Itta/238/2022 Of Sri Natakari Gopal v. Income Tax Appellate Tribunal And 2 Others

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD THURSDAY ,THE EIGHTEENTH DAY OF AUGUSTTWO THOUSAND AND TWENTY TWO PRESENTTHE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYANANDTHE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY INCOME TAX TRIBUNAL APPEAL NO: 238 OF 2022 Appeal under Section 2604 of the lncome Tax Act, 1961 against orderdated 24-11-2021 in ITA No 914/H/2019 , Assessment year 2007-2008 on the fileof the lncome Tax Appellate Tribunal, Hyderabad, Bench [- ]B, Hyderabad [preferred]against the order daled 04-03-2019 in Appeal No. 10245 12018-19 on the file ofthe Court of the Commissioner of lncome Tax ( Appeals ) -'12, Hyderabadpreferred against the order dated 31-03-2016 Between: Sri Natakari Gopal, S/o N.Agamaiah, Age 58 years, H.No 3-60, Maikapur Village,Kondapur Mandal, Sanga Reddy District, (PAN No. AJUPN 1204C) ...APPELLANT AND '1 . Towers, Kavadiguda, Secunderabad.lncome Tax Appellate Tribunal , Hyderabad Bench - B, Room No 502, CGO 2. Commissioner of lncome Tax (A), lll, Aayakar Bhavan, Hyderabad. 3. lncome Tax Officer, Assessment Officer, Ward 1, Sanga Reddy ...RESPONDENTS IA NO: 1 OF 2022 Application under Section 151 CPC [praying ]that in the circumstances statedin the accompanying affidavit, the High Court may be [pleased ]to condone thedelay of 3 days in [preferring ]the [present ]appeal against the order of ITA No9141H12019 on the file of the ITAT Hyderabad, Bench - B, Hyderabad, in theinterest of [justice.] lA NO: 2 OF 2022 Petition under Section 151 CPC praying that in the circumstances staled inthe affidavit filed in support of the petition, the High Court may be pleased to [grant]stay of all furlher [proceedings ]and operation of the [judgment ]in the order of ITA No9141H12019 on the file of the ITAT Hyderabad, Bench - B, Hyderabad, duringpending main appeal in the interest of justice. Counsel for the Appellant: SRl. N. NAVEEN RAJ Counsel for the Respondents: NONE APPEARED The Court made the following: ORDER THE HON'BLE THE CHIEF JUSTICE UJJAL BHIIYAN AND THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY I.T.T.A.No.238 of 2O22 ORDER: (Per the Hon'ble the Chief Justtce Uljal Bhugan) Heard Mr. N.Naveen Raj, learned counsel for the appellant. 2. This appeal has been preferred by the assessee as theappellant under Section 260A of the lncome Tax Act, 196 1 (brieflyreferred to hereinafter as 'the Act') assailing the legality andvalidity of the order dated 24.11.2021 passed by the Income TaxAppellate Tribunal, Hl,derabad Bench 'B', Hyderabad (Tribunal) inITA No.914/H l2Ol9 for the assessment year 2007-08. 3. The appeal has been preferred proposing the followingquestions as substantial questions of lau,: lIn the facts and circumstarces of the case, whether the orderof ITAT in dismissing IT oi thc assessee and upholding thesa-le value of property at Rs.11 lakhs on the basis of a letterin English, given in the year 2008, to the assessing officer,who was uneducated with rural background and notof ITAT in dismissing IT oi thc assessee and upholding thesa-le value of property at Rs.11 lakhs on the basis of a letterin English, given in the year 2008, to the assessing officer,who was uneducated with rural background and notconversant with English, agarnst the sale consideration ofRs. 1,50,000 shown in the registered sale deed and computation of LTCG is illegal and perverse, is liable to be setaside? 2Whether the agricultural land sold by the assessee dated l7-7l-2006 is a capital asset, attracting capital gains in the eyeof law?7l-2006 is a capital asset, attracting capital gains in the eyeof law? 3Whether the land in subject comes .,r'ithin the purview of theLTCG, without there being evidence, and in hasty way carneto conclusion on presumptions and assumptions?LTCG, without there being evidence, and in hasty way carneto conclusion on presumptions and assumptions? computation of LTCG is illegal and perverse, is liable to be setaside? 