ACIT, CHENNAI v. Shri G.Muralidhar, Bangalore

ITA 1955/CHNY/2008 | 2002-2003
Pronouncement Date: 09-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 195521714 RSA 2008
Assessee PAN AFKPM6731M
Bench Chennai
Appeal Number ITA 1955/CHNY/2008
Duration Of Justice 2 year(s) 11 month(s) 6 day(s)
Appellant ACIT, CHENNAI
Respondent Shri G.Muralidhar, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 09-09-2011
Date Of Final Hearing 25-08-2011
Next Hearing Date 25-08-2011
Assessment Year 2002-2003
Appeal Filed On 03-10-2008
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI A BENCH CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. N.S. SAINI A .M. I.T.A. NO. 1955/MDS/2008 ASSESSMENT YEAR: 2002-03 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE XIII NEW BLOCK VI FLOOR 121 N.H. ROAD CHENNAI 600 034. VS. SHRI G. MURALIDHAR NO.512 10 TH B MAIN ROAD I BLOCK JAI NAGAR BANGALORE 560 011. [PAN:AFKPM6731M] (APPELLANT) (RESPONDENT) I.T.A. NO. 1987/MDS/2008 ASSESSMENT YEAR: 2002-03 SHRI G. MURALIDHAR 46 HALLS ROAD KILPAUK CHENNAI 600 010. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE XIII CHENNAI 600 034. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHAJI P. JACOB SR. DR ASSESSEE BY : SHRI T. BANUSEKAR C.A. DATE OF HEARING : 25.08.2011 DATE OF PRONOUNCEMENT 09.09.2011 ORDER PER U.B.S. BEDI J.M. THESE TWO CROSS APPEALS ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY TH E LD. CIT(A) XII CHENNAI DATED 11.06.2008 RELEVANT TO THE ASSESSMENT YEAR 2002-03. 2. IN THE APPEAL OF THE REVENUE THE ISSUE RAISED IS WITH REGARD TO THE LD. CIT(A)S ACTION IN FIXING OF FAIR MARKET VALUE AS O N 01.04.1981 AT ` . 2.50 LAKHS PER I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .1 11 195 9595 955 & 19 5 & 19 5 & 19 5 & 1987 8787 87/MDS/ /MDS/ /MDS/ /MDS/08 0808 08 2 GROUND IN THE ABSENCE OF EXISTENCE OF ANY REAL SALE WHEREAS IN THE APPEAL OF THE ASSESSEE THE CHALLENGE IS WITH REGARD TO FIXING OF FAIR MARKET VALUE AS ON 01.04.1981 AT ` .2.50 LAKHS PER GROUND WHEN AS PER ASSESSEES VALUE R IT IS ` .7.00 LAKHS PER GROUND WHEN THE LD. CIT(A) HAS FAILED TO CONSIDER INDEX COST OF THE BUILDING NOT ALLOWED AS DEDUCTION AND EXEMPTION UND ER SECTION 54 FOR LONG TERM CAPITAL GAIN IN WORKING AND WAS ALSO NOT ALLOWED. 3. THE ONLY GROUND RAISED BY THE DEPARTMENT AND SE COND ISSUE RAISED IN THE APPEAL OF THE ASSESSEE PERTAINS TO FIXING THE FAIR MARKET VALUE AT ` .50 000/- BY THE ASSESSING OFFICER AGAINST ` .7.00 LAKHS DECLARED BY THE ASSESSEE AND ` .2.50 LAKHS BY THE LD. CIT(A) AND IT IS COMMON GROUND OF BOTH T HE SIDES THAT THE ISSUE IS COVERED BY THE DECISION OF THE A BENCH OF ITAT IN THE CASE OF TWO CO-OWNERS IN ITA NOS. 2944 & 2945/MDS/2005 DATED 13.04.2007. SO BOTH THE PARTIES HAVE AGREED AND SUBMITTED THAT THE DECISION OF THE ITAT IN THE CASE OF TWO OTHER CO- OWNERS TO BE ADOPTED HERE FOR FIXING THE FAIR MARKE T VALUE AT ` .1.00 LAKHS IN ORDER TO DETERMINE THE CAPITAL GAINS. SINCE THE ISSUE IS SQU ARELY COVERED BY EARLIER DECISION OF THE TRIBUNAL IN THE CASE OF OTHER TWO CO-OWNERS THEREFORE WE DIRECT THE ASSESSING OFFICER TO ADOPT ` .1.00 LAKHS AS FAIR MARKET VALUE TO DETERMINE THE CAPITAL GAINS. THIS DISPOSES OF THE APPEAL OF THE R EVENUE AND SIMILAR ISSUE RAISED BY THE ASSESSEE. 4. AS REGARDS FIRST ISSUE IN THE APPEAL OF THE ASS ESSEE THE CHALLENGE IS WITH REGARD TO REOPENING OF THE ASSESSMENT. THE LD. COUN SEL FOR THE ASSESSEE I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .1 11 195 9595 955 & 19 5 & 19 5 & 19 5 & 1987 8787 87/MDS/ /MDS/ /MDS/ /MDS/08 0808 08 3 SUBMITTED THAT IN VIEW OF THE RELEVANT PROVISIONS THE ASSESSMENT ALREADY FRAMED COULD NOT BE REOPENED BECAUSE ALL MATERIAL FACTS W ERE PLACED BEFORE THE ASSESSING OFFICER AT THE TIME OF CONSIDERING AND AC CEPTING THE RETURN OF THE ASSESSEE. THEREFORE HIS ACTION IS NOT JUSTIFIED. 5. THE LD. DR SUBMITTED THAT PRIOR TO REOPENING UN DER SECTION 148 THE RETURN WAS ONLY PROCESSED UNDER SECTION 143(1) AND THERE I S NO ASSESSMENT ORDER HAVING BEEN PASSED. HENCE THE ISSUE IS SQUARELY COVERED B Y THE HONBLE APEX COURTS DECISION IN THE CASE OF ACIT V. RAJESH JHAVERI STOC K BROKERS P. LTD. 291 ITR 500. THEREFORE THE PLEA OF THE ASSESSEE IN THIS REGARD SHOULD BE DISMISSED. 6. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDERI NG THE MATERIAL ON RECORD WE FIND THAT THE RETURN IN THIS CASE WAS FILED ON 3 1.07.2002 WHICH WAS ONLY PROCESSED BECAUSE NO ASSESSMENT ORDER UNDER SECTIO N 143(3) HAS BEEN PASSED AND THE CASE HAS BEEN REOPENED BY ISSUING AND SERVI NG OF NOTICE WITHIN 4 YEARS I.E. ON 23.03.2007. THEREFORE IN OUR VIEW THE INI TIATION OF REASSESSMENT PROCEEDINGS CANNOT BE HELD TO BE BAD IN LAW IN VIEW OF THE HONBLE SUPREME COURTS DECISION IN THE CASE OF ACIT V. RAJESH JHAV ERI STOCK BROKERS P. LTD. (SUPRA) AS CITED BY THE LD. DR. AS SUCH THE APPEAL OF THE ASSESSEE ON THIS GROUND IS DISMISSED. 7. THE NEXT ISSUE RAISED IN THE APPEAL OF THE ASSE SSEE IS WITH REGARD TO INDEX COST OF THE BUILDING NOT ALLOWED AS DEDUCTION AND I T WAS SUBMITTED BY THE LD. I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .1 11 195 9595 955 & 19 5 & 19 5 & 19 5 & 1987 8787 87/MDS/ /MDS/ /MDS/ /MDS/08 0808 08 4 COUNSEL OF THE ASSESSEE THAT THE LD. CIT(A) HAS FAI LED TO APPRECIATE THAT THE INDEX COST OF BUILDING IS NOT CONSIDERED WHILE ARRIVING A T THE LONG TERM CAPITAL GAIN SO THE SAME SHOULD BE DIRECTED TO BE ALLOWED. WHEREAS THE LD. DR SUBMITTED THAT THE ISSUE DOES NOT ARISE FROM THE ORDER OF THE LD. CIT( A) AND HE RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F CIT V. MALLADI PROJECT MANAGEMENT P. LTD. [2010] 324 ITR 87 AND ON MERITS ALSO THE ASSESSEE HAS NO CASE AS THE ASSETS SOLD WAS ONLY LAND AND NOT BUILD ING. SO FURTHER RELIANCE IN THIS REGARD WAS PLACED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. UNION CO. (MOTORS) LTD. 283 ITR 445. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PR ECEDENTS RELIED UPON AS WELL AS MATERIAL ON RECORD AND DO NOT FIND ANY MERI TS IN THE CONTENTION RAISED BY THE ASSESSEE IN THIS REGARD BECAUSE THE ISSUE IS SQUARE LY COVERED AGAINST THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURTS DECISION AS CITED BY THE LD. DR IN THE CASE CIT V. UNION CO. (MOTORS) LTD. (SUP RA). SO FOLLOWING THE SAME WE DISMISS THIS ISSUE BEING DEVOID OF ANY MERITS. 9. THE NEXT ISSUE IS WITH REGARD TO DEDUCTION UNDE R SECTION 54 WHICH HAS BEEN CHALLENGED WHICH WAS NOT ALLOWED AND IT IS THE MA IN CONTENTION OF THE ASSESSEES COUNSEL THAT THE SAME IS LIABLE TO BE ALLOWED WHIC H HAS NOT BEEN ALLOWED. THEREFORE THIS ISSUE REQUIRES ADJUDICATION. WHEREA S THE LD. DR FIRSTLY CONTENDED THAT THE ISSUE DOES NOT ARISE OUT OF THE ORDER OF T HE LD. CIT(A) SO THE PLEA OF THE ASSESSEE SHOULD BE DISMISSED BY FOLLOWING THE DECIS ION IN THE CASE OF CIT V. I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .1 11 195 9595 955 & 19 5 & 19 5 & 19 5 & 1987 8787 87/MDS/ /MDS/ /MDS/ /MDS/08 0808 08 5 MALLADI PROJECT MANAGEMENT P. LTD. [2010] 324 ITR 8 7(MAD) AND SECONDLY THE ASSESSEE HAS NOT BEEN ABLE TO GIVE ANY DETAILS ABOU T THE INVESTMENT MADE. AS SUCH THE GROUND RAISED BY THE ASSESSEE SHOULD BE DI SMISSED. 10. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDER ING THE MATERIAL ON RECORD WE FIND THAT THIS ISSUE HAS NOT BEEN RAISED BEFORE THE LD. CIT(A) THEREFORE IT DOES NOT ARISE OUT OF THE ORDER OF THE LD. CIT(A). AS SU CH THE SAME IS DISMISSED. 11. AT THE TIME OF HEARING THE ASSESSEES COUNSEL ALSO PLEADED THAT IN FACT THE STATUS OF THE ASSESSEE HAS BEEN TAKEN AS INDIVIDUAL AT THE TIME OF ASSESSMENT WHEREAS AS PER RECTIFICATION ORDER PASSED BY THE AS SESSING OFFICER THE SAME HAS BEEN CHANGED TO HUF VIDE ORDER DATED 26.07.2010. TH EREFORE THE ASSESSMENT FRAMED IN THE STATUS OF INDIVIDUAL SHOULD BE QUASHE D. WHEREAS THE LD. DR SUBMITTED THAT NO DOUBT THE STATUS OF THE ASSESSEE HAS BEEN CHANGED FROM INDIVIDUAL TO HUF YET THERE IS NO ADJUDICATION IN THIS REGARD BY THE LD. CIT(A). THEREFORE THE PLEA OF THE ASSESSEE THAT THE ASSESS MENT FRAMED IN THE STATUS OF INDIVIDUAL SHOULD BE QUASHED IS NOT MAINTAINABLE AN D AT THE MOST THE TRIBUNAL CAN REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION OF THE ISSUE AS 154 ORDER IS PASSED RECENTLY. 12. WE HAVE HEARD BOTH THE SIDES ON THIS POINT AND FIND THAT AS PER ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 154 ON 26.07 .2010 THE STATUS OF THE ASSESSEE HAS BEEN CONVERTED TO HUF IN PLACE OF INDI VIDUAL BUT THIS ISSUE WAS NOT I II I.T.A. NO .T.A. NO .T.A. NO .T.A. NOS SS S. .. .1 11 195 9595 955 & 19 5 & 19 5 & 19 5 & 1987 8787 87/MDS/ /MDS/ /MDS/ /MDS/08 0808 08 6 RAISED BEFORE THE LD. CIT(A) AND IN VIEW OF THE SUB SEQUENT ORDER PASSED BY THE ASSESSING OFFICER IN OUR CONSIDERED VIEW THE MATT ER SHOULD GO BACK TO THE ASSESSING OFFICE FOR RECONSIDERATION OF THE STATUS. AS SUCH THE ORDERS OF AUTHORITIES BELOW IN THIS REGARD IS SET ASIDE AND R ESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION AFRESH THIS I SSUE AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 13. IN THE RESULT BOTH THE APPEALS OF THE REVENUE AS WELL AS ASSESSEE ARE PARTLY ALLOWED/STATISTICAL PURPOSE. ORDER PRONOUNCED ON 09.09.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI DATED THE 09.09.2011 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.