Sri Janapala Satyanarayana, v. The ITO, Ward-1, Anakapalle

ITA 229/VIZ/2010 | 2005-2006
Pronouncement Date: 16-08-2010 | Result: Allowed

Appeal Details

RSA Number 22925314 RSA 2010
Assessee PAN AAGPN8851Q
Bench Visakhapatnam
Appeal Number ITA 229/VIZ/2010
Duration Of Justice 4 month(s) 10 day(s)
Appellant Sri Janapala Satyanarayana,
Respondent The ITO, Ward-1, Anakapalle
Appeal Type Income Tax Appeal
Pronouncement Date 16-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 16-08-2010
Assessment Year 2005-2006
Appeal Filed On 05-04-2010
Judgment Text
ITA NO 229/VIZAG/2010 JANAPALA SATYANARAYANA VISAKHAPATNAM PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.229/VIZAG/2010 ASSESSMENT YEAR: 2005-06 JANAPALA SATYANARAYANA VISAKHAPATNAM VS. ITO WARD-1 ANAKAPALLE (APPELLANT) PAN NO: AAGPN 8851 Q (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI J. SIRI KUMAR (DR) ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 18-01- 2010 PASSED BY LEARNED CIT(A) VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IS CHALLENGING THE COMPUTATION OF C APITAL GAIN BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT IN HI S HAND. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE FILED ITS RETURN OF INCOME DISCLOSING INCOME FROM PENSION AND INCOME FROM SHORT TERM CAPITAL GAIN. THE ASSESSING OFFICER NOTICED TH AT THE ASSESSEE HAS NOT TAKEN THE MARKET VALUE OF THE PROPERTY SOLD BY HIM AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. THE ASSESSEE HAD SOLD HIS HOUSE FOR A CONSIDERATION OF RS.4.00 LAKHS UNDER A DEED ENTITLED AS POSSESSO RY SALE AGREEMENT COUPLED WITH GENERAL POWER OF ATTORNEY. HOWEVER IN THE SAID DEED WHICH IS REGISTERED AS DOCUMENT NO.159/2005 WITH THE SUB REGISTRAR YELLAMANCHILI THE MARKET VALUE OF PROPERTY WAS SH OWN AT RS.9 35 000/-. AS PER THE PROVISIONS OF SECTION 50C THE MARKET VA LUE ASSESSED BY ANY ITA NO 229/VIZAG/2010 JANAPALA SATYANARAYANA VISAKHAPATNAM PAGE 2 OF 4 AUTHORITY OF THE STATE GOVERNMENT SHALL BE DEEMED T O BE THE FULL VALUE OF THE CONSIDERATION FOR THE PURPOSES OF COMPUTATION O F CAPITAL GAIN IF THE ACTUAL CONSIDERATION RECEIVED IS LESS THAN THE VALU E SO ADOPTED BY THE STATE GOVERNMENT AUTHORITY. HENCE THE ASSESSING OFFICER R ECOMPUTED THE SHORT TERM CAPITAL GAIN BY TAKING THE SALE CONSIDERATION AS RS.9 35 000/-. THE ASSESSEE COULD NOT WIN IN HIS APPEAL FILED BEFORE T HE LEARNED CIT (A). HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LEARNED AUTHORISED REPRESENTATIVE INVITED OUR ATTEN TION TO SUB SECTION 2 OF SECTION 50C WHICH READS AS UNDER: (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (1) WHERE A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE ST AMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS T HE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER; (B) THE VALUE SO ADOPTED OR ASSESSED (OR ASSESSABLE ) BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY COURT OF THE HIGH COURT. THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REF ERENCE IS MADE THE PROVISIONS OF SUB-SECTIONS (2) (3) (4) (5) AND (6) OF SECTION 16A CLAUSE (I) OF SUB-SECTION (1) AND SUB- SECTIONS (6) AND (7) OF SECTION 23A SUB-SECTION (5) OF SECTION 24 SECTION 34AA SECTION 35 AND SECTION 37 OF THE WEALTH TAX A CT 1957 (27 OF 1957) SHALL WITH NECESSARY MODIFICATIONS APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATIO N TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-S ECTION (1) OF SECTION 16A OF THAT ACT. ACCORDING TO LEARNED AUTHORISED REPRESENTATIVE THE ASSESSEE HAS OBJECTED TO THE PROPOSAL OF THE ASSESSING OFFICER TO ADOPT S ECTION 50C OF THE ACT BY A LETTER DATED 5-10-2007 AND ASSESSING OFFICER HAS NO T REFERRED THE MATTER TO THE VALUATION OFFICER AS PER SECTION 50C (2) OF THE ACT REFERRED SUPRA. THE LEARNED AUTHORISED REPRESENTATIVE ALSO POINTED OUT THAT THE ASSESSEE HAD ITA NO 229/VIZAG/2010 JANAPALA SATYANARAYANA VISAKHAPATNAM PAGE 3 OF 4 PURCHASED THE IMPUGNED SITE ON 9-5-2001 AND THE SAM E WAS SOLD ON 12 TH JANUARY 2005. THE BUILDING WAS ALSO CONSTRUCTED WI THIN 6 MONTHS FROM THE DATE OF PURCHASE OF THE SITE AND HENCE THE RESULTAN T GAIN IF ANY GIVE RISE TO LONG TERM CAPITAL GAIN ONLY AND NOT SHORT TERM CAPI TAL GAIN AS COMPUTED BY THE ASSESSING OFFICER. 5. IF WE NOTICE THE DATES OF PURCHASE AND THE SALE IT APPEARS THAT THE RESULTANT GAIN IS LONG TERM CAPITAL GAIN ONLY. HO WEVER THE ASSESSEE AS WELL AS THE ASSESSING OFFICER HAS COMPUTED THE INCO ME UNDER THE HEAD SHORT TERM CAPITAL GAIN WHICH IS NOT CORRECT IF WE TAKE INTO ACCOUNT THE DATES OF PURCHASE AND THE SALE. HENCE IN THE INTE REST OF NATURAL JUSTICE THIS MATTER REQUIRES VERIFICATION. FURTHER AS POI NTED OUT BY THE LEARNED AUTHORISED REPRESENTATIVE THE ASSESSEE HAS CITED T HE REASONS VIDE HIS LETTER DATED 5-10-2007 WHICH COMPELLED HIM TO SEL L THE IMPUGNED LAND AND BUILDING AT A LOWER RATE. BEFORE LEARNED CIT (A) A LSO THE ASSESSEE HAS FILED A LETTER DATED 12-12-2009 EXPLAINING THE REASONS SU BMITTED BEFORE THE ASSESSING OFFICER AND ALSO REQUESTED THE LEARNED CI T(A) NOT TO ADOPT THE VALUE AS PER THE PROVISIONS OF SECTION 50C OF THE A CT. HOWEVER NEITHER THE ASSESSING OFFICER NOR LEARNED CIT (A) HAS REFERRED THE MATTER OF VALUATION TO THE VALUATION OFFICER. IN VIEW OF THE ABOVE REASON ALSO WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTED THE CAPITAL GAIN BY ASCERTAINING THE DATE OF PURCHA SE DATE OF SALE OF THE IMPUGNED PROPERTY COST OF THE ASSET ETC. AND DETER MINE THE NATURE AND THE AMOUNT OF CAPITAL GAIN ACCORDINGLY. THE ASSESSING OFFICER IS ALSO DIRECTED TO ADOPT THE PROCEDURE PRESCRIBED IN SECTION 50C OF TH E ACT. 6. THE ASSESSEE HAS MOVED A PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE. THE ADDITIONAL EVIDENCE CONSISTED OF A LE TTER DATED 3-4-2010 FILED WITH THE REGISTRAR YELLAMANCHILI WHEREIN THE ASSES SEE HAS REQUESTED FOR CANCELLATION OF THE DEED UNDER CONSIDERATION IN THI S APPEAL. THE ASSESSEE HAS ALSO PLACED A PHOTOCOPY OF ACKNOWLEDGEMENT GIVE N BY THE SUB ITA NO 229/VIZAG/2010 JANAPALA SATYANARAYANA VISAKHAPATNAM PAGE 4 OF 4 REGISTRAR YELLAMANCHILI. HOWEVER THE LEARNED AUTH ORISED REPRESENTATIVE INFORMED THAT THE SUB REGISTRAR HAS NOT TAKEN ANY A CTION SO FAR ON THE ABOVE CITED LETTER. THE ASSESSEE HAS ALSO FILED A N OTICE DATED 23-3-2010 GIVEN BY THE ASSESSEE TO THE PURCHASER OF THE PROPE RTY. IT WAS ALSO INFORMED THAT THE SAID PURCHASER HAS NOT ALSO RESPO NDED TO THE SAID NOTICE. HOWEVER IN THE EARLIER PARAGRAPH WE HAVE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. HENCE THE ASSESSEE MAY FI LE ALL THESE ADDITIONAL EVIDENCES BEFORE THE ASSESSING OFFICER FOR TAKING A PPROPRIATE ACTION IN ACCORDANCE WITH THE LAW. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 16/08/2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 16 TH AUGUST 2010 COPY TO 1 SAHRI JANAPALA SATYANARAYANA S/O APPALANAIDU DI MILI VILLAGE RAMBILLI MANDAL VISAKHAPATNAM 2 THE ITO WARD-1 ANAKAPALLE 3 4. THE CIT 1 VISAKHAPATNAM THE CIT(A) VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM