Aparna Duddukunta, Hyderabad V. DCIT, CC-1(3), Hyderabad

MA 37/Hyd/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6542 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-04-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 19-03-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 28-08-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: S RAMA RAO
• Keywords: Period of limitation; Fair market value; Condonation of delay; TDS
• Section: 56(2); 201; 254(2)

Judgement Text

MA NO 37 OF 2020 APARNA DUDDUKUNTA HYDERABAD PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER M.A. NO.37/HYD/2020 (ARISING OUT OF ITA NO.917/HYD/2017) ASSESSMENT YEAR: 2011-12 MS. APARNA DUDDUKUNTA HYDERABAD PAN:AEGPD3262B VS. DY. C. I. T CENTRAL CIRCLE 1(3) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI S. RAMA RAO REVENUE BY : SRI Y.V.S.T. SAI, CIT(DR) DATE OF HEARING: 26/03/2021 DATE OF PRONOUNCEMENT: 15/04/2021 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS M.A. IS FILED BY THE ASSESSEE U/S 254(2) OF T HE I.T. ACT AGAINST THE ORDER OF THE TRIBUNAL DATED 29.10.2 019. 2. THIS M.A. WAS REQUIRED TO BE SUBMITTED ON OR BEF ORE 30.04.2020. HOWEVER, THIS M.A. WAS FILED ON 28.8.20 20 I.E. BEYOND THE TIME PRESCRIBED U/S 254(2) OF THE ACT. HOWEVER, THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY S TATING THAT THE DELAY IS DUE TO THE COVID-19 LOCKDOWN BY THE CENTRA L GOVT. IN THE ENTIRE COUNTRY W.E.F.25.3.2020. SHE ALSO SUBMIT TED THAT THE HON'BLE SUPREME COURT IN SUO MOTO WRIT PETITION (CI VIL) NO.3/2020 DATED 8 TH MARCH, 2021 DIRECTED THAT THE PERIOD W.E.F. 15.3.2020 TO 14.3.2021 SHOULD BE EXCLUDED FROM THE PERIOD OF LIMITATION DUE TO THE COVID LOCKDOWN. TAKING THE SA ME INTO MA NO 37 OF 2020 APARNA DUDDUKUNTA HYDERABAD PAGE 2 OF 6 CONSIDERATION, WE HOLD THAT THE PETITION FILED BY T HE ASSESSEE IS WITHIN THE PERIOD OF LIMITATION. 3. COMING TO THE ALLEGED MISTAKE APPARENT FROM RECO RD, THE ASSESSEE IS SEEKING RECTIFICATION/MODIFICATION OF TRIBUNALS ORDER U/S 254(2) OF THE ACT. THERE ARE SEVERAL CONT ENTIONS WHICH ARE RAISED BY THE ASSESSEE IN ITS APPLICATION WHICH READS AS UNDER: 2. AS ACCORDING TO THE PETITIONER THERE IS A MISTA KE IN THE ORDER OF THE HON'BLE [TAT, THE PRESENT PETITION IS SUBMITTED. THE FACTS LEADING TO THE ENHANCEMENT OF ASSESSMENT BY THE CIT (APPEALS) FOR THE ASSESSMENT YEAR 2011-12 ARE AS UNDER: A) THE PETITIONER IS THE OWNER OF 44.15 ACRES OF AGRICULTURAL LAND SITUATED AT GRAMADATLA VILLAGE, RAYADURG MANDAL, T. VEERAPURAM PANCHAYAT, ANANTHAPUR DISTRICT, ANDHRA PRADESH. THE SAID LAND WAS ACQUIRED AT CL COST OF RS.67,74,825/-. B) THE PETITIONER ENTERED INTO A LEASE AGREEMENT ON 16.3.2011 WITH SAI SUDHIR ENERGY LIMITED AND AS PER THE LEASE DEED, THE LESSEE COMPANY AGREED TO PAY RS . 