RAM NIVAS GOYAL,HYDERABAD vs. INCOME TAX OFFICER, WARD-7(3), HYDERABAD

Brief facts of the case are that, the assessee, an individual along with three others had sold an immoveable property situated at Maharajgunj, Hyderabad for a net sale consideration of Rs.1,20,62,500/-. The property was allegedly sold for a price below the market value and the Assessing Officer (AO) observed that the provisions of Section 50C of the Income Tax Act [Act] are applicable. Since the assessee did not file any return of income, the case of the assessee was re- opened u/s.147 of the Act.

Aggrieved, the assessee preferred an appeal before the CIT(A), who confirmed the order of AO and the assessee is in second appeal before the Tribunal.

The Ld.Counsel for the assessee, Shri K.A.Sai Prasad, reiterating the submissions made by the assessee before the authorities below, has drawn my attention to the assessee’s submissions before the AO which are placed at Pgs.1 to 3 of the Paper Book. He submitted that the assessee has clearly brought out the drawbacks and deficiencies in the property, such as property was occupied by the tenant viz., M/s.Hindustan Petroleum Corporation Ltd., [HPCL] for more than 50 years and though the lease period of HPCL ended on 30-06-2009 and the tenant HPCL is not ready to vacate the property, due to which, the property remained un-sold. It was also submitted that the property is situated in a by-lane i.e., more than 200 sft., away from the main road. Therefore, the property had to be sold at a lesser price. He also submitted that though all these elaborate submissions have been made before the AO and that these facts were also incorporated in the registered sale deed, demonstrating the difficulties/deficiencies in the property, the AO/CIT(A) have not taken the same into consideration and have summarily

Ld.DR, on the other hand, supported the orders of the authorities below and submitted that though the assessee has brought out the deficiencies in the property in the submissions before the AO, he has not made any specific request for referring the same to the Valuation Cell and therefore, the AO has proceeded to apply the provisions of Section 50C of the Act.

Having regard to the rival contentions and material on record, I find that the assessee is the owner of the property along with three others and the property is being occupied by the tenant, HPCL, who was not willing to vacate the premises even after the lapse of the lease period and also the property is situated in a by-lane more than 200 sft., away from the main road and that these facts have also been brought out in the registered sale deed. Both the AO as well as the CIT(A) have failed to note the relevant deficiencies and refer the matter to the DVO. In fact, in the case of the co-owner, Shri Rajender Prasad Goyal, the Ld.CIT(A) has considered all the relevant deficiencies to hold that the provisions of Section 50C are not

In the result, the appeal of assessee is allowed.

Shri Ram Nivas Goyal, C/o. Katrapati & Associates, 1-1-298/2/B/3, 1st Floor, Ashok Nagar, Hyderabad. 2. Income Tax Officer, Ward-7(3), Hyderabad.

CIT(Appeals)-3, Hyderabad.

Pr.CIT-3, Hyderabad.

D.R. ITAT, Hyderabad.

Guard File.