Baleshwar Rao Musthyala, Hyderabad V. ITO-Ward1(1), Mancherial, Mancherial

ITA 720/Hyd/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5508 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2015-2016
• Appeal Filed On: 25-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B. SHAANTHI KUMAR
• Keywords: Capital Gains
• Section: 147; 148; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.720/HYD/2020 ASSESSMENT YEAR: 2015-16 BALESHWAR RAO MUSTHYALA, 8-335, MLN COMPLEX, MARKET ROAD, MANCHERIAL 504208. TELANGANA. PAN NO.ABJPM6322R. VS. THE INCOME TAX OFFICER, WARD 1(1), MANCHERIAL. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI B. SHAANTHI KUMAR, AR REVENUE BY : SRI P. SURESH, DR DATE OF HEARING: 13/09/2021 DATE OF PRONOUNCEMENT: 15/09/2021 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2015-16 AGAIN ST THE ORDER OF THE CIT (A)-2, HYDERABAD, DATED 05.10. 2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DI D NOT FILE HIS RETURN OF INCOME FOR THE A.Y. 2015-16. A SURVE Y OPERATION U/S 133A OF THE ACT WAS CONDUCTED ON 13.06.2017 AT THE BUSINESS PREMISES OF MAHESWARI AGENCIES, THE PROPERTY CONCER N OF THE ASSESSEE, DURING THE COURSE OF WHICH, BOOKS OF ACC OUNTS, CERTAIN DOCUMENTS ETC. WERE FOUND AND IMPOUNDED AND THE ASS ESSEE HAD ALSO ADMITTED CAPITAL GAINS FROM THE SALE OF THE PR OPERTY. ITA NO 720 OF 2020 BALESHWAR RAO MUSTHYALA 2 3. SINCE THE ASSESSING OFFICER BELIEVED THAT INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT, HE REOPENED T HE ASSESSMENT U/S 147 OF THE ACT BY ISSUING A NOTICE U/S 148 OF T HE ACT DT.18.01.2018. IN RESPONSE TO THE SAME, THE ASSESS EE FILED HIS RETURN OF INCOME ON 06.03.2018 ADMITTING INCOME OF RS.14,92,230/-. WHILE COMPLETING THE ASSESSMENT, T HE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SOLD IMMOVAB LE PROPERTY BEARING NOS.8-388 AND 8-388/1, HAVING CONSTRUCTED A REA OF 1550 SQ.FT IN GROUND FLOOR, 1550 SQ.FT IN 1 ST FLOOR AND 658 SQ.FT TOGETHER WITH LAND ADMEASURING 361 SQ.YDS FOR A TOTAL CONSI DERATION OF RS.80 LACS. WHILE COMPUTING THE CAPITAL GAINS, THE ASSE SSEE WAS ASKED TO FURNISH DOCUMENTARY EVIDENCE FOR COST OF PURCHASE AND ALSO COST OF IMPROVEMENTS CARRIED OUT BY HIM. THE ASSESSEE EXPR ESSED HIS INABILITY TO FURNISH THE DETAILS OF IMPROVEMENTS. HE FURNISHED THE COPY THE SALE DEED BEARING NO.1847 OF 2014 DT.23.0 6.2014. THE ASSESSING OFFICER THEREAFTER PROCEEDED TO COMPUTE T HE CAPITAL GAINS BY ADOPTING SRO VALUE OF THE PROPERTY FOR CONSTRUCT ION OF THE HOUSE IN THE YEAR 2003-04 AT RS.370 PER SQ.FT. ACCORDING LY, HE COMPUTED THE CAPITAL GAINS AT RS.49,42,203/-. HE MADE A FUR THER ADDITION OF RS.2,40,355/- AS INCOME FROM BUSINESS. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL WHIC H WAS PARTLY ALLOWED BY THE CIT(A) AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S OF APPEAL : 1. THE LD. CIT(APPEALS)S ORDER IN CONFIRMING THE CAPITAL GAIN TO THE EXTENT OF RS.36,11,539/- IS UNSUSTAINABLE ON FACTS AND IN LAW. 2. THE LD. CIT(APPEALS) ERRED IN CONFIRMING THE AO S ADOPTION OF SROS VALUE I.E., RS.13,96,750/- AS COST OF CONS TRUCTION IN 2003-04. ITA NO 720 OF 2020 BALESHWAR RAO MUSTHYALA 3 3. THE LD. CIT(APPEALS) ERRED IN NOT CONSIDERING T HE COST OF CONSTRUCTION OF RS.19,50,000/- ADOPTED BY THE APPEL LANT WHICH IS FACTUALLY CORRECT. 4. THE LD. CIT(APPEAL) ERRED IS NOT CONSIDERING THE FACT THAT THE SROS VALUE IS ONLY AN ESTIMATE. 5. THE LD.CIT(APPEAL) ERRED IN NOT CONSIDERING THE FACT THAT THE APPELLANT USED SUPERIOR MATERIAL JUSTIFYING THE COS T OF CONSTRUCTION. 5. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS AGGRIEVED B Y THE ORDER OF CIT(A) IN CONFIRMING THE ASSESSMENT ORDER AND IN NO T REFERRING THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER (DVO) INSTEAD OF ADOPTING S.R.O VALUE SINCE THE ASSESSEE HAD DISPUTE D THE SRO VALUATION. HE SUBMITTED THAT THE ASSESSEE HAD CON STRUCTED THE HOUSE IN THE YEAR 2003, WHEREAS THE ASSESSMENT WAS COMPLETED IN THE YEAR 2018 AND THEREFORE, THE ASSESSEE COULD NOT SUBMIT THE DETAILS OF COST OF CONSTRUCTION OF THE NEW HOUSE AF TER 15 YEARS AND THEREFORE, HE REQUESTED THAT THE VALUATION OF PROPE RTY AS ON 16.07.2003 MAY BE REFERRED TO THE DVO AND THEREAFTE R, TO COMPUTE THE CAPITAL GAINS. THE LEARNED DR WAS ALSO HEARD. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THERE IS NO DISPUTE THAT TH E CAPITAL GAINS HAS ARISEN IN THIS CASE. THE ONLY ISSUE BEFORE US IS THE VALUATION TO BE ADOPTED FOR DEMOLITION OF OLD HOUSE AND FOR THE CONSTRUCTION OF NEW HOUSE AS ON 16.07.2003. SINCE NEARLY 18 YEARS HAVE ELAPSED, WE AGREE WITH THE LEARNED COUNS EL FOR THE ASSESSEE THAT HE MAY NOT POSSESS NECESSARY EVIDENC E FOR ADOPTING THE COST OF CONSTRUCTION OR COST OF IMPROV EMENTS. THEREFORE, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO CALL FOR A REPORT FROM THE DVO ON THE VALUE OF THE PROPERTY AS ON 16.07.2003 A ND AFTER ITA NO 720 OF 2020 BALESHWAR RAO MUSTHYALA 4 GIVING ASSESSEE A FAIR OPPORTUNITY OF HEARING, TO R ECOMPUTE THE CAPITAL GAINS IN ACCORDANCE WITH LAW. 7. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH SEPTEMBER, 2021. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 15 TH SEPTEMBER, 2021. TYNM COPY TO: S.NO ADDRESSES 1 BALESHWAR RAO MUSTHYALA, 8-335, MLN COMPLEX, MARKET ROAD, MANCHERIAL 504208,TELANGANA 2 THE INCOME TAX OFFICER, WARD 1(1), MANCHERIAL 3 CIT (A)-2, HYDERABAD 4 PR. CIT 2,HYDERABAD 5 DR, ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER