The ITO, Ward -1(1), Guntur, Guntur V. Sri Garineni Chalapathi Rao, Vijayawada

ITA 9/VIZ/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80151 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D MANOJ KUMAR
• Assessee Lawyers: R PRASAD
• Keywords: Additional evidence

Judgement Text

ITA NO.9/VIZAG/2012 SRI GARINENI CHALAPATHI RAO, PIDUGURALLA IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 9 /VIZAG/ 2012 ASSESSMENT YEAR : 2008-09 ITO WARD-1(1) GUNTUR VS. SRI GARINENI CHALAPATHI RAO PIDUGURALLA (APPELLANT) (RESPONDENT) PAN NO.ACKPG 5927G ASSESSEE BY: SHRI M.S.R. PRASAD, CA REVENUE BY: SHRI D. MANOJ KUMAR, ADDL. CIT DATE OF HEARING : 10.07.2014 DATE OF PRONOUNCEMENT : 10.07.2014 ORDER PER BENCH:- THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 28.6.2011 OF THE CIT(A) GUNTUR PERTAINING TO THE ASSESSMENT Y EAR 2008-09. 2. BRIEFLY THE FACTS ARE THE ASSESSEE AN INDIVIDUAL FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DECLARING T OTAL INCOME OF RS.1,60,244/-. DURING THE ASSESSMENT PROCEEDING, T HE ASSESSING OFFICER NOTICED THAT THE ASSESSEE ALONG WITH SHRI G.H. RAO AND G. M. MOHAN PURCHASED A PROPERTY ON 5.1.2005 FOR A CONSIDERATIO N OF RS.9,90,000/- IN WHICH ASSESSEES SHARE IS 50%. ASSESSEE ALONG WITH OTHER TWO PERSONS ENTERED INTO A MEMORANDUM OF UNDERSTANDING ON 21.12 .2006 WITH M/S. S.V. PROPERTIES, HYDERABAD FOR DEVELOPMENT OF THE PROPER TY ON CONDITION OF ALLOTMENT OF 50% OF THE CONSTRUCTED AREA AND PAYMEN T OF RS.2.5 CRORES OF REFUNDABLE ADVANCE. FURTHER, IT WAS NOTICED BY THE ASSESSING OFFICER THAT IN TERMS OF A MEMORANDUM OF UNDERSTANDING, THE ASSESSE E HAS RECEIVED ADVANCE OF RS.1.25 CRORES ON 21.12.2006 AND 9.2.200 7 AND HANDED OVER PHYSICAL POSSESSION OF PROPERTY TO M/S. S.V. PROPER TIES ON 9.2.2007. ON THE BASIS OF THE AFORESAID FACTS, THE ASSESSING OFFICER HELD THAT AS THE ASSESSEE ITA NO.9/VIZAG/2012 SRI GARINENI CHALAPATHI RAO, PIDUGURALLA 2 HAS RECEIVED THE AMOUNT OF RS.1.25 CRORES, WHICH WA S NOT REFUNDED AND SINCE THE LAND WAS HELD BY THE ASSESSEE FOR LESS THAN A P ERIOD OF 3 YEARS, THERE IS A TRANSFER OF PROPERTY WITHIN THE MEANING OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT AND WORKED OUT SHORT TERM CAPITAL GAIN OF RS.57,07,572/-. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED, THE AS SESSEE PREFERRED APPEAL BEFORE THE CIT(A). 3. THE CIT(A) NOTED THAT TILL 31.3.2007, THE DEVELO PER HAS NOT OBTAINED THE NECESSARY PERMISSION FOR SANCTION FOR THE PROPO SED PROJECT. HENCE, AS THE LIFE OF ANY AGREEMENT UNLESS RENEWED IS 3 YEARS , THE MOU DATED 21.12.2006 HAS EXPIRED BY 21.12.2009. ACCORDINGLY, THE CIT(A) HELD THAT AS THE DEVELOPER HAS NOT FULFILLED THE CONDITIONS STIP ULATED IN THE MOU THERE IS NO TRANSFER OF THE PROPERTY EITHER IN TERMS OF U/S 53A OF THE ACT OR UNDER THE INCOME-TAX ACT. ACCORDINGLY, HE DIRECTED THE ASSESS ING OFFICER TO DELETE THE ADDITION OF RS.57,07,572/- MADE TOWARDS SHORT TERM CAPITAL GAIN. 4. BEING AGGRIEVED OF THE SAID ORDER, THE DEPARTMEN T HAS FILED THE PRESENT APPEAL. 