ITO, WARD-7(2), HYDERABAD, HYDERABAD vs. KONIJETI ASHOK KUMAR, HYDERABAD, HYDERABAD

O R D E R Per Laxmi Prasad Sahu, A.M. : These three appeals are filed by the Revenue against the orders of Commissioner of Income Tax (Appeals)-3, Hyderabad dt.4.11.2016 and 4.4.2017 respectively, for the Assessment Year 2008-09.

Revenue are as under :

3. The Ld. CIT(A) ought to have taken the fact in cognizance that the property remained at Section 10(1) stage of the ULC Act and that the land has not got vested with the Government, in the absence of an order passed under Section 10(3) of the ULC Act.

4. The Ld. CIT(A) failed to appreciate that if the land was really under the ULC Act, the assessee as seller could not have

5. The Ld. CIT(A) ought to have remanded the matter for verification of additional evidences/submissions made by the assessee regarding striking off of survey numbers of the land in all documents as the same could have been verified with the buyer.

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

From the above grounds of appeal, it is clear that the issue involved in all the appeals are similar in nature therefore for the sake of convenience and brevity, we decide to take up and the decision of this appeal shall apply mutatis mutandis to other two appeals.

Accordingly, a notice u/s. 148 was issued and served on the assessee on 7.10.2014. In response to the notice issued by the I.T. Department u/s. 148 of the Act, the assessee filed a letter dt.4.11.2014 stating that the Return filed u/s. 139 of the Act may be treated as Return filed in response to the notice. Subsequently, other statutory notices were issued to the assessees. The assessee filed various documents relating to the Urban Land Ceiling Act (ULCA) and stated that the ULC Act is not in force in respect of the land under consideration therefore Section 50C of the Act is not applicable. The AR of the assessee also requested to the Assessing Officer that the matter Officer (DVO) but the Assessing Officer denied by holding as under :

The assessee requested to refer the valuation to the Valuation Officer, which is rejected for the reason that when the plea of Urban Land Ceiling itself is rejected, it would not be correct to refer the matter to DVO. Moreover, the valuation is not for any apparent reason i.e. location of the property, distance form the main road, surroundings and uneven/barren land etc. but only a pretext, which did not prevent any activity carried on in the land.

The Assessing Officer has also examined the details as filed by the assessee and accordingly he computed the capital gains. The proceedings also made in respect of other two assessees i.e. Shri K. Pavan Kumar and Smt. K. Usha Rani in the ratio of 50:50. Feeling aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the CIT(Appeals) and CIT(Appeals) observed after examining the details filed by the assessee, he allowed the appeal of the assessee and in respect of protective assessments the Revenue is in appeal before the Tribunal.

“ 6(b) All the survey numbers totaling to 5.35 Acres were subject matter of ULCA (Urban Land Ceiling Act.)

Court of Andhra Pradesh in 2002 against Government of Andhra Pradesh; Commissioner of Land Revenue, AP; Special Officer and Competent Authority, ULC; MRO, Asif Nagar and District Collector, Hyderabad.

Therefore as the property was covered by ULC Act, Sec. 50C cannot be invoked and SRO value cannot be taken as the sale consideration. In result, 1st, 2nd, 3rd, 4th and 5th grounds of appeals are treated as allowed.”

From the above, it is clear that the CIT(Appeals) has examined the issue on the basis of documents available before him and has decided the issue in favour of the assessee by stating that the land was under the ULC Act and in such situation the section 50C of the Act cannot be applied. We also gone through the order of the Assessing Officer and submissions made by the learned authorised representative of the assessee, we notice that the sale documents were executed as under :

We further notice that on the above date of sale, the land was under the ULC Act and the state legislature repealed on 27.3.2008 and thereafter division of Hon’ble jurisdictional High Court, the state government issued a Memo on 11.7.2012 declaring that the property does not attract the provisions of ULC Act and thereafter the Tahsildar vide letter dt.24.5.2014 allowed the construction on the land. We do not find any substance in the arguments advanced by the ld. DR and there is no infirmity in the order of CIT(Appeals). Therefore we dismiss the appeal of the Revenue.