2Whether the agricultural land sold by the assessee dated l7-7l-2006 is a capital asset, attracting capital gains in the eyeof law?7l-2006 is a capital asset, attracting capital gains in the eyeof law? 3Whether the land in subject comes .,r'ithin the purview of theLTCG, without there being evidence, and in hasty way carneto conclusion on presumptions and assumptions?LTCG, without there being evidence, and in hasty way carneto conclusion on presumptions and assumptions? 4Whether the orders of the Tribunal a.nd Revenue solelyrelying on a letter in English given for the purpose of capitalgain to have obtained from the assessee, who was illiterateald uneducated, rural background is sustainable in law?relying on a letter in English given for the purpose of capitalgain to have obtained from the assessee, who was illiterateald uneducated, rural background is sustainable in law? 5Whether the courts below without following due process cancome to conclusion for determining such huge amount?"come to conclusion for determining such huge amount?" 4 . Learned counsel for the for the appellant submits thatappellant is an uneducated person with rural background and notconversant u'ith English language. Therefore, he could notproperly defend himself in the assessment proceeding. Learned counsel for the for the appellant submits that 5. On a query by the Court as to whether this ground was/ [urged ][before ][the ][first ][appellate ][authority as ][well ][as ][before ][the]Tribunal, learned counsel for the appellant is not in a position..to-.reply to the query of the Court. 6. Appellant is an assessee under the Act having thestatus of Hindu Undivided Family (HUF). Initially assessing officermade ale assessment order on 3l.l2.2OOq under Section 144 ofthe Act assessing iong term capital gains at Rs.24,91,860.00. Theabove addition was made on account of sale of land by theappellant uide Sale Deed dated 17.11.2006. Appellant preferredappeal before the first appellate authority but the appeal wasdismissed on 04.06.2014. Thereafter appellant preferred appealbefore the Tribunal being ITA No.l474lHydl2ol4. Vide orderdated 21.01.2015, Tribunal set aside the assessment order andremanded the matter back to the assessing officer lor framingassessment afresh after giving due opportunity to the appellant.Assessing officer was directed to determine the correct status ofthe appellant, shares of the appeilant and the price that theappellant. had received on the sale so that correct capital gainscould be brought to tax. 7. On remand, fresh assessment proceedings [were/-]ainitiated by the assessing officer. Appellant was represented by a,counsel [as ][his ][authorised ][representative. ][On examination of ][the]materials on record, assessing officer passed fresh order of assessment on 31.03.2016 under Section 143(3) read u,ith Section254 ol the Act making addition of Rs.8,25,000.O0 orr account ofthe long term capital gains. Against the aforesaid order of theassessing olficer dated 31.03.2016, appellant again preferredappeal before the first appellate authority for deletion of theaddition made by the assessing officer. However, by the orderdated 04.03.2019, the first appellate authority dismissed theappeal of the appellant by confirming the order of the assessingofficer. It [q.as ]held as follows: 7. On remand, fresh assessment proceedings [were/-]ainitiated by the assessing officer. Appellant was represented by a,counsel [as ][his ][authorised ][representative. ][On examination of ][the]materials on record, assessing officer passed fresh order of assessment on 31.03.2016 under Section 143(3) read u,ith Section254 ol the Act making addition of Rs.8,25,000.O0 orr account ofthe long term capital gains. Against the aforesaid order of theassessing olficer dated 31.03.2016, appellant again preferredappeal before the first appellate authority for deletion of theaddition made by the assessing officer. However, by the orderdated 04.03.2019, the first appellate authority dismissed theappeal of the appellant by confirming the order of the assessingofficer. It [q.as ]held as follows: "l have carefully considered the submissions of theappeilant as well as the order of the Assessing officer. Fromthe assessment order reproduced in Para 6.1 above, it can beseen that the A.O. has duly complied with all the directions ofthe Hon'ble ITAT, and has given his hndings on each of thefour issues, aJter examining all the information filed in thecourse of assessment proceedings. The sale value of the landis taken at Rs.l1,00,000/-, as per the assessee's own letterdated 04. 12.2008. It is the contention of the appellant's ARthat this letter should not be taken as a basis, since it iswritten in English, and the appellant is illiterate. Theargument of the AR is, however, absolutely flimsy arrd illogical.Even if the appellant is illiterate, he has got the letter draftedhimself, signed it himself, and filed it voluntarily duringassessment proceedings. It is seen that he was represented byan Advocate during assessment proceedings, ald wastherefore assisted by a professional He cannot now take the plea that the letter he frled himself should not be takencognizance of. Besides, the appellant's AR has himself statedthat in the original assessment, the sale price was taken atRs.24,91,860/- without any basis. Now, the sale price hasbeen taken at Rs.8,25,000/-, as per the appellant's letter and Ido not find any reason to interfere with that. Similarly, theshare of the appellalt has been taken at 3/4th as per the saledocument itself, The status of the appellant as HUF is alsotaken as HUF as per the said document. I, therefore, find nomerits in the submissions of the appellant's AR and theaddition made is conf-rrmed. " 8. Against the aforesaid decision of the first appellateauthority, appellant preferred lurther appeal belore the Tribunal.The order of the lirst appellate authority was assaile(l on thefollowing grounds: 1The order of the Honble CIT(A) is erroneous in law aswell as facts of the case.well as facts of the case. 2The Hon'ble CIT(A) ought to have observed that therewas no material on record to conclude that the share inthe sale proceeds received by the assessee amounted toRs.8,25,OOo/-.was no material on record to conclude that the share inthe sale proceeds received by the assessee amounted toRs.8,25,OOo/-. 3The Hon'bie CIT(A) ought to have observed that thedepartment adopted the share of the assessee in saleproceeds at different figures in the orders passed fromtime to time and thus there was no factual conclusiondepartment adopted the share of the assessee in saleproceeds at different figures in the orders passed fromtime to time and thus there was no factual conclusion with regard to sale price and it is only an assumedfigure.figure. 4The assessing offrcer proceeded to compute the share ofthe assessee on the basis of letter dated 03.12.2008which was signed by the assessee (an illiterate shipyard)without having full knowledge of the contents of theletter.the assessee on the basis of letter dated 03.12.2008which was signed by the assessee (an illiterate shipyard)without having full knowledge of the contents of theletter. with regard to sale price and it is only an assumedfigure.figure. 4The assessing offrcer proceeded to compute the share ofthe assessee on the basis of letter dated 03.12.2008which was signed by the assessee (an illiterate shipyard)without having full knowledge of the contents of theletter.the assessee on the basis of letter dated 03.12.2008which was signed by the assessee (an illiterate shipyard)without having full knowledge of the contents of theletter. 5The Hon'bie CIT (A) ought to have deleted the additionmade by the assessing officer with regard to saleconsideration in the absence of any material on recordto support the conclusion of the assessing officer thatthe sale price amounted to Rs. 1 I,00,000/- andassessee share was Rs.8,25,0O0/- as both figures werewithout aly basis.made by the assessing officer with regard to saleconsideration in the absence of any material on recordto support the conclusion of the assessing officer thatthe sale price amounted to Rs. 1 I,00,000/- andassessee share was Rs.8,25,0O0/- as both figures werewithout aly basis. ()In the facts and circumstances of the case , the Hon'bleCIT(A) ought to have deleted the addition made by theassessing officer.CIT(A) ought to have deleted the addition made by theassessing officer. 7. Ar-ry other ground will be raised at the time of hearing." 9. By the order dated 24.11.2021, Tribunal did not findany merit in the appeai and dismissed the sarne. Tribunal held asfollows:follows: "Considered the riva-l submissions and perused thematerial on record as well as gone through the orders ofrevenue authorities. We lind that when the ITAT remitted theissue to the frle of the AO with a direction to decide the issueissue to the frle of the AO with a direction to decide the issue with verification of the issues pointed out by the ITAT citedsupra, the AO accordingly completed the assessment byaddressing all the points raised by the ITAT. As per the AO theassessee vide letter dated 03- 12-2008 hled in this oflice on O4-l2-2OOa has stated that he has received Rs. 1 i,00,000/- fromthe purchaser towards sale of Ac. 0.30 guntas situated inSy.No.139/AA2, Malkapur village Kondapur Mandal, MedakDistrict. The same was pointed out by the ITAT also in para 2of its order. Accordingly, sa.le price is considered as Rs. 11lakh. Vide sale deed No.27230 dated I7-11-2006 executed bythe assessee as a vendor, it was mentioned in the documentthat assessee is executed the said sale deed as a HUF and hisshare was mentioned as 3/4th and the remaining 1/4th of theshare pertains to his son Sri N.Praveen Kumar. Hence thequantum of amount in ttre hands of the assessee is consideredat Rs. 8,25,000 /- [p/q,n ]of Rs.11,00,000/-). While confirmingthe addition made by the AO, the CIT(A) obsened that the AOhas duly complied with a-ll the directions of the Hon'ble ITATand has given his frndings on each of the four issues afterexamining a.ll the information filed in the course of assessmentproceedings. Therefore, we do not {ind any infirmity in theorder of the CIT(A) and upholding the same, we dismiss thegrounds rarsed by the assessee." 10. Thus on thorough consideration of all aspects of thematter, we are of the view that the questions proposed by theappellant as substantial questions of 1aw do not arise out of theaforesaid order of the Tribunal; at the most those are onlyquestions of fact. No substantial question of 1aw can be said to arise oLlt of the order of the Tribunal, not to speak of anysubstantial question of lar.r,. There is no infirmity in the orderpassed lry the Tribunal. i 1. Consequentiy, the appeal is dismissed. However, theresha11 be no order as to costs. 12.. As a sequel, miscellaneousapplications pending, ilany, in the appeal, sha1l stand closed.,/SD/.B.S.CHIRANJEEVIJOINT REGISTRAR9//TRUE SECTION To '1The lncome [Tax ][Appellate ][Tribunal' ][Hyderabad' ][Bench ][- ][B' ][Room No ][502]c'c"O io*er., [Kavidiguda ][Hyderabad]c'c"O io*er., [Kavidiguda ][Hyderabad] 2. The Commissioner [of ][lncome ][Tax ][( ][Appeals ][) ][-12' ][Hyderabad] arise oLlt of the order of the Tribunal, not to speak of anysubstantial question of lar.r,. There is no infirmity in the orderpassed lry the Tribunal. i 1. Consequentiy, the appeal is dismissed. However, theresha11 be no order as to costs. 12.. As a sequel, miscellaneousapplications pending, ilany, in the appeal, sha1l stand closed.,/SD/.B.S.CHIRANJEEVIJOINT REGISTRAR9//TRUE SECTION To '1The lncome [Tax ][Appellate ][Tribunal' ][Hyderabad' ][Bench ][- ][B' ][Room No ][502]c'c"O io*er., [Kavidiguda ][Hyderabad]c'c"O io*er., [Kavidiguda ][Hyderabad] 2. The Commissioner [of ][lncome ][Tax ][( ][Appeals ][) ][-12' ][Hyderabad] e. The [lncome ][Tax Officer' ][Ward ]- [1' ][Sangareddy] 4. One CC to [SRl. N. NAVEEN RAJ' Advocate ] 5. Two [CoPies] c 6. One [SPare ][CoPY] HIGH COURT DATED:1810812022 ORDER ITTA.No.238 of 2022 DISIVIISSING Tl It, ITTA WITHOUT COSTSDISMISSING TI IE APPEAL -),- />--^1 \ )>tsF.--'//a-<.+ t- oTATL=1I [rB ][sL? ][Ntl]