2021 (2) TMI 610 - AT - Income Tax

Reopening of assessment u/s 147 - addition u/sec. 50C as well as rejection of the assessee's claim for deduction u/sec. 54F - HELD THAT - AO taken the sale consideration at ₹ 60.00 lakhs as declared by the assessee. Similarly, the AO also allowed deduction u/sec. 54F of the Act. No other addition was made by the AO pursuant to the audit objection raised by the revenue audit party. AO has only brought the information to the notice of the ld. CIT(A) and the CIT(A) has considered the issues and held that there is no case for making the addition u/sec. 50C as well as rejection of the assessee's claim for deduction u/sec. 54F. Since AO has not made any addition, the contention raised by the Department with regard to the SRO value as well as granting of exemption u/sec. 54F was incorrect, since, both of them were not born out of impugned assessment order. Therefore, we agree with the contention of the ld. AR that the appeal is below the prescribed limit of tax under CBDT Circular No. 3/2018 , dated 11/07/2018, and not covered by exceptions, hence, not maintainable. Thus, the appeal filed by the Revenue is dismissed.

Summary

Issues:
Appeal by Revenue against CIT(A) order for A.Y. 2009-10 - Tax effect below limit - Sale consideration and exemption u/sec. 54F disputed - AO's assessment, Revenue audit objection, CIT(A)'s decision, Department's appeal, cross objection by assessee.

Analysis:
The appeal before the ITAT Visakhapatnam involved the Revenue challenging the CIT(A) order for the assessment year 2009-10, where the tax effect was claimed to be below the prescribed limit. The primary issues revolved around the disputed sale consideration and exemption u/sec. 54F. The AO initially accepted the sale consideration and allowed the exemption. However, during the appellate proceedings, a revenue audit objection arose regarding the application of deemed value under section 50C and the eligibility for deduction u/sec. 54F. The CIT(A) examined these issues and provided relief to the assessee.

In the first issue of sale consideration, the appellant had admitted the sale consideration at a certain amount, which was later disputed by the Revenue audit party based on the SRO value of the property. The assessing officer recommended adopting the SRO value under section 50C, but the appellant argued against it, presenting legal documents and a judgment copy to support their claim. The CIT(A) considered the evidence and directed the AO to accept the sale consideration admitted by the appellant.

Regarding the exemption u/sec. 54F, the audit objection raised concerns about the appellant receiving multiple flats and thus being ineligible for the exemption. However, the CIT(A) found that the appellant had received only one flat jointly with another co-owner, her mother, and therefore qualified for the exemption. The Department appealed these decisions before the ITAT.

During the ITAT proceedings, the Department argued that the relief granted by the CIT(A) was not justified as it was based on revenue audit objections. However, the ITAT noted that the AO had not made any additional assessments based on the audit objections but had merely brought them to the attention of the CIT(A). As no additions were made by the AO, the ITAT agreed with the appellant's contention that the appeal fell below the prescribed tax limit and was not maintainable. Consequently, the ITAT dismissed the Revenue's appeal.

Additionally, the cross objection filed by the assessee in support of the CIT(A) order was rendered infructuous due to the dismissal of the Department's appeal. Therefore, the ITAT dismissed both the Revenue's appeal and the assessee's cross objection.