Income Tax Appellate Tribunal - Hyderabad
P. Vijaya Kumar, Hyderabad vs Ito,Ward 6(3),, Hyderabad on 30 November, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "A", HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT
AND
SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
I.T.A. No. 388/HYD/2014
Assessment Year: 2009-10
P. Vijaya Kumar The Income Tax Officer,
HYDERABAD Vs Ward-6(3),
[PAN: ADYPP7273K] HYDERABAD
(Appellant) (Respondent)
For Assessee : Shri S. Rama Rao, AR
For Revenue : Shri A. Sitarama Rao, DR
Date of Hearing : 28-09-2016
Date of Pronouncement : 30-11-2016
ORDER
PER B. RAMAKOTAIAH, A.M. :
This is an appeal by assessee against the order of the Commissioner of Income Tax (Appeals)-IV, Hyderabad, dated 13-12-2013. The issue in this appeal is with reference to cost of improvement claimed by assessee to an extent of Rs. 47,46,404/- spent in two financial years which was disallowed by the Assessing Officer (AO).
:- 2 -: I.T.A. No. 388/Hyd/2014
P. Vijaya Kumar
2. Briefly stated, assessee has sold a property at
Gajularamaram for Rs. 1.05 Crores and claimed cost of acquisition and development expenses at Rs. 99,96,854/-. AO has noted that assessee has claimed cost of acquisition at Rs. 52,50,000/- and cost of improvement in FY. 2007-08 at Rs. 28,50,450/- and in FY. 2008-09 at Rs. 18,96,404/-. AO noted that the land is plain and assessee could not have incurred so much of expenditure. He verified the Google maps over a period and noted that land was of plain terrain and also deputed an Inspector to examine and report. The ITI conducted filed enquiry and noted that there was a compound wall on three sides of the property and the nearest hill or up land was 1.5 KMs away from the plot. By enclosing the photos of the plot as well as Google Earth Maps, AO concluded the claim of improvement is not correct. However, he has allowed an amount of Rs. 2,50,000/- towards construction of compound wall and for other expenditure, thereby re-working out the Short Term Capital Gain.
3. When contested before the Ld.CIT(A), Ld.CIT(A) did not take into consideration the report of the ITI and the Google maps on the reason that they have neither established nor disproved assessee's claim. However, the CIT(A) examined the nature of expenditure vide para 4.4 and noted that the payments were made over a period of time and assessee could have substantiated the expenditure. Since assessee failed to discharge the onus, the order of AO was upheld. Aggrieved, the present appeal.
:- 3 -: I.T.A. No. 388/Hyd/2014
P. Vijaya Kumar
4. Assessee has raised the following grounds:
"2. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in holding that the appellant did not incur expenditure on development of land.
3. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in disallowing cost of improvements by way of development expenditure claimed by the appellant of Rs. 44,96,404/-.
4. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in determining the capital gain at Rs. 55 lakhs as against Rs. 5,03,146/-.
5. The learned Commissioner of Income Tax (Appeals) erred in confirming levy of interest u/s. 234A, u/s. 234B and u/s. 234C of the I.T. Act".
Ground Nos. 1 & 6 are general in nature.
5. We have heard the Ld. Counsel and Ld. DR.
6. In the course of the present proceedings, assessee's counsel was asked to place on record the details of returns of income and enclosures filed with the returns of income in earlier years along with copies of sale deed and purchase deed. In the Paper Book from pages 76 to 120, assessee has placed on record the copies of returns of income along with enclosures and also sale deed documents and one purchase agreement i.e., Agreement of Sale cum General Power of Attorney dt. 24-03-2007 for a consideration of Rs. 10 Lakhs.
7. On perusing the above documents which are placed after hearing of the case on 28-09-2016, it was noticed that assessee has shown purchase of two properties at Gajularamaram and as :- 4 -: I.T.A. No. 388/Hyd/2014 P. Vijaya Kumar per the Balance Sheet as on 31-03-2007, the cost of property was shown at Rs. 10,52,150/- each. The cost talleys with the Purchase cum Sale Agreement placed on record for Survey No. 206 equivallent to 42 Guntas (part). Whether this agreement is for the whole of the property or only part of the property could not be verified as only this document indicating Rs. 10 Lakhs cost was placed on record. As per the Balance Sheet, there are two properties costing almost same price at Rs. 10,52,150/- and Rs. 10,52,110/-. As on 31-03-2008, the value of the property had differed. As seen from the Balance Sheet placed in pg. 89, for the year ending 31-03-2008, the land at Gajularamaram at Survey No. 206 was shown at Rs. 81,00,450/- and the land at Gajularamaram in Survey Nos. 335/A, 336, 337 and 336 was shown at the same cost of Rs. 10,52,110/-. The above indicates that the impugned land which is sold during the year was only costing Rs. 10,52,110/- and the value has been shown as on 31-03-2008 at Rs. 81,00,450/-. Assessee's claim of cost of land including improvements as per the AO's order was at Rs. 99,96,854/-. Since the cost of land and the cost of improvement shown on the particular piece of land is at variance with that of values shown in the assessment order, in the interest of justice, we are of the opinion that the entire cost as well as cost of improvement needs verification by the AO afresh, not only on the basis of the returns filed by assessee in earlier year but also on the basis of the bank entries and other book entries. It is noticed that assessee is partner in a firm and has various incomes and has been filing returns regularly. In view of that, we are of the opinion that this forum cannot arrive at any decision without examination on the facts and accordingly, we are of the opinion that the entire issue :- 5 -: I.T.A. No. 388/Hyd/2014 P. Vijaya Kumar should be re-examined by the AO. For this purpose, the orders of the AO and CIT(A) are set aside and entire assessment for computation of Short Term Capital Gain is restored to the file of AO. The grounds are allowed for statistical purposes.
8. In the result, appeal of assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 30th November, 2016 Sd/- Sd/-
(D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 30th November, 2016 TNMM Copy to :
1. Shri P. Vijaya Kumar, Hyderabad. C/o. Sri S. Rama Rao, Advocate, Flat No. 102, Shriya's Elegance, H.No. 3-6-643, St. No. 9, Himayatnagar, Hyderabad.
2. The Income Tax Officer, Ward-6(3), Hyderabad.
3. The Commissioner of Income Tax(Appeals)-IV, Hyderabad.
4. The Commissioner of Income Tax-III, Hyderabad.
5. D.R. ITAT, Hyderabad.
6. Guard File.