(Late) Dr Kedarnath Agarwal, L/R of Smt. Shanta Agarwal, Hyd, Hyderabad V. ITO, Ward-8(2), Hyderabad, Hyderabad

ITA 862/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2406 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 19-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 862/HYD/2017 ASSESSMENT YEAR: 2009-10 (LATE) DR. KEDARNATH AGARWAL, LR. SMT. SHANTA AGARWAL, HYDERABAD [PAN: ABLPA2766P] VS INCOME TAX OFFICER, WARD-8(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI B. SHANTHI KUMAR, AR FOR REVENUE : SHRI RAVI BABU, DR DATE OF HEARING : 07-11-2017 DATE OF PRONOUNCEMENT : 10-11-2017 O R D E R THIS IS AN APPEAL BY THE LEGAL REPRESENTATIVE OF LATE DR. KEDARNATH AGARWAL, AGAINST THE ORDER OF THE LD. CO MMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD, DATED 29-02-20 16. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE CIT(APPEALS) IS NOT JUSTIFIED IN OPINING AN D HOLDING THAT THE ASSESSEE DID NOT RESPOND TO THE POSTING NOTICES WIT HOUT REALIZING THE FACT THAT THE ASSESSEE DIED. 2. THE CIT(APPEALS) IS NOT JUSTIFIED IN DECIDING TH E APPEAL WITHOUT AFFORDING OPPORTUNITY TO THE LEGAL REPRESENTATIVE O F THE DECEASED ASSESSEE. 3. THE CIT(APPEALS) ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ACTION OF THE AO IN ADOPTING THE VALUE OF THE PROPERTY UND ER TRANSFER AT RS.34, 11,710/- AS AGAINST THE ADMITTED VALUE OF RS.23,92, 000/- BY INVOKING SECTION 50C OF THE ACT. 4. THE CIT(APPEALS), WHILE DECIDING THE APPEAL ON M ERITS, ERRED IN NOT CONSIDERING THE ASSESSEE'S OBJECTIONS RAISED BEFORE THE AO AGAINST INVOKING OF SECTION 50C AND ALSO FAILED TO APPRECIA TE THAT WHEN ASSESSEE I.T.A. NO. 862/HYD/2017 :- 2 - : RAISED OBJECTION FOR INVOKING SECTION 50C, THE AO W AS BOUND TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION CELL. 5. THE ORDER OF CIT(APPEALS) IS DEFICIENT INASMUCH AS GROUND NUMBER 4 CONTENDING THAT APPLICATION OF SECTION 50C WAS ARBI TRARY, WITHOUT REFERRING THE MATTER OF VALUATION TO THE VALUATION AUTHORITIE S, WAS NOT CONSIDERED. 6. THE ORDER OF CIT (APPEALS) IS DEFICIENT INASMUCH AS GROUND NUMBER 5 CONTENDING THAT THE COST OF THE PROPERTY WAS RS. 68 ,302/- AND NOT RS. 62,701/- WAS NOT CONSIDERED. 2. BRIEFLY STATED, LATE DR. KEDARNATH AGARWAL WAS AN I NDIVIDUAL, FILED RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 2 ,10,720/-. ASSESSING OFFICER (AO) NOTICED THAT ASSESSEE HAS SOLD A PORTION OF THE PROPERTY AND RECEIVED CONSIDERATION WHICH WAS LES S THAN MARKET VALUE ADOPTED BY THE SUB-REGISTRAR. ACCORDINGL Y, HE HAS ISSUED A SHOW CAUSE NOTICE ON 14-10-2011, PROPOSING AN ADDITION OF RS. 9,45,545/- (AS CAN BE SEEN FROM PARA 2 OF THE ASSESSMENT ORDER). ASSESSEES WIFE SMT. SHANTA AGARWAL, WHO FIL ED THE PRESENT APPEAL AS A LEGAL REPRESENTATIVE, INTIMATED THE AO VIDE LETTER DT. 21-10-2011 THAT HER HUSBAND LATE DR. KEDARNATH AGARWAL HAD EXPIRED ON 15-02-2011, WHICH WAS EXTRACTED BY THE AO IN PARA 3 OF THE ASSESSMENT ORDER. INSPITE OF THAT, SMT. SHANTA AGARWA L WAS NOT TAKEN AS LEGAL HEIR AND NOTICES WERE ISSUED IN FAV OUR OF LATE DR. KEDARNATH AGARWAL, AS CAN BE SEEN FROM THE REPLY DT. 21-10-2011, EXTRACTED IN PARA 3.1. INSPITE