ASST. COMMISSIONER OF INCOME TAX, CIRCLE-9(1), HYDERABAD vs. MEKA JANAKIRAM & OTHERS, HYDERABAD

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ITA 1539/HYD/2017Status: DisposedITAT Hyderabad06 May 2021AY 2006-0715 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(Appeals) should have admitted the additional evidence in the form of the letter dated 20.1.2012 from APIIC, as the assessee submitted it was obtained after the AO's assessment and was not available earlier. The Tribunal also considered the letter dated 1.4.2009 filed before it, noting its relevancy to support the assessee's challenge to the DVO's valuation, which was based on factors like plot size, location, and approach from the main road, without considering the restrictive industrial use. The Tribunal found that the DVO's report did not take into account the industrial nature of the area developed by APIIC. The CIT(Appeals) had adopted twice the specified value fixed by APIIC for industrial plots, which resulted in a market value of Rs. 8,91,93,400, still less than the declared sale consideration of Rs. 9,06,00,000. Therefore, the Tribunal found no reason to interfere with the CIT(Appeals)'s conclusion in deleting the impugned addition.

What were the facts?

The assessee, M/s. Meka Janakiram & Others, a partnership firm, sold an industrial property in Sanathnagar, Hyderabad, for Rs. 9,06,00,000 in Assessment Year 2006-07. The Assessing Officer (AO) reopened the assessment under Section 147 and, invoking Section 50C, proposed to use the stamp duty valuation of Rs. 11,34,93,000 as the sale consideration. The AO referred the matter to the Department Valuation Officer (DVO) who reported the property's value at Rs. 15,99,81,400. The AO made an addition of Rs. 6,68,52,860 to the capital gains based on the DVO's valuation. The assessee appealed to the CIT(Appeals), who declined to admit additional evidence and upheld the AO's action. The assessee then appealed to the ITAT. The ITAT, in a prior proceeding, set aside the matter to the AO.

What were the issues?

1. Whether the Tribunal had to decide if the Commissioner of Income Tax (Appeals) erred in declining to admit additional evidence filed by the assessee, specifically a letter from Andhra Pradesh Industrial Infrastructure Corporation (APIIC) dated 20.1.2012, which stated the land rate in February 2006 was Rs. 3,750 per sq. metre. Assessee's Contention: The assessee argued that the letter dated 20.1.2012 was obtained only after the assessment was completed and was not available earlier, hence it could not be filed before the AO. The assessee also filed a letter dated 1.4.2009 from APIIC as additional evidence before the Tribunal, stating it was obtained subsequent to the CIT(A)'s order, which clarified that the land could only be used for industrial purposes. Revenue's Contention: The Revenue argued that the additional evidence should not be admitted as it was available during the assessment proceedings and should have been filed before the AO. The Revenue also opposed the admission of the letter dated 1.4.2009.

Which sections of the Income-tax Act were involved?

Section 50C,Section 143(3),Section 147,Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘ B ‘ BENCH, HYDERABAD.

Before: SHRI SATVEER SINGH GODARA & SHRI LAXMI PRASAD SAHU

For Appellant: Shri Rohith Majumdar (D.R.)
For Respondent: Shri Y. Ratnakar
Hearing: 7.4.2021Pronounced: 06.05.2021

O R D E R Per Shri S.S. Godara, J.M. : This Revenue’s appeal for Asst. Year 2006-07 arises from the Commissioner of Income Tax (Appeals)-17 Hyderabad’s order dt.5.5.2017 passed in case No.0507/CIT(A)-7/2016-17 in proceedings under Section 143(3) r.w.s. 254 of Income Tax Act, 1961 (‘the Act’). Heard both the parties. Case file perused.

2.

Coming to the Revenue’s sole substantive ground seeking to revive the Assessing Officer’s action making Long Term Capital Gains (LTCG) addition of Rs.11,34,93,000 as per Department Valuation Officer (DVO’s)

50C of the Act, both the learned representatives took us to the CIT(Appeals) order deleting the same as under :

3.

We have given our thoughtful consideration to rival pleadings against and in support of CIT(Appeals) foregoing detailed discussion deleting the impugned addition. The Revenue’s case as per the Assessing Officer’s stand is that the DVO’s report herein had determined final valuation of the assessee's property and the same ought not to have been disturbed in the CIT(Appeals) order keeping in mind all the corroborating material facts. We find no substance in the foregoing argument of Revenue for the clinching reason that the relevant capital asset herein is situated in industrial area developed by APIIC (a state government body itself) carrying necessary in-built conditions regarding the proposed activity to be carried out thereupon. The said asset could only be used for industrial and other specified purposes in an institutional / industrial area otherwise therefore. Learned department

DVO report therein has not taken into consideration the same as he had gone by other consideration regarding plot size, location, approach from the main road and nature of the locality only. It is further evident that the CIT(Appeals) has already adopted twice the specified value fixed by M/s. APIIC value for industrial plots and still the same comes to Rs.8,91,93,400 as against the declared sum of Rs.9,06,00,000. We thus find no reason to interfere with the CIT(Appeals) conclusion under challenge deleting the impugned addition.

4.

No other argument has been raised before us.

5.

This Revenue’s appeal is dismissed in above terms.

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