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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” , HYDERABAD
Before: SHRI LALIET KUMAR, HON’BLE & SHRI MADHUSUDAN SAWDIA
O R D E R PER LALIET KUMAR, J.M.
This appeal is filed by the assessee, feeling aggrieved by the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 21.02.2014 for the AY 2017-18 on the following grounds :
“1. The Learned Commissioner of Income Tax is not justified in confirming the addition of Rs.2,62,50,000/- made by the Assessing Officer towards 50% share of capital gains adopting the SRO value under Sec. 50C of Rs. 17,95,5.. as against Rs.12,70,50,000/- as certified by the SRO.
2. The Learned Commissioner of Income Tax (Appeals) is not justified in confirming the action of the Assessing Officer in adopting Rs. 17,95,50,000/-, as the value under Sec. 50C of the Act.
3. The Lower authorities failed to appreciate the fact that the Assessing Officer is not correct in ignoring the valuation certificate issued by the SRO.”
The appeal filed by the assessee is barred by limitation by 2 days. It has moved a condonation petition explaining reasons thereof. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the condonation petition, we condone the delay and admit the appeal for hearing.
Facts of the case, in brief, are that the assessee is engaged in the business of mining granite, processing it, and exporting the processed dimensional blocks to China, as well as making domestic sales. The assessee company also gave a piece of land to M/S Rasun Ace Infra Pvt. Ltd. for development into residential flats. The original return of income was e-filed on 30/10/2017, declaring a loss of Rs.2,24,35,491/-, later return of income was revised on 31/03/2018 to a loss of Rs. 3,70,62,272/- and further revised on 21/12/2018 to declare an income of Rs. 1,92,62,090/-. As per the records, assessee sold three properties during F.Y. 2016-17 for a sale consideration of Rs. 6,35,25,000/- to M/s. Rasun Ace Infra Private Limited, representing 50% of the total value. However, the stamp duty value of the property was Rs. 17,95,50,000/-, making the actual consideration at Rs. 8,97,75,000/-. As per Section 50C of the Income Tax Act, 1961, this higher value should be considered, resulting in escaped income of Rs. 6,35,25,000/- and hence, Assessing Officer issued a notice under Section 148 of the Income Tax Act, 1961, on 29.06.2021, after obtaining necessary sanctions as per Section 151. Thereafter, assessee submitted replies on 27/08/2022, 10/04/2023, 17/04/2023, and 08/05/2023, along with the computation of income, copies of current and cash credit accounts etc.
3.1. Assessing Officer observed that though the assessee company transferred the property at a value of Rs. 17,95,50,000/- as determined by the stamp valuation authority, but reported the value as Rs.12,70,50,000/- based on a market value certificate, however, did not provide a valid explanation for the discrepancy. Despite being questioned, the assessee continued to use the lower value. Hence, the assessing officer added the difference to the total income and initiated penalty proceedings for misreporting income and finally completed the assessment u/s 147 r.w.s. 144B of the Act and passed assessment order on 13.05.2023 interalia making addition of Rs.2,62,50,000/- towards capital gains.
Feeling aggrieved by the order passed by the assessing officer, assessee filed appeal before the Ld. CIT(A) / NFAC, who dismissed the appeal of assessee by holding as under :
“5. Decision : I have carefully gone through the facts of the case, Moreover, all notices were duly served upon the appellant through email. The appellant opted hot to respond the above notices for the reasons best known to him. No documents were produced before me in support of his GOA or to rebut the assessment order. In view of the above facts, it is clear that the appellant is not interested in prosecuting the present appeal on merits and therefore in absence of any evidence to rebut the assessment order, the assessment order is CONFIRMED and accordingly the appeal is dismissed. Hence all Ground of appeal raised by the appellant are dismissed.”
5. Feeling aggrieved with the order of ld.CIT(A), assessee is now in appeal before us.
6. Before us, ld.AR submitted that the assessee has failed to provide necessary information and appear before the lower authorities. Hence, the ld. AR requested the Bench to remand the matter back to the file of ld.CIT(A). Ld.AR further submitted that as the assessee has sufficient cause from putting in appearance before the lower authorities, matter may kindly be remitted back to the authorities below for afresh adjudication.
Per contra, the ld.DR relied upon the orders of lower authorities.
We have heard the rival contentions of both the parties and perused the material available on record and also the orders passed by the lower authorities. On perusal of the impugned order passed by ld.CIT(A), we found that ld.CIT(A) dismissed the appeal of assessee, as the assessee did not make any submissions to rebut the arguments of Assessing Officer though all the notices were duly severed upon the assessee through email. Even before the Assessing Officer, assessee company failed to submit the information properly why it had considered Rs.6,35,24,00/- instead of Rs.8,97,75,000/-, as sale consideration, received from the transaction with M/s. Rasun Ace Infra Private Limited being 50% of Rs.12,70,50,000/- as the difference amount of Rs.2,62,50,000/- has escaped from the assessment. Thus, the assessee has failed to prove its case before the lower authorities even after granting several opportunities. From para 5 of the order of ld.CIT(A), it is clear that ld.CIT(A) finds no reason to interfere with the order of Assessing Officer, as there was no submission of the assessee in support of grounds of appeal despite grant of various opportunities. However, in our view, the ends of justice will be met if the matter is remanded back to the file of ld.CIT(A) with a direction to decide the issue after considering the documents available on record and affording the opportunities of hearing to the assessee in accordance with law.
9. The assessee shall produce the relevant documents to prove its case and the ld.CIT(A) shall examine all those documents / evidence filed by the assessee and any other documents which may be filed by the assessee as additional evidence. Based on the above said observation, the ld.CIT(A) shall decide the issue in accordance with law and thereafter, pass a detailed speaking order dealing with the contentions of the assessee. Needless to say, we have not adjudicated any other ground, all the grounds are required to be adjudicated by the ld.CIT(A) in the remand proceedings. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the Open Court on 02nd July, 2024.