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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ SMC Bench, Hyderabad
Before: Smt. P. Madhavi Devi
This is assessee’s appeal for the A.Y 2011-12 against the order of the CIT (A)-1, Hyderabad, dated 26.7.2018.
At the outset, it is noticed that there is a delay of 1 day in filing of the appeal before the Tribunal and an affidavit in support of condonation of the delay was filed by the assessee. Taking into consideration the fact that the delay is only one day, the delay is condoned.
Brief facts of the case are that the assessee, an individual, deriving income from business, filed his return of income for the A.Y 2011-12 on 13.6.2012 declaring total income of Rs.1,73,400/-. According to the information received by the Department, the assessee has sold two immovable properties vide document No.1993/2010 and 1994/2010 both dated 29.6.2010
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during the relevant previous year for a value of Rs.9,22,000/- each as against the SRO value of Rs.16,38,000/- each respectively. The AO observed that the SRO value being higher than the sale consideration mentioned in the sales deed, the provisions of section 50C are applicable. Accordingly, a show- cause notice was issued to the assessee to which the assessee replied stating that with regard to the sale of property during the financial year 2010-11, there was capital loss and hence he has not disclosed the capital loss in his I.T. returns. The AO however, did not accept the assessee’s contention and adopted the SRO value of Rs.16,38,000/- for each of the flat as sale consideration u/s 50C and computed the long term capital gain accordingly. Aggrieved by the same, the assessee filed an appeal before the CIT (A) and also made a claim of exemption u/s 54 of the I.T. Act. The CIT (A), however, confirmed the order of the AO and rejected the claim of deduction u/s 54 on the ground that the said claim was not made in the return of income and therefore, is not allowable.
The learned Counsel for the assessee submitted that the property is surrounded by various deficiencies due to which the assessee has received less consideration than the SRO value and since the assessee had raised this objection before the CIT (A), he ought to have referred the matter to the file of the Valuation Officer, rather than confirming the order of the AO. Further, he also submitted that the assessee’s claim of deduction u/s 54 should have been considered by the CIT (A).
The learned DR, however, supported the orders of the CIT (A).
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Having regard to the rival contentions and the material on record, I find that the assessee has raised additional ground vide letter dated 31.10.2019 i.e. at the time of hearing. The regular grounds raised by the assessee as well as the additional ground are as under: Regular Grounds: “1. On the facts and in the circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) -1, Hyderabad is erroneous and bad in law.
On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) -1, Hyderabad ought not to have dismissed the appeal filed.
On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) -1, Hyderabad erred in upholding the orders passed by the learned Assessing Officer being the ITO- Ward 4(3), Hyderabad determining the normal income of the appellant at Rs. 2,65,400/- and Long-Term Capital gains at Rs. 20,87,555/-by invoking the provisions of section 50C of the IT Act 1961 vide order u/s 143 rws 147 of the IT Act, 1961 dated 14/3/2016 and which Long Term Capital Gains was revised to Rs. 27,84,483/- vide modification order dated 16/09/2016.
On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) -1, Hyderabad erred by upholding the wrongful act of the learned Assessing Officer in invoking section 50C of the IT Act 1961 for determining the sale consideration and by not considering the value as per Section 50C for determining the indexed cost of Acquisition.
On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) -1, Hyderabad erred by not considering the claim of the assessee/appellant for deduction u/s 54 of the Income Tax Act, 1961.
LEAVE
The Appellant craves leave to alter, amend or delete any of the above grounds of appeal and/or to add any fresh ground(s) of appeal at or before the hearing of the appeal”
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Additional Ground
“1. On the facts and in the circumstances of the case, the learned CIT (A) being the first appellate authority erred by not referring to the Valuation Officer for determining the appropriate value of the property since the assessee represented during the assessment as well as the first appellate proceedings that the actual market value of the property was much less than the value adopted by the SRO for Stamp Duty purpose due to local factors.
Since the additional ground raised by the assessee is for reference to the Valuation Officer and the assessee had already raised the said objection before the CIT (A), I deem it fit and proper to admit the same and adjudicate as under. Since the assessee had raised its objection to the adoption of the SRO value u/s 50C of the Act, by pointing out certain deficiencies in the property, I deem it fit and proper to set aside the order of the CIT (A) and remand the issue to the file of the AO with a direction to refer the valuation of the property to the valuation cell and recompute the capital gain after giving the assessee a fair opportunity of hearing including claim of deduction u/s 54 made by the assessee on a property the assessee.
In the result, assessee’s appeal is treated as allowed for statistical purposes. Order pronounced in the Open Court on 1st Nov. 2019. Sd/- (P. MADHAVI DEVI) JUDICIAL MEMBER
Hyderabad, dated 1st Nov. 2019. Vinodan/sps
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Copy to:
1 Shri Bathula Venugopal C/o Y.V. Bhanu Narayan Rao, C.A. 10-2- 195, Opp: Deccan Club, East Maredpally, Secunderabad 500026 2 ITO Ward 4(3) Hyderabad 3 CIT (A)-1 Hyderabad 4 Pr. CIT – 1 Hyderabad 5 The DR, ITAT Hyderabad 6 Guard File
By Order
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