The Assistant Commissioner of Wealth Tax, Central Circle-2, `, Visakhapatnam V. Ganapathiraju Venkata Sita Rama Raju, , Visakhapatnam

WTA 19/VIZ/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3997 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 03-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / W.T.A. NO. 0 6 /VIZ/201 8 ( / A SSESSMENT YEAR : 20 09 - 1 0 ) JT . COMMISSIONER OF W E ALTH TAX (OSD) CENTRAL CIRCLE - 2 VISAKHAPATNAM VS. SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU PLOT NO.42, SHIVAJI GARDENS KURMANAPALEM VISAKHAPATNAM [PAN : AHAPP1548F] ( / APPELLANT) ( / RESPONDENT) CO NO. 8 4 /VIZ/2018 (ARISING OUT OF W.T. A. NO. 0 6 /VIZ/201 8 ) ( / ASSESSMENT YEAR:20 09 - 1 0 ) SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU PLOT NO.42, SHIVAJI GARDENS KURMANAPALEM VISAKHAPATNAM [PAN : AHAPP1548F] VS. JT . COMMISSIONER OF W E ALTH TAX (OSD) CENTRAL CIRCLE - 2 VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) ./ W.T. A .NO S . 19&20/VIZ/2018 ( / A SSESSMENT YEAR : 2009 - 10) ASST . COMMISSIONER OF WEALTH TAX CENTRAL CIRCLE - 2 VISAKHAPAT NAM VS. SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU PLOT NO.42, SHIVAJI GARDENS KURMANAPALEM VISAKHAPATNAM [PAN : AHAPP1548F] ( / APPELLANT) ( / RESPONDENT) 2 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM CO NO. 37 /VIZ/201 9 & 38 /VIZ/2018 (ARISING OUT OF W.T. A.NO S . 19 /VIZ/201 8 AND 20 /VIZ/2018 ) ( / ASSESSMENT YEAR : 20 09 - 10 ) SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU PLOT NO.42, SHIVAJI GARDENS KURMANAPALEM VISAKHAPATNAM [PAN : AHAPP1548F] VS. ASST . COMMISSIONER OF WEALTH TAX CENTRAL CIRCLE - 2 VISAKHAPAT NAM ( / APPELLANT) ( / RESPONDENT) /REVENUE BY : S MT.SUMAN MALIK , DR / ASSESSEE BY : SHRI G.V.N.HARI, AR / DATE OF HEARING : 10 .0 4 .2019 / DATE OF PRONOUNCEMENT : 2 3 .04.2019 / O R D E R P ER BENCH : THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS OF THE COMMISSIONER OF WEALTH TAX (APPEALS) [C W T(A)] - 3, VISAKHAPATNAM DATED 2 9 .0 3 .2018 AND THE CROSS OBJECTIONS ARE FILED BY THE ASSESSEE IN SUPPORT OF THE ORDER OF THE CWT (A) . F OR THE SAKE OF CONVENIENCE , T HE APPEALS ARE CLUBBED, HEARD TOGETHER AND A COMMON ORDER IS BEING PASSED AS UNDER. 3 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM W.T.A.NO.06/VIZ/2018& CO NO.84/VIZ/2018,A.Y.2009 - 10 2. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CWT(A). IN THIS CASE, THE ASSESSING OFFICER (AO) PASSED TWO WEALTH TAX ASSESSMENT ORDER S FOR THE A.Y.2009 - 10, U/S 16(3) R.W.S.17 OF THE WEALTH TAX ACT, 1957 (IN SHORT ACT) DATED 31.03.2015 AND 26.10.2016. THE LD.CWT(A) PASSED COMMON ORDER FOR BOTH THE ASSESSMENT ORDERS VIDE DATED 29.03.2018. 3. AGAINST THE ORDER S OF THE CWT(A), THE DEPARTMENT HAS FILED COMMON APPEAL IN SINGLE FORM - 36 FOR BOTH THE ASSESSMENT ORDERS PASSED BY THE AO INSTEAD OF FILING SEPARATE APPEALS. WHEN THE DEFECT WAS BROUGHT TO THE NOTICE OF THE REVENUE, THE DEPARTMENT HAS FILED TWO SEPARATE AP PEALS AGAINST EACH ASSESSMENT ORDER VIDE W.T.A. 19/VIZ/2018 AND 20/VIZ/2018 ON 03.12.2018. HENCE, THE APPEAL FILED BY THE REVENUE IN W.T.A. NO.06/VIZ/2018 HAS BECOME INFRUCTUOUS AS IT IS DEFECTIVE AND NOT MAINTAINABLE, HENCE, THE APPEAL OF THE REVENUE AS W ELL AS THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. W.T.A. NO.19/VIZ/2018 AND CO NO.37/VIZ/2019, A.Y.2009 - 10 4. THE ONLY ISSUE IN THIS APPEAL IS TAXABILITY OF FLAT IN SLN TOWERS, NARASIMHANAGAR, VISAKHAPATNAM WHICH WAS RENTED OUT FOR COMPLETE 4 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM FINANC IAL YEAR. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS OWNED A RESIDENTIAL FLAT AT SLN TOWERS, NARASIMHANAGAR, VISAKHAPATNAM WHICH WAS LET OUT DURING THE FINANCIAL YEAR 2008 - 09 AND DECLARED THE RENT AL INCOME OF RS.32,812/ - FOR THE WHOLE YEAR. THE ASSESSEE SUBMITTED THAT THE FLAT WAS LET OUT FOR MORE THAN 300 DAYS IN THE IMPUGNED ASSESSMENT YEAR AND THE RENTAL INCOME WAS ADMITTED ON ACTUAL BASIS . THE AO FOUND IN THE SUBSEQUENT FINANCIAL YEAR I.E. FOR THE A.Y. 2010 - 11, THE ASSESSEE H A S RECEIVED THE RENTAL INCOME OF RS.1,24,792/ - , HENCE, CONTENDED THAT THE FLAT WAS NOT LET OUT FOR MORE THAN 300 DAYS DURING THE FINANCIAL YEAR RELEVANT TO THE A.Y. 2009 - 10 , IT WAS LET OUT FOR SHORTER PERIOD AND CLAIMED EXEMPTION FROM WEALTH TAX. HENCE , W ORKED OUT THE SRO VALUE OF THE PROPERTY AT RS.2400/ - PER SFT AND VALUED THE 50% OF THE SHARE OF THE ASSESSEE AT RS.11,52,000/ - AS TAXABLE WEALTH AND THE SAME WAS BROUGHT TO WEALTH TAX. 5. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEF ORE THE CWT(A) AND THE LD.CWT(A) DELETED THE ADDITION MADE BY THE AO OBSERVING THAT THE AO SIMPLY INFERRED THAT THE FLAT WAS NOT LET OUT FOR MORE THAN 300 DAYS CONTRARY TO THE FACTUAL POSITION. 5 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM 6. AGAINST THE ORDER OF THE CWT(A), THE DEPARTMENT HAS FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.DR RELIED ON THE ORDER OF THE AO, AGAINST WHICH, THE LD.AR RELIED ON THE ORDER OF LD.CWT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THE ASSESSEE SUBMITTED THAT HE HAD LET OUT THE PROPERTY FOR MORE THAN 300 DAYS DURING THE FINANCIAL YEAR 2008 - 09 RELEVANT TO THE A.Y.2009 - 10 AND THE ADMITTED RENTAL INCOME OF RS.32,812/ - FOR THE A.Y. 2009 - 10. HOWEVER, IN THE SUBSEQUENT ASSESSMENT YEAR, IT WAS FOUND THAT THE ASSESSEE HAD RECEIVED THE RENTAL INCOME OF RS.1,24,792/ - WHICH GAVE SUSPICION TO THE AO TO HOLD THAT THE ASSESSEE DID NOT LET OUT THE FLAT FOR MORE THAN 300 DAYS, KEEPING IN VIEW OF THE RENT RECEIVED BY THE ASSESSEE IN THE SUBSEQUENT ASSESSMENT YEAR. THERE WAS NO EVIDENCE BROUGHT ON RECORD BY THE AO TO ESTABLISH THAT THE FLAT WAS LET OUT FOR LESS THAN 300 DAYS OR THE ASSESSEE HAD UNDER STATED THE RENTAL INCOME , THUS THE ADDITION OF RS.11,52,000/ - WAS MADE PURELY ON SUSPICION. AS P ER LAW, T HE AO IS NOT PERMITTED TO MAKE ANY ADDITION ON PRESUMPTIONS AND SURMISES UNLESS THERE IS A MATERIAL ON RECORD TO SHOW THAT THE FLAT WAS NOT LET OUT FOR MORE THAN 300 DAYS. IN THE INSTANT CASE, THERE WAS NO EVIDENCE, HENCE, THE 6 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM ADDITION MADE BY TH E AO IS UNSUSTAINABLE, ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD.CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 8. THE ASSESSEE FILED CROSS OBJECTION SUPPORTING THE ORDER OF THE LD.CIT(A). SINCE, WE UPHELD THE ORDER OF THE LD.CIT(A), THE CROSS OBJECTIONS FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND THE SAME IS DISMISSED. W.T.A. NO.20/VIZ/2018 AND CO NO.38/VIZ/2019, A.Y.2009 - 10 9. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 16(3) R.W.S. 17 OF THE ACT, BY AN ORDER DATED 26.10.2016. THE AO REOPENED THE ASSESSMENT FOR ESCAPEMENT OF WEALTH RELATING TO VACANT LAND SITUATED AT RAJAHMUNDRY CONSISTING OF ONE ACRE OF AGRICULTURAL LAND. THE AO OBSERVED THAT THE ASSESSEE IS HOLDING ONE ACRE OF LAND AT RAJAHMUNDRY WHICH WAS NOT DISCLOSED IN THE WEALTH TAX RETURN S . SINCE THE ASSESSEE ALSO DID NOT FURNISH THE DETAILS BEFORE THE AO, THE AO HELD THAT THE LAND AT RAJAHMUNDRY IS A VACANT URBAN LAND AND ACCORDINGLY, THE VALUE OF LAND OF RS.90,000/ - WAS BROUGHT TO WEALTH TAX. 10. AGAINST THE ORDER OF THE AO, THE ASSESS EE WENT ON APPEAL BEFORE THE CWT(A) AND THE LD.CWT(A) FOUND THAT THE LAND IS AN AGRICULTURAL LAND. THE CWT(A) PERUSED THE DOCUMENTS FILED BEFORE HIM AND ACCORDINGLY FOUND THAT THE LAND IS AGRICULTURAL LAND. THE LD.CWT(A) ALLOWED THE APPEAL OF THE 7 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM ASSESSE E. AGAINST THE ORDER OF THE CWT(A) THE REVENUE IS IN APPEAL BEFORE US. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. DURING THE APPEAL HEARING, THE ASSESSEE HAS FURNISHED THE LAND DOCUMENTS AND ALSO COPIES OF PATTADAR PASS BOOKS FOR THE SAID ONE ACRE OF AGRICULTURAL LAND IN THE PAPER BOOK . AS PER THE PASS BOOKS AND THE COPIES OF SALE DEED FURNISHED BY THE ASSESSEE VIDE PAGE NOS.42 TO 80 OF THE PAPER BOOK, THE SAID LAND IS AGRICULTURAL LAND AND AGRICULTURAL OPERATIONS ARE BE ING CARRIED ON IN THE SAID LAND, THUS, IT IS EXEMPT FROM WEALTH TAX U/S 2(EA) OF WEALTH TAX ACT. 12. ON IDENTICAL FACTS FOR THE A.Y. 2010 - 11 TO 2013 - 14 IN THE ASSESSEES OWN CASE IN W.T.A. 7 TO 10/VIZ/2018 DATED 22.11.2018, THIS TRIBUNAL HELD THAT THE S AID LAND IS AGRICULTURAL LAND AND HAS NO APPLICATION OF SECTION 2(EA) OF W.T.ACT . FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THIS TRIBUNAL IN PAGE NO.4 AND 5 WHICH READS AS UNDER : 4. ON APPEAL BEFORE THE LD. CWT(A), IT WAS SUBMITTED THAT THE LAND SITUATED AT RAJAHMUNDRY IS AN AGRICULTURAL LAND AND THEREFORE, SECTION 2(EA) HAS NO APPLICATION. THE LD. CWT(A) AFTER CONSIDERING THE BALANCE SHEET, PATTAADAAR PASS BOOK AND SALE DEED, GAVE A CATEGORICAL FINDING THAT THE LAND IS AN AGRICULTURAL LAND. THE RELEVANT PORTION OF THE ORDER OF LD. CWT(A), IS EXTRACTED AS UNDER: - 8 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM 6.3 WITH REGARD TO LAND AT RAJAHMUNDRY, THE DESCRIPTION IN THE BALANCE SHEET CLEARLY INDICATES THAT IT IS AN AGRICULTURAL LAND. THE ASSESSING OFFICER DID NOT HAVE ANY MATERIAL TO SAY THAT THIS IS NOT AN AGRICULTURAL LAND. ON A PERUSAL OF THE DOCUMENT EVIDENCING THE PURCHASE OF LAND AND ALSO THE PASS BOOK, I FIND THAT THE LAND IS AN AGRICULTURAL LAND. HENCE, I FIND MERIT IN THE CONTENTION OF THE APPELLANT. HENCE, THE ADDITION OF RS. 90,000/ - MADE BY THE ASSESSING OFFICER FOR THE A.Y. 2009 - 10 AND RS. 2.20,000/ - MADE FOR THE A.YS. 2010 - 11 TO 2013 - 14 IS DIRECTED TO BE DELETED. 5. ON APPEAL BEFORE US, LD. DEPARTM ENTAL REPRESENTATIVE RELIED ON THE ORDER PASSED BY THE ASSESSING OFFICER, BUT NOT POINT OUT ANY ERROR COMMITTED BY THE LD. CWT(A). WE HAVE GONE THROUGH THE ASSESSMENT ORDER AND ALSO THE ORDER OF LD. CWT(A) AND FIND THAT LD. CWT(A) BY CONSIDERING THE PATTA ADAAR PASS BOOK, SALE DEED AND BALANCE SHEET, GAVE A CATEGORICAL FINDING THAT THE LAND IS AN AGRICULTURAL LAND AND SECTION 2(EA) HAS NO APPLICATION. IN VIEW OF THE SPECIFIC FINDING GIVEN BY THE LD. CWT(A), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CWT( A). THUS, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 12.1. SINCE THE FACTS ARE IDENTICAL, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THIS TRIBUNAL, WE UPHOLD THE ORDER OF THE LD.CWT(A) AND DISMISS THE APPEAL OF THE REVENUE. 13. THE ASSESSEE FILED C ROSS OBJECTION SUPPORTING THE ORDER OF THE CWT(A). SINCE THE ORDER OF THE CWT(A) IS UPHELD, THE CROSS OBJECTIONS OF THE ASSESSEE HAVE BECOME INFRUCTUOUS AND THE SAME ARE DISMISSED. 14. IN THE RESULT, APPEALS FILED BY THE REVENUE AS WELL AS THE CROSS OBJEC TIONS FILED BY THE ASSESSEE ARE DISMISSED. 9 W.T. A. NO S.06, 19 & 20/VIZ/2018 AND CO NOS.84/VIZ/2018 AND 37 & 38/VIZ/2019 SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, VISAKHAPATNAM ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD APRIL, 2019. S D/ - S D/ - ( . . ) ( . ) ( D.S. SUNDER SINGH ) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /VISAKHAPATNAM /DATED : 23 .04.2019 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - SRI GANAPATHIRAJU VENKATA SITA RAMA RAJU, PLOT NO.42, SHIVAJI GARDENS, KURMANAPALEM, VISAKHAPATNAM 2. / THE REVENUE JT . COMMISSIONER OF W E ALTH TAX (OSD), CENTRAL CIRCLE - 2, VISAKHAPATNAM (II) ASST . COMMISSIONER OF WEALTH TAX CENTRAL CIRCLE - 2, VISAKHAPAT NAM 3. THE PR.COMMISSIONER OF INCOME - TAX (CENTRAL), VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3 , VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM