Smt. C,Lalitha, Hyderabad v. ITO, Ward-6(1),, Hyderabad

ITA 742/HYD/2012 | 2007-2008
Pronouncement Date: 18-10-2013 | Result: Allowed

Appeal Details

RSA Number 74222514 RSA 2012
Assessee PAN AHTPC5322R
Bench Hyderabad
Appeal Number ITA 742/HYD/2012
Duration Of Justice 1 year(s) 5 month(s) 4 day(s)
Appellant Smt. C,Lalitha, Hyderabad
Respondent ITO, Ward-6(1),, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 18-10-2013
Assessment Year 2007-2008
Appeal Filed On 14-05-2012
Judgment Text
1 ITA.NO.742/HYD/2012 SMT. C. LALITHA HYDERABAD. IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER ITA.NO.742/HYD/2012 ASSESSMENT YEAR 2007-2008 SMT. C. LALITHA HYDERABAD PAN AHTPC5322R VS ITO WARD 6 (1) HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI P. MURALI MOHAN (A.R.) RESPONDENT BY : SHRI D. SUDHAKAR RAO (C.I.T) DATE OF HEARING : 05.09.2013 DATE OF PRONOUNCEMENT : 18.10.2013 ORDER PER SMT. ASHA VIJAYARAGHAVAN J.M. : THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE R PASSED UNDER SECTION 263 OF THE INCOME TAX ACT 1963 BY THE COMMISSIONER OF INCOME TAX-III HYDERABAD DATED 19.03.2012 FOR THE A SSESSMENT YEAR 2007- 2008. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL DERIVED INCOME FROM HOUSE PROPERTY AND INCOME FROM O THER SOURCES. THE ASSESSEE FILED RETURN OF INCOME OF INCOME ON 7.6.20 07 DECLARING TOTAL INCOME AT RS.1 63 307/-. SCRUTINY ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 148 OF THE I.T. ACT ON 30.12.2010 ACCEPTING THE INCOME RETURNED. THE COMMISSIONER OF INCOME TAX UNDER SECTI ON 263 OF THE I.T. ACT HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 148 IN ASSESSEES CASE IS ERRONEOU S AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE FACTS ARE THAT THE AS SESSEE SOLD THE HOUSE ADMEASURING 150 SQ. YARDS BEARING NO. 6-3-663/14/1 SOMAJIGUDA 2 ITA.NO.742/HYD/2012 SMT. C. LALITHA HYDERABAD. HYDERABAD ON 22.03.2007 TO SMT. G. NEELIMA DEVI W/O. G. PANDURANGA RAO VIDE REGISTERED DOCUMENT NO. 639/2007 FOR A CONSIDE RATION OF RS.30 00 000/-. DURING THE COURSE OF SCRUTINY PROCEE DINGS BEFORE THE ASSESSING OFFICER A REQUEST WAS MADE TO ALLOW THE E XEMPTION FOR LONG TERM CAPITAL GAINS U/S. 54 OF THE IT ACT AS THE CAPITAL GAINS WERE USED/INVESTED FOR PURCHASE OF A RESIDENTIAL PROPERTY. IN SUPPORT O F THE CLAIM AN UN- REGISTERED PURCHASE DOCUMENT WAS PRODUCED BEFORE TH E ASSESSING OFFICER. 3. ON VERIFICATION OF THE PURCHASE DEED NO 2554/05 DT.06.06.2005 OF HOUSE BEARING NO.10-10-8 AT OLD SURVEY NO. 413/C-2 T.S.NO.970 ARANDALPET NEAR PALNADU BUS STAND NARASARAOPET PRODUCED IT WAS NOTICED THAT THIS PROPERTY WAS PURCHASED FOR A C ONSIDERATION OF RS.27 00 000/-. O UT OF THIS AN AMOUNT OF RS.25 00 000/- WAS PAID AS ADVANCE AND THE BALANCE AMOUNT OF RS.2 00 000/- WAS TO BE PAID AT THE TIME OF REGISTRATION. BASING ON THIS PURCHASE AGREE MENT WHICH WAS NOT REGISTERED IT WAS REQUESTED TO ALLOW THE DEDUCTION U/S. 54 OF THE IT ACT. THE ASSESSING OFFICER ALLOWED THE CLAIM OF DEDUCTIO N U/S. 54 OF THE I.T ACT BASING ON THE UN-REGISTERED PURCHASE DOCUMENT DATED 1309-2007 WHILE PASSING THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 14 8 ON 30-12-2010 WHICH IS NOT ALLOWABLE. 4. VIDE THIS OFFICE SHOW CAUSE NOTICE ISSUED U/S. 263 DATED 13.09.2011 TO THE ASSESSEE THE ASSESSEE COMPANY WAS ASKED AS TO WHY THE ASSESSMENT ORDER DATED 30.12.2010 SHOULD NOT BE REV ISED ON THE ABOVE TINES. 5. IN RESPONSE THERETO THE ASSESSEE'S AUTHORIZED REPRESENTATIVE FILED WRITTEN SUBMISSIONS VIDE LETTER DT. 18-11-201 1. IN THIS LETTER IT IS CONTENDED THAT ALL RELEVANT DOCUMENTS ARE ALREADY FU RNISHED AND RELEVANT INFORMATION WAS ALREADY SUBMITTED BEFORE THE ASSESSI NG OFFICER. IT WAS FURTHER ARGUED THAT THE ASSESSING OFFICER HAS ALREA DY CONSIDERED THE INFORMATION AND PASSED THE ASSESSMENT ORDER. IN VIE W OF THIS IT WAS OBJECTED 3 ITA.NO.742/HYD/2012 SMT. C. LALITHA HYDERABAD. THAT BY MAKING CHANGE OF OPINION AN ORDER CANNOT BE PASSED U/S. 263. 6. THE COMMISSIONER OF INCOME TAX HELD THAT THE PRO PERTY AT SOMAJIGUDA HYDERABAD WAS PURCHASED BY THE ASSESSEE ON 6.6.2005 AND THE SAME WAS SOLD ON 22.3.2007 AND AS SUCH THE PROPERT Y WAS HELD BY THE ASSESSEE FOR A TOTAL PERIOD OF LESS THAN 3 YEARS PRE CISELY FOR 21 MONTHS 16 DAYS ONLY AND THEREFORE THE PROPERTY IS BECOMES A SHO RT TERM CAPITAL ASSET AND THE GAIN ON SALE OF THE PROPERTY ATTRACTS SHORT TERM CAPITAL GAIN. THE COMMISSIONER OF INCOME TAX FURTHER HELD AS FOLLOWS : 7.2. EXEMPTION U/S 54 CAN BE CLAIMED AGAINST THE TONG TERM CAPITAL GAINS ONLY. IN THE PRESENT CASE THE GAINS RECEIVED BY THE ASSESSEE ARE SHORT TERM CAPITAL GAINS IN NATURE HENCE THE ASSESSEE IS NOT ENTITLED FOR ANY EXEMPTION U/S. 54. THE ASSESSING OFFICER IS DIRECTED TO REVISE THE ORDER PASSED U/S 143(3) R.W.S. 148 DATED 30-12-2010 BY BRINGING TO TAX THE ABOVE SHORT TERM CAPITAL GAINS AND INITIATE PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT. 7.3. ASSUMING BUT RIOT ACCEPTING FOR A WHILE THAT THE GAINS ARE LONG TERM CAPITAL GAINS FOR THE DEDUCTIO N U/ S 54 IS TO BE ALLOWABLE THE ASSESSEE SHOULD INVEST T ONG TERM CAPITAL GAINS FOR PURCHASE OR CONSTRUCTION OF A NEW HOUSE. BUT IN THE PRESENT