2,5001 - PER ACRE PER MONTH TOWARD S LEASE RENTAL. A SUPPLEMENTARY LEASE DEED WAS ENTERED INTO ON 17.3.2011 ACCORDING TO WHICH THE LEASE DEED DATED 16.3.2011 WAS MODIFIED. THE LEASE DEED 17.3.2011 WAS ACTED UPON INITIALLY. C) AS PER THE LEASE DEED DATED 17.3.2011 THE LESSEE COMPANY AGREED TO PAY LEASE RENTAL OF RS.24,434/- PER ACRE PER ANNUM. D) THE LESSEE COMPANY ALSO AGREED TO PAY ADVANCE LEASE RENTAL FOR 99 YEARS WHICH WORKS OUT TO RS. 10,67,53,833/-. THIS AMOUNT WAS NOT PAID IN CASH/ CHEQUE BUT WAS PROVIDED IN THE BOOKS OF THE COMPANY . E) THE LESSEE COMPANY MADE AN ENTRY IN THE BOOKS OF ACCOUNT BY CREDITING THE ACCOUNT OF THE PETITIONER I.E. D. APARNA REDDY WITH AN AMOUNT OF RS. 9,60, 78,450/- AND THE BALANCE OF RS.1 ,06,75,383/-1 - IS CREDITED TO THE TDS ACCOUNT. THE AGGREGATE AMOUNT OF RS.10,67,53,833/- WAS DEBITED TO THE ACCOUNT 'ADVAN CE LEASE RENTAL'. F) AS PER THE SUPPLEMENTARY LEASE AGREEMENT, THE LESSEE COMPANY AGREED TO DISCHARGE THE LIABILITY OF RS. 9,60,78,450/- BY ALLOTTING SHARES. ACCORDINGLY, IT ALLOTTED 48,03,923 EQUITY SHARES OF RS.10/- EACH ON MA NO 37 OF 2020 APARNA DUDDUKUNTA HYDERABAD PAGE 3 OF 6 31.3.2011. THIS AMOUNT IS DEBITED TO THE PETITIONER 'S ACCOUNT AND CREDITED TO THE SHARE APPLICATION/SHARE CAPITAL ACCOUNT. G) AS PER THE SUPPLEMENTARY LEASE AGREEMENT, THE LESSEE ALLOTTED FURTHER 48,03,923 EQUITY SHARES OF RS.10/- EACH ON 2.4.2011. THIS AMOUNT IS DEBITED TO PETITIONER'S ACCOUNT AND CREDITED TO SHARE APPLICATION/SHARE CAPITAL ACCOUNT. BY THIS ENTRY TH E ENTIRE AMOUNT PAYABLE BY THE LESSEE TO THE PETITION ER WAS ADJUSTED AGAINST SHARE CAPITAL ACCOUNT. H) ON 2.7.2011, ANOTHER LEASE AGREEMENT WAS ENTERED INTO WHICH WAS REGISTERED ACCORDING TO WHICH THE LE ASE RENTAL PAYABLE WAS RS.24, 17,976/-. HOWEVER, THE SA ID AGREEMENT WAS ALSO NOT ACTED UPON. IMMEDIATELY ON 8.7.2011, A REGISTERED SALE DEED WAS EXECUTED AND CONSIDERATION OF RS.24,17,976/- WAS PAID BY THE COMPANY TO THE PETITIONER. I) ONCE THE SALE DEED WAS EXECUTED ON 8.7.2011, THE EARLIER LEASE AGREEMENT GOT TERMINATED. AT THAT STA GE, THE ADVANCE LEASE RENTAL IS CREDITED WITH THE AMOUN T OF RS.10,67,53,640/ - AND DEBITED TO THE TDS PAYABLE ACCOUNT - RS.1,06,75,383/- BESIDES DEBITING THE PETITIONER'S ACCOUNT WITH RS.9,60,78,450/-. IN SO F AR AS TDS IS CONCERNED, IT IS NULLIFIED WHEREAS THE AMOUN T STANDING TO THE ACCOUNT OF THE PETITIONER STOOD AT RS.9,60,678,450/-. THIS AMOUNT WAS DUE AND PAYABLE BY THE PETITIONER TO THE COMPANY. J) WHEN THE FACTS STOOD AS MENTIONED ABOVE, THE ASSESSING OFFICER IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2012-13 ====== HELD THAT IT WAS A BUSINESS TRANSACTION AND DIFFERENCE BETWEEN THE ADVANCE LEASE RENTAL AND THE COST WAS TREATED AS TH E INCOME FROM BUSINESS. ON AN APPEAL FILED, THE LEARN ED CIT (APPEALS) HELD THAT THE SAID AMOUNT: CAN NEITHE R BE ASSESSED AS A CAPITAL GAIN NOR AS INCOME FROM BUSINESS. THIS VIEW OF THE CIT (APPEALS) IS ACCEPTE D BY THE DEPARTMENT AND NO APPEAL WAS FILED. K) HOWEVER, THE LEARNED CIT (APPEALS) TOOK AN ALTOGETHER DIFFERENT VIEW HOLDING THAT THE VALUE OF SHARES ALLOTTED ON 31.1.2011, 2.4.2011 AND THE TDS REPRESENT THE INCOME ASSESSABLE U/S 56(2)(VII)(C )( I) OF THE I.T. ACT AS NO CONSIDERATION WAS PAID. AS THE SHARES WERE ALLOTTED DURING THE FINANCIAL YEARS 201 0-11 AND 2011-12, THE CIT (APPEALS) ENHANCED THE ASSESSMENT FOR THE ASSESSMENT YEAR 2011-12 BY HOLDING THAT THE VALUE OF RS. OF RS.4,80,39,230/- A ND THE TDS OF RS.1,06,75,383/- REPRESENT THE INCOME ASSESSABLE U/S 56(2)(VII)(C) (I). MA NO 37 OF 2020 APARNA DUDDUKUNTA HYDERABAD PAGE 4 OF 6 THE PETITIONER BEFORE THE HON'BLE ITAT PLEADED IN A PPEAL THAT: I) IN SO FAR AS ALLOTMENT OF SHARES IS CONCERNED, T HE AMOUNT IS RECORDED AS PAYABLE BY THE PETITIONER IN THE BOOKS OF ACCOUNT OF THE COMPANY. THE AMOUNT WAS DUE AND THE SHARES WERE NOT WITHOUT CONSIDERATION. AS SUBMITTED IN THE EARLIER PARAGRAPH, INITIALLY THE S HARES WERE ALLOTTED AGAINST THE ADVANCE LEASE RENTAL DUE. WHEN THE LEASE WAS CANCELLED, THE AMOUNT WAS TRANSFERRED TO LOAN ACCOUNT OF THE PETITIONER. THER EFORE, IT WAS PLEADED THAT THE SHARES WERE NOT ALLOTTED AG AINST LEASE RENTAL. II) THE TDS AMOUNT WAS NOT PAID TO THE GOVERNMENT B Y THE LESSEE. THE LESSEE ULTIMATELY PURCHASED THE PROPERTY VIDE SALE DEED DATED 8.7.2011 AND THE ENTR Y MADE TOWARDS LEASE RENTALS WAS REVERSED. THE PETITIONER DID NOT TAKE CREDIT FOR SUCH TDS AND IT WAS NOT CLAIMED BY THE PETITIONER. WHEN THE TDS WAS NOT PAID TO THE GOVERNMENT ACCOUNT NOR PAID TO THE PETITIONER IT CANNOT BE SAID THAT THERE IS ANY INCO ME ASSESSABLE U/S 56(2)(VII)(C)(I) OF THE I.T. ACT, PA RTICULARLY WHEN THE LEASE AGREEMENT ITSELF IS CANCELLED. 3. THE HON'BLE ITAT DISCUSSED THE ISSUE AT PARA NO. 15 & PAGES NO.13 TO 16 OF THE ORDER. THE HON'BLE ITAT HELD THAT THE PROVISIONS OF SEC. 56(2) (VII)( C) (I) OF THE I.T ACT ARE NOT APPLICABLE TO THE FACTS OF THE CASE. HOWEVE R, AT PARA NO.16 IN THE FIRST THREE LINES, THE HON'BLE IT AT MENTIONED AS UNDER: ' AS REGARDS AMOUNT OF RS.L,06,75,383/- WHICH WAS RETAINED TOWARDS THE TDS BROUGHT TO TAX AS 'INCOME FROM OTHER SOURCES'. THE ADDITION TO THAT EXTENT IS CONFIRMED'. 4. IT. IS HUMBLY SUBMITTED THAT THE TDS IS A PART O F LEASE RENTAL. IT WAS NOT PAID BY THE COMPANY SAI SUDHIR ENERGY LIMITED TO THE GOVERNMENT ACCOUNT. THE AMOUN T OF RS.L,06,75,383/ - INITIALLY CREDITED TO THE TDS ACCOUNT BY THE COMPANY BY DEBITING 'ADVANCE LEASE RENTALS' WAS REVERSED BY THE COMPANY BY MAKING A JOURNAL ENTRY. THE SAID COMPANY DID NEITHER PAY THE ADVANCE LEASE RENTALS NOR CREDIT ANY AMOUNT ON ACCOUNT OF T DS. SUCH TDS WAS NOT PAID BY THE COMPANY TO THE CENTRAL GOVERNMENT ACCOUNT. IT WAS NEITHER CLAIMED AS A DEDUCTION OF TAX BY THE PETITIONER NOR ALLOWED BY T HE ASSESSING OFFICER AS A DEDUCTION FROM THE TAX PAYAB LE. THEREFORE, THE BENEFIT TO THE EXTENT OF RS.1,06,75, 383/- DID NOT ACCRUE TO THE PETITIONER. IT WAS NEITHER PA ID BY THE COMPANY NOR RECEIVED BY THE PETITIONER. THEREFO RE, MA NO 37 OF 2020 APARNA DUDDUKUNTA HYDERABAD PAGE 5 OF 6 NO GAIN WAS DERIVED BY THE PETITIONER TO THE EXTENT OF RS.1,06,75,383/- . 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROVISIONS OF SEC. 56(2) (VII)( C) (I) OF THE I.T. ACT ARE NOT APPLICABLE. IN THIS REGARD THE PETITIONER MAY BE PERMITTED TO REFER TO THE PROVISIONS OF SEC. 56(2) (VII)( C) (I) OF THE IT. ACT OR THE IT. ACT WHICH ARE REPRODU CED HEREUNDER: '(C) ANY PROPERTY, OTHER THAN IMMOVABLE PROPERTY- I) WITHOUT CONSIDERATION, THE AGGREGATE FAIR MARKET VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, THE WHOLE OF THE AGGREGATE FAIR MARKET VALUE OF SUCH PROPERTY;' 6. THE SAID SECTION CLEARLY INDICATES THAT UNLESS T HE PROPERTY IS RECEIVED, THE PROVISIONS OF SEC. 56(2) (VII)( C) (I) OF THE I.T. ACT CANNOT BE INVOKED. IN THE CASE OF THE PETITIONER NO SUCH AMOUNT WAS RECEIVED BY HER AND, THEREFORE, THE PROVISIONS OF SEC. 56(2) (VII)( C) ( I) OF THE I.T. ACT HAVE NO APPLICATION. 7. FURTHER, IT IS SUBMITTED THAT IN SO FAR AS THE B ALANCE OF RS.9,60,78,257/- IS CONCERNED, THE HON'BLE TRIBU NAL HELD THAT THE PROVISIONS OF SEC. 56(2) (VII)( C) (I ) OF THE I.T. ACT HAVE NO APPLICATION AND HELD THAT SUCH AMOUNT CANNOT BE TREATED AS INCOME OF THE PETITIONER AS SU CH AMOUNT IS NOT RECEIVED BY THE PETITIONER. THE HON'B LE ITAT SHOULD HAVE CONSIDERED THE FACT. THAT EVEN TDS AMOUNT WAS NOT RECEIVED BY THE ASSESSEE NOR IS CREDITED TO THE ACCOUNT OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE PETITIONER SUBMITS THAT THERE IS AN ERRO R IN THE ORDER OF THE HON'BLE ITAT DATED 29.10.2019 WHIC H MAY KINDLY BE CONSIDERED AND APPROPRIATE ORDERS BE PASSED RECTIFYING THE MISTAKE. 5. THE LEARNED COUNSEL FOR THE ASSESSEE TRIED TO PO INT OUT THAT THE TRIBUNAL HAS NOT CONSIDERED THE ABOVE CONT ENTIONS OF THE ASSESSEE AND THEREFORE, THERE IS A MISTAKE APPARENT FROM RECORD. HOWEVER, WE FIND THAT REAPPRECIATION OF FACTS AND M ODIFICATION OF THE TRIBUNALS ORDER IS NOTHING BUT REVIEW OF ITAT ORDER. U/S 254(2) OF THE I T ACT, ITAT CAN ONLY RECTIFY THE AL LEGED MISTAKES WHICH ARE APPARENT FROM RECORD AND CANNOT REAPPRECI ATE THE EVIDENCE AND REVIEW ITS FINDINGS AS HELD BY THE HON 'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RAMESH ELECTRIC & TRADING CO. MA NO 37 OF 2020 APARNA DUDDUKUNTA HYDERABAD PAGE 6 OF 6 (1993) 203 ITR 497 (BOM.). THEREFORE, THIS M.A. IS NOT MAINTAINABLE AND IS ACCORDINGLY REJECTED. 6. IN THE RESULT, M.A. FILED BY THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH APRIL, 2021. SD/- SD/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 15 TH APRIL, 2021. VINODAN/SPS COPY TO: 1 SMT. APARNA DUDDUKUNTA, FLAT NO.S-3, 8-2-603/B/4, BANJARA HILLS, HYDERABAD 500034 2 DY.CIT, CENTRAL CIRCLE 6(NOW DCIT CC-1(3) AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 3 CIT (A)-11 HYDERABAD 4 PR. CIT CENTRAL, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER