Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”: HYDERABAD
Before: SHRI SATBEER SINGH GODARA & SHRI LAXMI PRASAD SAHU
O R D E R PER L.P. SAHU, A.M.: This appeal filed by the assessee is directed against CIT(A) - 12, Hyderabad’s order dated 04/03/2019 for AY 2007-08 involving proceedings u/s 143(3) r.w.s. 254 of the Income Tax Act, 1961 ; in short “the Act on the following grounds of appeal: “1. The order of the Hon'ble CIT(A) Is erroneous in law as well as facts of the case.
2. The Hon'ble CIT(A) ought to have observed that there was no material on record to conclude that the share in :- 2 -: Sri Natakari Gopal, Hyd. the sale proceeds received by the assessee amounted to Rs.8,25,000/-.
3. The Hon'ble 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 with regard to sale price and it is only an assumed figure.
The assessing officer 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.
5. The Hon'ble 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. 11,00,000/- and assessee share was Rs.8,25,000/- as both figures were without any basis.
6. In the facts and circumstances of the case, the Hon'ble CIT(A) ought to have deleted the addition made by the assessing officer.
Any other ground will be raised at the time of hearing.” Briefly, the facts of the case are that the assessee 2. being a HUF, sold his land of Acre 0.30 guntas situated at Sy.No.139 of Malkapur village vide sale deed No.27230 dated 17.11.2006. The consideration mentioned in the document was Rs.1,50,000/- Initially the AO made assessment vide order u/s.144 dated 31.12.2009 assessing
:- 3 -: Sri Natakari Gopal, Hyd.
Long Term Capital Gains at Rs.24,91,860/-. Aggrieved by the order of the AO, the assessee went into appeal before the CIT(A)-III, Hyderabad. The CIT(A)-III, Hyderabad, dismissed the appeal of the assessee vide order dated 03.06.2014, stating that the assessee could not avail the opportunity afforded by the AO during the assessment proceedings. Aggrieved by the order of the CIT(A), the assessee went into appeal before the ITAT. The ITAT vide order in dated 21.01.2015, set- aside the assessment and directed to decide the issue afresh and complete the assessment after verification of the following points:
1. 1. Assessee should be given due opportunity. 2. AO should determine the correct status. 3. AO should determine the shares of the assessee.
4. AO should determine the price that assessee received so that correct capital gains could be brought to tax. 2.1 Accordingly, the AO issued notice u/s.143(2) on 12.08.2015 and notice u/s.142(1) on 07.03.2016. In response, the assessee's AR Sri S.B.R Patil, Advocate appeared and made submissions. After examination of the material available on record and the information furnished, the assessment was completed by the Assessing Officer u/s s.143(3) r.w.s. 254 on 31.03.2016, by making the addition of Rs. 8,25,000/- on account of long term capital gains by observing in the assessment order as under: 2.2 Regarding the arriving sale price: The assessee vide letter dated 03-122008 filed in this office on 04-12-2008
:- 4 -: Sri Natakari Gopal, Hyd. has stated that he has received Rs.11, 00, 000/ - from the purchaser towards sale of Ac. O. 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, sale price is considered as Rs.11 lakh.
2.3 Regarding the bringing of quantum of amount in the hand the assessee: Vide sale deed No.27230 dated 17-11- 2006 executed by the assessee as a vendor, it was mentioned in the document that assessee is executing the said sale deed as a HUF and his share was mentioned as 3/4th and the remaining 1/41h of the share pertains to his son Sri N.Praveen Kumar. Hence the quantum of amount in the hands of the assessee is being considered at Rs. 8,25,000 (3/4th of Rs. 11,00,000/-.
2.4 Regarding how the agricultural land considered as capital asset: As per section 2(14)(iii)(b), Capital Asset also includes Agricultural Land in any area within such distance, not being more than eight kilometers, from the local limits of any municipality or cantonment board referred to in item(a), as the Central Government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette". In this regard, reference is made to Central Government Notification u/s :- 5 -: Sri Natakari Gopal, Hyd.
2(1A)(C), proviso, Clause (II)(B) and section 2(l4)(III)(b): Urbanization of areas vide Notification No.(SO 9447) (File No. 164/ 3/ 87-ITA.1), dated 06-1-1994, wherein the list of notified municipalities and their respective distances to be considered for working out areas falling outside the local limits of municipality, are mentioned. In this regard, Sangareddy is the nearest municipality to the place where land is sold i.e Malkapur village is situated. All areas up to a distance of SKM [rom the Sangareddy municipal limits in all directions fall under the 'Capital Asset' as per section 2(14)(iii)(b} of IT Act. Malkapur village is abutting Sangareddy municipality, adjacent to Mumbai national highway. A copy of Map, indicating location of Malkapur, is attached to this order as Annexure-I. Therefore, as the area falls within 5 KM distance from nearest Sanga Reddy municipality, it does not qualify as a agricultural land within the meaning of section 2(l4)(iii)(b) of I. T Act, and hence partakes the character of a capital asset. The capital gain is thus chargeable to tax.
2.5 Determination of correct status: In this regard, in the sale deed No.27230 dated 17-11-2006 itself. it was mentioned that the sale deed is being executed by the assessee in his HUF status to the extent of his 3/4th of share in Ac. O. 30 guntas. In the submissions made by AR dt.15-03-20 16, in para 6, the status was claimed as HUF. Hence the assessment is correctly being made under the :- 6 -: Sri Natakari Gopal, Hyd.
HUF status. The regular assessment u/ s 144 at 31-12-2009 was also done in status of HUF. So, there is no difference of opinion between the Revenue and assessee in this regard.
2.6. Though it was mentioned in the sale deed that Rs.1,50,000/- is being received by the vendors, the assessee vide letter dated 03-12-2008 filed in this office on 04-12- 2008 has stated that he has received Rs. 11,00,000/ - from the purchaser towards sale of ik.0.30 guntas situated in Sy.No.139/ AA2,' Malkapur village, Kondapur mandal, Medak District. Hence, the consideration received by the assessee i.e. 3/4th of the share is taken at Rs. 8, 25,000/ -, treating the asset sold as a Capital Asset since it is situated in Malkapur village which is within 5 KM of Sanga Reddy municipality which is a notified municipality. As the assessee did not file return and did not submit details of cost of acquisition, the cost of acquisition is treated as NIL. The entire amount of Rs.8,25,000/- is reckoned as Long Term Capital Gains.
Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A) and before the CIT(A), inter- alia, submitted that in the absence of any material on record even in the course of reassessment proceedings, with regard to sale price, it is not proper to adopt the sale price at some figure other than that was mentioned in the registered document. Further, the sale price that might
:- 7 -: Sri Natakari Gopal, Hyd. have been mentioned in the transaction between Smt. Bhagya Laxmi and others or in the general letter filed which was signed by the assessee without understanding the contents cannot be the basis for computing the total income. Hence, the Hon'ble CIT(A) is requested to delete the addition made by the assessing officer.
4. The CIT(A) after considering the submissions of the assessee, confirmed the order of AO by observing as under: “I have carefully considered the submissions of the appellant 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 findings on each of the four issues, after examining all the information filed in the course of assessment proceedings. The sale value of the land is taken at Rs.11,00,000/·, 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 and 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, and was therefore assisted by a professional He cannot now take the plea that the letter he filed 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 appellant has been taken at 3/4th as per the sale document itself. The :- 8 -: Sri Natakari Gopal, Hyd.
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 confirmed.”
Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT.
Before us, the ld. AR of the assessee submitted that the original assessment order, the AO concluded the sale price at Rs. 24,91,860/- and the present AO fixed the sale price at Rs. 11 lakhs itself shows that there is no clarity or proper conclusion with regard to sale price of the said property. He further submitted that in the absence of any supporting material or any proper evidence or any proper conclusion the amount adopted by the AO at Rs. 11 lakhs as sale price cannot be held as valid.
7. On the other hand, ld. DR submitted that the sale value of the land is taken at Rs. 11,00,000/- as per the assessee’s own letter dated 04/12/2008. He, therefore, objected to the submissions made by the ld. AR that no supporting material is there to adopt the land value at Rs. 11 lakhs.
Considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. We find that when the ITAT remitted the issue to the file of the AO with a direction to decide the :- 9 -: Sri Natakari Gopal, Hyd.
issue 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 filed in this office on 04-12-2008 has stated that he has received Rs.11,00,000/- from the purchaser towards sale of Ac. O. 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, sale price is considered as Rs.11 lakh. Vide sale deed No.27230 dated 17-11-2006 executed by the assessee as a vendor, it was mentioned in the document that assessee is executing 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 the hands of the assessee is considered at Rs. 8,25,000/- (3/4th of Rs. 11,00,000/-). While confirming the addition made by the AO, the CIT(A) observed that the AO has duly complied with all the directions of the Hon’ble ITAT and has given his findings on each of the four issues after examining all the information filed in the course of assessment proceedings. Therefore, we do not find any infirmity in the order of the CIT(A) and upholding the same, we dismiss the grounds raised by the assessee.
:- 10 -: Sri Natakari Gopal, Hyd.
In the result, appeal of the assessee is dismissed in above terms. Pronounced in the open court on 24th November, 2021.