CASE THE ASSESSEE HAS NO T ADDUCED ANY PROOF FOR INVESTMENT BUT SIMPLY FILED AN UNREGISTERED DOCUMENT SO AS TO IMPRESS UPON THAT SH E IS ELIGIBLE FOR DEDUCTION U/S. 54. THE UNREGISTERED DOCUMENT DOES NOT HAVE ANY AUTHENTICITY AND CANNOT BE TAKEN INTO COGNIZANCE FOR ALLOWING DEDUCTION U/S 54 . IN THE WRITTEN SUBMISSION FILED THE ASSESSEE STATED T HAT THE PROPERTY IS NOT REGISTERED IN THE ASSESSEE'S NAM E 4 ITA.NO.742/HYD/2012 SMT. C. LALITHA HYDERABAD. EVEN TODAY. THUS THE ASSESSEE'S IMPLIED INTENTION T HAT IT IS ELIGIBLE FOR DEDUCTION U/S 54 ON THE UNREGISTERED DOCUMENT IS NOT IN ORDER. THEREFORE EVEN IN THIS C ASE ALSO THE ASSESSES FAILS. HENCE IT IS HELD THAT NO DEDUCTION U/S. 54 IS ALLOWABLE TO THE ASSESSEE. 7. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US AND SUBMITTED THAT THE ASSESSMENT HAS BEEN COMPLETED BY THE ASSESS ING OFFICER AFTER DUE VERIFICATION AND ACCEPTING THE EXPLANATION GIVEN BY THE ASSESSEE. THE ASSESSEE RELIED ON MALABAR INDUSTRIAL COMPANY LTD. VS. CIT 243 ITR 83 (SC) AND THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF SPECTRA SHARES & SCRIPS PVT. LTD. VS. CIT (2013) 354 ITR 35 (AP). 8. THE LEARNED D.R. SUBMITTED THAT THE CAPITAL GAI NS IS NOT LONG TERM CAPITAL GAIN AND ONLY SHORT CAPITAL GAIN AS HEL D BY THE COMMISSIONER OF INCOME TAX AND HENCE ORDER PASSED UNDER SECTION 263 IS JUSTIFIED. 9. IN THE RE-JOINDER THE LEARNED A.R. SUBMITTED TH E COMPUTATION OF SHORT TERM CAPITAL GAIN AS FOLLOWS : SALE CONSIDERATION RECEIVED ON SALE OF PROPERTY 3 0 00 000 LESS: COST ACQUISITION INCLUDING STAMP DUTY 13 22 380 16 77 620 LESS: COST OF IMPROVEMENT 17 10 000 CAPITAL GAIN/LOSS 32 380 10. THE LEARNED A.R. SUBMITTED THAT THERE IS NO LO NG TERM OR SHORT TERM CAPITAL GAIN WHATSOEVER SINCE THERE IS A LOSS OF RS.32 380/- IN THE CASE OF THE ASSESSEE. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIALS ON RECORD. WE FIND FROM THE MEMO OF INCOME AND THE RE TURN FILED THAT THE ASSESSEE HAS NOT MENTIONED ANYTHING ABOUT CAPITAL GA INS OR CAPITAL LOSS. 5 ITA.NO.742/HYD/2012 SMT. C. LALITHA HYDERABAD. THERE IS ALSO NO CLAIM FOR EXEMPTION U/S 54. THE AO HAS ALSO NOT DEALT WITH ANY OF THE CLAIM OF THE ASSESSEE REGARDING SALE OF P ROPERTY AT SOMAJI GUDA HYDERABAD. NOTHING HAS BEEN PRODUCED BEFORE TO SHOW THAT THE AO HAD CALLED FOR THE DETAILS AND EXPLANATION ABOUT THE SAL E IMMOVABLE PROPERTY AND WAS APPARENTLY SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSESSEE. EVEN IF SOME DOCUMENTS WERE FILED BEFORE THE AO FOR WHI CH NO PROOF OR ACKNOWLEDGEMENT HAS BEEN FILED WITH US THE AO HAS