Sri Natakari Gopal V. Income Tax Appellate Tribunal and 2 Others

ITTA/238/2022

AI Insights

The case involves an appeal by Sri Natakari Gopal against the order of the Income Tax Appellate Tribunal, Hyderabad, which confirmed the addition of Rs.8,25,000 as long-term capital gains for the assessment year 2007-08. The appellant contested the sale value of the property, which was assessed at Rs.11 lakhs based on a letter he submitted, arguing that he was illiterate and did not understand the contents of the letter. The Tribunal and the lower authorities rejected his plea, noting that he was represented by an advocate and had voluntarily submitted the letter. The High Court dismissed the appeal, agreeing with the Tribunal's findings and noting that the questions raised were factual in nature, not substantial questions of law.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 762876 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 18-08-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Section 260A of the Income Tax Act, 1961, Section 151 CPC
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: N NAVEEN RAJ
• Keywords: Assessment Year 2007-2008; Capital Gains; Illiterate; Income Tax; Long Term Capital Gains; Rural background; Sale Consideration
• Section: 143(3); 260A; 254; 151

Judgement Text

"IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THURSDAY ,THE EIGHTEENTH DAY OF AUGUST TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY INCOME TAX TRIBUNAL APPEAL NO: 238 OF 2022 Appeal under Section 2604 of the lncome Tax Act, 1961 against order dated 24-11-2021 in ITA No 914/H/2019 , Assessment year 2007-2008 on the file of the lncome Tax Appellate Tribunal, Hyderabad, Bench - B, Hyderabad preferred against the order daled 04-03-2019 in Appeal No. 10245 12018-19 on the file of the Court of the Commissioner of lncome Tax ( Appeals ) -'12, Hyderabad preferred against the order dated 31-03-2016 Between: Sri Natakari Gopal, S/o N.Agamaiah, Age 58 years, H.No 3-60, Maikapur Village, Kondapur Mandal, Sanga Reddy District, (PAN No. AJUPN 1204C) ...APPELLANT AND '1 . lncome Tax Appellate Tribunal , Hyderabad Bench - B, Room No 502, CGO Towers, Kavadiguda, Secunderabad. 2. Commissioner of lncome Tax (A), lll, Aayakar Bhavan, Hyderabad. 3. lncome Tax Officer, Assessment Officer, Ward 1, Sanga Reddy ...RESPONDENTS Application under Section 151 CPC praying that in the circumstances stated in the accompanying affidavit, the High Court may be pleased to condone the delay of 3 days in preferring the present appeal against the order of ITA No 9141H12019 on the file of the ITAT Hyderabad, Bench - B, Hyderabad, in the interest of justice. IA NO: 1 OF 2022 lA NO: 2 OF 2022 Petition under Section 151 CPC praying that in the circumstances staled in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all furlher proceedings and operation of the judgment in the order of ITA No 9141H12019 on the file of the ITAT Hyderabad, Bench - B, Hyderabad, during pending main appeal in the interest of justice. Counsel for the Appellant: SRl. N. NAVEEN RAJ Counsel for the Respondents: NONE APPEARED The Court made the following: ORDER THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY I.T.T.A.No.238 of 2O22 ORDER: (Per the Hon'ble the Chief Justtce Uljal Bhugan) Heard Mr. N.Naveen Raj, learned counsel for the appellant. 2. This appeal has been preferred by the assessee as the appellant under Section 260A of the lncome Tax Act, 196 1 (briefly referred to hereinafter as 'the Act') assailing the legality and validity of the order dated 24.11.2021 passed by the Income Tax Appellate Tribunal, Hl,derabad Bench 'B', Hyderabad (Tribunal) in ITA No.914/H l2Ol9 for the assessment year 2007-08. 3. The appeal has been preferred proposing the following questions as substantial questions of lau,: AND l In the facts and circumstarces of the case, whether the order of ITAT in dismissing IT oi thc assessee and upholding the sa-le value of property at Rs.11 lakhs on the basis of a letter in English, given in the year 2008, to the assessing officer, who was uneducated with rural background and not conversant with English, agarnst the sale consideration of Rs. 1,50,000 shown in the registered sale deed and THE HON'BLE THE CHIEF JUSTICE UJJAL BHIIYAN HCI & CVBR,I I.T.T.A.No.238 of 2022 computation of LTCG is illegal and perverse, is liable to be set aside? Whether the agricultural land sold by the assessee dated l7- 7l-2006 is a capital asset, attracting capital gains in the eye of law? Whether the land in subject comes .,r'ithin the purview of the LTCG, without there being evidence, and in hasty way carne to conclusion on presumptions and assumptions? Whether the orders of the Tribunal a.nd Revenue solely relying on a letter in English given for the purpose of capital gain to have obtained from the assessee, who was illiterate ald uneducated, rural background is sustainable in law? Whether the courts below without following due process can come to conclusion for determining such huge amount?\" 4 . Learned counsel for the appellant submits that appellant is an uneducated person with rural background and not conversant u'ith English language. Therefore, he could not properly defend himself in the assessment proceeding. 5. On a query by the Court as to whether this ground was / urged before the first appellate authority as well as before the Tribunal, learned counsel for the appellant is not in a position..to-. reply to the query of the Court. 2 2 3 4 5 HC] & CVBRJ I.T.T.A.No-238 of 2O22 6. Appellant is an assessee under the Act having the status of Hindu Undivided Family (HUF). Initially assessing officer made ale assessment order on 3l.l2.2OOq under Section 144 of the Act assessing iong term capital gains at Rs.24,91,860.00. The above addition was made on account of sale of land by the appellant uide Sale Deed dated 17.11.2006. Appellant preferred appeal before the first appellate authority but the appeal was dismissed on 04.06.2014. Thereafter appellant preferred appeal before the Tribunal being ITA No.l474lHydl2ol4. Vide order dated 21.01.2015, Tribunal set aside the assessment order and remanded the matter back to the assessing officer lor framing assessment afresh after giving due opportunity to the appellant. Assessing officer was directed to determine the correct status of the appellant, shares of the appeilant and the price that the could be brought to tax. 7. On remand, fresh assessment proceedings were/- a initiated by the assessing officer. Appellant was represented by a ,counsel as his authorised representative. On examination of the 3 materials on record, assessing officer passed fresh order of appellant. had received on the sale so that correct capital gains HC] & CVBRJ I. T.T. A., o. 2 38 of 2022 assessment on 31.03.2016 under Section 143(3) read u,ith Section 254 ol the Act making addition of Rs.8,25,000.O0 orr account of the long term capital gains. Against the aforesaid order of the assessing olficer dated 31.03.2016, appellant again preferred appeal before the first appellate authority for deletion of the addition made by the assessing officer. However, by the order dated 04.03.2019, the first appellate authority dismissed the appeal of the appellant by confirming the order of the assessing officer. It q.as held as follows: \"l have carefully considered the submissions of the appeilant as well as the order of the Assessing officer. From the assessment order reproduced in Para 6.1 above, it can be seen that the A.O. has duly complied with all the directions of the Hon'ble ITAT, and has given his hndings on each of the four issues, aJter examining all the information filed in the course of assessment proceedings. The sale value of the land is taken at Rs.l1,00,000/-, as per the assessee's own letter dated 04. 12.2008. It is the contention of the appellant's AR that this letter should not be taken as a basis, since it is written in English, and the appellant is illiterate. The argument of the AR is, however, absolutely flimsy arrd illogical. Even if the appellant is illiterate, he has got the letter drafted himself, signed it himself, and filed it voluntarily during assessment proceedings. It is seen that he was represented by an Advocate during assessment proceedings, ald was therefore assisted by a professional He cannot now take the 4 HC] & CVBRJ I.T.T.A.No.238 of 2022 plea that the letter he frled himself should not be taken cognizance of. Besides, the appellant's AR has himself stated that in the original assessment, the sale price was taken at Rs.24,91,860/- without any basis. Now, the sale price has been taken at Rs.8,25,000/-, as per the appellant's letter and I do not find any reason to interfere with that. Similarly, the share of the appellalt has been taken at 3/4th as per the sale document itself, The status of the appellant as HUF is also taken as HUF as per the said document. I, therefore, find no merits in the submissions of the appellant's AR and the addition made is conf-rrmed. \" authority, appellant preferred lurther appeal belore the Tribunal. The order of the lirst appellate authority was assaile(l on the following grounds: The order of the Honble CIT(A) is erroneous in law as well as facts of the case. ) 1 2 The Hon'ble CIT(A) ought to have observed that there was no material on record to conclude that the share in the sale proceeds received by the assessee amounted to Rs.8,25,OOo/-. The Hon'bie CIT(A) ought to have observed that the department adopted the share of the assessee in sale proceeds at different figures in the orders passed from time to time and thus there was no factual conclusion 3 8. Against the aforesaid decision of the first appellate I'rcJ & CVBRJ I.T.T.A.No.238 of 2022 with regard to sale price and it is only an assumed figure. The assessing offrcer proceeded to compute the share of the assessee on the basis of letter dated 03.12.2008 which was signed by the assessee (an illiterate shipyard) without having full knowledge of the contents of the letter. The Hon'bie CIT (A) ought to have deleted the addition made by the assessing officer with regard to sale consideration in the absence of any material on record to support the conclusion of the assessing officer that the sale price amounted to Rs. 1 I,00,000/- and assessee share was Rs.8,25,0O0/- as both figures were without aly basis. In the facts and circumstances of the case , the Hon'ble CIT(A) ought to have deleted the addition made by the assessing officer. 7. Ar-ry other ground will be raised at the time of hearing.\" 9. By the order dated 24.11.2021, Tribunal did not find any merit in the appeai and dismissed the sarne. Tribunal held as follows: \"Considered the riva-l submissions and perused the material on record as well as gone through the orders of revenue authorities. We lind that when the ITAT remitted the issue to the frle of the AO with a direction to decide the issue 6 4 5 () L{C] & CVBRJ I.T.T.A.No.238 of 2O22 with verification of the issues pointed out by the ITAT cited supra, the AO accordingly completed the assessment by addressing all the points raised by the ITAT. As per the AO the assessee vide letter dated 03- 12-2008 hled in this oflice on O4- l2-2OOa has stated that he has received Rs. 1 i,00,000/- from the purchaser towards sale of Ac. 0.30 guntas situated in Sy.No.139/AA2, Malkapur village Kondapur Mandal, Medak District. The same was pointed out by the ITAT also in para 2 of its order. Accordingly, sa.le price is considered as Rs. 11 lakh. Vide sale deed No.27230 dated I7-11-2006 executed by the assessee as a vendor, it was mentioned in the document that assessee is executed the said sale deed as a HUF and his share was mentioned as 3/4th and the remaining 1/4th of the share pertains to his son Sri N.Praveen Kumar. Hence the quantum of amount in ttre hands of the assessee is considered at Rs. 8,25,000 /- p/q,n of Rs.11,00,000/-). While confirming the addition made by the AO, the CIT(A) obsened that the AO has duly complied with a-ll the directions of the Hon'ble ITAT and has given his frndings on each of the four issues after examining a.ll the information filed in the course of assessment proceedings. Therefore, we do not {ind any infirmity in the order of the CIT(A) and upholding the same, we dismiss the grounds rarsed by the assessee.\" 10. Thus on thorough consideration of all aspects of the matter, we are of the view that the questions proposed by the appellant as substantial questions of 1aw do not arise out of the aforesaid order of the Tribunal; at the most those are only 7 questions of fact. No substantial question of 1aw can be said to HC] & CVBRJ I.T.T.A.No.238 of 2022 arise oLlt of the order of the Tribunal, not to speak of any substantial question of lar.r,. There is no infirmity in the order passed lry the Tribunal. i 1. Consequentiy, the appeal is dismissed. However, there sha11 be no order as to costs. 12.. As a sequel, miscellaneous 8 any, in the appeal, sha1l stand closed. //TRUE COPY// To applications pending, il ,/ SD/.B.S.CHIRANJEEVI JOINT REGISTRAR 9 SECTION OFFICER '1 The lncome Tax Appellate Tribunal' Hyderabad' Bench - B' Room No 502 c'c\"O io*er., Kavidiguda Hyderabad 2. The Commissioner of lncome Tax ( Appeals ) -12' Hyderabad e. The lncome Tax Officer' Ward - 1' Sangareddy 4. One CC to SRl. N. NAVEEN RAJ' Advocate [OPUC] 5. Two CD CoPies 6. One SPare CoPY c HIGH COURT DATED:1810812022 ORDER ITTA.No.238 of 2022 DISIVIISSING Tl It, ITTA WITHOUT COSTS t- oTATL= 1 I rB sL? Ntl DISMISSING TI IE APPEAL -),- ) />--^1 >tsF.- -'//a-<.+ "