VENUGOPAL REDDY GELIVI,HYDERABAD vs. ITO (INT TAXN)-1, HYDERABAD

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ITA 393/HYD/2025Status: DisposedITAT Hyderabad03 July 2025AY 2015-169 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer was justified in invoking Section 50C and treating the SRO value as the deemed sale consideration for calculating capital gains. The assessee's failure to comply with notices led to a best judgment assessment.

What were the facts?

The assessee, an NRI, along with co-owners, sold an immovable property for Rs. 60,00,000, which was less than the SRO value of Rs. 66,36,000. The Assessing Officer initiated reassessment proceedings for escaped capital gains.

What were the issues?

Whether the Assessing Officer correctly invoked Section 50C by considering the SRO value as deemed sale consideration for capital gains. Whether the best judgment assessment under Section 144 was valid due to non-compliance by the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 142(1),Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘A‘Bench, Hyderabad

For Respondent: Shri Vinod Kumar Suthar, Shri Gurpreet Singh, Sr.AR
Pronounced: 03.07.2025

प्रति रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.

The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals) 10, Hyderabad, dated 29.10.2024, which in turn arises from the order passed by the Assessing Officer (for short “A.O.”) under Section 147 r.w.s. 144 of the Income Tax Act, 1961 (for short “the Act") dated 27.04.2023 for A.Y. 2015-16.

Succinctly stated, the A.O. observed that the assessee along with three other co-owners, had during the subject year sold an immovable property viz. House No.SRT-267, bearing Municipal No.7-2-488, admeasuring 150 Sq.yards (equivalent to 125.42 Sq.mtrs), situated at Industrial Housing Colony, Sanatnagar, Hyderabad, vide a Sale Deed Document No. 2340 of 2014, dated 10.12.2014, which was registered with the office of the Joint Sub- Registrar-7, S.R. Nagar, Hyderabad, for a total sale consideration of Rs.60,00,000/- as against the SRO value of Rs.66,36,000/- wherein his share in the sale consideration was one-fourth. The A.O. observed that, as per the information available on record, the income of the assessee on account of “capital gains” arising from the aforesaid transfer of his share in the property had escaped assessment, initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act, dated 26.03.2021 was issued to the assessee.

However, the assessee did not file his return of income in compliance to the notice u/s 148 of the Act, dated 26.03.2021.

Also, the notice issued by the A.O. u/s 142(1) of the Act, dated 20.01.2023 was nor complied with by the assessee. Considering the aforesaid facts, the A.O. was constrained to proceed with and frame the assessment to the best of his judgment u/s 144 of the Act.

During the course of assessment proceedings, the A.O. observed that the assessee, who is an NRI, had, along with his wife, had sold the subject immovable property vide a sale deed, dated 10.12.2014 that was registered with the Joint Sub-Registrar–7, S.R. Nagar, Hyderabad, for a total sale consideration of Rs. 60,00,000/- as against the SRO value of Rs. 66,36,000/-.

Accordingly, the A.O. triggered the provisions of Section 50C of the Act, and by treating the market value (S.R.O. Value of Rs.66,36,000/-) as the deemed sale consideration received on the sale of the subject property, determined the “Long-Term Capital Gains” (“LTCG

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