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Income Tax Appellate Tribunal, HYDERABAD ‘B’ BENCH, HYDERABAD.
Before: SHRI S.S. GODARA & SHRI L. P. SAHU
O R D E R Per Bench : The instant batch of six cases pertains to four assessees namely S/Sri Satya Sai Srinivas Potluri, Pandu Nadigepu Rameshwar, Anand Gudala, and Srinivas No. & Date of Proceedings Order of the CIT(A) u/s. 170/Hyd/2020 0189/CIT(A)-7/2017- 143 r.w.s.147 of 18 Dt.11.11.2019. the IT Act. 171/Hyd/2020 0186/CIT(A)-7/2017- 143 r.w.s.147 of 18 Dt.11.11.2019. the IT Act. 172/Hyd/2020 0191/CIT(A)-7/2017- 143 r.w.s.147 of 18 Dt.11.11.2019. the IT Act. 176/Hyd/2020 0189/CIT(A)-7/2017- 143 r.w.s.147 of 18 Dt.11.11.2019. the IT Act. 177/Hyd/2020 0191/CIT(A)-7/2017- 143 r.w.s.147 of 18 Dt.11.11.2019. the IT Act. 179/Hyd/2020 0189/CIT(A)-7/2017- 143 r.w.s.147 of 18 Dt.11.11.2019. the IT Act.
We notice during the course of hearing that all these instant six appeals have arisen on account of a search dt.25.09.2014 conducted in case of one Sri G. Bal Reddy and related group.
3. Learned CIT-DR fairly informs us that the relevant seized documents in the said search led the department to the corresponding tangible material against all these assessees which culminated in initiation of 147/148 assessments making various additions in their respective hands.
It emerges during the course of hearing that this tribunal’s co-ordinate bench order in Revenue’s appeals 1375 & 1379/Hyd/2019 decided on 11.3.2021 in connected cases has restored the very issue(s) back to the Assessing Officer for de novo consideration as under :
2. The Revenue have raised three identical grounds in its appeals however, the crux of the issue is that: “the ld. CIT (A) erred in law and on facts that the cancellation deed is not a registered document kept pending by the registration authority and hence the joint development agreement is not yet cancelled.”
The brief facts of the case are that all the three assessees are individuals related to each other earning agricultural income. The assessees Sri Pitla Krishna and Smt. Pitla Lakshmi filed their income tax return on 31/7/2009 declaring total income of Rs. 4,23,040/- and 3,13,963/- and agricultural income of Rs. 2,40,000/- and Rs. 1,80,000/- respectively. The assessee Sri Pitla Mohan Raj initially did not file his return of income however, in response to notice U/s. 148 of the Act filed his return of income on 6/12/2016 admitting total income of Rs. 2,30,500/-. A search and seizure operation U/s. 132 of the Act was conducted in the case of Sri G. BalReddy and his related group. During the course of the search and seizure operation and post search proceedings it was observed that that the assessee Shri Pitla Krishna along with wife Smt. Pitla Lakshmi and son Shri Mohan Raj had entered into a sale agreement coupled with registered General Power of Attorney vide Document No. 2234/2008 dated 30/07/2008 towards sale of their immovable property consisting of 14 Acres of land for an aggregate sale consideration of Rs. 14 Crs. It was further observed from the sworn statement dated 6/1/2015 recorded from Sri P. Krishna during the course of search proceedings that physical possession of the land was handed over to the vendee G. BalReddy. Since the SRO value of the land was Rs. 14,22,96,000/-, the Ld. AO invoked the provisions of section 50C of the Act and adopted the sale consideration at the SRO value of the property for computing the LTCG which worked out to Rs.4,72,89,652/- in the case of 4 171, 172 & 176, 177 & 179/Hyd/2020. each of the assessee. The assessees had failed to declare the LTCG in their respective returns of income since the sale transaction was cancelled.
4. At the outset, the Ld. AR submitted before us that the Ld. Revenue Authorities had held the transfer to be valid because the sale cancellation deed was not executed by way of a registered document. The Ld. AR further submitted that the sale document was executed by way of registered sale cancellation deed dated 07/03/2019. However, the same was kept as “pending document” and was released on 2/11/2019, by then the Ld. CIT (A) had passed the order on 22/7/2019 as the registered document was not produced before him. The Ld. AR therefore submitted that either the matter may be decided in the assessee’s favour since the registered sale cancellation deed is placed on record before the Tribunal or remitted back to the file of Ld. AO for de-novo consideration. The Ld. DR on the other hand argued in support of the orders of the Ld. Revenue Authorities and prayed for confirming the same.
We have heard the rival submissions and carefully perused the materials on record. Since the assessee has produced the registered sale cancellation document before us which goes to the root of the matter with respect to the validity of the sale or the transfer of the property as the case may be, in the interest of justice, we hereby remit the matter back to the file of the Ld. AO for de-novo consideration. It is also pertinent to mention that not producing the registered sale cancelation document at the appropriate time before the ld. Revenue Authorities is not attributable to the lapse on the part of the assessee as the same was withheld by the Registration Department which is beyond the control of the assessee.”
We thus adopt the very course of action herein as well and restore all the relevant grounds in instant six cases back to the Assessing Officer for his contiguous adjudication. The fact also remains that these assessees have raised legal grounds. It shall therefore be very much open for these to plead the same before the Assessing Officer in consequential proceedings as per law. Ordered accordingly.
5. All these six appeals ITA 170, 171, 172, 176, 177 & 179/Hyd/2020 are allowed for statistical purpose in above
Order pronounced in the open court on 6th Jan., 2022.