OF BRINGING TO THE NO TICE OF AO AND ALSO FURNISHING NECESSARY DETAILS AS ENQUIRED, AO CO MPLETED THE ASSESSMENT IN THE NAME OF LATE DR. KEDARNATH AGARWAL A ND ALSO MAKING ADDITIONS RECALCULATING THE AMOUNT U/S. 50C OF TH E INCOME TAX ACT [ACT] AT RS. 10,11,846/- AS AGAINST RS. 9,45, 545/- PROPOSED. I.T.A. NO. 862/HYD/2017 :- 3 - : 2.1. HOWEVER, ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD.CIT(A) IN THE NAME OF LATE DR. KEDARNATH AGARWAL, BUT SIGNED THE VERIFICATION IN THE NAME OF SMT. SHANTA AGARWAL, W/O. LATE DR. KEDA RNATH AGARWAL. SINCE THE NOTICES WERE ISSUED IN THE NAME O F LATE DR. KEDARNATH AGARWAL, THERE SEEMS TO BE NO PROPER SERVICE ON ASSESSEE AND HENCE, CIT(A) WITHOUT CONSIDERING THE ME RITS OF THE CONTENTIONS IN THE GROUNDS, DISMISSED THE APPEAL EXPAR TE. HENCE THE PRESENT APPEAL. 3. LD. COUNSEL SUBMITTED THAT ASSESSEE HAS SOLD THE PROP ERTY FOR A LESSER PRICE AS IT HAS NO MARKET VALUE BEING A TRIANGULAR PIECE OF LAND WHICH IS ANTI-VASTU AND REFERRED TO THE DETAILED EXPLANATION FILED BEFORE THE AO, WHICH WAS EXTRACTED IN THE ORDER . IT WAS SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 50C, IF A SSESSEE OBJECTS, THEN AO HAS TO REFER TO VALUATION CELL FOR DETE RMINING THE FAIR MARKET VALUE, WHICH THE AO HAS NOT FOLLOWED, EVE N THOUGH HE STATED THAT SECTION 50C IS STATUTORILY AND STRICTLY TO BE F OLLOWED. SINCE NOTICES WERE NOT RECEIVED FROM THE OFFICE OF THE CIT(A), ASSESSEE COULD NOT REPRESENT THE CASE. THEREFORE, IT WAS PLEADED THAT THE APPEAL MAY BE RESTORED TO THE FILE OF CIT(A) FO R CONSIDERATION ON MERITS. 4. AFTER CONSIDERING THE CONTENTIONS, I AM OF THE OPINIO N THAT THE ORDER OF THE CIT(A) CANNOT BE SUSTAINED. AS ALREADY B RIEFLY STATED, THE FORM 35 ITSELF IS NOT PROPERLY FILED AND EVEN THE ASSESSMENT ORDER IS DEFECTIVE IN THE SENSE THAT THE ORDER WAS PASS ED ON A DECEASED PERSON WHICH WAS DULY INTIMATED IN THE COURS E OF ASSESSMENT. SMT. SHANTA AGARWAL HAS TO BE TAKEN AS A LE GAL REPRESENTATIVE ON RECORD AND PROPER FORM 35 HAS TO B E FILED BEFORE I.T.A. NO. 862/HYD/2017 :- 4 - : THE LD.CIT(A). ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND APPEAL MEMO BEFORE HIM IS RESTORED FOR FRESH CONSIDE RATION AFTER FOLLOWING DUE PROCESS OF LAW. AS THE APPEAL IS RESTOR ED TO LD.CIT(A) THE ISSUES ON MERITS IS NOT CONSIDERED NOW. ASSESSEE I S FREE TO RAISE ALL LEGAL AND FACTUAL CONTENTIONS BEFORE THE CIT(A), I NCLUDING THE CONTENTION THAT REFERENCE U/S. 50C(2) WAS NOT MADE BY TH E AO. CIT(A) IS DIRECTED TO EXAMINE ALL THE CONTENTIONS ON ME RITS AND DECIDE THE APPEAL AS PER THE PROVISIONS OF LAW AND FA CTS, AFTER RECTIFYING THE FORM 35. ACCORDINGLY, THE APPEAL MEMO BEFORE HIM IS RESTORED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH NOVEMBER, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH NOVEMBER, 2017 TNMM I.T.A. NO. 862/HYD/2017 :- 5 - : COPY TO : 1. (LATE) DR. KEDARNATH AGARWAL, LR. SMT. SHANTA AG ARWAL, C/O. B. SHANTHI KUMAR, ADVOCATE, 111, TARAMANDAL COMPLEX, 5-9-13, SAIFABAD, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-8(2), HYDERABAD. 3. CIT (APPEALS)-2, HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.