NEKKUNDI SRINIVASA REDDY KESHAVA REDDY,BENGALURU V. DCIT, CENTRAL CIRCLE-2(4), BENGALURU

ITA 2614/BANG/2024

AI Insights

The case involves Sri Nekkundi Srinivasa Reddy Keshava Reddy, who was assessed for capital gains over several assessment years (A.Y. 2013-14 to 2016-17) following a search operation under section 132 of the Income Tax Act at the premises of Mr. J Boopesh Reddy, where documents related to the assessee were found. The Assessing Officer (AO) issued notices under sections 153C and 142(1) of the Act, leading to the assessment of substantial capital gains based on a Joint Development Agreement with M/s. SJR Enterprises. The assessee contested the assessments, claiming compliance and prior tax payments on similar gains, which the AO rejected, leading to the current appeals. The CIT(A) had earlier restored the matter to the AO for a fresh assessment, which the Tribunal supported, dismissing the appeals.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712642 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Document seized; Documents seized; Capital Gains; Valuation report
• Section: 142(1); 132

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “B,”BANGALORE Before Shri Prashant Maharishi, Hon’ble Vice President & Shri Soundararajan K, Hon’ble Judicial Member ITA Nos.2611, 2612, 2613 & 2614/Bang/2024 (A.Ys. 2013-14, 2014-15, 2015-16 & 2016-17) Sri Nekkundi Srinivasa Reddy Keshava Reddy 230, Dodanekkundhi Marathalli Post Bengaluru - 560037 PAN: ANEPK7168A vs. The DCIT – Central Circle -2(4) Bengaluru (Applicant) (Respondent) Assessee Represented by: Ms. Sunaina Bhatia, CA Department Represented by: Sri Murali Mohan, CIT DR Date of Hearing:22.07.2025 Date of Pronouncement 30.07.2025 O R D E R Per Prashant Maharishi, Vice President: 1. Captioned appeals are filed by Sri Nekkundi Srinivasa Reddy Keshava Reddy against the consolidated order passed by Commissioner of Income Tax (Appeals)-15, Bengaluru (“the Ld.CIT(A)”) for the A.Ys. 2013-14 to 2016-17 dated 20.12.2024 on identical facts and circumstances. We first state facts for the A.Y.2013- 14. 2. The brief facts of the case shows that, assessee is an individual who has not filed any return of income. A search under section 132 of the Act was carried out in Printed from counselvise.com 2 ITA Nos.2611, 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy 2 the case of Mr. J Boopesh Reddy on 09.0.2017 at Bangalore wherein certain documents pertaining to the assessee were found. During assessment proceedings of Mr. J Boopesh Reddy, the Ld.AO of Mr. J Boopesh Reddy recorded a satisfaction that these documents pertain to the assessee and therefore seized documents were sent to the Ld. AO of this appellant. . Accordingly, after recording the satisfaction, notice under section 153C of the Act was issued on06.08.2019 and subsequently notice under section 142(1) was issued and served. 3. The issue was determination of the capital gain and therefore the assessee was asked to prove the computation of capital gain. The Ld. AO was also furnished the valuation report. Accordingly, the Ld. AO to verify the claim of the assessee referred the matter to the District Valuation Officer (“DVO”) under section 142A of the Act on 14.06.2021 who submitted the valuation report on 26.10.2021. It was also the report of the DVO that assessee has not provided any information or details with respect to the property. The notices under section 142(1) of the Act were also issued to the assessee, however the assessee was Printed from counselvise.com 3 ITA Nos.2611, 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy 3 totally non-compliant. Even the show cause notice was issued was not answered. 4. The Ld. AO issued a show cause notice that Short Term Capital Gain of Rs.69,75,248/- and Long Term Capital Gain of Rs.75,42,333/- were proposed to be taxed in the hands of the assessee based on the Joint Development Agreement entered into with M/s. SJR Enterprises dated 30.12.2010. In the end, the assessee submitted its response on 16.12.2021 wherein it was stated that the assessee along with his family members have received a total of 36 flats towards his share of land. However, he has surrendered 28 flats to the builders and received advance as per supplementary agreement. It was further stated that he has paid the tax on capital gain in the assessment year 2012-13. 5. The Ld. AO rejected the contentions and made addition of Rs.1,45,17,581/- by assessment order dated 24.12.2021 passed under section 153C r.w.s. 144 of the Act. 6. Identically, the order for the A.Y. 2014-15 was passed on 24.12.2021 wherein total capital gain of Printed from counselvise.com 4 ITA Nos.2611, 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy 4 Rs.3,32,93,220/- was assessed. For the A.Y. 2015-16 as per order under section 153C r.w.s. 144 of the Act dated 24.12.2021 the assessment to the extent of Rs.10,03,66,918/- was made taxing the above sum of Long Term Capital Gains. 7. For the A.Y. 2016-17, the assessment order under section 153C r.w.s. 144 of the Act was passed on 24.12.2021 determining the Long Term Capital Gain of Rs.6,29,50,400/- along with income from house property of Rs.4,97,000 and income from other sources at Rs.1,56,504/-, the total income was determined at Rs.6,34,43,904/-. 8. Against all these four assessment orders, assessee preferred appeal before Ld.CIT(A). The Ld.CIT(A) in terms of amendment to section 251 of the Act by the Finance(No.2) Act, 2024 restored all the appeals back to the file of Ld.AO for fresh consideration as per law and allowed the appeal of the assessee for statistical purposes. 9. The assessee is still aggrieved and is in appeal before us raising the ground that the assessment order is bad in law and time barred. Printed from counselvise.com 5 ITA Nos.2611, 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy 5 10. The Ld. Authorized Representative Ms. Sunaina Bhatia, furnished a paper book containing 120 pages. 11. The Ld. Departmental Representative vehemently stated that this issue has been restored back to the file of Ld. AO by the Ld.CIT(A) as the orders were passed under section 144 of the Act and without giving proper opportunity of hearing to the assessee, therefore assessee should not have grievance, appeals could not have been filed. 12. We found that Ld.CIT(A) in Paragraph No. 5.1 has categorically noted that there was a sufficient cause which prevented the appellant from filing the details before the Ld. AO during the assessment proceedings. He also agreed that the explanation given by the assessee for not representing the case and not filing the details as bonafide. Therefore, he held that in the interest of justice and fair play an opportunity should be given to the appellant to represent his case with necessary documents before the Ld. AO. Accordingly, he restored the issue back to the file of Ld. AO for fresh consideration as per law after giving the assessee an opportunity of hearing. 13. We find there is no infirmity in the order of the Ld.CIT(A) when all issues are left open to be contested before Ld. AO, the Printed from counselvise.com 6 ITA Nos.2611, 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy 6 grievance of the assessee is unfound. Accordingly, we see no merit in all these four appeals filed by the assessee. 14. In the result, appeals of the assessee are dismissed. Order pronounced in the open court on 30th July 2025. Sd/- (SOUNDARARAJAN K) JUDICIAL MEMBER Sd/- (PRASHANT MAHARISHI) VICE PRESIDENT Bangalore; Dated: 30th July 2025 Giridhar, Sr.PS Printed from counselvise.com 7 ITA Nos.2611, 2612, 2613 & 2614/Bang/2024 Sri Nekkundi Srinivasa Reddy Keshava Reddy 7 Copy to: 1. The Applicant. 2. The Respondent. 3. The CIT(A) Concerned. 4. The DCIT concerned. 5. The Sr. DR, ITAT, Bangalore. 6. Guard File. Asst.Registrar ITAT, Bangalore Printed from counselvise.com "