5. AT THE OUTSET THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED A PETITION UNDER RULE 29 OF THE INCOME-TAX APPELLATE TRIBUNAL RULES, 1963 FOR ADMISSION OF ADDITIONAL EVIDENCE BEING A COPY OF TH E CANCELLATION OF MEMORANDUM OF UNDERSTANDING EXECUTED N 19.9.2013. IN THE PETITION, IT IS SUBMITTED BY THE ASSESSEE THAT AS THE MOU WAS EXECU TED ON 19.9.2013, CANCELLING THE EARLIER MOU DATED 21.12.2006, THERE IS NO SCOPE FOR THE ASSESSEE TO PRODUCE IT BEFORE THE ASSESSING OFFICER OR CIT(A). IT WAS SUBMITTED THAT SINCE THE ADDITIONAL EVIDENCE SOUGHT TO BE PRODUCED IS VERY MUCH MATERIAL FOR DECIDING THE ISSUE, THE SAME MAY BE ADMITTED. TO SUBSTANTIATE HIS ARGUMENT THAT THE RESPONDENT CAN A LSO FURNISH ADDITIONAL EVIDENCE, THE ASSESSEE RELIED UPON A DECISION OF TH E HONBLE DELHI HIGH COURT IN CASE OF CIT VS. TEXT HUNDRED INDIA PVT. LTD. 351 ITR 0057. ITA NO.9/VIZAG/2012 SRI GARINENI CHALAPATHI RAO, PIDUGURALLA 3 6. THE LD. D.R. ON THE OTHER HAND STRONGLY OBJECTIN G TO THE ADMISSION OF ADDITIONAL EVIDENCE SUBMITTED THAT AN EVIDENCE WHIC H WAS EXISTING EARLIER BUT COULD NOT BE PRODUCED DUE TO SUFFICIENT CAUSE CAN B E CONSIDERED AS ADDITIONAL EVIDENCE. HOWEVER, EVIDENCE WHICH CAME INTO EXISTEN CE SUBSEQUENTLY CANNOT BE CONSIDERED AS ADDITIONAL EVIDENCE. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE DECISION OF THE HONBLE DELHI HIGH COURT CITED BY THE LD. A.R. ON GOING THROUGH THE PROVISIO N CONTAINED UNDER RULE 29 OF THE ITAT RULES, 1963 AS WELL AS THE RATIO LAID D OWN BY THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. TEXT HUNDERED INDIA P VT. LTD., (SUPRA) WE ARE OF THE VIEW THAT THE ASSESSEE AS RESPONDENT CAN ALS O FILE ADDITIONAL EVIDENCE. SO FAR AS THE ADDITIONAL EVIDENCE IS CONCERNED, WE FIND THAT IT IS A DOCUMENT EXECUTED ON 19.9.2013 CANCELLING THE MEMORANDUM OF UNDERSTANDING EXECUTED ON 21.12.2006. CONSIDERING THE SUBMISSION S OF THE ASSESSEE THAT THE AFORESAID DOCUMENT MAY HAVE A CRUCIAL BEARING O N THE ISSUE IN DISPUTE, WE ADMIT THE SAME. HOWEVER, SINCE THE AFORESAID AD DITIONAL EVIDENCE SUBMITTED BEFORE US WAS NEITHER BEFORE THE ASSESSIN G OFFICER NOR BEFORE THE CIT(A), IN THE INTEREST OF JUSTICE, WE REMIT THE MA TTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE ISSUE AFRESH AFT ER CONSIDERING THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE. WE MAKE IT CLE AR THAT WE HAVE NOT EXPRESSED ANY OPINION, WITH REGARD TO THE CONTENTS OF THE ADDITIONAL EVIDENCE. THE ASSESSING OFFICER IS FREE TO EXAMINE THE ADDITI ONAL EVIDENCE ON ITS OWN MERIT. 7. IN THE RESULT, THE DEPARTMENTS APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 10 TH JULY14 SD/- SD/- (J. SUDHAKAR REDDY) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 10 TH JULY, 2014 ITA NO.9/VIZAG/2012 SRI GARINENI CHALAPATHI RAO, PIDUGURALLA 4 COPY TO 1 ITO WARD-1(1), GUNTUR 2 G. CHALAPATHI RAO, PLOT NO.30, 74-12/2-2-13, ELEC TRICITY COLONY, PATAMATA, VIJAYAWADA 3 THE CIT, GUNTUR 4 THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM