ITO, Ward-9(4), Hyd, Hyderabad V. Simmaiah Chigullapally, Hyd, Hyderabad

ITA 908/HYD/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0026 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 16-07-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 16-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Capital asset; Capital Gains
• Section: 2(14); 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH DEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 905/HYD/2016 2008-09 INCOME TAX OFFICER, WARD-9(4), HYDERABAD SRI LOKESH CHIGULLAPALLY, HYDERABAD [PAN: ACJPC0241J] 906/HYD/2016 SRI RAMESH CHIGULLAPALLY, HYDERABAD [PAN: ACJPC0236B] 907/HYD/2016 SRI HARINATH CHIGULLAPALLY, HYDERABAD [PAN: AAXPC8174A] 908/HYD/2016 SRI SIMMAIAH CHIGULLAPALLY, HYDERABAD [PAN: ABWPC2500Q] 909/HYD/2016 SRI KRISHNA CHIGULLAPALLY, HYDERABAD [PAN: ACJPC0242M] FOR REVENUE : SHRI RAJENDRA KUMAR, CIT - DR FOR ASSESSEE : SHRI S.RAMA RAO, AR DATE OF HEARING : 16 - 07 - 2021 DATE OF PRONOUNCEMENT : 23 - 07 - 2021 O R D E R PER S.S.GODARA, J.M. : THESE FIVE REVENUES APPEALS, INVOLVING AS MANY ASSESSEES ARISE AGAINST THE CIT(A)-7, HYDERABADS SEP ARATE ORDERS; ALL DATED 25-02-2016 PASSED IN CASE NOS.1068 , 1057, 1064, 1063 & 1066/CIT(A)-7/2014-15, INVOLVING PROCE EDINGS U/S.143(3) R.W.S.148 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]; RESPECTIVELY. HEARD BOTH THE PARTIES. CASE FILES PERUSED. ITA NOS. 905 TO 909/HYD/2016 :- 2 -: 2. IT TRANSPIRES AT THE OUTSET THAT THE REVENUES IDENTICAL SUBSTANTIVE GROUNDS IN ALL THE FIVE INSTANT APPEALS REA D AS UNDER: 1. (I)CTT(A) ERRED IN NOT APPRECIATING THE FOLLOWI NG FACTS WHICH INDICATE THAT THE IMPUGNED LAND WAS NOT AN AGRICULT URAL LAND: A) THE LAND IS SOLD TO A NON-AGRICULTURIST FOR NON-AGR ICULTURAL PURPOSES. B) THE LAND IS SAID AT A PRICE COMPARABLE TO THE PRICE FETCHED BY BUILDING SITES. IT MAY BE NOTED THAT THE PROPOSED I NVESTMENT BY THE REAL ESTATE COMPANY IS APPROXIMATELY RS.900 CRO RES FOR 86 ACRES WHICH WORKS OUT TO INVESTMENT OF AROUND RS .10 CRORES PER ACRE. C) THE PRICE IS SUCH THAT NO BONAFIDE AGRICULTURIST WO ULD PURCHASE THE SAME FOR GENUINE AGRICULTURAL OPERATIONS. D) THE LAND IS SITUATED IN AN AREA WHICH IS IN PROXIMI TY TO THE HYDERABAD INTERNATIONAL AIRPORT. (II) CIT(A) ERRED BY IGNORING THE FACT THAT THE AFO RESAID FACTORS OUTWEIGH OTHER CIRCUMSTANCES SUCH AS RECORDING IN L AND RECORDS AS AGRICULTURAL LAND, PAYMENT OF LAND REVENUE, DISCLOS ING AGRICULTURAL INCOME IN RETURNS ETC., AS DECIDED BY HON'BLE CHENN AI ITAT IN THE CASE OF ITO (INTL.TAX), CHENNAI VS. ABOOBUCKER (67 TAXMANN.COM 114- 2016). 