Rao Pamganamamula, Hyderabad V. Income Tax Officer, (International Taxation)-II), Hyderabad

ITA 91/Hyd/2021

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0562 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 01-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT MUJUMDARDR
• Assessee Lawyers: D V ANJANEYULU
• Keywords: Sale consideration of property below Jantri Value; Application of stay; Cost of acquisition; Capital Gains
• Section: 50C; 147; 148

Judgement Text

ITA NO 91 OF 2021 AND SA NO 5 OF 2021 RAO PAMGANAM AMULA USA PAGE 1 OF 4 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.91/HYD/2021 & SA NO.5/HYD/2021 ASSESSMENT YEAR: 2012-13 SHRI RAO PAMGANAMAMULA, TEXAS, USA PAN:CKIPP3397K VS. INCOME TAX OFFICER (INTERNATIONAL TAXATION)- II, HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI D.V. ANJANEYULU REVENUE BY : SRI ROHIT MUJUMDAR,DR DATE OF HEARING: 24/02/2021 DATE OF PRONOUNCEMENT: 03/03/2021 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2012-13 AND S .A. FOR THE A.Y 2012-13 AGAINST THE ORDER OF THE CIT (A )-10, HYDERABAD, DATED 27.10.2020. 2. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF 29 DAYS IN FILING OF THIS APPEAL. SATISFIED WITH THE REASON S GIVEN IN THE CONDONATION PETITION, THE DELAY IS CONDONED AND THE APPEAL IS DECIDED AS UNDER: 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A NON- RESIDENT, DID NOT FILE ANY RETURN OF INCOME FOR THE A.Y 2010-11. AS PER THE INFORMATION RECEIVED FROM THE DIRECTOR OF I NCOME TAX (I&CI), HYDERABAD, THE ASSESSEE WAS THE OWNER OF TH E PROPERTY, ITA NO 91 OF 2021 AND SA NO 5 OF 2021 RAO PAMGANAM AMULA USA PAGE 2 OF 4 BEARING HOUSE NO.8-3-833/A-52, FLAT NO.A-52, STEEL & MINES COMPLEX, SRINAGAR COLONY, HYDERABAD, ADMEASURING 82 .85 SQ. YARDS (850 SFT) AND THAT THE SAID PROPERTY WAS SOLD TO SRI VIJAY KUMAR UPPAL FOR A TOTAL SALE CONSIDERATION OF RS.22 ,00,000/- AS AGAINST THE MARKET VALUE OF RS.31,61,200/- THROUGH SALE DEED NO.1215/2012, DATED 29.03.2012. 4. SINCE THE ASSESSEE HAS NOT FILED THE RETURN OF I NCOME FOR THE A.Y 2012-13 ADMITTING THE ABOVE TRANSACTION , PROCEEDINGS U/S 147 WERE INITIATED BY ISSUANCE OF A NOTICE U/S 148 OF THE ACT ON 3.3.2016. THEREAFTER, AS NONE APPEARED FOR THE ASSESSEE, THE AO PROCEEDED TO COMPLETE THE ASSESSMENT EX-PARTE TH E ASSESSEE, HE INVOKED THE PROVISIONS OF 50C AND ADOPTED THE MA RKET VALUE BEING RS.31,61,200/- AS THE SALE CONSIDERATION AND AFTER ALLOWING INDEXED COST OF ACQUISITION OF RS.75,114/-, HE ARRI VED AT THE LONG- TERM CAPITAL GAIN OF RS.30,86,086/- AND BROUGHT IT TO TAX. 5. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) CLAIMING THAT INVOKING OF THE PROVISIONS OF SEC TION 50C IS ERRONEOUS AND ALSO THAT THE AO OUGHT TO HAVE ALLOWE D THE COST OF CONSTRUCTION OF RS.2,10,000/- AND COST OF IMPROVEME NT OF RS.2,20,000/- INCURRED BY THE ASSESSEE DURING THE F INANCIAL YEAR 1987-88 WHILE COMPUTING THE LONG TERM CAPITAL GAINS . THE CIT (A) HOWEVER, CONFIRMED THE APPLICATION OF PROVISION S OF SECTION 50C TO THE FACTS OF THE CASE BEFORE US, BUT AS FAR AS T HE COST OF ACQUISITION AND COST OF IMPROVEMENT ARE CONCERNED, HE DIRECTED THE AO TO ALLOW 75% OF THE CLAIM WHICH COMES TO ARO UND RS.3,82,500/- AND ALLOW INDEXATION THEREON. THUS, T HE ASSESSEES APPEAL IS PARTLY ALLOWED AND THE ASSESSEE IS IN SEC OND APPEAL ITA NO 91 OF 2021 AND SA NO 5 OF 2021 RAO PAMGANAM AMULA USA PAGE 3 OF 4 BEFORE US SEEKING 100% ALLOWANCE ON COST OF CONSTRU CTION AND COST OF IMPROVEMENT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE INVESTMENTS WERE MADE IN THE FINANCIAL YEA R 1987-88 AND THEREFORE, THE ASSESSEE COULD NOT HAVE PRODUCED ANY DOCUMENTARY EVIDENCE WITH REGARD TO THE COST OF CONSTRUCTION AN D COST OF IMPROVEMENT IN THE BUILDING SINCE MORE THAN 20 YEAR S HAVE ELAPSED. THEREFORE, HE PRAYED THAT THE ENTIRE COST OF CONSTRUCTION AND COST OF IMPROVEMENT CLAIMED BY THE ASSESSEE BE ALLOWED. 7. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHO RITIES BELOW. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY IN 2016 BY ISSUANCE OF A NOTICE U/S 148 WHEREAS THE PROPERTY WAS SOLD IN THE FINANCIAL YEAR 2011-12. THE ASSESSEE HA D CLAIMED THE COST OF ACQUISITION, COST OF IMPROVEMENT FOR COMPUT ATION OF CAPITAL GAINS ONLY BEFORE THE CIT (A). THE CIT (A), THOUGH ACCEPTED THAT THERE IS COST OF CONSTRUCTION AND COS T OF IMPROVEMENT, WHICH ARE TO BE ALLOWED , THE CIT (A) HAS ALLOWED ONLY 75% OF BOTH ON THE GROUND, THAT THE ASSESSEE H AS NOT PRODUCED THE DOCUMENTARY EVIDENCE WITH REGARD TO TH E SAME AFTER 20 YEARS OF SUCH CONSTRUCTION AND IMPROVEMENT. IN O UR OPINION, WHERE THE CIT (A) HAS ACCEPTED PART OF THE COST OF CONSTRUCTION AND IMPROVEMENT, HE OUGHT TO HAVE ACCEPTED IT IN FU LL. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED BY ALLOWING T HE BALANCE OF 25% AS WELL. ITA NO 91 OF 2021 AND SA NO 5 OF 2021 RAO PAMGANAM AMULA USA PAGE 4 OF 4 9. SINCE THE APPEAL HAS BEEN DISPOSED OF, THE STAY APPLICATION HAS BECOME INFRUCTUOUS AND IS ACCORDING LY DISMISSED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D AND STAY APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MARCH, 2021. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 3 RD MARCH, 2021. VINODAN/SPS COPY TO: 1 SHRI RAO PAMGANAMAMULA, C/O ANJANEYULU & CO. C.A, 30 BHAGYALAKSHMI NAGAR, GANDHINAGAR, HYDERABAD 500080 2 ITO (INTERNATIONAL TAXATION)-II HYDERABAD 3 CIT (A)-10 HYDERABAD 4 CIT (IT & TP) HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER