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Income Tax Appellate Tribunal, HYDERABAD ‘ B ‘ BENCH, HYDERABAD.
Before: SHRI S.S. GODARA & SHRI LAXMI PRASAD SAHU
Date of Hearing :27.05.2021. Date of Pronouncement : 04.06.2021. . O R D E R Per S.S. Godara, J.M. : The instant batch of five appeals for Assessment Year 2007-08 pertains to four assessees. First assessee Sri Nimmala Srinivas (HUF)’s and Revenue’s cross appeals & 475/Hyd/2011 are directed
2 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 against the CIT(A) -IV, Hyderabad’s order dt.30.12.2010 passed in case No.563/ACIT 6(1)/CIT(A)-IV/09-10. Second assessee Sri Nimmala Raghupati has filed CIT(A)-III, Hyderabad’s order dt.21.3.2013 in case No.263/CIT-III/2012-13; Revenue’s appeal ITA No.933/Hyd/2015 in case of third assessee Sri Nimmala Srinivas (Individual) is directed against the CIT(Appeals)-IV, Hyderabad’s order dt.13.03.2015 passed in case No.0456/2014-15/Dy.CIT, Cir.6(1)/CIT(A)/Hyd/2014-15 and last assessee Smt. Nimmala Suchitra’s appeal ITA No.1038/Hyd/2016 arises against the CIT(A)-VI, Hyderabad’s order dt.28.4.2016 in case No.0957/2014-15/CIT(A)-6 involving proceedings u/s. 143(3) in former two, sec. 263 in third and sec. 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short ‘the Act’, in fourth and fifth cases, respectively. Heard assessees’ A.R. as well as department representative(supra)) Case files perused.
3 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 2. We proceed appeal-wise for the sake of convenience and brevity. First assessee's appeal ITA 350/Hyd/2011 raises the following substantive grounds : “ 1. The impugned assessment order is passed much against the weight of evidence and contrary to law and as such, the said order is liable to be set aside.
The authorities below erred in taxing the sale transaction in respect of agriculture lands. They failed to appreciate the fact that the lands which were sold were agricultural one and is not a capital asset within the meaning of section 2(14)(iii) of the IT Act, 1961.
3. The authorities below erred in not deducting the amount of commission paid in the sale transaction. They failed to appreciate the evidence on record which clinicingly proved the fact of payment of the commission and as such, the same may be deducted from the sale consideration while computing the capital gains.
The authorities below erred in taking the FMV on the sold property as on 1.4.1981 at Rs.6,000 per acre against the claim of the appellant at Rs.70,000 per acre. The FMV adopted by the Assessing Officer is ridiculously 4 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 low and in uncertain term does not reflect the actual value. It is indeed surprising to note that the Sub-Registrar office has intimated the market value at Rs.1/- per sq. yd. and the learned officer has snot provided an opportunity to substantiate the FMV adopted by the appellant.
5. The learned Assessing Officer erred in charging interest u/s. 234C of the IT Act, 1961. Under the facts and circumstances of the appellant’s case, no interest is leviable. In any event, the calculation of interest is also not correct and as such, liable to be deleted.”
Learned AR submitted at the outset that the assessee is not pressing for its second substantive ground raising the issue of application of section 2(14)(iii) of the Act. The same is rejected as not pressed therefore.
4. Coming to the assessee's third substantive grievance that both the learned lower authorities have erred in law and on facts in disallowing its commission expenditure claim of Rs.5 lakhs involving brokerage services, Mr. Yadav, invited our attention to page 14 of paper book containing the corresponding brokers’ names/signatures.
5 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 It nowhere emerges from a perusal thereof as to whether the assessee/HUF had incurred the impugned commission expenditure qua the corresponding land transaction as per the agreement and sale deed or not. And also that it’s eponymous karta; who had paid the impugned sum has not clarified all these details. We hold in this backdrop that both the learned lower authorities have rightly disallowed the assessee's impugned claim of Rs.5 lakhs. It fails in third substantive ground therefore.
Next comes assessee's third substantive grievance regarding FMV of the property in question as on 1.4.1981 claimed @ Rs.70,000 per acre as against that granted @ Rs.6,000/- per acre only. Suffice to say, we notice from page 52 in assessee's paper book that the learned lower authorities have already accepted Sri Nimmala Anjaiah’s (individual/brother)’s claim of Rs.70,000 for the very asset(s). These clinching facts have got unrebutted from the Revenue’s side. We thus issue necessary directions to the Assessing Officer to adopt the impugned FMV/assessee's land cost of acquisition @ Rs.70,000 per 6 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 acre as on 1.4.1981 to be followed by necessary consequential computation. This third substantive ground is accepted in assessee's favour. No other ground has been pressed before us. This first and foremost appeal 350/Hyd/2011 is partly accepted in above terms.
We next take up Revenue’s cross appeal 475/Hyd/2011. It transpires at the outset that the department has sought to raise two substantive grounds involving corresponding sum(supra)) of Rs.80 lakhs and Rs.20.50 lakhs i.e. less than having the prescribed tax effect of Rs.50 lakhs as per CBDT Circular dt.08.08.2019 having retrospective effect qua pending appeals as well. This appeal ITA 475/Hyd/2011 is dismissed for involving lower tax effect of less than Rs.50 lakhs therefore.
We now take up second assessee Sri Nimmala Raghupati’s appeal CIT(A)’s order passed in section 263 revision proceedings thereby forming the corresponding assessment /reassessment dt.18.11.2010 as 7 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 an erroneous on causing prejudice to interest of the Revenue. We notice at the outset from a perusal of the CIT’s order that he has nowhere held the said assessment as both erroneous as well as causing prejudice to the interest of revenue; simultaneously, as it is held mandatory in Malabar Industrial Co, Vs. CIT 243 ITR 83 (SC) and other judicial precedents. We thus reverse the learned CIT’s impugned order for this precise reason alone. All other pleadings are rendered infructuous. The second assessee's appeal ITA 1229/Hyd/2013 is accepted.
We now take up Revenue’s appeal in ITA 933/Hyd/2015 in case of third assessee Sri Nimmala Srinivas ( Individual ). It’s is only the case that the Assessing Officer had rightly assessed the impugned Long Term Capital Gains (LTCG) in the individual’s hands. The same however goes contrary to the admitted factual position that the department has itself assessed the eponymous HUF (supra) for the very same income. The CIT(A)’s detailed discussion to this effect read as under :
8 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 “2. Sri Nirmala Srinivas filed Return of Income for the A.Y. 2007-08 on 21/09/2007 in the status of HUF by admitting an income at Rs.1.61,34,340/- which includes the long term capital gain of rs.1,57,05,993/-. The A.O. noticed that the assessee HUF filed the ……..
It is sufficiently clear from the perusal of the foregoing detailed discussion that once the impugned LTCG has been assessed in HUF’s hands, the same has nolegs to stand qua the individual assesseeherein so as to avoid double taxation. We thus find no merit in Revenue’s instant grievance. This appeal ITA 933/Hyd/2015 is rejected therefore.
Lastly comes fourth assessee Smt. Nirmala Suchitra in ITA No.1038/Hyd/2016. Her sole substantive ground challenges correctness of both the learned lower authorities’ action assessing her for an amount of Rs.20lakhs received in the transfer agreement/sale deed. Her only case before us is that her husband Sri Nimmala 12 & 475/Hyd/2011; 1229/Hyd/2013; 933/Hyd/2015 & 1038/Hyd/2016 Srinivas (supra) already stands assessed for the very income and therefore, the impugned addition deserves to be deleted. We make it clear that the assessee has not even filed copy of the agreement or the sale deed that the impugned sum does not pertain to her share in the property. Be that as it may, hon'ble apex court’s land mark decision in ITO Vs. C.S. Atchaiah 218 ITR 239 (SC) has settled the law long back that the Assessing Officer can and he must tax the right person and the right person alone qua the income in issue. We conclude in this factual and legal backdrop that it is the assessee only who is liable to be assessed qua the impugned sum of Rs.20 lakhs received by her in her individual capacity and not her husband in foregoing terms. Her sole substantive ground as well as the main appeal in ITA 1038/Hyd/2015 is declined.
To sum up, first assessee's ITA 350/Hyd/2011 is partly allowed; Revenue’s twin appeals ITA 475/Hyd/2011 and 933/Hyd/2015 are dismissed; Second assessee's appeal ITA 1229/Hyd/2013 is `allowed and above terms. A copy of this common order be placed in the respective files.