NOT EVEN MADE A PASSING MENTION ABOUT SALE OF IMMOVABLE PROPERTY MUC H LESS THE CAPITAL GAIN/ LOSS ARISING THEREFROM OR DEDUCTION U/S 54. THE DECISIONS CITED BY THE ASSESSEE ARE DISTINGUISHABLE ON FACTS REGARDING FAC TS FURNISHED AT THE TIME OF ASSESSMENT AND THE APPLICATION OF MIND BY THE AO. THESE ISSUES DO NOT APPEAR TO HAVE BEEN CONSIDERED AT ALL BY THE AO AND REQUIRE FURTHER CONSIDERATION. IN THE CIRCUMSTANCES AND ON THE FACT S OF THE CASE SUBMITTED BEFORE US WE CONCLUDE THAT THE CIT HAD VALIDLY EXER CISED THE JURISDICTION U/S 263. 12. BUT WE DO NOT ACCEPT THE CONCLUSION OF THE CI T WORKING OUT THE SHORT TERM CAPITAL GAINS AT RS. 16 77 620/- OR HOLD ING THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 54. HE HAS NOT APPREC IATED THAT FOR DETERMINING WHETHER AN ASSET IS LONG TERM OR SHORT TERM CAPITAL ASSET THE PERIOD OF `HOLDING THE ASSET IS RELEVANT AND NOT ME RELY THE DATE OF REGISTERED CONVEYANCE. UNDER CERTAIN CIRCUMSTANCES AN IMMOVABL E PROPERTY CAN BE CONSIDERED TO HAVE BEEN TRANSFERRED EVEN WITHOUT A REGISTERED CONVEYANCE DEED (PLEASE SEE MYSORE MINERALS V CIT 239 ITR 775 S C). HENCE THE PERIOD OF HOLDING OF THE ASSET BY THE ASSESSEE HAS TO BE REASS ESSED BASED ON THE FACTS OF THE CASE. FURTHER EVEN ASSUMING THAT IT IS A SHO RT TERM CAPITAL ASSET THE ASSESSEE HAD SUBMITTED THAT SHE HAD INCURRED EXPENDI TURE RS. 17 10 000/- SUPPORTED BY ENGINEERS CERTIFICATE WHICH MAY HAVE T O BE ADDED TO THE COST OF ACQUISITION OF THE ASSET. IF THIS EXPENDITURE IS TAKEN INTO ACCOUNT THERE WILL NOT BE ANY CAPITAL GAINS BUT ONLY LOSS ON SALE. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE CIT. 6 ITA.NO.742/HYD/2012 SMT. C. LALITHA HYDERABAD. 13. IN THE CIRCUMSTANCES WHILE UPHOLDING THE ASSU MPTION OF JURISDICTION U/S 263 WE SET ASIDE THE ORDER OF THE CIT IN SO FAR AS MERITS OF THE ISSUE IS CONCERNED AND REMIT THE MATTER TO THE FILES OF THE AO TO CONSIDER THE GAINS ARISING FROM SALE OF PROPERTY AT SOMAJI GUDA HYDERABAD IN ACCORDANCE WITH LAW. TO THIS EXTENT THE ORDER OF COMMISSIONER OF INCOME TAX UNDER SECTION 263 IS MODIFIED. 14. IN THE RESULT APPEAL OF THE ASSESSEE IS TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON : 18.10.2013 SD/- SD/- (CHANDRA POOJARI) (SMT. ASHA VIJAYA RAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD DATE 18 TH OCTOBER 2013. VBP/- COPY TO 1. SMT. C. LALITHA HYDERABAD C/O. P. MURALI & CO. C.A S. 6 - 3 - 655/2/3 1 ST FLOOR SOMAJIGUDA HYDERABAD 82. 2. IT O WARD - 6 (1) HYDERABAD. 3. C IT - I I I HYDERABAD 4. ADDL. CI T RANGE - 6 HYDERABAD 5 . DR B BENCH ITAT HYDERABAD