M.Jankiram & Others,, Hyderabad vs Assessee

M/s. Janakiram & Others, V/s. Asstt. Commissioner of Income-tax Hyderabad Circle 9(1), Hyderabad

( PAN - AAKFM 0800 A)

(Appellant) (Respondent)

Appellant by : Shri Y.Ratnakar

Respondent by : Shri Ramakrishna Bandi DR

Date of Hearing 29.06.2015 Date of Pronouncement 08.07.2015

ORDER

Per P.M.Jagtap, Accountant Member :

This appeal filed by the assessee is directed against order of the learned Commissioner of Income-tax(Appeals) 6, Hyderabad dated 10.8.2012 and the solitary issue arising out of the same relates to the addition made by the Assessing Officer and confirmed by the learned CIT(A) to the total income of the assessee on account of long term capital gain by adopting the sale consideration of Rs.11,34,93,000 in place of Rs.9,06,00,000 shown by the assessee by invoking the provisions of S.50C of the Income Tax Act,1961.

2. The assessee in the present case is a partnership firm. During the year under consideration, a property comprising of industrial sheds with plinth area of 1,511 sq. metres. and the land appurtenant thereto admeasuring 3,641 sq. metres situated at A-5, Industrial Estate, Ward No.7, Block No.2, Sanathnagar, Hyderabad, was sold by the assessee and the capital gain arising from the said sale as computed at Rs.4,39,59,860 2 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

was declared in the return of income filed on 28.7.2006. The said return was originally processed by the Assessing Officer under S.143(1) on 14.8.2007, accepting the income as returned by the assessee. Subsequently, a notice under S.148 was issued by the Assessing Officer on 30.4.2010 reopening the assessment after recording the reasons. In reply, a letter dated 07.6.2010 was filed by the assessee requesting the Assessing Officer to treat the original return filed by it on 28.7.2006 as the return filed in response to the notice under S.148. During the course of re-assessment proceedings, the assessee was called upon by the Assessing Officer to explain as to why the market value of the property as taken by the Stamp Valuation Authority at Rs.11,34,93,000 should not be taken as the sale consideration in place of the lower consideration of Rs.9,06,00,000 shown in the agreement, for the purposes of computation of capital gains in accordance with the provisions of S.50C of the Act. In reply, it was submitted by the assessee that the value adopted by the Stamp Valuation Authority is excessive and the same being more than the fair market value, a reference may be made for valuation of the property to the DVO. Accordingly, a reference was made by the Assessing Officer to the DVO, who submitted his valuation report on 27.12.2011 determining the value of the property sold by the assessee at Rs.15,99,81,400 The valuation report of the DVO was confronted by the Assessing Officer to the assessee, seeking its objections, if any. Accordingly, the assessee raised the following objections in respect of the valuation report prepared and furnished by the DVO-

"The Valuation Cell Authorities have given notice dt 1911212011 u/s.16(A) of (4) of the Wealth Tax Act, read with sex. 50C of the Income-taxAct,1961. Calling for objections on valuation of property valued at Rs. 15,99,81,000/-.The Valuation Cell Authorities have not considered our objections. The Valuation Cell Authorities final report given on 26-12-2011 stating the value of the property Rs.15,99,81,000/-. The valuation Cell Authorities have not considered our objections. The Valuation Cell Authorities have adopted the Rs. 12,000/- per Sq. Yard, whereas 3 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

the Registration Authorities have adopted different rates in valuing the property at the time of Registration of the property our main intention in referring the valuation cell is to value the property at fair market value, with considering the area of land restriction in utilization of land and prevailing market rate in that industrial area. The valuation cell authorities have not considered any of these conditions. They have valued the property simply on the Registration Authorities general value. Even after filing our objections they have not considered our objections. Hence we are not agreeing the valuation report value on the property.

We are herewith giving evidence that the property fair market value of property is less than Registration Authority value. Whereas we have purchased the property from Andhra Pradesh Small Scale Industries Development Corporation in open auction and registered in our firm name. Open auction d amount for land & building was Rs. 3,69,50,000/- only. Whereas at that time Registration Authority value is as under:

12,528 Sq. Yards Value @ Rs. 6,000/- 7,51,68,000 33,260 sq. Feet Built up area Value @ 150/- 49,89,000 8,01,57,000

Whereas the A.P.S.S.I.D.C is Govt. body hence the Registration

Authority collected the Stamp Duty for Rs. 3,69,50,000/- only. Whereas the Property Registration value is Rs. 8,01,57,000/-.

As we have purchased the property in Open Auction for Rs.3,69,50,000/- that is the fair market value at that time even though Registration Authority Value is Rs.8,01,57,000/. Hence it is evident from this transaction Registration Authority value is more than fair market value. In the same way it is at the time of sale of property also.

In this regard our honorable request to the Honorable g Officer to consider the facts of the case. That the fair market value of the property in that Industries Area below the Registration Authority Value and our sale consideration is at fair market value. So kindly adopt the sale consideration value in calculation the capital gain tax and complete the Assessment."

3. The Assessing Officer did not find merit in the above objections raised by the assessee. According to him, the stand of the assessee that the difference that existed at the time of purchase between the purchase price and the valuation as per the registering authority has existed even at the time of sale also had no basis. He held that the 4 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

property of the assessee over a period of time had gained much commercial value and as per the specific provisions contained in S.50C the value adopted by the Stamp Valuation authority was required to be taken as sale consideration for the purpose of computing the long term capital gains. Accordingly, such value, which was less than the value determined by the DVO was adopted by the Assessing Officer as sale consideration and long term capital gains chargeable to tax in the hands of the assessee was worked out by him at Rs.6,68,52,860 in the assessment completed under S.143(3) read with S.147, vide order dated 30.12.2011.

4. Against the order passed by the Assessing Officer under S.143(3) read with S.147, an appeal was filed by the assessee before the learned CIT(A) challenging inter alia the value of the property determined by the DVO at Rs.15,99,81,4000. During the course of appellate proceedings before the learned CIT(A), a letter dated issued by the general Manger(Finance), Andhra Pradesh Industrial Infrastructure Corporation Ltd. stating that the land rate in Industrial Estate, Sanathnagar fixed by the Price Fixation Committee during February, 2006 was Rs.3,750 per sq. metre, was filed by the assessee as additional evidence seeking admission thereof. The learned CIT(A), however, noted that sufficient opportunity was afforded to the assessee at the assessment stage by the Assessing Officer as well as the DVO, to adduce whatever evidence it wanted to, but the assessee clearly failed to avail the same. She also noted that no reason whatsoever was given by the assessee as to why the said evidence could not be furnished by the assessee at the assessment stage. She held that the assessee was attempting to use the appellate proceedings just to patch up its weak points and it was not a fit case where the discretion to admit the additional evidence could justifiably be exercised. Accordingly, she declined to admit the additional evidence filed by the assessee and proceeded to uphold the action of the Assessing Officer in computing the long term capital gains by adopting the stamp 5 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

duty valuation as sale consideration by invoking the provisions of S.50C. Aggrieved by the order of the learned CIT(A), assessee has preferred this appeal before the Tribunal.

5. At the outset, it is observed that there is a delay of 23 days on the part of the assessee in filing this appeal before the Tribunal. In this regard, an application is filed by the assessee seeking condonation of the said delay. Keeping in view the submissions made therein, which are duly supported by the affidavits of the concerned persons, we are satisfied that there was a sufficient cause for the delay in filing the present appeal by the assessee, and this position is not disputed even by the Learned Departmental Representative. The delay in filing this appeal on the part of the assessee is, therefore, condoned and we now proceed to dispose of the same on merits.

6. In the original grounds raised in this appeal, the assessee has raised various issues challenging the valuation of its property as determined by the DVO. During the course of appellate proceedings before the Tribunal, the assessee has filed an applications seeking admission of the following additional grounds-

"1. It is contended that provisions of 50C are inapplicable to the facts of the appellant's case in as much as the said section has no application to bona fide, genuine and honest transaction entered into between the parties.

2. On the facts on record, it is not the case of the revenue that any consideration is paid over and above the sale consideration shown in the sale deed. Hence it is contended that the provisions of section 50C are inapplicable to the appellant's case.

3. It is contended that section50C cannot be invoked, unless there is prima facie evidence available that the appellant has received more moneys by way of sale 6 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

consideration in addition to what was recorded in the sale deed. As this being not the case it is contended that section 50C is inapplicable and cannot be invoked by the Assessing Officer.

4. The appellant seeks leave to add, alter or take up any other ground as the occasion may warrant."

7. Since the common issue raised in the additional grounds challenging the applicability of the provisions of S.50C is a legal issue and the adjudication of the same does not require investigation into new facts, the additional grounds filed by the assessee have been admitted by us.

8. Since a preliminary issue is raised by the assessee in the additional grounds, we now proceed to consider and decide the same in the first place.

9. The learned counsel for the assessee, at the outset invited our attention to the provisions of S.50C and contended that although there is no requirement that the revenue should bring on record some evidence to show that there is under valuation of capital asset being land or building or both, and that the assessee has received something more than the consideration specified in the relevant agreement, the said requirement has to be read into the provisions of S.50C. In support of this contention, he mainly relied on the decision of the Hon'ble Supreme Court in the case of K.P.Varghese V/s. ITO (131 ITR 597), wherein it was held while interpreting the provision of S.52(2) that strict literal interpretation of the provisions should be avoided and its language must be construed having regard to the object and purpose which the legislature had in view in enacting that provision. It was held that it is therefore not enough to attract the applicability of S.52(2) that the fair market value of the capital asset transferred by the assessee as on the date of transfer exceeded the full value of the consideration declared in respect of the transfer by not 7 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

less than 15% of the value so declared, but it is further more necessary that the full value of the consideration in respect of the transfer is understated or, in other words, shown at least at a lesser figure than that actually received by the assessee. It was held that provisions of S.52(2) therefore, cannot be invoked by the Revenue, unless there is understatement of the consideration in respect of the transfer and the burden of showing that there is such understatement is on the Revenue. It was also held that under Entry 82 List 1 of Seventh Schedule of the Constitution, tax can be imposed on income other than agricultural income and the Parliament cannot choose to tax as income an item which, in no rational sense, can be regarded as a citizen's income or even a receipt. The learned counsel for the assessee submitted that S.52(2) creates a fiction similar to S.50C and therefore, the of S.50C can be invoked only when the Revenue has brought on record something to show that there is understatement of the consideration in respect of the transfer or in other words, the consideration actually received by the assessee is more than what is declared or disclosed by him, as held by the Hon'ble Supreme Court in the case of K.P.Varghese (supra).

10. The learned counsel for the assessee also relied on other case- laws wherein a similar view, as expressed by the Hon'ble Supreme Court in the case of K.P.Varghese (supra), was taken in the context of the proviso to S.12B(2) of the Indian Income-tax Act, 1922. He also relied on the decision of the Hon'ble Punjab and Haryana High Court in the case of CIT V/s. Chandan Bhochar (323 ITR 510), wherein it was held that purchase price assessed for the purposes of stamp duty cannot be taken as the sale consideration in the absence of positive evidence brought by the Assessing Officer on record to support price assessed by the State Government for the purpose of stamp duty.

8 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

11. The Learned Departmental Representative, on the other hand, submitted that the provisions of S.50C are very plain and clear and there being no ambiguity in the language of S.50C , the intention of the legislature is required to be gathered from the language used. He contended that the provisions of S.50C make it abundantly clear that there is no legal requirement of any evidence to be brought on record by the department to prove under valuation of the capital asset by showing that the assessee has actually received something more as sale consideration than what is declared in the relevant agreement. He contended that the stamp duty valuation is required to be taken as fair market value for the purposes of computing the capital gains arising from the transfer or property, being land or building or both, as per the clear and specific provisions of S.50C, and there is no scope for reading anything into these provisions, as sought to be contended by the learned counsel for the assessee , relying on the decision of the Hon'ble Supreme Court in the case of K.P.Varghese(Supra).

12. The Learned Departmental Representative contended that all the case-laws cited by the learned counsel for the assessee are in the context of S. 52(2) of the Income Tax Act,1961 and proviso to S.12B of the Indian Income-tax Act, 1922, the provisions of which are different from the provisions of S.50C, and therefore, the ratio of the said case- laws cannot be applied in the context of S.50C. He contended that the Assessing Officer for invoking the proviso to S.12B of the Indian Income- tax Act, 1922 and S.52(2) of the Income Tax Act,1961, was required to be satisfied about the under valuation of capital asset and therefore, the onus was held to be on the department to prove such under valuation. According to him, there is, however, no such satisfaction of the Assessing Officer contemplated under S.50C and therefore, the decision rendered in the context of proviso to S.12B of the Indian Income-tax Act, 1922 and S.52(2) of the Income Tax Act,1961 cannot be applied in the context of 9 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

S.50C. He contended that the position on this issue has entirely changed after the insertion of S.50C in the statute and if the contention of learned counsel for the assessee is accepted, the very purpose of S.50C will be defeated, rendering the said provision redundant.

13. As regards the decision of the Hon'ble Punjab and Haryana High Court in the case of CIT V/s. Chandani Bhochar (supra), cited by the learned counsel for the assessee, the Learned Departmental Representative submitted that the same is rendered in the case of a purchaser of the property, while applying the provisions of S.69B for making the addition on account of unexplained investment by relying on the value of the asset determined for the purpose of paying stamp duty, and the same, therefore, cannot be applied in the present case, where the assessee is the seller and the issue is relating to the computation of capital gains by applying the provisions of S.50C.

14. We have considered the rival submissions and also perused the relevant material on record. In the present case, the capital gain arising from the sale of its property being land and building declared by the assessee in the return of income at Rs.4,39,59,860 was enhanced by the Assessing Officer to Rs.6,68,52,860 by adopting the stamp duty valuation of Rs.11,34,93,000 as sale consideration instead of sale consideration of Rs.9,06,00,000 declared by the assessee by invoking the provisions of S.50C of the Act. On appeal, the addition made by the Assessing Officer on this issue has been sustained by the learned CIT(A), after taking note of the fact that the market value of the property as determined by the stamp valuation authority at Rs.11,34,93,000 is more than the sale consideration declared by the assessee and therefore, the provisions of S.50C are clearly applicable in the case of the assessee. In the additional grounds raised before the Tribunal, the assessee has challenged the applicability of the provision of S.50C in its case on the 10 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

ground that in the absence of anything brought on record by the Revenue to show the under valuation of the property or to show that the assessee has received something more than what is declared as sale consideration, provisions of S.50C cannot be invoked merely on the basis of higher valuation made by the stamp duty authority. In this regard, the learned counsel for the assessee has contended before us that though there is no such requirement specifically envisaged in the provisions of S.50C, the same is required to be read into the said provision. In support of this contention, he has relied on the decision of the Hon'ble Supreme Court in the case of K.P.Varghese (supra) as well as other judicial pronouncements, wherein it was held that the said requirement is required to be read into even in the absence of relevant provision specifying such requirement. It is observed that these case-laws cited by the learned counsel for the assessee are in the context of S.52(2) of the Income Tax Act,1961 as well as the proviso to S.12B(2) of Indian Income- tax Act, 1922 and it is therefore, necessary to refer to these provisions alongwith the provision of S.50C, which are relevant in the present case. The said provisions read as under:

S.52 of the Income Tax Act,1961 "52 (1) Where the person who acquires a capital asset from assessee is directly or indirectly connected with the assessee and the Income-tax officer has reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee under section 45, the full value of the consideration for the transfer shall, with the previous approval of Inspecting Assistant Commissioner, be taken to be the fair market value of the capital asset on the date of the transfer.

(2) Without prejudice to the provisions of sub-section (1), if in the opinion of the Income-tax officer the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the full value of the consideration d d by the assessee in respect of the transfer of such capital assets by an amount of not less than fifteen per cent of the value red, the full value of the consideration for such capital asset shall, with the 11 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

previous approval of the Inspecting Assistant Commissioner, be taken to be its fair market value on the date of its transfer. "

(Emphasis supplied)

***********

S.12B of the Indian Income Tax Act,1922

"12B. Capital gains. - (1) The tax shall be payable by an assessee under the head 'capital gains' in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after the 31st day of March, 1946, and before the 1st day of April, 1948, and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place : .......

(2) The amount of a capital gain shall be computed after making the following deductions from the full value of the consid for which the sale, exchange or transfer of the capital asset is made, namely :-

(i) expenditure incurred solely in connection with such sale, exchange or transfer;

(ii) the actual cost to the assessee of the capital asset, including any expenditure of a capital nature incurred and borne by him in making any additions or alterations thereto, but excluding any expenditure in respect of which any allowance is admissible under any prov of sections 8, 9, 10 and 12 :

Provided that where a person who acquires a capital asset from the assessee, whether by sale, exchange or transfer, is a erson with whom the assessee is directly or indirectly connected, and the Income-tax Officer has reason to believe that the sale, exchange or transfer was effected with the object of avoidance or reduction of the liability of the assessee under this the full value of the consideration for which sale, exchange or transfer is made shall, with the prior approval of the Inspecting Assistant Commissioner of Income-tax, be taken to be the fair market value of the capital asset on the date on which the sale, exchange or transfer took place : .....

Provided further that........"

*************** (Emphasis supplied) 12 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

S.50C of the Income Tax Act,1961

"50C. Special provision for full value of consideration in certain cases. -(1) Where the consideration received or accruing as a lt of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereinafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer."

15. Although the learned counsel for the assessee has contended that since S.52(2) as well as proviso to S.12B(2) creates a deeming fiction similar to S.50C, the ratio of the decisions rendered in the context of S.52(2) and the proviso to S.12B(2) is applicable even in the context of S.50C, the comparative reading of the relevant provisions clearly shows that the Assessing Officer, for invoking the provision of S.52(2) as well as the proviso to S.12B(2) was required to have a reason to believe that the transfer was effected by the assessee with the object of avoidance or reduction of the tax liability, by understating the sale consideration of the capital asset sold, and keeping in view this specific requirement and the object of the relevant provisions of S.52(2) as well as proviso to S.12B(2), it was held by the Hon'ble Supreme Court as well as other Courts that it was incumbent upon the Assessing Officer to bring something on record to show that consideration had been understated by the assessee and the assessee had actually received more than what was declared by it. Such requirement, however, is not contemplated by the provisions of S.50C which, as rightly contended by the Learned Departmental Representative, are plain and simple. No doubt, S.50C also creates a deeming fiction, but for applying the said provision, what is required is that consideration received or accruing as a result of the transfer by the assessee of a capital asset, being land or building or both, 13 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

is less than the value adopted or assessed by any authority of State Government for the purpose of payment of stamp duty in respect of such transfer. If this situation as contemplated in sub-section (1) of S.50C is found to be obtained in any case, the provisions of S.50C can be invoked, subject, of course, to the provisions of sub-section (2) and (3) thereof, and there is nothing more that is required to be done by the Assessing Officer to show the under-valuation of sale consideration by the assessee or to show that the assessee has actually received more than what is declared by him. The scope of S.50C, in our opinion, thus is entirely different from the scope of S.52(2) as well as proviso to S.12B(2) and the ratio of the decisions of the Hon'ble Supreme Court in the case of K.P.Varghese (supra) as well as other case-laws cited by the assessee, which are rendered in the context of S.52(2) as well as proviso to S.12B(2) cannot be applied in the context of S.50C.

16. While relying on the decision of the Hon'ble Supreme Court in the case of K.P.Varghese (Supra), learned counsel for the assessee has specifically invited our attention to the observations made by the Hon'ble Apex Court by relying on Entry 82 in List 1 of the Seventh Schedule of the Constitution that the Parliament cannot choose to tax as income an item which, in no rational sense, can be regarded as a citizen's income or even receipt. In this regard, it is observed that the constitutional validity of the provisions of S.50C was challenged by the assessee in the case of K.R. Palani Samy and Others Vs. Union of India and Others(306 ITR 61) before the Hon'ble Madras High Court and in the case of Bhatia Nagar Premises Cooperative Society Ltd. V/s. Union of India and others (334 ITR

145) before the Hon'ble Bombay High Court. It was contende on behalf of the assessee in this regard that the power of Central Legislature to tax on capital gain arises under Entry 82 List 1 of Schedule VII of the Constitution of India and although the word 'income' has to be interpreted in a liberal sense, the amount sought to be taxed must bear a reasonable 14 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

relation to the concept of income. It was contended that the meaning of 'income' under S.50C is therefore, beyond what is stipulated under Entry 82 List 1 Schedule VII of the Constitution. This contention of the assessee, however, was not accepted by the Hon'ble Bombay High Court as well as the Hon'ble Madras High Court by relying on the decision of the Hon'ble Supreme Court in the case of Union of India V/s. A.Sanyasi Rao and Others (219 ITR 330) wherein it was held that there is a clear distinction between the subject matter of tax and the standard by which the amount of tax is measured. Explaining further, it was observed by the Hon'ble Supreme Court in the case of A.Sansyasi Rao and Others (supra) that having regard to the past difficulties in making a normal assessment and collection in the case of a certain categories assesses, for convenience sake, the legislature has chosen to make appropriate provision for collection of taxes at an anterior stage by adopting purchase price as a measure of tax, which is permissible. Relying on this proposition propounded by the Hon'ble Supreme Court in the case of A.Sanyasi Rao and others (supra), it was held by the Hon'ble Bombay High Court in the case of Bhatia Nagar Premises Co-operative society Ltd. (supra), that applying the rule of stamp duty, as contained in S.50C, is for the purpose of computation of income which is only a standard of measure for imposing tax. It was observed that S.50C is a measure provided to bridge the gap as it was found that assessees were not correctly declaring the full value of the consideration or in other words, resorting to the practice of undervaluation.

17. It is interesting to note that in the case of K.R.Palanisamy (supra), a reference was specifically made by the Hon'ble Maras High Court to the decision of the Hon'ble Supreme Court in the case of K.P.Varghese (supra) which is heavily relied upon by the learned counsel for the assessee in the present case. It was observed that in the case of K.P.Varghese (supra), the issue raised was in the context of S.52(2), 15 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

which did not contain any provision for giving opportunity to the assessee to rebut the presumption made under the said provision and the said provision, therefore, was directed to be read down by the Hon'ble Supreme Court, by casting upon the burden of proof of under valuation on the revenue. It was held that sufficient opportunity, however, has been given to the assessee as per the provisions contained in sub-section (2) and (3) of S.50C to rebut the presumption as to the full market value of the capital asset arrived at by the stamp duty authorities and therefore, the contention raised on behalf of the assessee, as to reading down of the provisions of S.50C has to be rejected.

18. In view of the above discussion, as well as relying on the decision of the Hon'ble Bombay High Court in the case of Bhatia Nagar Premises Co-operative Society Ltd. V/s. Union of India and Others (supra) and that of the Hon'ble Maras High Court in the case of K.R.Palaniswamy & Ors. V/s. Union of India and others (supra), we do not find merit in the preliminary issue raised by the assessee in this appeal, contending that the Assessing Officer, for invoking the provisions of S.50C, has to bring something on record to show that the consideration has been understated by the assessee, and that the assessee has actually received more than what is declared by him. The additional grounds raised by the assessee are accordingly dismissed.

19. As already noted, the assessee in the original grounds raised in this appeal has challenged the valuation of its property as determined by the DVO in his valuation report. In this regard, it is observed that the additional evidence in the form of letter dated 20.1.2012 issued by the General Manager, A.P. Industrial Infrastructure Corporation was filed by the assessee before the learned CIT(A), wherein it was stated that the land rate in industrial Estate, Sanath Nagar fixed by the Price Fixation Committee during February, 2006 was Rs.3,750 per sq. metre. The said 16 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

additional evidence, however, was not admitted by the learned CIT(A) mainly on the ground that the assessee had not furnished any reason whatsoever as to why the said evidence was not filed before the Assessing Officer. As submitted by the learned counsel for the assessee in this regard, the said evidence in the form of letter dated 20.1.2012 was obtained by the assessee only after the completion of assessment by the Assessing Officer on 30.12.2011 and since the same was not available at the relevant time, it could not be filed before the Assessing Officer. Keeping in this submission made by the learned counsel for the assessee, we are of the view that the learned CIT(A) should have admitted the additional evidence filed by the assessee in the form of letter dated 20.1.2012 issued by the General manger, A.P. Infrastructure Corporation Ltd.

20. During the course of appellate proceedings before the Tribunal, the assessee has also filed a copy of letter dated 1.4.2009 addressed by the Executive Director, APIIC to the Principal Secretary to Government MA & UD Department clarifying that the land can only be used for industrial purposes, as additional evidence with application seeking admission thereof. The Learned Departmental Representative has strongly opposed to the admission of this additional evidence by pointing out that the letter dated 1.4.2009 having been available with the assessee at the relevant time during the assessment proceedings, the same should have been filed by the assessee before the Assessing Officer. The learned counsel for the assessee, however, has submitted that the copy of the said letter has been obtained by the assessee subsequent to the passing of the impugned order by the learned CIT(A). He has also submitted that the valuation of the property, as determined by the DVO, was challenged by the assessee during the course of assessment proceedings inter alia on the ground of restrictive use of property only for industrial purposes, affecting its valuation adversely. Keeping in view th submissions of the 17 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

learned counsel for the assessee as well as having regard to the relevancy of the letter dated 1.4.2009 filed by the assessee as additional evidence, to further support its stand taken before the assessing officer that the valuation of its property is adversely affected as a result of restrictive use of its property for industrial purpose only, we consider it appropriate and in the interests of justice to admit the said letter as additional evidence.

21. Keeping in view our decision rendered above admitting the letter dated 1.4.2009 filed by the assessee before us as additional evidence as well as the letter dated 21.2.2012 filed by the assessee before the learned CIT(A) as additional evidence, we consider it just and proper to restore the matter to the file of the Assessing Officer for deciding afresh the issue relating to the valuation of the assessee's property, as done by the DVO in the light of this additional evidence. The impugned order of the learned CIT(A) on this issue is accordingly set aside and the matter is restored to the file of the Assessing Officer for deciding the same afresh. The original grounds filed by the assessee in this appeal are accordingly treated as allowed for statistical purposes.

22. In the result, assessee's appeal is treated as partly allowed for statistical purposes.

Order pronounced in the court on 8th July, 2015 Sd/- Sd/-

(Saktijit Dey) (P.M.Jagtap) Judicial Member Accountant Member

Dt/- 8th July, 2015 18 ITA No.1802/Hyd/2012 M/s. Janakiram & Others, Hyderabad

Copy forwarded to:

1. M/s. M.Janakiram & Others, 23-18 Gaddiannaram, Dilsukhnagar, Hyderabad

2. Asstt. Commissioner of Income-tax Circle 9(1), Hyderabad

3. Commissioner of Income-tax(Appeals) VI, Hyderabad

4. Commissioner of Income-tax V, Hyderabad

5. Departmental Representative, ITAT, Hyderabad.

B.V.S