Ita/281/2010 Of Sri Y A Subramanyam (Huf) v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 8 DAY OF JANUARY 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE RAVI V.HOSMANL1LT.A. NO.281 OF 2010 BEI|WEEN SRI. Y.A. SUBRAMANYAM (HUF)AGED ABOUT 58 YEARS.S/O SRI. LATE SRI. Y.S. ADINARAYANA SETTYR/AT. SUDHAMA HOUSE.CHICKPET, BANGALORE-560053. APPELLANT (By Sri. S. PARTHASARATHI, ADV.)| AND" THE DEPUTY COMMISSIONER OF INCOME-TAXCIRCLE 5(1), BANGALORE. ... RESPONDENT (By Sri. K.V. ARAVIND, ADV.) THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 20-4-2010|PASSED IN ITA NO.1098/BNG/2009, FOR THE ASSESSMENTYEAR 2006-07, PRAYING TO FORMULATE THE SUBSTANTIAL|QUESTIONS OF LAW STATED THERIN. ALLOW THE APPEAL|AND SET ASIDE THE ORDERS PASSED BY THE [TAT|BANGALORE IN ITA No.1098/BNG/2009, DATED 20-4-2010,.IN THE INTEREST OF JUSTICE AND EQUITY. THIS I.T.A. COMING ON FOR HEARING, THIS DAY,ALOK ARADHE J.,DELIVERED THE FOLLOWING: JUDGMENT Mr.S.Partnasaratni,iearnec|counsel]for.the appellant.| Mr.K.V.Aravind,learned|counsel|for.the respondent. 2. This appeal under Section 260-A of the Income|Tax Act, 1961 (hereinafter referred to as ‘the Act’, forsnort) has been filed by the assessee which wasadmitted by a Bench of this Court on the followingsubstantial question of law: When once the revenue accepts thevaluation for the purpose of capital gains in)the returns filed over a period of years,|subsequently can they refuse to accept the|Saidvaluation aS|thebasis, fortheSubsequent years?| 3. Facts giving rise to the filing of the appeal|briefly stated are that the appellant had filed return ofincome on 04.01.2007 which was processed underSection 143(1) of the Act. The appellant along with.others had owned an inherited property. The appellantand other members of the family had different andspecific shares in the said property. All the co-ownershave constructed a residential complex on the aforesaidland in accordance with the terms and conditions of the.agreement and sold the flats which came to theirpossession as their individual share. The capital gainswhicn arose from tne sales were decliared. Tneappellant, for the purpose of capital gains, had shown.tne fair market value as per the report of the valuer inwhich the value was declared as490.25 per square feet. —During the assessment proceedings, the AssessingOfficer was of the opinion that the fair market valuedeclared by the appellant was on the nigher side as theland was situated in an underdeveloped area. Finally, the Assessing Authority concluded the assessment byadopting the fair market value so determined at the rateOf =25.50 per square feet and reworked the capital gains|and made certain disallowances. Being aggrieved by theorder of assessment, the appellant filed an appealbefore the Commissioner of Income Tax (Appeals). TheCommissioner of Income Tax (Appeals) partly allowedthe appeal with an observation that there is no reason toadopt the difference fair market value since sales wereaffected from the same survey and locality. Accordingly,the Appellate Authority adopted=38/- per square feet|instead of=25.50 per square feet as adopted by theAssessing Authority. Being aggrieved, the appellant|preferred an appeal before the Income Tax Appellate|Tribunal. The Tribunal, by an order dated 20.04.2010,|partly allowed the appeal and the fair market value wasmodified as on 01.04.1981 by|450/- per square feet.Being aggrieved, the appellant has filed this appeal. 4. Learned counsel for the appellant submitted that|none of the parties have adverted to the fact that oncethe revenue accepts the value for the purpose of capitalgains in the return filed over a period of years,subsequently, they cannot refuse to accept the valuationfor the consequent years. It is further submitted that inall the cases, the scrutiny assessment was made andtherefore, the valuation report which was accepted forthe purpose of capital gains in the previous years oughtto have been accepted. However, the aforesaid aspectof the matter has not been adverted to by theauthorities under the Act. 5. On the other hand, learned counsel for the)respondent submitted that if the valuation for thepurpose of capital gain has been accepted in scrutiny.assessment for the previous years, the same shall beadverted to by the authorities under the Act. 6. In view of the aforesaid submissions and after.perusal of the orders passed by the authorities underthe Act, it is evident that the issue whether, when thevaluation for the purpose of capital gains in the returnsfiled over a period of years, is accepted by theauthorities, they cannot refuse to accept the same forthe consequent years, has not been adverted to by theauthorities under the Act. 7. For the aforementioned reasons, the substantial question of law framed by a Bench of this Court by anorder dated 09.08.2010 Is answered in favour of theassessee subject to the condition that the valuation.report has been accepted in scrutiny assessment at theinstance of the assessee. | 8. In the result, the impugned order dated)20.04.2010 is hereby quashed and the matter isremitted to the Assessing Officer to decide the issue with. (6C1(8�20�=15:12)07�;0(�236�<:(<046�0;�91<)215�C1)74�)7� 236�5)C32�0;�236�0A46(=12)074�>186�)7�23)4�0(86(�4:<(1�� �990(8)7C5'#�236�1<<615�)4�8)4<0468�0;��� ��� ������������ �������������