FAROOQI FAMILY TRUST,HYDERABAD vs. INCOME TAX OFFICER, WARD-4(2), HYDERABAD

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ITA 338/HYD/2019Status: DisposedITAT Hyderabad18 December 2019AY 2007-083 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee should be given a proper opportunity to present its case before the Assessing Officer. The matter was remanded to the AO for a decision after providing a reasonable opportunity of hearing.

What were the facts?

The assessee trust sold a plot of land for Rs. 70,00,000/- which was below the market value of Rs. 1,18,80,000/-. The Assessing Officer (AO) reopened the assessment to tax capital gains and disallowed deduction under Section 54, considering the trust ineligible.

What were the issues?

Whether the assessee trust is eligible for deduction under Section 54 for investment in a residential house, and whether the capital gains should be computed based on the sale consideration or the stamp duty valuation.

Which sections of the Income-tax Act were involved?

Section 50C,Section 54,Section 144,Section 147

AI-generated summary — verify with the full judgment below

Before: SMT. P. MADHAVI DEVI & SHRI A. MOHAN ALANKAMONY

For Appellant: Shri K.A. Sai Prasad
For Respondent: Shri Nilanjan Dey
Hearing: 18/12/2019Pronounced: 18/12/2019

+IN THE INCOME TAX A PPELLATE TRIBUNAL HYDERABAD BENCH ‘B', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER

ITA No. 338/Hyd/2019 Assessment Year: 2007-08 Farooqi Family Trust, vs. Income-tax Officer, Hyderabad. Ward – 4(2), Hyderabad. PAN – AAATF 4607 Q Appellant Respondent Assessee by: Shri K.A. Sai Prasad Revenue by: Shri Nilanjan Dey Date of hearing: 18/12/2019 Date of pronouncement: 18/12/2019 O R D E R PER P. MADHAVI DEVI, J.M.:

This is an appeal filed by the assessee against the order of CIT(A) – 8, Hyderabad dated 22/01/2019 for AY 2007-08.

2.

Brief facts of the case are that assessee had sold a plot admeasuring 515 Sq. Yds. to Bawarchi Restaurant at RTC X Roads for a sale consideration of Rs. 70,00,000/- during FY 2006-07 as against the market value of the same at Rs. 1,18,80,000/-. Therefore, the assessment was reopened to bring to tax the capital gains arising out of the said transaction. The assessee objected to the proposed capital gain tax by applying provisions of section 50C of the Ac and

2 I.T.A. No. 338/Hyd/19 Farooqi Family Trust, Hyd.

also claimed deduction u/s 54 of the Act in respect of the investment made in a residential house. However, AO observed that the assessee trust was for the benefit of the family members in the Trust and as there is no deduction u/s 54 available to the family trust, the entire sale consideration as per the SRO value of Rs. 1,18,80,000/-is to be brought to tax. Accordingly, the assessment was completed u/s 144 rws 147 of the Act. 3. Aggrieved, the assessee preferred an appeal before the CIT(A) by filing written submissions. However, none appeared before the CIT(A) for personal hearing and, therefore, the CIT(A) confirmed the order of AO and the assessee is in second appeal before the Tribunal. 4. The ld. counsel for the assessee submitted that the assessee has strong case on merits and, therefore, the assessee should be given an opportunity of hearing before the CIT(A). 5. The ld. DR, on the other hand, supported the orders of authorities below. 6. Having regard to the rival contentions and particularly to the fact that the CIT(A) has not disposed of the objections of the assessee raised in the detailed written submissions filed before him, we are of the opinion that the assessee should be provided a proper opportunity of presenting its case before the AO. In view of the same, we deem it fit and proper to remand

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the issue to the file of the AO with a direction to decide the appeal in accordance with law and after providing reasonable opportunity of hearing to the assessee.

7.

In the result, appeal of the assessee is treated as allowed for statistical purposes. Pronounced in the open court on 18th December, 2019.

Sd/- Sd/- (A. MOHAN ALANKAMONY) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, dated 18th December, 2019. kv

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