3. RELEVANT FACTS PERTAINING TO THE FOREGOING SOLE ISSUE OF ASSESSMENT OF LONG TERM CAPITAL GAINS IN ALL THESE FIV E CASES DOES NOT APPEAR TO INVOLVE A COMPLICATED BACKDROP. SU FFICE TO SAY, ALL THESE ASSESSEES HAD BEEN CO-OWNING/CO-POSSE SSING THEIR LAND(S) SITUATED IN THUMMALUR VILLAGE, MAHESWAR AM MANDAL, R.R.DISTRICT AND ADJOINING KOTHUR VILLAGE. THE Y HAD ENTERED INTO THE JOINT DEVELOPMENT AGREEMENT(S) JDAS I N ISSUE DT.27-09-2007 FOLLOWED BY THE RESPECTIVE SALE D EED(S) AS WELL. THE ASSESSING OFFICER INTER ALIA TOOK NOTE OF THE FOREGOING JDA AND SOUGHT TO TREAT THE SAME AS TRANSFER(S) U/S.2(47) (V) OF THE ACT. WE NOTE FROM THE LEAD ASSESSMENT YEAR APPEAL I TA NO.905/HYD/2016 FOR AY.2008-09 THAT HE INTER ALIA CONSIDERED ITA NOS. 905 TO 909/HYD/2016 :- 3 -: THE NATURE OF THE LAND TO BE AGRICULTURAL OR NOT FOLLOW ED BY HIS DETAILED ADJUDICATION ON THE ISSUE OF SECTION 2(47)(V) TRANSFER, AND PAYMENTS OF ALLEGED EXORBITANT CONSIDERATION RUNNI NG INTO CRORES TO HOLD THAT THE SAME GAVE RISE TO LONG TERM CAPITA L GAINS OF RS.14,92,89,030/- EACH. HE THUS FRAMED HIS CONSEQUENTIAL ASSESSMENT(S) ON THESE VERY LINES MAKIN G THE IMPUGNED ADDITION IN THE FIVE ASSESSEES HANDS. 4. THE CIT(A) HAS REVERSED THE ASSESSING OFFICERS A CTION AS UNDER: ITA NOS. 905 TO 909/HYD/2016 :- 4 -: ITA NOS. 905 TO 909/HYD/2016 :- 5 -: ITA NOS. 905 TO 909/HYD/2016 :- 6 -: ITA NOS. 905 TO 909/HYD/2016 :- 7 -: ITA NOS. 905 TO 909/HYD/2016 :- 8 -: ITA NOS. 905 TO 909/HYD/2016 :- 9 -: ITA NOS. 905 TO 909/HYD/2016 :- 10 -: ITA NOS. 905 TO 909/HYD/2016 :- 11 -: ITA NOS. 905 TO 909/HYD/2016 :- 12 -: ITA NOS. 905 TO 909/HYD/2016 :- 13 -: ITA NOS. 905 TO 909/HYD/2016 :- 14 -: ITA NOS. 905 TO 909/HYD/2016 :- 15 -: ITA NOS. 905 TO 909/HYD/2016 :- 16 -: ITA NOS. 905 TO 909/HYD/2016 :- 17 -: ITA NOS. 905 TO 909/HYD/2016 :- 18 -: ITA NOS. 905 TO 909/HYD/2016 :- 19 -: ITA NOS. 905 TO 909/HYD/2016 :- 20 -: ITA NOS. 905 TO 909/HYD/2016 :- 21 -: ITA NOS. 905 TO 909/HYD/2016 :- 22 -: ITA NOS. 905 TO 909/HYD/2016 :- 23 -: ITA NOS. 905 TO 909/HYD/2016 :- 24 -: ITA NOS. 905 TO 909/HYD/2016 :- 25 -: ITA NOS. 905 TO 909/HYD/2016 :- 26 -: ITA NOS. 905 TO 909/HYD/2016 :- 27 -: ITA NOS. 905 TO 909/HYD/2016 :- 28 -: ITA NOS. 905 TO 909/HYD/2016 :- 29 -: ITA NOS. 905 TO 909/HYD/2016 :- 30 -: 5. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDED DURING THE COURSE OF HEARING THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS AND IN DELETING THE IMPUGNE D LONG TERM CAPITAL GAINS IDENTICAL ADDITION IN THESE FIVE A SSESSEES HANDS. HE SOUGHT TO BUTTRESS THE RELEVANT FACTUAL BACKDRO P INTER ALIA THAT THESE ASSESSEES LANDS ARE NOT AGRICULTURAL IN NATURE; THEY FALL WITHIN THE MUNICIPAL LIMITS OF THE HY DERABAD DEVELOPMENT AUTHORITY AREA, ALL TAXPAYERS HAD EXECUTED A JDA AND SALE DEED(S) WITH THE DEVELOPER, THEY HAD N OT BEEN CARRYING OUT ANY AGRICULTURAL ACTIVITY AND THE IMPUG NED LONG TERM CAPITAL GAINS ADDITION DESERVES TO BE RESTORED. DR.RAJENDRA KUMAR, FURTHER STATED THAT IT IS THE ASSESSEE S ONLY WHO HAD APPLIED FOR ALL THE NECESSARY MUNICIPAL PERM ISSION QUA LANDS DEVELOPMENT AS WELL AS THE ANCILLARY FORMALITIE S EVEN WELL AFTER THE JDA AND SALE DEED(S) AND THE ASS ESSING OFFICER HAS RIGHTLY ASSESSED THEM FOR HAVING DERIVED LONG TERM CAPITAL GAINS. ITA NOS. 905 TO 909/HYD/2016 :- 31 -: 6. LEARNED AUTHORISED REPRESENTATIVE ON THE OTHER HAND INVITED OUR ATTENTION TO THE ASSESSEES STAND ADOPTED THROU GH OUT, RIGHT FROM SCRUTINY TILL THE CIT(A)S ORDER INTER ALIA HIGHLIGHTING THE FACT THAT THEIR LANDS CONCERNED ARE AGRICULTURAL AND NOT CAPITAL ASSETS GIVING RISE TO THE IMPUGNED LONG TERM CAPITAL GAINS. THEY ARE PURELY AGRICULTURAL LANDS. AND THAT THE VENDEE(S) CONCERNED HAD UNDERTAKEN ALL T HE RISK AND RESPONSIBILITY TO DEVELOP THE SAME DT. 7. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO REVENU ES FOREGOING CONTENTIONS. WE FIND NO REASON TO SUSTAIN EITHER PARTIES SUBMISSIONS IN ENTIRETY. WE MAKE IT CLEAR FI RST OF ALL THAT THERE IS NO CLARITY ON THE BASIC CLINCHING ISSUE AS TO WHETHER THE LANDS CONCERNED FORMING SUBJECT MATTER OF THE IMPUGNED TRANSFER HEREIN FORMED A CAPITAL ASSET U/S.2(14)(III)(A) AND (B) OF THE ACT OR NOT. ALTHOUGH BOTH THE LEARNED REPRESENTATIVES HAVE ARGUED SUFFICIENTLY ON A LL THE FOREGOING ISSUES, WE FIND THAT THE ASSESSING OFFICER A S WELL AS THE CIT(A) NOWHERE EXPRESS ANY OPINION ON THE APPLIC ATION OF THE FOREGOING STATUTORY PROVISION DEFINING A CAPITAL AS SET WHICH COULD BE HELD AS GIVING RISE TO THE IMPUGNED CAPITAL G AINS. DR.RAJENDRA KUMAR, AT THIS STAGE SOUGHT TO INVITE OUR ATTENTION TO THE FACT THAT THESE ASSESSEES HAD IN FACT AP PLIED FOR PERMISSION FROM THE HYDERABAD MUNICIPAL AUTHORITY HMDA VERY WELL AFTER THE IMPUGNED TRANSFER BY WAY OF THE JDA AS WELL AS THE SALE DEED (SUPRA). MR.RAO NOWHER E DISPUTED APPLICATION OF SECTION 2(47)(V) ON THE OTHER HAND. FACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE TO RESTORE THE INSTANT CLINCHING ISSUE BACK TO THE ASSESSIN G OFFICER TO DECIDE THE APPLICABILITY OF SECTION 2(14) OF THE ACT ITA NOS. 905 TO 909/HYD/2016 :- 32 -: QUA THE ASSESSEES LANDS SOLD DURING THE RELEVANT PREVIO US YEAR. IT IS MADE CLEAR THAT THE ASSESSING OFFICER SHA LL GO BY THE CORRESPONDING MUNICIPAL LIMITS PRESCRIBED BY THE OF FICIAL GAZETTE NOTIFICATION AS APPLICABLE ON THE DATE OF TRANSFE R ONLY AND NOT THEREAFTER. NEEDFUL SHALL BE DONE WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING. IT IS FURTHER MADE ABUNDANT LY CLEAR THAT ALL THESE ASSESSEES SHALL BE AT LIBERTY TO RAISE A S ALL FACTUAL/LEGAL SUBMISSIONS AS ARE ADMISSIBLE TO THEM UN DER THE LAW. 8. ALL THESE REVENUES FIVE APPEALS ARE TREATED AS ALL OWED FOR STATISTICAL PURPOSES IN FOREGOING TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 23-07-2021 TNMM ITA NOS. 905 TO 909/HYD/2016 :- 33 -: COPY TO : 1.INCOME TAX OFFICER, WARD-9(4), HYDERABAD. 2.SRI LOKESH CHIGULLAPALLY, B-13, NEW FRUIT MARKET, GADDIANNARAM, HYDERABAD. 3.SRI RAMESH CHIGULLAPALLY, B-13, NEW FRUIT MARKET, GADDIANNARAM, HYDERABAD. 4.SRI HARINATH CHIGULLAPALLY, B-13, NEW FRUIT MARKE T, GADDIANNARAM, HYDERABAD. 5.SRI SIMMAIAH CHIGULLAPALLY, B-13, NEW FRUIT MARKE T, GADDIANNARAM, HYDERABAD. 6.SRI KRISHNA CHIGULLAPALLY, B-13, NEW FRUIT MARKET , GADDIANNARAM, HYDERABAD. 7.CIT(APPEALS)-7, HYDERABAD. 8.THE PR.CIT-7, HYDERABAD. 9.D.R. ITAT, HYDERABAD. 10.GUARD FILE.