Itta/634/2014 Of Harishchand Surana v. Cit(Reported In 187 Itr 688) And In Ntpc Vs. Cit (Reported In 229 Itr 383) Permitting The Assessee To Raise A New Ground Before The Learned Income Tax Appellate

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAAND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. Nos.633 & 634 of 2014 DATED:29.10.2014 I.T.T.A. No. 633 of 2014 Between:Nikhil Surana,Secunderabad. AndThe Deputy Commissioner of Income Tax,Hyderabad. … Appellant ….Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. Nos.633 & 634 of 2014 Common Judgment :(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) These appeals are sought to be preferred against the common judgmentand order of the learned Tribunal dated 21.2.2014 in relation to assessmentorder 2009-10 on the following suggested questions of law: 1. Whether on the facts and in the circumstances of the case, thelearned Income Tax Appellate Tribunal was correct in sustainingthe inclusion of Rs.7,09,750/- allegedly paid to the appellant assale consideration by the purchaser viz. Sainath Estates Pvt.Ltd., over and above the sale consideration declared by theappellant for the sale of his immovable property comprising ofland with industrial sheds when the said payment is not supportedby any receipts signed by the appellant or documentary evidencein support of payment and the payment was denied by theappellant.learned Income Tax Appellate Tribunal was correct in sustainingthe inclusion of Rs.7,09,750/- allegedly paid to the appellant assale consideration by the purchaser viz. Sainath Estates Pvt.Ltd., over and above the sale consideration declared by theappellant for the sale of his immovable property comprising ofland with industrial sheds when the said payment is not supportedby any receipts signed by the appellant or documentary evidencein support of payment and the payment was denied by theappellant. 2. Whether on the facts and in the circumstances of the case thefinding of the learned Income Tax Appellate Tribunal that the saidamount of Rs.7,09,750/- forming part of sum of Rs.1,60,00,000/-was received by the appellant towards sale consideration isarbitrary, unreasonable supported by no evidence and/orperverse ?finding of the learned Income Tax Appellate Tribunal that the saidamount of Rs.7,09,750/- forming part of sum of Rs.1,60,00,000/-was received by the appellant towards sale consideration isarbitrary, unreasonable supported by no evidence and/orperverse ? 3. Whether on the facts and in the circumstances of the case, thelearned Income Tax Appellate Tribunal is correct in remitting thematter relating to the valuation of the property as on 1.4.81 to thefile of assessing officer when the said valuation is covered by theregistered valuer’s certificate dated 1.12.2010 and there is nomaterial on record to doubt or to reject the above valuation madeby the Registered Valuer.learned Income Tax Appellate Tribunal is correct in remitting thematter relating to the valuation of the property as on 1.4.81 to thefile of assessing officer when the said valuation is covered by theregistered valuer’s certificate dated 1.12.2010 and there is nomaterial on record to doubt or to reject the above valuation madeby the Registered Valuer. 3. Whether on the facts and in the circumstances of the case, thelearned Income Tax Appellate Tribunal is correct in remitting thematter relating to the valuation of the property as on 1.4.81 to thefile of assessing officer when the said valuation is covered by theregistered valuer’s certificate dated 1.12.2010 and there is nomaterial on record to doubt or to reject the above valuation madeby the Registered Valuer.learned Income Tax Appellate Tribunal is correct in remitting thematter relating to the valuation of the property as on 1.4.81 to thefile of assessing officer when the said valuation is covered by theregistered valuer’s certificate dated 1.12.2010 and there is nomaterial on record to doubt or to reject the above valuation madeby the Registered Valuer. 4. Whether on the facts and in the circumstances of the case, thelearned Income Tax Appellate Tribunal was correct in sustainingthe inclusion of Rs.1,52,90,250/- allegedly paid to the appellant assale consideration by the purchaser viz., Sainath Estates Pvt.Ltd., over and above the sale consideration declared by theappellant for the sale of his immovable property comprising ofland with industrial sheds when the said payment is not supportedby any receipts signed by the appellant or documentary evidencein support of payment and the payment was denied by theappellant ?learned Income Tax Appellate Tribunal was correct in sustainingthe inclusion of Rs.1,52,90,250/- allegedly paid to the appellant assale consideration by the purchaser viz., Sainath Estates Pvt.Ltd., over and above the sale consideration declared by theappellant for the sale of his immovable property comprising ofland with industrial sheds when the said payment is not supportedby any receipts signed by the appellant or documentary evidencein support of payment and the payment was denied by theappellant ? 5. Whether on the facts and in the circumstances of the case, thefinding of the learned Income Tax Appellate Tribunal that the saidfinding of the learned Income Tax Appellate Tribunal that the said amount of Rs.1,52,90,250/- forming part of sum ofRs.1,60,00,000/- was received by the appellant towards saleconsideration is arbitrary, unreasonable supported by noevidence and/or perverse ? 6. Whether on the facts and in the circumstances of the case, thelearned Income Tax Appellate Tribunal is correct in remitting thematter relating to the valuation of the property as on 1.4.81 to thefile of assessing officer when the said valuation is covered by theregistered valuer’s certificate dated 1.12.2010 and there is nomaterial on record to doubt or to reject the above valuation madeby the Registered Valuer ?learned Income Tax Appellate Tribunal is correct in remitting thematter relating to the valuation of the property as on 1.4.81 to thefile of assessing officer when the said valuation is covered by theregistered valuer’s certificate dated 1.12.2010 and there is nomaterial on record to doubt or to reject the above valuation madeby the Registered Valuer ? 7. Whether on the facts and in the circumstances of the case, theappellant is entitled to claim deduction under Section 54-F inrespect of all the nine residential flats which were acquired by himwhile computing the capital gain on the sale of the above property?appellant is entitled to claim deduction under Section 54-F inrespect of all the nine residential flats which were acquired by himwhile computing the capital gain on the sale of the above property? 7. Whether on the facts and in the circumstances of the case, theappellant is entitled to claim deduction under Section 54-F inrespect of all the nine residential flats which were acquired by himwhile computing the capital gain on the sale of the above property?appellant is entitled to claim deduction under Section 54-F inrespect of all the nine residential flats which were acquired by himwhile computing the capital gain on the sale of the above property? 8. Whether on the facts and in the circumstances of the case, thelearned Income Tax Appellate Tribunal is justified in restricting thededuction under Section 54-F to only residential flat out of the 9flats acquired, ignoring several decisions of the High Courtincluding the jurisdictional High court which held that thededuction should be given for all residential flats acquired and notrestricted to merely one residential flat alone ?learned Income Tax Appellate Tribunal is justified in restricting thededuction under Section 54-F to only residential flat out of the 9flats acquired, ignoring several decisions of the High Courtincluding the jurisdictional High court which held that thededuction should be given for all residential flats acquired and notrestricted to merely one residential flat alone ? 9. Whether on the facts and in the circumstances of the case, thelearned Income Tax Appellate Tribunal is justified in not admittingthe additional grounds relating to deduction under Section 54F inrespect of all the nine residential flats acquired by the appellantwhen the relevant facts are all available notwithstanding thedecisions of the Hon’ble Supreme Court in Jute Corporation ofIndia Ltd., vs. CIT(reported in 187 ITR 688) and in NTPC vs. CIT(reported in 229 ITR 383) permitting the assessee to raise a newground before the learned Income Tax Appellate Tribunal notraised earlier ?learned Income Tax Appellate Tribunal is justified in not admittingthe additional grounds relating to deduction under Section 54F inrespect of all the nine residential flats acquired by the appellantwhen the relevant facts are all available notwithstanding thedecisions of the Hon’ble Supreme Court in Jute Corporation ofIndia Ltd., vs. CIT(reported in 187 ITR 688) and in NTPC vs. CIT(reported in 229 ITR 383) permitting the assessee to raise a newground before the learned Income Tax Appellate Tribunal notraised earlier ? It appears from the aforesaid suggested questions of law that thespecific grievance is in relation to the inclusion of more amount withconsideration for sale of the immovable property comprising of land andindustrial sheds and valuation of the property, secondly not having given anydeduction fully under Section 54-F of the Income Tax Act, 1961 (for short ‘theAct’) out of the said consideration. We have heard Mr. Y. Ratnakar, learned Senior Counsel and have gonethrough the impugned judgment and order of the learned Tribunal. As far as the first issue relating to inclusion of sale consideration isconcerned, we notice from the findings in the judgment of the learned Tribunalthat initially the assesee denied having received any cash payment on account of consideration of sale of the aforesaid immovable property. However, whensome signed and unsigned vouchers regarding receipt of payment wereconfronted and the entries recorded in the books of accounts of the payee wereproduced and confronted, the assessee was compelled to admit that somecash payment was received on account of consideration. The AssessingOfficer also summoned the payee and pursuant thereto books of accounts werealso produced. After analyzing the material on record and disbelieving thestatement of the assessee, the Tribunal came to the conclusion factually that asum of Rs. 16.20 crores was received. It is absolutely appreciation of fact andbased on certain materials, this Court cannot re-appreciate in the absence ofthe element of perversity, the evidence and factual issue. of consideration of sale of the aforesaid immovable property. However, whensome signed and unsigned vouchers regarding receipt of payment wereconfronted and the entries recorded in the books of accounts of the payee wereproduced and confronted, the assessee was compelled to admit that somecash payment was received on account of consideration. The AssessingOfficer also summoned the payee and pursuant thereto books of accounts werealso produced. After analyzing the material on record and disbelieving thestatement of the assessee, the Tribunal came to the conclusion factually that asum of Rs. 16.20 crores was received. It is absolutely appreciation of fact andbased on certain materials, this Court cannot re-appreciate in the absence ofthe element of perversity, the evidence and factual issue. On the question of benefit under Section 54-F is concerned, the learnedTribunal found that for the first time, this ground was sought to be agitatedbefore the Tribunal and this Court. It is primarily relatable to fact. When it is notquestion of law based on fact on record at the appellate stage in Tribunal, itcannot be entertained. Following the decision of the Supreme Court in National Thermal Power Company vs. Commissioner of Income Tax, the learnedTribunal held that in such situation, additional grounds which were not raisedbefore the authority below should not be allowed to be raised in the appeal. We,therefore, do not find any error or infirmity in the judgment and order of thelearned Tribunal. With reference to the judgment of the Supreme Court relied on by thelearned Tribunal in the case of National Thermal Power Company, wherein it is observed by the Apex Court as follows: “Undoubtedly, the Tribunal will have the discretion to allow or notallow a new ground to be raised. But where the Tribunal is onlyrequired to consider a question of law arising from the facts whichare on record in the assessment proceedings we fail to see whysuch a question should not be allowed to be raised when it isnecessary to consider that question in order to correctly assessthe tax liability of an assessee.” It appears, the learned Tribunal found that this factual aspect was never raisedbefore the Tribunal. Our reading of the Supreme Court judgment is that thelearned Tribunal can allow to raise question before the Tribunal for the first timeprovided it is backed by factual materials, which have been brought before theauthorities below, not otherwise. So, we think the learned Tribunal has takencorrect course of action in allowing to raise this question. We therefore, find no element of law involved in the appeals. The appeals are accordingly dismissed. No order as to costs. __________________K.J. SENGUPTA, CJ 29[th] October, 2014Pnb _________________SANJAY KUMAR, J