M/s H. Rajendra Kumar, Bangalore v. ITO, Bangalore

ITA 799/BANG/2010 | 2004-2005
Pronouncement Date: 01-03-2011 | Result: Allowed

Appeal Details

RSA Number 79921114 RSA 2010
Bench Bangalore
Appeal Number ITA 799/BANG/2010
Duration Of Justice 8 month(s) 16 day(s)
Appellant M/s H. Rajendra Kumar, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 01-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 01-03-2011
Date Of Final Hearing 17-02-2011
Next Hearing Date 17-02-2011
Assessment Year 2004-2005
Appeal Filed On 15-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO. 799/BANG/2010 ASSESSMENT YEAR : 2004-05 M/S. H. RAJENDRA KUMAR C/O. G.V. JHABAKH 157 P.M. SWAMY COLONY R.S. PURAM COIMBATORE 2. : APPELLANT VS. THE INCOME TAX OFFICER WARD 5(3) BANGALORE. : RESPONDENT APPELLANT BY : SHRI R. KRISHNAMURTHY ADVOCATE RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI ADDL. C IT(DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT (A)-II BANGALORE IN ITA NO:169/W 5( 3)/CIT(A)-II/06-07 DATED: 15.10.2009 FOR THE ASSESSMENT YEAR 2004-05. 2. THE ASSESSEE IN THE GROUNDS OF APPEAL HAD RAI SED NINE GROUNDS WHICH ARE LISTED OUT AS UNDER: THE ASSESSING OFFICER ERRED IN NOT ITA NO.799/BANG/10 PAGE 2 OF 8 - CONSIDERING THE CLAIM OF THE ASSESSEE THAT THE PROP ERTY WAS AGRICULTURE LAND AND DOES NOT ATTRACT CAPITAL G AINS; - CONSIDERING THE ADVANCE MADE ON RESIDENTIAL PROPERT Y AT BANGALORE; - CONSIDERING THE INVESTMENT MADE IN RESIDENTIAL PROP ERTY AT COIMBATORE; - CONSIDERING THE PETITION TO TRANSFER THE FILE TO CO IMBATORE WHICH HAD THE JURISDICTION TO THE ASSESSEES CASE; - TREATING THE RE-COMPUTATION OF INCOME U/S 154/155; - VERIFYING THE GUIDELINES VALUE FROM THE WEBSITE OF TAMIL NADU GOVERNMENT; & - THE AO ERRED IN DISCUSSING EVENTS NOT RELATED TO TH E ASSESSMENT YEAR CONCERNED; & - THAT THE CIT (A) ERRED IN HOLD THAT THE ASSESSEE HA D CLAIMED EXEMPTION IN THE INVESTMENT OF COIMBATORE PROPERTY AND THAT HE HAD ERRED IN NOT GIVING ANY FI NDING WITH REGARD TO THE REVISED RETURN FILED AT COIMBATO RE OFFICE. 3. BEFORE VENTURE INTO ADDRESS THE GRIEVANCES OF T HE ASSESSEE IT WAS NOTICED THAT THE APPEAL PREFERRED BY THE ASSESS EE WAS BARRED BY LIMITATION OF ONE DAY. 3.1. THE ASSESSEE DURING THE COURSE OF HEARING HAD SUBMITTED A PETITION FOR CONDONATION OF DELAY ALONG WITH AN AFF IDAVIT DATED: 21.1.2010 (SIC) 21.1.2011 WHEREIN IT WAS PLEADED AMONG OTHE RS THAT THE DELAY OF ONE DAY IN FILING THE APPEAL MAY BE CONDONED WHICH WAS UN-INTENTIONAL AND BEYOND THE CONTROL OF THE APPELLANT. 3.2. DUE CONSIDERATION OF THE ASSESSEES PLEA THAT THE PREFERRING OF THE APPEAL AGAINST THE IMPUGNED ORDER OF THE CIT (A) WAS DELAYED BY ITA NO.799/BANG/10 PAGE 3 OF 8 JUST A DAY THE SAME WAS CONDONED AND THE REGISTRY WAS DIRECTED TO PLACE THE ASSESSEES PETITION ALONG WITH THE AFFIDAVIT IN ORIGINAL ON RECORD. 4. THE ISSUE IN BRIEF THE ASSESSEE - AN INDIVIDU AL - WAS A DEALER IN ELECTRICAL GOODS FURNISHED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER DISPUTE ADMITTING A TOTAL INCOME AT RS.1.78 LAKHS [CLAIMING EXEMPTION U/S 54EC OF THE ACT] WHICH WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY HIS CASE WAS TAKEN UP FOR SCRUTINY. THE AO HAD HOWEVER DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.7 .32 LAKHS. THE REASONS FOR SUCH ACTION OF THE AO ARE SUMMARIZED AS UNDER: - THE ASSESSEE AND FIVE OTHERS APPEARS TO HAVE JOIN TLY SOLD AN IMMOVABLE PROPERTY AT COIMBATORE FOR RS.67.5 LAKHS AND THE AS SESSEES SHARE WAS 2/6 TH WHICH WAS RS.22.5 LAKHS AS HE HAD TAKEN OVER 1/6 TH SHARE OF ONE DINESH KUMAR; THAT HE HAD INVESTED RS.18.5 LAKHS OU T OF RS.19.11 LAKHS AND THE BALANCE WAS OFFERED FOR TAX UNDER LTCG; - HOWEVER ON SCRUTINY OF THE SALE DEED OF THE SAI D PROPERTY IT WAS FOUND THAT THE PROPERTY WAS REGISTERED FOR RS.84.12 LAKHS AND TAKING INTO ACCOUNT THE TOTAL CONSIDERATION AT RS.84.12 LAKHS WHICH HAD RESULTED IN LTCG OF RS.24.65 AFTER INDEXATION OF COST OF ACQUISITION AN D AFTER GIVING CREDIT FOR RS.18.5 LAKHS BEING THE AMOUNT INVESTED IN NABARD U /S 54EC OF THE ACT THE BALANCE OF RS.6.15 LAKHS WAS BROUGHT ON TAX NET ; - THE AO HAD BRUSHED ASIDE THE ASSESSEES CLAIM MA DE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR FURTHER DEDUCTION OF RS.6 LAKHS OUT OF RS.6.15 LAKHS AS INVESTMENT IN PROPERTY AT BANGALOR E ON THE GROUND THAT THE ASSESSEE HAD NOT ORIGINALLY MADE ANY CLAIM WITH REGARD TO INVESTMENT IN PROPERTY AT BANGALORE IN HIS RETURN OF INCOME F ILED ON 24.6./2004 AND ALSO FURNISHED NO REVISED RETURN FOR SUCH A CLAIM A ND EVEN ON AN INQUIRY BY THE REVENUE REVEALED THAT THE SAID PROPERTY WAS A COMMERCIAL PROPERTY AS THE GROUND FLOOR SAID TO BE USED FOR GO-DOWN AN D THE FIRST FLOOR WAS LET- OUT TO A TENANT ETC. 5. THIS WAS HOTLY OBJECTED TO BY THE ASSESSEE BEFO RE THE LD. CIT (A). AFTER DUE EXAMINATION OF THE CONTENTIONS PUT- FORTH BY THE ASSESSEE THE OBSERVATIONS MADE BY THE LD. CIT (A) ARE SUMMED UP AS UNDER: ITA NO.799/BANG/10 PAGE 4 OF 8 - THE AO HAD REJECTED THE APPELLANTS CLAIM OF EXEM PTION U/S 54F OF THE ACT ON TWO COUNTS: (I) THE APPELLANT HAD NOT CLAIMED ANY EXEMPTION ON THE PROPERTY AT BANGALORE IN THE ORIGINAL RETURN FURNISHED ON 24.6. 2004; & (II) THE PROPOSED PROPERTY BEING USED FOR COMMERCIAL PUR POSE - EXTENSIVELY QUOTING THE PROVISIONS OF S.54F OF TH E ACT AND ALSO TAKING CUE FROM THE PROVISO OF THE SAID SECTION WHEREIN IT HA S BEEN PRESCRIBED THAT - THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY WHERE THE ASSESSEE (I) OWN MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET. - THAT THE PRESENT APPELLANT HIMSELF ADMITTED THAT HE WAS HAVING A RESIDENTIAL PROPERTY AT COIMBATORE ON WHICH HE HAD CLAIMED EXEMPTION UNDER THE SAID SECTION. THIS ASSERTION ITSELF CLEAR THAT THE APPELLANT OWN ONE MORE RESIDENTIAL HOUSE THUS ATTRACT THE PROVI SO OF SUB-SECTION (I) OF SECTION 54F OF THE ACT; - THE APPELLANT HAD FURNISHED A COPY OF RENT/LEASE AGREEMENT FOR THE PROPERTY SITUATED AT AZIZ SAIT INDUSTRIAL TOWN NAY ANDAHALLI OF BANGALORE; - TAKING REFUGEE UNDER THE FINDING OF THE HONBLE T RIBUNAL LUCKNOW BENCH REPORTED IN (2008) 305 ITR (AT) 62 THE CIT ( A) UPHELD THE AOS STAND IN ADOPTING THE SALE CONSIDERATION OF RS.84.1 2 LAKHS OF COIMBATORE PROPERTY AS UNDER: 5. IN THE INSTANT CASE AS PER SALE DEED ACTUAL S ALE CONSIDERATION OF VACANT LAND WAS RS.67 50 000/-. HOWEVER FOR THE PURPOSE OF STAMP DUTY IN RESPECT OF TRANSFER OF SAID PROPERTY VALUED FOR RS. 84 12 300/-. THERE IS NO INFORMATION AVAILABLE ON RECORD THAT THE APPELLANT HAS OBJECT TO THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. I N THE LIGHT OF THE RATIO OF THE JUDGMENT OF THE HONBLE ITAT LUCKNOW (SUPRA ) THAT SECTION 50C WHICH PROVIDES FOR SUBSTITUTION OF STAMP VALUE FOR THE APPELLANT CONSIDERATION DECLARED IN THE DOCUMENT IS MANDATORY SUBJECT TO THE REMEDIES IN THE SECTION ITSELF. WITH THE FACTS STA TED ABOVE THERE IS NO REASON TO INTERFERE WITH THE FINDINGS OF THE AO IN ADOPTING THE SALE CONSIDERATION AT RS.84 12 300/-. 6. AGGRIEVED THE ASSESSEE HAS COME UP WITH THE PR ESENT APPEAL. THE LD. A R MORE OR LESS REITERATED WHAT W AS PORTRAYED BEFORE THE LD. CIT (A). IN FURTHERANCE COPIES OF (I) SALE DE ED OF BANGALORE PROPERTY; ITA NO.799/BANG/10 PAGE 5 OF 8 SALE DEED DATED: 20.2.2001 AND (II) RENT AGREEMENT OF SAID PROPERTY WERE FURNISHED TO STRENGTHEN THE ASSESSEES CLAIM. 6.1. ON THE OTHER HAND THE LD. D R WAS VERY BRIEF IN HER URGE THAT THE AO HAD ANALYZED THE ISSUE IN DEPTH AND CAME TO THE CONCLUSION IN A RIGHTEOUS MANNER WHICH HAS BEEN JUDICIOUSLY RATIFIE D BY THE FIRST APPELLATE AUTHORITY. IT WAS THEREFORE PASSIONATELY PLEADED THAT SINCE THE FINDING OF THE LD. CIT (A) DOESNT SUFFER FROM ANY INFIRMITY W HICH REQUIRES THE INTERVENTION OF THIS HONBLE BENCH AT THIS STAGE. 7. WE HAVE ATTENTIVELY CONSIDERED THE RIVAL SUBMIS SIONS SCRUPULOUSLY PERUSED THE RELEVANT RECORDS AND ALSO THE EVIDENCES PRODUCED BY THE LD. A R DURING THE COURSE OF HEARIN G PROCEEDINGS. 7.1. AT THE OUT-SET WE WOULD LIKE TO POINT OUT TH AT THE ISSUES BEFORE US REQUIRE THOROUGH EXAMINATION AND INVESTIG ATION WHICH HAVE NOT BEEN PROPERLY CARRIED OUT AT THE TIME OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS. IN THE VIEW OF THE ABOVE AND IN THE I NTEREST OF JUSTICE THE MATTER REQUIRES TO BE REMITTED BACK ON THE FILE OF THE A.R FOR FRESH CONSIDERATION FOR THE FOLLOWING REASONS: (I) THE ASSESSEES CLAIM THAT THE PROPERTY SOLD AT COIM BATORE WAS AGRICULTURAL LAND AND DOESNT ATTRACT CAPITAL GAINS BUT NO DOCUMENTARY EVIDENCE WAS FORTH-COMING TO STRENGTHEN HIS CLAIM AS SUCH; (II) NO SALE INSTANCES OF SIMILAR PROPERTIES IN THE VICI NITY WERE FURNISHED TO SUPPORT HIS CLAIM THAT THE RATE ADOPT ED BY THE REGISTRATION AUTHORITIES WERE ONLY FOR STAMP DUTY P URPOSES AND THAT THE SUBJECT PROPERTY WAS ONLY AGRICULTURAL LA ND ETC.; (III) WHEN THE BUYER OF THE SAID PROPERTY [M/S.SHAKTHI CO NSTRUCTION] WAS SPECIFICALLY QUERIED BY THE AO WHETHER THE PROP ERTY WAS AN AGRICULTURAL LAND OR OTHERWISE THE REPLY WAS RATHE R EVASIVE IN AS MUCH AS WHATEVER BE THE CONSIDERATION AGREED UPON BETWEEN ITA NO.799/BANG/10 PAGE 6 OF 8 THE BUYER AND SELLER THE STAMP AUTHORITIES HAD FIX ED A VALUE WHICH IS POPULARLY KNOWN AS GUIDELINE VALUE AND T HIS IS BEING RETURNED IN THE DOCUMENT AS THE PRESENT MARKET VALU E WHICH HAVE BEEN RELEVANT ONLY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. THIS VIRTUALLY PUT THE ASSESSEES CLAIM UNDER THE SCANNER; (IV) WITH REGARD TO THE ASSESSEES CLAIM THAT THE AO HAD ERRED IN NOT CONSIDERING THE INVESTMENT MADE IN A RESIDENTIAL PR OPERTY AT COIMBATORE HOWEVER THE DOCUMENT DT.20.2.2001[REG ISTERED WITH THE REGISTRATION AUTHORITIES AT COIMBATORE) B ETWEEN THE ASSESSEE AND SANKARAMMAL KALAISELVI AND NESAMANI D ESCRIBES THAT THE ASSESSEE HAD PURCHASED A PROPERTY FOR RS. 2.10 LAKHS WHICH DESCRIBES 181 SFT. CONSISTING OF R.C.C. SHO P WITH ELECTRICITY CONNECTION (R.R.NO.535) ETC.; THAT A DO UBT HAS ARISEN AS TO WHETHER THE SAID PROPERTY WAS A SHOP BUILDING OR A RESIDENTIAL HOUSE AS CLAIMED BY THE ASSESSEE; - HOWEVER THE LD. CIT (A) IN HIS FINDING ASCRIBES TH AT 4.5. IN THE INSTANT CASE THE APPELLANT HIMSELF A DMITTED THAT HE IS HAVING A RESIDENTIAL PROPERTY AT COIMBAT ORE ON WHICH HE HAS CLAIMED EXEMPTION UNDER THE SAID SECTI ON. IF SO THE ASSESSEES CLAIM FOR EXEMPTION FOR A PRO PERTY AT BANGALORE CANNOT BE ACCEDED TO. - THIS REQUIRES VERIFICATION; (V) THE ASSESSEE CLAIMED THAT HE HAD PETITIONED TO TH E AO FOR TRANSFER THE FILE TO HIS COUNTERPART AT COIMBATORE AS HE HAD JURISDICTION TO ASSESS HIS CASE ETC. HOWEVER NO D OCUMENTARY PROOF WAS FORTH-COMING FOR SUCH A CLAIM; (VI) THE ASSESSEES OTHER CLAIM THAT HE HAD FURNISHED A REVISED RETURN AT COIMBATORE. HOWEVER THE PROOF FOR HAVING DONE SO HAS NOT BEEN FURNISHED TO ASCERTAIN THE AUTHENTICITY OR OTH ERWISE OF SUCH A CLAIM; - THE ASSESSMENT ORDER WAS ALSO SILENT ON THIS POIN T; (VII) THE STAND OF THE REVENUE WAS THAT THE PROPERTY AT B ANGALORE WAS USED FOR COMMERCIAL PURPOSE AND THUS THE ASSESSEE WAS NOT ENTITLED TO CLAIM CAPITAL GAINS ETC. HOWEVER ON FACE OF IT THE PROPERTYS ADDRESS HAS BEEN GIVEN ONLY AS AZEEZ SAI T INDL. TOWN MAY BE A PRIVATELY FORMED AREA. IT WAS NOT EXPLI CITLY CLARIFIED WHETHER THE PLACE WAS CATEGORIZED AS AN INDUSTRIAL AREA BY THE LOCAL AUTHORITIES. MOREOVER THE INCOME-TAX ACT DO ESNT DEFINE THAT THE RESIDENTIAL PROPERTY SITUATED AT AN INDUST RIAL AREA WILL NOT BE QUALIFIED FOR EXEMPTION U/S 54F OF THE ACT. ITA NO.799/BANG/10 PAGE 7 OF 8 - THIS REQUIRES EXAMINATION. 7.2. TO FACILITATE THE AO TO LOOK INTO THE ABOVE F ACTS THE ISSUE IS REMITTED BACK ON THE FILE OF THE AO FOR FRESH CONSI DERATION AND TO TAKE APPROPRIATE ACTION IN ACCORDANCE WITH THE LAW OF C OURSE AFTER AFFORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEA RD. IN THE MEANWHILE THE ASSESSEE THROUGH HIS A.R IS ADVISED TO FURNIS H ALL THE RELEVANT MATERIALS AT HIS POSSESSION TO THE AO TO ENABLE HIM TO CARRY OUT THE DIRECTIONS OF THIS BENCH CITED SUPRA IN AN EXPEDITI OUS MANNER. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES . PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF MARCH 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 1 ST MARCH 2011. DS/- ITA NO.799/BANG/10 PAGE 8 OF 8 COPY TO: BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE. 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE