What did the Tribunal hold?

The Tribunal restored the assessee's grievances back to the CIT(A) for fresh adjudication. The CIT(A) was directed to provide three effective opportunities of hearing to the assessee.

The assessee's appeal concerned the fair market value of a capital asset and the disallowance of cost of improvements. The CIT(A) had passed an ex-parte order without providing a further opportunity to the assessee.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order and denying the assessee an opportunity to present evidence regarding the fair market value and cost of improvements.

Vootkuri Muthyalugoud, R.R.Dist vs ITO | ITAT Hyderabad 2021

Income Tax Appellate Tribunal, HYDERABAD BENCHES : BENCH “B” HYDERABAD

Before: SHRI S.S. GODARA & SHRI L.P. SAHU

Hearing: 07/04/2021Pronounced: 11/06/2021

O R D E R PER S.S. GODARA, J.M.

This asessee’s appeal for AY 2009-10 arises from CIT(A)-10 Hyderabad’s order dated 31.08.2016 passed in case no. 69/2015-16 involving proceedings u/s 143(3) of the Income Tax Act, 1961 for short ‘the Act’.

Heard both the parties. Case file perused.

Assessee has raised the following substantive grounds in the instant appeal. “1. The order of the ld.CIT(A) is erroneous both on facts and in law.

The ld.CIT(A) erred in deciding the appeal without providing further opportunity to the appellant.

The ld.CIT(A) erred in law in confirming the market value as on 14.1982 of the property acquired at Rs1/- per sq.yard as against Rs.130/- per sq.yard adopted by the appellant.

The ld.CIT(A) ought to have considered the fact that the land in Keesara village and Mandal is nearer to ECIL and other Industrial areas of Ghatkesar Mandal.

The ld.CIT(A) ought to have considered the cost of improvement claimed by the appellant of Rs.15,45,000/-.

The ld.CIT(A) ought to have seen that while converting agricultural land into house sites, the appellant had undertaken survey of land, preparation of lay out, laying of roads and other amenities were provided to facilitate the sale of the plots and, therefore the AO is not justified in disallowing cost of improvements claimed by appellant.

Any other ground that may be urged at the time of hearing.”

2. We have given our thoughtful consideration to rival pleadings. It transpires at the outset that the CIT(A)’s lower appellate order under challenge confirming Assessing officer’s action on both counts qua fair market value of the capital asset in question as well as disallowance of cost of improvements (supra); has been passed ex party. There is further no indication in para 4 of the lower appellate order as to whether the assessee has been served the relevant hearing notice(s) before the last date i.e. 13.7.2016. Coupled with this, learned authorized representative invited our attention to the assessee’s additional evidence in pages 1 to 4 inter-alia containing details of proceedings of board resolution on legal services regarding the land in issue as well as application relating to market value of the immovable property prima facie going to root of the matter; but, could not be placed on record either before the Assessing officer or before the CIT(A). We make it clear that the foregoing additional evidence relevance per se has also not been disputed at Revenue’s behest as well. Faced with this situation, we deem it fit and proper to restore assessee’s twin substantive grievances back to the CIT(A) for a fresh and proper adjudication as per law within three effective opportunities of hearing. The assessee or his authorized representative shall appear before the CIT(A) on or before 30/09/2021 along with all the relevant evidence(s); to be put to verification within three effective opportunities of hearing.

This assessee’s appeal is allowed for statistical purposes in above terms. Pronounced in Open Court on 11th June, 2021.

VOOTKURI MUTHYALUGOUD, R.R.DIST,R.R.DIST vs. ITO, WARD-8(3), HYDERABAD, HYDERABAD

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