Bachupally Laxmi (Alias Routhu Laxmi), Suryapet v. Income Tax Officer, Ward-1, Suryapet

ITA 572/Hyd/2020 | 2014-2015
Pronouncement Date: 27-05-2021 | Result: Allowed

Appeal Details

RSA Number 57222514 RSA 2020
Assessee PAN ALWPB8472E
Bench Hyderabad
Appeal Number ITA 572/Hyd/2020
Duration Of Justice 7 month(s) 5 day(s)
Appellant Bachupally Laxmi (Alias Routhu Laxmi), Suryapet
Respondent Income Tax Officer, Ward-1, Suryapet
Appeal Type Income Tax Appeal
Pronouncement Date 27-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 27-05-2021
Date Of Final Hearing 21-04-2021
Next Hearing Date 21-04-2021
Last Hearing Date 12-04-2021
First Hearing Date 09-02-2021
Assessment Year 2014-2015
Appeal Filed On 22-10-2020
Judgment Text
ITA NOS 571 TO 573 OF 2020 BACHUPALLY LAXMI AND OTH ERS PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NO ASSESSEE RESPONDENT A.Y 571/HYD/2020 SMT. BACHUPALLY LAXMI (ALIAS ROUTHU LAXMI) SURYAPET PAN:ALWPB8472E INCOME TAX OFFICER WARD-1 SURYAPET 2013-14 572/HYD2020 - DO - - DO - 2 014 - 15 573/HYD/2020 KOUSHIK ROUTHU SURYAPET PAN:AZSPR1568B -DO- 2014-15 ASSESSEE BY: SRI S. RAMA RAO REVENUE BY : SRI E. SRIDHAR DR DATE OF HEARING: 21/04/2021 DATE OF PRONOUNCEMENT: 27/05/2021 ORDER ITA NOS.571 & 572/HYD/2020 ARE THE APPEALS FILED BY SMT. BACHUPALLY LAXMI (ALIAS ROUTHU LAXMI) FOR THE A.YS 2013-14 AND 2014-15 WHILE ITA NO.573/HYD/2020 IS THE APPEA L FILED BY SRI KOUSHIK ROUTHU FOR THE A.Y 2014-15. ALL THESE A PPEALS ARE FILED BY THE ASSESSEES AGAINST THE SEPARATE BUT SIM ILAR ORDERS OF THE CIT (A)-3 HYDERABAD DATED 6.1.2020. THEREFO RE BOTH THE ASSESSEES ARE RELATED TO EACH OTHER AND THE FACTS A ND CIRCUMSTANCES AND THE GROUNDS RAISED ARE SIMILAR. T HEREFORE ALL THE THREE APPEALS WERE HEARD TOGETHER AND ARE DISPO SED OF BY THIS COMMON AND CONSOLIDATED ORDER. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SM T. BACHUPALLY LAXMI AND THE ASSESSEE SHRI KAUSHIK ROUT HU ARE MOTHER AND SON AND ARE OWNERS OF LAND TO THE EXTENT OF 363 SQ. YARDS AND 121 SQ. YARDS RESPECTIVELY IN SURYAPET. B OTH THE ITA NOS 571 TO 573 OF 2020 BACHUPALLY LAXMI AND OTH ERS PAGE 2 OF 5 ASSESSEES ALONG WITH TWO OTHERS I.E. SMT.DEVI REDDY RENUKA AND SMT. NALLAPATTU SARASWATHI WHO ALSO HOLD 242 SQ. YA RDS LANDS EACH IN THE ADJOINING PLOTS ENTERED INTO A DEVELOP MENT AGREEMENT DATED 9.11.2009 WITH A BUILDER FOR CONSTRUCTION OF A RESIDENTIAL APARTMENT. NOW THE RATIO OF SHARE BETWEEN THE LANDO WNERS AND THE DEVELOPER/BUILDER IS 35:65. IN RESPECT THEREOF SMT. LAKSHMI WAS TO RECEIVE 3 FLATS + 75% SHARE IN THE FOURTH FL AT AND KAUSHIK ROUTHU WAS TO RECEIVE ONE FLAT + 25% IN THE FOURTH FLAT. SMT. RENUKA DEVI AND SMT. NALLAPATTU SARASWATI WERE TO R ECEIVE TWO FLATS EACH AND 50% EACH IN THE THIRD FLAT. THE SPEC IFIC FLATS ALLOTTED TO EACH OF THE LANDOWNER IS ALSO PART OF THE DEVELO PMENT AGREEMENT. THE ASSESSEES DID NOT FILE THEIR RETURNS OF INCOME FOR THE RELEVANT A.YS. WHEN THE ASSESSING OFFICER CAME TO KNOW ABOUT THE DEVELOPMENT AGREEMENT NOTICES U/S 148 WERE ISS UED TO EACH OF THE ASSESSEES. THE ASSESSEES FILED THEIR RETURNS OF INCOME DECLARING THE LONG-TERM CAPITAL GAIN ARISING OUT OF THE DEVELOPMENT AGREEMENT AND CLAIMED THE SAME AS EXEMP T U/S 54F OF THE ACT ON ACCOUNT OF THE FLATS ALLOTTED TO THEM BY THE BUILDER. THE ASSESSING OFFICER ALLOWED THE EXEMPTION IN THE A.Y 2010-11. SUBSEQUENTLY THE BUILDER COMPLETED THE CONSTRUCTIO N AND HANDED OVER THE FLATS TO THE ASSESSEES IN MAY 2012. THE A SSESSEE SMT. LAKSHMI SOLD ONE FLAT IN THE FINANCIAL YEAR 2013 RE LEVANT TO THE A.Y 2013-14 AND ANOTHER FLAT IN THE FINANCIAL YEAR RELEVANT TO THE A.Y 2014-15. SIMILARLY THE ASSESSEE SHRI KAUSHIK A LONG WITH HIS MOTHER SOLD A FLAT IN THE FINANCIAL YEAR RELEVANT T O THE A.Y 2014- 15. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE S HAVE RECEIVED THE CONSTRUCTED FLAT IN MAY 2012 AND WITHIN A YEAR THEREAFTER THE ASSESSEES HAVE SOLD THE FLATS AND THEREFORE THE PR OVISIONS OF SUB- SECTION 3 OF SECTION 54F ARE ATTRACTED. HE HELD THA T THE EXEMPTION GRANTED U/S 54F OF THE ACT TO THE ASSESSEES IN THE A.Y 2010-11 HAS TO BE WITHDRAWN IN THE A.YS 2013-14 IN THE CASE OF SMT. ITA NOS 571 TO 573 OF 2020 BACHUPALLY LAXMI AND OTH ERS PAGE 3 OF 5 LAKSHMI AND IN THE CASE OF SHRI KOUSHIK IN THE A.Y 2014-15. HE ACCORDINGLY BROUGHT THE LTCG TO TAX. 3. FURTHER WITH REGARD TO THE CAPITAL GAIN ARISING OUT OF THE SALE OF FLAT HE HELD THAT THE GAIN ARISING THE REON IS SHORT-TERM CAPITAL GAIN (STCG) SINCE THE ASSESSEE HAS NOT HELD THE ASSET FOR MORE THAN 3 YEARS. THUS HE WITHDREW THE EXEMPTION GRANTED U/S 54F IN THE A.Y 2010-11 AND ALSO BROUGHT THE STCG ON SALE OF FLAT TO TAX. IN THE CASE OF SMT. LAKSHMI FOR THE A.Y 201 4-15 THE ASSESSING OFFICER WITHDREW THE EXEMPTION GRANTED U/ S 54F ON A PROTECTIVE BASIS IN THE AY 2014-15 AND SUBSTANTIALL Y IN THE A.Y 2013-14. AGGRIEVED BOTH THE ASSESSEES PREFERRED APPEALS BEFORE THE CIT (A) AND THE CIT (A) CONFIRMED THE ASSESSMEN T ORDER AND THE ASSESSEES ARE IN SECOND APPEAL BEFORE THE TRIBU NAL. SINCE THE GROUND OF APPEAL IN ALL THE THREE APPEALS ARE SIMIL AR THE GROUNDS OF APPEAL IN ITA NO.571/HYD/2020 ARE REPRODUCED HER EUNDER: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OF FICER OF RS.28 98 425/- BY APPLYING THE PROVISIONS OF SEC.54 F(3) OF THE I.T. ACT. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT THE FLAT WAS SOLD AFTER A PERIOD OF THREE YEARS FROM THE DATE OF THE DEVELOPM ENT AGREEMENT AND THAT THEREFORE EXEMPTION U/S 54 EARL IER ALLOWED SHOULD NOT HAVE BEEN WITHDRAWN. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ASSESSING THE CAPITAL GAIN OF RS.1 90 000/- IN R ESPECT OF FLAT NO.303 AS SHORT-TERM CAPITAL GAIN WITHOUT CONS IDERING THE FACT THAT THE PROPERTY WAS HELD FOR MORE THAN T HREE YEARS AND THE CAPITAL GAIN ARISING IS LTCG. 5. AS AN ALTERNATIVE THE ASSESSING OFFICER OUGHT T O HAVE TREATED THE GAIN ON SALE OF LAND AS LTCG. ITA NOS 571 TO 573 OF 2020 BACHUPALLY LAXMI AND OTH ERS PAGE 4 OF 5 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING LEVY OF INTEREST U/S 234A 234B AND 2 34C OF THE I.T. ACT. 7. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 3. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE REITE RATING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW S UBMITTED THAT FOR THE PURPOSE OF COMPUTATION OF LTCG ARISING OUT OF THE DEVELOPMENT AGREEMENT CUM GPA THE ASSESSING OFFICE R HAS ACCEPTED THAT THE ASSESSEE HAS ACQUIRED THE FLATS A S ON 9.11.2009 AND THEREFORE IN THE YEAR 2012 WHEN THE ASSESSEE H AS SOLD THE FLAT THE HOLDING PERIOD HAS TO BE HELD AS MORE THA N 3 YEARS AND THE PROVISIONS OF SUB-SECTION 3 OF SECTION 54F ARE NOT APPLICABLE. SIMILARLY THE GAIN ARISING OUT OF THE SALE OF FLAT ALSO HAS TO BE HELD AS LTCG AND NOT STCG AS HELD BY THE ASSESSING OFFIC ER. SHE FURTHER SUBMITTED THAT IN THE CASE OF CO-OWNERS I.E . SMT. DEVI REDDY RENUKA AND SMT. NALLAPATTU SARASWATI THE RES PECTIVE CIT (A)S HAVE HELD THE ISSUE IN FAVOUR OF THE ASSESSEES AND THE REVENUE HAS NOT FILED ANY APPEALS TO THE TRIBUNAL. THEREFORE ACCORDING TO HER THE RULE OF UNIFORMITY AND CONSIS TENCY HAS TO BE ADOPTED AND THE SAME DECISION IS TO BE TAKEN IN THE CASE OF THE PRESENT ASSESSEES AS WELL. 4. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD AND HAVING GONE THROUGH THE DEVELOPMENT A GREEMENT CUM GPA I FIND THAT THE ASSESSEES HAVE GIVEN THEI R LANDED PROPERTY FOR DEVELOPMENT AND THEIR SHARE OF FLATS H AVE BEEN ITA NOS 571 TO 573 OF 2020 BACHUPALLY LAXMI AND OTH ERS PAGE 5 OF 5 IDENTIFIED AND ALLOTTED BY WAY OF THE SAID AGREEMEN T ITSELF. THEREFORE THE RESPECTIVE CIT (A)S IN THE CASE OF SMT. DEVI REDDY RENUKA AND SMT. NALLAPATTU SARASWATI HAVE HELD THAT THE ASSESSEES THEREIN ARE DEEMED TO HAVE ACQUIRED THE P ROPERTY ON THE DATE OF DEVELOPMENT AGREEMENT ITSELF AND THUS THE PERIOD OF HOLDING HAS TO BE HELD TO BE MORE THAN 3 YEARS. IN THE CASE OF CO- OWNERS THE REVENUE CANNOT TAKE A DIFFERENT STAND. IF THE REVENUE HAS ACCEPTED THE DECISION OF THE CIT (A)S IN THE CASES OF RENUKA AND SARASWATI I AM OF THE OPINION THAT THE SAME DE CISION HAS TO BE TAKEN IN THE CASE OF THE ASSESSEES BEFORE THIS T RIBUNAL ALSO. THEREFORE BY ADOPTING THE PRINCIPLES OF CONSISTENC Y AND UNIFORMITY I HOLD THAT THE EXEMPTION U/S 54F CANNO T BE WITHDRAWN IN THE RELEVANT A.YS AND THE CAPITAL GAIN ARISING OUT OF SALE OF FLAT HAS TO BE TREATED AS LTCG AS DONE IN T HE CASE OF CO- OWNERS. THUS THE APPEALS OF BOTH THE ASSESSEES ARE ALLOWED. 6. IN THE RESULT ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 27 TH MAY 2021. VINODAN/SPS COPY TO: S.NO ADDRESSES 1 SMT.BACHUPALLY L AXMI ALIAS ROUTHU LAXMI & SRI KOUSHIK ROUTHU FLAT NO.203 LAKSHMI DWARAKAMAYI RESIDENCY 60FEET ROAD SURYAPET 508213 2 INCOME TAX OFFICER WARD -1 SURYAPET 3 CIT (A) - 3 HYDERABAD 4 PR. CIT 3 HYDERABAD 5 DR ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER