SUNITHA MALU,HYDERABAD vs. ITO, WARD-5(1), HYDERABAD

At the outset, on perusal of the record, we find that there is a delay of 14 days in filing the present appeal before the Tribunal. With respect to the belated filing of the appeal, the Learned Authorized Representative (for short, “Ld. AR”) had drawn our attention to the petition requesting for condonation delay along with an affidavit, dated16/02/2026 filed by the assessee, wherein it is submitted that 3

After hearing the Learned Authorized Representatives of both parties and on perusal of the assessee’s petition requesting for condonation of delay along with the affidavit filed by the assessee (supra), we are of the considered view that the delay of 14 days in filing of the appeal before the Tribunal had crept in because of the bona fide reasons, i.e., due to ill health of the assessee and the same could not be uploaded in the absence of digital signature of the assessee, therefore, the same constitutes sufficient and reasonable cause. Hence,

Succinctly stated, the assessee had filed its revised return of income for the AY 2018-19 on 26/12/2018, declaring an income of Rs.23,05,820/-. Subsequently, the case of the assessee was selected for “limited scrutiny” for verifying “large deduction claimed under section 57 (Non-business ITR)”.

During the course of the assessment proceedings, the AO observed that the assessee, during the subject year, had sold (along with 4 other persons) Shop No.10 on the ground floor of Manjera Majestic Commercial at Kukatpally, Hyderabad on 06/12/2017, wherein her share in the sale consideration amounted to Rs. 45 lakhs. The AO observed that the assessee had disclosed the capital gain on the sale of the shop at Rs. 2,22,477/-, as under:

The AO observed that the assessee had both purchased/sold the aforementioned property vide assignment agreements and not through registered sale deeds. Accordingly, the AO held a conviction that the assessee by executing the agreement on 06/12/2017 had extinguished her rights in the subject property, which, thus, had resulted to transfer of the same. Accordingly, the AO was of the view that the profit/gain of Rs.

The AO observed that out of the aforesaid property admeasuring 6453 sq ft. the assessee had sold 3030 sq ft in the year 2014, while for, the balance of 3423 sq ft was sold during the subject year. The AO observed that the deemed sale consideration of the subject property admeasuring 6453 sq ft. was Rs. 4.80 crores.

As the stamp duty value of the subject property was not available, the AO resorted to section 50D of the Act and adopted its prevalent market price based on the information retrieved through the portal “The Telangana Land Registration and Stamps Department”, as per which the market value of the property was Rs. 24,242/- per sq ft. Accordingly, the AO worked out the market value of the property at Rs. 7,67,19,580/- . Thereafter, the AO worked out the 1/5th share of the assessee in the subject property at Rs.1,53,43,916/-.

Thereafter, the AO re-determined the long-term capital gains (LTCG) on the transfer of the subject property at Rs. 90,20,616/-.

Ostensibly, as the assessee had objected to the adoption of the market value of the subject property at Rs.24,242/- per sq ft, the AO, had made a reference to the District Valuation Officer (DVO) for 6 Sunitha Malu vs. ITO valuation of the property. As the report of the DVO was not received till the framing of the assessment on 22/04/2021, the AO framed the assessment with a specific observation that the order was passed subject to the receipt of the valuation report from the DVO, and suitable remedial action shall be taken as per the extant provisions of the Act. Accordingly, the AO, based on his aforesaid observation, had determined the income of the assessee at Rs. 1,18,94,826/-.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee had failed to participate in the proceedings before the CIT(A), therefore, he had dismissed the appeal on the ground of non-prosecution and had summarily approved the view taken by the AO. For the sake of clarity, we deem it apposite to cull out the observation of the CIT(A), as under:

1 The grounds of appeal, copy of assessment order, submissions of the appellant, statement of facts and Form 35 have been carefully considered and adjudicated as under;

2 The appeal was filed by appellant on 21.05.2021 against the order u/s. 143(3) r.w.s. 144B of the IT Act, 1961. In connection to the appeal, opportunities were provided to the appellant to substantiate his grounds of appeal on following dates: As can be seen from the above table, as many as four opportunities have been granted. On verification of the ITBA portal, it is observed that all the above-mentioned hearing notices got delivered to email hdmalu@rediffmail.com successfully. It is evident that the appellant is neither filing any details nor availing the opportunity to seek adjournment to file the same during the appellate proceedings under the principle of natural justice, TAX DEP

3 In this regard, the reliance is place on the decision of the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and Another (118 ITR 461) wherein it has been held that appeal does not mean merely filing of memo of appeal but also pursuing it effectively. In cases where the appellant does not want to pursue the appeal, appellate authorities have inherent power to dismiss the appeal for non- prosecution as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. Union of India in Excise Appeal No. 62 of 2009. While deciding the issue, the Hon'ble High Court of Bombay has referred to the observations of Hidayatullah, Chief Justice (as His AIR 1958 MP 260 wherein it was observed: -

4 This appeal has been filed by the appellant claiming that the action of the Assessing Officer is not supported by facts and laws and that it is unjust. In such a situation, it is for the appellant to furnish submissions with relevant evidence(s), case laws, if any, to support the claim. The 'burden of proof is always on the person who makes the claim. In this case, it is the appellant who has made the claim by filing the appeal. Thus, in cases where a particular receipt is sought to be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Since an appeal is nothing but the claim of the appellant that he has been unduly unjustifiably taxed, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so.

