Itta/360/2014 Of The Commissioner Of Income Tax-I v. Hari Bhagavan Kanyalal

IN THE HIGH COURT OF JUDICATURE AT HYDERABADFOR THE STATE OF TELANGANA AND THE STATE OF ANDHRAPRADESH THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 360 of 2014 Date: 10.07.2014 Between: The Commissioner of Income Tax-I,Hyderabad. … Appellant And Hari Bhagavan Kanyalal Asian Films,Secunderabad. … Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 360 of 2014 JUDGMENT:(Per the Hon’ble The Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is intended to be preferred and admitted against thejudgment and order of the learned Tribunal dated 25.11.2013 in relation tothe assessment year 2007-08 on the following suggested questions of law: “1. Whether on the facts and circumstances of the case and inlaw, the Income Tax Appellate Tribunal is justified in canceling theorder of the CIT passed under Section 263 holding that the AO hasconsidered one of the possible views, without appreciating theprovisions of Section 50C as per which the value adopted orassessed by the stamp valuation authority of the land as prevailingon the date of registration is deemed to be the full value ofconsideration for the purposes of Sec.48 of the Income Tax Act,1961? 2. Whether on the facts and circumstances of the case, theITAT was correct in holding that the decision of the assessing officerwas correct in adopting the value of the property as prevailing at thetime of finalizing the transaction, without appreciating that no suchdiscretion is provided to the assessing officer and he is bound toadopt the value of the land assessed by the stamp valuation authorityfor the purpose of stamp duty as per the provisions of Sec.50C of theIncome Tax Act, 1961?” The short fact in this case is that in regular assessment thecapital gain tax was assessed. While doing so, the Assessing Officer considered the valuation of the property by following legally permissiblevalue of the property. This assessment order was taken up to the appealbefore the Commissioner of Income Tax (Appeals). However, the appealdid not reach to its logical conclusion, as by that time the Commissionerexercised jurisdiction under Section 263 of the Income Tax Act, 1961 (forshort, “the Act”). Only question is whether the Commissioner onaforesaid factual background has exercised jurisdiction lawfully or not. The learned Tribunal while entertaining the appeal filed againstthe order of the Commissioner passed under Section 263 relied on one ofits previous decisions in the case of Khaja Kutubudedin Khan,Hyderabad in ITA.Nos.1451 and 1452/Hyd/2008 and ITA.Nos.1574 and1575/Hyd/2008 of the assessee respectively on identical issue andpoints. The decision rendered by the learned Tribunal in KhajaKutubudedin Khan was not challenged by any of the parties. Learned Tribunal taking note of the relevant portion of the saidjudgment found that the same is applicable to this case also although Mr.Prasad, learned counsel appearing for the appellant, says it is not so. But, no such ground has been taken in the appeal that the aforesaidjudgment is not applicable to this case. The learned Tribunal again foundthat similar issue was covered by the judgment of its Coordinate Benchin the case of S. Venkat Reddy, Hyderabad and another inITA.Nos.974 and 975/Hyd/2010. Thus, the learned Tribunal, afteranalyzing the fact and law, concluded that the Assessing Officer hasadopted one of the legally possible views, which also find support fromits decisions referred above. We hold that the Commissioner was notjustified in exercising jurisdiction under Section 263 of the Act, as thelaw is well settled that when one of the legally possible views isaccepted by the Assessing Officer, the Commissioner cannot exercisejurisdiction under Section 263 of the Act. Hence, the learned Tribunal, in our view, has rightly passed the