Essor Hotels Pvt. Ltd., CHENNAI v. ACIT, CHENNAI

ITA 463/CHNY/2010 | 2005-2006
Pronouncement Date: 20-07-2011 | Result: Allowed

Appeal Details

RSA Number 46321714 RSA 2010
Assessee PAN AAACE7242F
Bench Chennai
Appeal Number ITA 463/CHNY/2010
Duration Of Justice 1 year(s) 3 month(s) 7 day(s)
Appellant Essor Hotels Pvt. Ltd., CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 20-07-2011
Date Of Final Hearing 23-06-2011
Next Hearing Date 23-06-2011
Assessment Year 2005-2006
Appeal Filed On 12-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH C : CHENNAI [BEFORE DR. O.K. NARAYANAN VICE-PRESIDENT AND SHRI HARI OM MARATHA JUDICIAL MEMBER] I.T.A NO. 463/MDS/2010 ASSESSMENT YEAR : 2005-06 M/S ESSOR HOTELS PVT. LTD NO.84 FLAT NO.1 RADHA VIHAR MC.NICHOLLS ROAD CHETPET CHENNAI 600 031 VS THE ACIT COMPANY CIRCLE II(1) CHENNAI [PAN AAACE7242F ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.VENUGOPALAN CA RESPONDENT BY : DR. I.VIJAYAKUMAR CIT/DR O R D E R PER HARI OM MARATHA JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEA R 2005-06 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT CHENNAI- I DATED 8.3.2010 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) ON 24.12.2007 ON A TOTAL INCOME OF ` 18 74 95 140/- . THE ASSESSEE HAD TRANSFERRED LAN D AND BUILDING FOR A TOTAL CONSIDERATION OF ` 16.39 CRORES BY BIFURCATING THE PROFITS TOWARDS LAND AT ` 10.80 CRORES AND TOWARDS BUILDING AT ` 5.59 CRORES. ITA 463/10 :- 2 -: THE ASSESSING OFFICER TOOK THE VIEW THAT THE ENTIRE SALE CONSIDERATION WAS TO BE TREATED TOWARDS THE SALE OF LAND AND THE PROVISIONS OF SECTION 50C WOULD APPLY. FOR THAT PURPOSE HE TOOK THE ENTIRE SALE CONSIDERATION OF ` 23 68 85 400/- FOR SALE OF LAND ONLY. THIS PROPE RTY WAS SOLD TO M/S SHREE JAI JIRENDRA CONSTRUCTIONS LT D. IN THE SALE DEED THE PROPERTY SOLD IS DESCRIBED AS 27 GROUNDS AND 35 0 SQ FT OF LAND TOGETHER WITH BUILDING FIXTURES AND FITTINGS. THE LD. CIT CALLED FOR THE RECORDS OF THIS ASSESSMENT ORDER AND FOUND THAT THE ASSESSING OFFICER HAS NOT CONSIDERED ANY PORTION OF THE SALE CONSIDER ATION ON ACCOUNT OF TRANSFER OF BUILDING FURNITURE AND FIXTURES ETC. A ND THIS OMISSION IN THE ASSESSMENT ORDER ACCORDING TO HIM HAS RESULTED I NTO AN ERROR IN SO FAR IT IS PREJUDICIAL TO THE INTERESTS OF THE REVEN UE. THEREFORE HE HAS ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT WHICH WAS REPLIED BY THE ASSESSEE STATING THAT THERE WAS NO OMISSION ON THE PART OF THE ASSESSING OFFICER BECAUSE AFTER CONSIDERING THE STA ND OF THE ASSESSEE WHICH WAS CLEARLY SPELT OUT IN THE RETURN FILED FOR THE YEAR IN QUESTION THE ASSESSING OFFICER HAS TAKEN ONE VIEW THAT ENTIR E SALE CONSIDERATION RELATES TO LAND ONLY. BUT STILL THE LD. CIT HAS S ET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION THAT THE ASSESSING OFFICER S HALL PASS A FRESH ORDER AFTER CONSIDERING THE ASSESSEES LIABILITY TO CAPITAL GAINS ON THE SALE OF OTHER ASSETS LIKE BUILDING FURNITURES FIX TURES ETC. IN ADDITION TO ITA 463/10 :- 3 -: THE CAPITAL GAINS ON LAND ALREADY CONSIDERED BY HIM . NOW THE ASSESSEE IS AGGRIEVED AND HAS RAISED THE FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN PASSING AN ORDER U/S.263 ON THE FACTS AND CIRCUMSTA NCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THAT THE CONSIDERATION RECEIVED IS INCLU SIVE OF LAND AND BUILDING AND LAND AND BUILDING IS INSEPARA BLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO NO TE THAT THE ASSESSING OFFICER HAS ALREADY CONSIDERED T HE LAND AND BUILDING IN THE ASSESSMENT AS HE HAS SPECIFICAL LY DISCUSSED THIS ISSUE IN HIS ORDER ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED COMMISSIONER OF INCOME TAX FAILS TO APPRECIATE THAT THIS ASSESSMENT ALREADY COMPLETED B Y THE ASSESSING OFFICER ITSELF IS IN DISPUTE BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL) AND THE VALUATI ON TAKEN BY THE ASSESSING OFFICER ITSELF IS IN DISPUTE AS NO VALUE HAS BEEN FIXED BY THE STAMP DUTY AUTHORITIES AND 50C SPECIFICALLY REFERS ABOUT LAND AND BUILDING ONLY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN COM ING TO THE CONCLUSION THAT BUILDING VALUE HAS NOT BEEN CONSIDERED ON THE FACTS AND CIRCUMSTANCES OF THE CA SE. 6. THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THAT THE TRANSFER OF PROPERTY WAS IN FAC T A DISPUTED SALE AS THE PROPERTY WAS UNDER THE ATTACHM ENT OF DEBT RECOVERY TRIBUNAL AND COURT MATTER WAS PENDING AND THE TOTAL CONSIDERATION FIXED IS WITH THE CONSENT O F THE COURT AND THE BANKERS ON THE FACTS AND CIRCUMSTANCES OF T HE CASE. ITA 463/10 :- 4 -: 7. THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THAT THE CONSIDERATION FIXED BY THE ASSE SSING OFFICER ONLY FOR LAND IS ONLY HIS OPINION AND HE HA S SPECIFICALLY DISCUSSED THIS ISSUE IN HIS ORDER AS I N HIS OPINION THIS BUILDING WAS DEMOLISHED AND HENCE HE T OOK THE VALUE AS NIL ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO NO TE THAT THE ASSESSING OFFICER'S OPINION ON TAKING THE ENTIRE CONSIDERATION FOR LAND IS NOT JUSTIFIABLE ON THE SP ECIFIC REASON GIVEN BY HIM ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THE CIRCUMSTANCES IN WHICH THE PROPERTY WAS SOLD AND THE TOTAL CONSIDERATION RECEIVED ON THE FA CTS AND CIRCUMSTANCES OF THE CASE. 10. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN GIV ING DIRECTIONS U/S 263 BY HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE ON THE FACTS AND CIRCUMSTA NCES OF THE CASE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT WAS STATE D BY THE LD.AR SHRI S.VENUGOPALAN THAT THIS VERY SAME ISSUE HAD TRAVELL ED UPTO THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 10.2 .2011 IN I.T.A.NO. 1243/MDS/2010 [ASSESSEES APPEAL] AND IN I.T.A.NO. 1336/MDS/2010 [REVENUES APPEAL] FOR ASSESSMENT YEAR 2005-06 HAS ESTABLISHED THE FACT THAT ONLY THE LAND WAS SOLD BECAUSE THE SALE T OOK PLACE AFTER DEMOLISHING THE BUILDING ETC. AND THE SALE CONSIDER ATION WAS TOWARDS SALE OF LAND ONLY. THE TRIBUNAL HAS ALSO HELD THA T THE VALUE OF LAND ITA 463/10 :- 5 -: AND BUILDING HAS ALREADY BEEN CONSIDERED BY THE ASS ESSING OFFICER IN THE ASSESSMENT ORDER AND THUS THE TRIBUNAL HAS CON FIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER. ON THE OTHER HAND THE LD.DR HAS SUPPORTED THE VIEW TAKEN BY LD. CIT BY VEHEMENTLY S UPPORTING HIS REASONING. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A CASE IN WHICH ASSESSMENT ORDER CAN BE REVISED. THE ASSESSMENT ORDER/ANY ORDER CAN BE RE VISED ONLY IF THE TWIN CONDITIONS NAMELY (I) THE ORDER IS ERRONEOUS AND (II) IT IS ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE CO-EXI ST. THE ASSESSING OFFICER HAS APPLIED HIS MIND TO THE ISSUE IN QUESTI ON BY EXPRESSING HIS VIEW IN SO MANY WORDS. HE HAS OBSERVED THAT THE AS SESSEE HAD CLEARLY DISCLOSED THE RECEIPT TOWARDS THE SALE OF LAND AND BUILDING BUT AFTER CONSIDERING THE FACT THAT BUILDING WAS DEMOLISHED B EFORE THIS SALE THE ASSESSING OFFICER HAS TAKEN A VIEW WHICH IS ONE OF THE POSSIBLE VIEWS AND THIS VIEW HAS BEEN FURTHER CONFIRMED BY THE TRI BUNAL SO WE CANNOT SAY THAT THERE IS ANY ERROR IN THE ASSESSMEN T ORDER. THE TRIBUNAL HAS FINALLY SETTLED THIS ISSUE WHICH CANNO T BE DISTURBED BY US EVEN. THEREFORE TWIN CONDITIONS REQUISITE U/S 263 WHICH ARE THE SINE QUA NON FOR REVISING AN ORDER ARE FOUND TO BE EXTIN CT IN THIS CASE. HENCE THE ASSESSMENT IN QUESTION CANNOT BE REVIS ED. ACCORDINGLY ITA 463/10 :- 6 -: WE SET ASIDE THE ORDER OF THE LD. CIT AND RESTORE THE ASSESSMENT ORDER. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE STAND S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.7.2011 SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 20 TH JULY 2011 RD COPY TO:APPELLANT/RESPONDENT/CIT(A)/CIT/DR