IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH 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 SENGUPTA AND THE 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 the judgment and order of the learned Tribunal dated 25.11.2013 in relation to the assessment year 2007-08 on the following suggested questions of law:
“1. Whether on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal is justified in canceling the order of the CIT passed under Section 263 holding that the AO has considered one of the possible views, without appreciating the provisions of Section 50C as per which the value adopted or assessed by the stamp valuation authority of the land as prevailing on the date of registration is deemed to be the full value of consideration for the purposes of Sec.48 of the Income Tax Act, 1961?
2. Whether on the facts and circumstances of the case, the ITAT was correct in holding that the decision of the assessing officer was correct in adopting the value of the property as prevailing at the time of finalizing the transaction, without appreciating that no such discretion is provided to the assessing officer and he is bound to adopt the value of the land assessed by the stamp valuation authority for the purpose of stamp duty as per the provisions of Sec.50C of the Income Tax Act, 1961?”
The short fact in this case is that in regular assessment the capital gain tax was assessed. While doing so, the Assessing Officer considered the valuation of the property by following legally permissible value of the property. This assessment order was taken up to the appeal before the Commissioner of Income Tax (Appeals). However, the appeal did not reach to its logical conclusion, as by that time the Commissioner exercised jurisdiction under Section 263 of the Income Tax Act, 1961 (for short, “the Act”). Only question is whether the Commissioner on aforesaid factual background has exercised jurisdiction lawfully or not.
The learned Tribunal while entertaining the appeal filed against the order of the Commissioner passed under Section 263 relied on one of its previous decisions in the case of Khaja Kutubudedin Khan, Hyderabad in ITA.Nos.1451 and 1452/Hyd/2008 and ITA.Nos.1574 and 1575/Hyd/2008 of the assessee respectively on identical issue and points. The decision rendered by the learned Tribunal in Khaja Kutubudedin Khan was not challenged by any of the parties.
Learned Tribunal taking note of the relevant portion of the said judgment 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 aforesaid judgment is not applicable to this case. The learned Tribunal again found that similar issue was covered by the judgment of its Coordinate Bench in the case of S. Venkat Reddy, Hyderabad and another in ITA.Nos.974 and 975/Hyd/2010. Thus, the learned Tribunal, after analyzing the fact and law, concluded that the Assessing Officer has adopted one of the legally possible views, which also find support from its decisions referred above. We hold that the Commissioner was not justified in exercising jurisdiction under Section 263 of the Act, as the law is well settled that when one of the legally possible views is accepted by the Assessing Officer, the Commissioner cannot exercise jurisdiction under Section 263 of the Act.
Hence, the learned Tribunal, in our view, has rightly passed the impugned judgment and order and we do not see any reason to interfere with the same.
The appeal is accordingly dismissed. No costs.
K.J. SENGUPTA, CJ SANJAY KUMAR, J Date: 10.07.2014 ES