5 From the conduct of the appellant as per the facts noted above, it is clear that the appellant does not wish to pursue the appeal. Though the appellant filed appeal but remained non-compliant during the appellate proceedings also and not furnished any evidences to satisfy the appellate authority. Even otherwise on the merits of it also, I do not see any reason to differ with the findings of the AO. Since no attempt has been made by the appellant to discharge its onus. Hence,

0 In effect, the appeal filed by the appellant is dismissed.”

The assessee, aggrieved with the order of the CIT(A) has carried the matter in appeal before us.

We have thoughtfully considered the contentions advanced by the Learned Authorised Representatives of both parties, perused the orders of the authorities below and considered the material available on record.

Smt. S. Sandhya, Advocate, at the threshold of hearing of the appeal, submitted that though the AO had in the course of the assessment proceedings made a reference to the DVO for valuation of the subject property, but as the valuation report was not received by him till the framing of the assessment on 22/04/2021, therefore, he had taken the market value as the deemed sale consideration and computed the long term capital gains (LTCG) on the transfer of the subject property at Rs.90,20,616/-, with a rider that the order was being passed by him subject to the receipt of the valuation report of the DVO, pursuant whereto suitable remedial action can be taken as per extant provisions of the Act. Elaborating on her contention, the Ld.AR submitted that the report of the Valuation Officer-1, Valuation Cell, Hyderabad, dated 30/09/2021 was though received by the AO after the 9 Sunitha Malu vs. ITO framing of the assessment by him vide his order passed under section 143(3) r.w.s 144B of the Act, dated 22/04/2021, but he had till date not modified the determination of the long term capital gains (LTCG) despite having specifically stated so in the body of the assessment order. The Ld. AR submitted that as per the Valuation Report, dated 30/09/2021, the fair market value (FMV) of the subject property has been determined at Rs. 2.50 crores (3423 sq ft X Rs. 7303.54 per sq ft). The Ld.AR submitted that the subject matter in all fairness and in the interest of justice be set aside to the file of the AO with a direction to re- determine the capital gains by adopting the deemed sale consideration of the subject property falling to the share of the assessee at Rs.50 lakhs (1/5th of Rs.2.50 crores), i.e., in conformity with the value determined vide valuation report dated 30/09/2021 by the Valuation Officer-1, Valuation Cell, Hyderabad.

Per contra, Shri D. Praveen, Learned Senior Departmental Representative (for short, Ld. Sr-DR”) relied upon the orders of the authorities below.

We have thoughtfully considered the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the orders of the authorities below.

Admittedly, it is a matter of fact borne from the record that the AO had determined the long term capital gains (LTCG) on the transfer of 10 Sunitha Malu vs. ITO the subject property by the assessee vide an assignment agreement, dated 06/12/2017, by taking the prevalent market price based on the information retrieved through the portal of “The Telangana Land Registration and Stamps Department”, i.e., at Rs.24,242/- per sq ft. Be that as it may, the deemed sale consideration in the subject property was worked out in the hands of the assessee at Rs. 1,53,43,916/- with consequential determination of the long-term capital gain at Rs. 90,20,616/-.

Admittedly, the AO, while framing the assessment, had pursuant to the objection raised by the assessee to the adoption of the market value of the subject property at Rs. 24,242/- per sq ft. made a reference to the DVO for the determination of the fair market value (FMV). As the valuation report of the DVO was not received till the framing of the assessment on 22/04/2022, the AO has framed the assessment subject to a rider that on receipt of the report from DVO, suitable remedial action will be taken as per the extant provisions of the Act. However, we find that though the report of the Valuation Officer-1, Valuation Cell, Income Tax Department, Hyderabad, dated 30/09/2021 had been received by the AO/Department, Page Nos.30-35 of APB, wherein the fair market value (FMV) of the subject property sold by the assessee (along with 4 co-owners) had been determined at Rs.2.50 crores (3432

We thus, in terms of our aforesaid observations, set aside the matter to the file of the AO with a direction to consider the valuation report, dated 30/09/2021, received from Valuation Officer-1, Valuation Cell, Income Tax Department, Hyderabad, and re-determine the long term capital gains (LTCG) on transfer of the subject property based on the same.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.

The Principal Commissioner of Income Tax, Hyderabad.

"वभागीय""त"न"ध, आयकरअपील"यअ"धकरण /DR,ITAT, Hyderabad.