Ita/547/2007 Of The Commr Of Income Tax v. Sri M.l.sridhar

IN THB HIGH COURT OF KARNATAKA AT BANGALORE DATEBD THIS THE [rd]DAY OF FEBRUARY 2014 PRESENT THER HON’BLE MR. JUSTICE DILIP B.BHOSALEAN ] THE HON’BLE MR. JUSTICE B.MANOHAR| I.T.A. No.547/2007 BETWEEN : 1.|The Commissioner of Income-tax, Central Circle, C.R.Building, Queens Road, Bangalore. 2 |The Income Tax Officer, Ward — 19(2), C.R.Building, Queens Road, Bangalore. ... APPELLANTS (By Sri.K.V.Aravind, Adv.) AND :. M.L.Sridhar,No.101, 3[* ]Cross,RMV Extension,4[* ]Main,vadasivanagar,Bangalore. ... RESPONDENT (By Sri.M.V.Javali, Adv.|absent)) This I.T.A. is filed under Section QO0OA oft thIncome Tax Act, 1961 praying to (i) formulate thesubstantial questions of law stated therein, (11) allow theappeal and set-aside the order passed by the IncomeTax|AppellateTribunal, Bangalore|1nNLT.A..No.396/Bang/2006 dated 09.02.2007 and confirm the -9O-. order of the Appellate Commissioner confirming theorder passed by the Income Tax Officer, Ward-19(2),Bangalore, in the interest of justice and equity. This 1.T.A. coming on for|hearing,this day,DilipB.Bhosale, J.,delivered the following: JUDGMENT This Income-tax appeal is directed against theorder dated 09.02.2007 passed by the Income-taxAppellate Tribunal, Bangalore Bench A’ (for short,“the.Tribunal’) in LT.A. No.3896/2006 for the assessmentyear 1999-2000 whereby the Tribunal allowed theappeal and set-aside the orders passed by the FirstAppellateAuthoritydated|23.03.2006andthe.Assessment Officer dated 22.03.2005. 2. It appears that the respondent-assessee hadfiled return under Section 139 of the Income-tax Act,|1961 (for short“the Act’) on 23.06.1999 and the same.was accepted under Section 143(1) of the Act videintimation dated 22.11.1999. The assessment was/§thereafter re-opened under Section 147 of the Act. Itwas reopened solely on the ground that the cost of -3- acquisition, shown by the assessee, of the property inquestion was much more than the guidance valueprescribed by the Government Circular bearing No.RB-3990 KST 79 dated 10.11.1982. #£$This Court whiadmitting the appeal vide order dated 14.06.2010 hadformulated the two substantial questions of law forconsideration. However, learned counsel for the partiesstate that the following substantial question of law onlyarise for our consideration: 5$6Whether the Tribunal was justified in)holding that the Government Circular)prescribing the guidance value for.stamp duty cannot be placed reliance.by the Assessing Officer to reopen the.assessments under Section 147 read|with Section 148 of the Act?holding that the Government Circular)prescribing the guidance value for.stamp duty cannot be placed reliance.by the Assessing Officer to reopen the.assessments under Section 147 read|with Section 148 of the Act? 3. None appears for the respondents, though)served and hence, with the assistance of the learnedcounsel appearing for the Revenue, we have perused theorder passed by the Tribunal and so also the orderspassed by the Authorities below. From the facts of thecase, it appears that the assessee had acquired land -4 _| 5$6Whether the Tribunal was justified in)holding that the Government Circular)prescribing the guidance value for.stamp duty cannot be placed reliance.by the Assessing Officer to reopen the.assessments under Section 147 read|with Section 148 of the Act?holding that the Government Circular)prescribing the guidance value for.stamp duty cannot be placed reliance.by the Assessing Officer to reopen the.assessments under Section 147 read|with Section 148 of the Act? 3. None appears for the respondents, though)served and hence, with the assistance of the learnedcounsel appearing for the Revenue, we have perused theorder passed by the Tribunal and so also the orderspassed by the Authorities below. From the facts of thecase, it appears that the assessee had acquired land -4 _| measuring 7,987.50 sq. ft. prior to 01.04.1981. Itis notclear whether he made construction of 600 sq. ft. overthe said plot or he acquired the land with built up area. —Be that as it may, the value of the land shown in thereturn filed in the year 1999-2000 was Rs.300/- per sq.ft. and the cost of construction was shown at Rs.100/-.per sq. It. As against this, the Circular dated)10.11.1982, on the basis of which, the assessment was|reopened, shows the guidance value of the residentialplot in the locality was around Rs.30.22 per sq. it. andas per the Senior Registered Valuer, cost of theconstruction was Rs./0/- per sq. ft. In view thereof, theassessment was reopened by the Assessing Officer andhe ultimately called upon the assessee to pay tax on thedifference of the acquisition value of the property andthe price received by him on sale of the property in theyear 1999-2000. The order of the Assessing Officer was_confirmed by the First Appellate Authority. The|Tribunal did not go into merits of the case and allowedthe appeal solely on the ground that the Assessing -5 -) Officer was wrong in re-opening the assessment aiter 160years on the basis of the Circular dated 10.11.1982. | 4. In our opinion, the view taken by the Tribunalwas wrong. Though the Circular was issued 16 yearsago, it was showing the guidance value prevailing at therelevant time. Having regard thereto and consideringthe difference between the guidance value and the valueof land shown by the assessee in the return, theTribunal ought to have recorded its finding on meritsalso. It is pertinent to note that the assessee did notand could not produce on record any authentic materialto show the purchase price of the property in theyearl1981 or, when he actually purchased the saidproperty. He quoted value of the land at Rs.300/- persq. it. on the basis of the Valuer’s report obtained byhim. The Tribunal, therefore, ought to have consideredthe case on merits also to find out whether the Valuer’sReportWaSauthenticandacceptable.Inthecircumstances, we are inclined to allow this appealanswering the substantial question of law formulated by -6-. this Court, in their favour and against the assessee. — Hence, the following order: 5+6Appeal isallowed 5=6The appeal filed by the Tribunal, accordingly| stands restored to file. | 5(6The Tribunal shall hear and decide the appeal|atresh on merits in accordance with law and in.atresh on merits in accordance with law and in. the light of the observations made in this order. (d)All contentions of the parties are kept open. | 5!6It is needless to mention that the Tribunal shall issue notice to the assessee, who chose to’remain absent before this Court, before dealingremain absent before this Court, before dealing with the appeal afresh. Sd/-. JUDGE Sd/-| JUDGE $'$