Commissioner of Income Tax-III V. Sri Atluri Subba Rao,

ITTA/110/2013

AI Insights

The case involved the Commissioner of Income Tax-III as the appellant and Sri Atluri Subba Rao as the respondent. The dispute centered on the assessment year 2005-2006, concerning alleged unexplained investments and the applicability of Section 50C of the Income Tax Act. The ITAT had previously found no unexplained investment by the respondent and ruled that Section 50C did not apply, as the respondent was not directly involved in the property transactions but acted under a Power of Attorney. The High Court, after reviewing the facts and the ITAT's decision, dismissed the appeal, agreeing with the lower tribunal's findings.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 740944 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 26-06-2013
• Assessment Year: misc
• Laws Referred To: Section 50C of the Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Assessment year 2005-2006; Power of attorney; Short Term Capital Gain; Unexplained investment
• Section: 50C

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD WEDNESDAY, THE TWENTY SIXTH DAY OF JUNE TWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE MS. JUSTICE G.ROHINI I.T.T.A. No. 110 OF 2013 Between: Commissioner of Income Tax-III IT Towers, AC Guards, Hyderabad. ..... Appellant AND Sri Atluri Subba Rao, .....Respondent The Court made the following : JUDGMENT: (per the Hon’ble the Chief Justice Sri K.J. Sengupta) We have heard the learned counsel for the appellant. This appeal is sought to be admitted on the following suggested questions of law in relation to the assessment year 2005-2006. a. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in upholding the finding that there is no unexplained investment by the Respondent – Assessee, when the Respondent – Assessee is a purchaser under the agreement of sale-cum-irrevocable Power of Attorney and failed to provide sufficient evidence for the said unexplained investment? b. In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in holding that the provision of Section 50C of the Act has no applicability to the facts of the case, when the Respondent – Assessee, being the purchaser under an agreement of sale-cum-irrevocable Power of Attorney, sold the property for a lesser value than the market value? c. Whether the Hon’ble Tribunal (ITAT) is justified in law in upholding the deletion of unexplained investment and subject Short Term Capital gain without due appreciation of material facts stated in the assessment order? Having heard the learned counsel for the appellant and having gone through the impugned judgment and order, we are of the view that no element of law point is involved in this matter, as the learned Tribunal has decided the matter appreciating on facts. We appropriately quote the relevant fact-finding of the learned Tribunal: “…With regard to the addition of Rs.30 lakhs, there is a confirmation letter from Sri P.V.Ramana Reddy to the effect that he has made the said payment of Rs.30.00 lakhs to Ms. PHPL. In turn, M/s. PHPL has made payment to M/s. SEL. This payment of Rs.30 lkahs is also reflected in the books of account of M/s. PHPL as the payment was made by Sri P.V.R.Reddy to M/s. SEL. In the confirmation letter, it has been mentioned that this payment is for the purpose of purchase consideration of the impugned property. This being so, there cannot be any doubt that the payment has been routed through Sri P.V.Ramana Reddy on behalf of M/s. PHPL to M/s. SEL for purchae of the impugned property. If Shri P.V. Ramana Reddy has no sufficient source for making this payment or M/s. PHPL has no sources, the same has to be considered as unexplained investment in their hands and at any stretch of imagination, it cannot be considered as unexplained investment as the assessee is neither purchase of the property nor the seller of the property and he is only having irrevocable Power of Attorney for the purpose of facilitating sales transactions which is evident from four sale deeds being Documents Nos. 1806 to 1809 of 2005 all dated 20.8.2005…” Therefore, Section 50C of the Act has no application. We do not find any substantial questions of law involved in this appeal. Accordingly, we dismiss the appeal. No order as to costs. ______________________ Kalyan Jyoti Sengupta, CJ. __________ G.Rohini, J. June 26, 2013 MAS "