EXPECTED THAT THE CIT(A) MUST RECORD THE REASONS FOR REJECTING THE CLAIM OF THE ASSESSEE. HENCE, IN THE INTEREST OF JUSTICE, WE SE T ASIDE THE ORDER OF THE CIT(A) AND REMIT THE ENTIRE ISSUE-IN-DISP UTE TO THE FILE OF THE CIT(A) TO PASS A SPEAKING ORDER, AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. AT THIS STAGE, WE REFRAIN FR OM COMMENTING ON MERITS OF THE ISSUES RAISED BY THE ASSES SEE BEFORE US. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND AUGUST, 2017 SD/- SD/- (D. MANMOHAN) (CHANDRA POOJARI) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 2 ND AUGUST, 2017 TNMM I.T.A. NO. 633/HYD/2016 :- 4 - : COPY TO : 1. SMT. P. INDUMATHI, C/O. M/S. MAHESH, VIRENDER & SRIRAM, CHARTERED ACCOUNTANTS, 6-3-788/36&37A, AMEE R PET, HYDERABAD. 2. INCOME TAX OFFICER, WARD-1, VIKARABAD. 3. CIT (APPEALS)-2, HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.