Rajeshwari Reddy Baddam, Hyderabad, Hyderabad V. ITO, Ward-8(2), Hyderabad, Hyderabad

ITA 140/HYD/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2691 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 30-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value
• Section: 50C; 142(1); 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.140/HYD/2017 ASSESSMENT YEAR: 2007-08 SMT. RAJESHWARI REDDY BADDAM, HYDERABAD. PAN CBVPB5025N VS. INCOME TAX OFFICER, WARD -8(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B. SHANTHI KUMAR REVENUE BY : SMT. SUMAN MALIK DATE OF HEARING : 24-01-2018 DATE OF PRONOUNCEMENT : 25-01-2018 ORDER PER SHRI B. RAMAKOTAIAH, AM: THIS IS AN APPEAL BY ASSESSEE AGAINST THE EX-PARTE ORDER PASSED BY LD. CIT(A)-2, HYDERABAD DATED 16-11- 2016, ON THE ORDER OF THE A.O U/S 144 OF THE IT ACT R.W.S 147 OF THE IT ACT DATED 31-03-2015. 2. THE ISSUE IN THIS APPEAL ARISES AS FOLLOWS. CONSEQUENT TO THE RECEIPT OF INFORMATION THAT ASSESSEE HAS SOLD A PROPERTY ON 26-06-2006 AND NOT FINDING ASSESSEE FILING A RETURN OF INCOME, A.O INITIATED PROCEEDINGS U/S 147 OF THE ACT. AS THE NOTICE COULD NOT BE SERVED, AS ASSESSEE MOVED OUT OF THE ADDRESS, THE NOTICE WAS SERVED BY AFFIXTURE. THEREAFTER, ASSESSEE WAS TRACED AND NOTICE U/S 142(1) AND 143(2) OF THE IT ACT WERE SERVED BUT ASSESSEE COULD NOT REPRESENT BEFORE A.O. AS THERE WAS NO RESPONSE TO THE NOTICES ISSUED, A.O COMPLETED THE 2 ITA NO. 140/HYD/2017 SMT. RAJESHWARI REDDY, BADDAM, HYDERABAD. ASSESSMENT U/S 144 OF THE IT ACT BASED ON THE INFORMATION AVAILABLE. AS ASSESSEE PURCHASED PROPERTY ON 28/04/2016 BY WAY OF AGPA AND SOLD ON 26/06/06, A.O INVOKED PROVISIONS OF SECTION 50C OF THE IT ACT AND COMPUTED SHORT TERM CAPITAL GAIN AT RS. 12,15,880/-. IN ADDITION, AS THE PURCHASE WAS MADE IN CASH AND THE SOURCES WERE NOT EXPLAINED, A.O TREATED THE PURCHASE CONSIDERATION OF RS. 20,34,120/- AS UNEXPLAINED INVESTMENT, THUS, ASSESSING THE INCOME AT RS. 32,50,000/-. 3. BEFORE THE LD. CIT(A), ASSESSEE CONTENDED THAT ASSESSEE HAD ENTERED INTO AN ADVENTURE IN THE NATURE OF TRADE AND IMMEDIATELY AFTER TWO MONTHS SOLD FOR A PROFIT OF RS. 65,780/- AND AS THE SAID AMOUNT WITH OTHER INCOME WAS LESS THAN TAXABLE LIMIT, ASSESSEE HAS NOT FILED RETURN OF INCOME. IT WAS FURTHER SUBMITTED THAT ASSESSEE WAS NOT ASSESSED EARLIER AND SO COULD NOT ENGAGE A COUNSEL TO REPRESENT BEFORE A.O AND RAISED GROUNDS CONTENDING THE PROCEEDINGS U/S 147 OF THE IT ACT AND MERITS OF THE ADDITIONS. 3.1 WITHOUT SPECIFYING THE NUMBER OF OPPORTUNITIES GIVEN AND DATES OF POSTING IN THE ORDER, LD. CIT(A) CONSIDERED THAT THERE WAS NO RESPONSE TO THE NOTICES ISSUED AND DECIDED THE APPEAL EX-PARTE DISMISSING THE GROUNDS. 3 ITA NO. 140/HYD/2017 SMT. RAJESHWARI REDDY, BADDAM, HYDERABAD. 4. IT WAS THE CONTENTION THAT ASSESSEE HAS ENTERED INTO A BUSINESS TRANSACTION AND HAS NO INTENTION TO RETAIN THE PROPERTY SO THE TRANSACTION HAS TO BE TREATED AS ADVENTURE IN NATURE OF TRADE. LD. COUNSEL RELIED ON THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF G. VENKATESWAMY NAIDU & CO. VS. CIT, 1959 AIR 359 FOR THE PROPOSITION. FURTHER, IT WAS SUBMITTED THAT IF GIVEN AN OPPORTUNITY ASSESSE WOULD EXPLAIN THE SOURCE OF INVESTMENT AS WELL. 5. LD. DR, HOWEVER, SUBMITTED THAT ASSESSEE IS NOT COOPERATING AND SO THE ORDER OF A.O AND CIT(A) MAY BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. AS SEEN FROM THE RECORD, THE PROPERTY WAS PURCHASED BY WAY OF AGPA ONLY. WHETHER THE SAME WAS REGISTERED OR UNREGISTERED WAS NOT DISCUSSED BY ANY AUTHORITY. MOREOVER, ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE TRANSACTION IS ONE OF ADVENTURE IN THE NATURE OF TRADE AND SO PROVISIONS OF SECTION 50C OF THE IT ACT DO NOT APPLY. SINCE ASSESSEE HAS NOT PLACED ANY INFORMATION ON RECORD, NO FINDING CAN BE GIVEN ON THAT CONTENTION. IN THE INTEREST OF JUSTICE, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED TO A.O FOR ANALYZING THE TRANSACTION AND ALSO THE SOURCE OF INVESTMENTS AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 7. WE ALSO NOTICE THAT ASSESSEE HAS NOT REPRESENTED BEFORE THE AUTHORITIES AT ALL. AS LD. CIT(A) STATED IN PARA 8, THE LAW ASSISTS THE PERSON WHO IS VIGILANT. SINCE ASSESSEE 4 ITA NO. 140/HYD/2017 SMT. RAJESHWARI REDDY, BADDAM, HYDERABAD. HAS NOT AVAILED THE OPPORTUNITY GIVEN BY THE AO AS WELL AS LD. CIT(A), WE IMPOSE A COST OF RS. 2,000/-ON THE ASSESSEE FOR HER NON-COMPLIANCE BEFORE THE AUTHORITIES AND THE SAME SHOULD BE PAID TO PRIME MINISTERS RELIEF FUND, WITHIN THREE MONTHS FROM THE DATE OF THIS ORDER. 8. WITH THE LEVY OF ABOVE COST ON ASSESSEE, WE SET ASIDE THE ORDERS OF A.O AND CIT(A) AND RESTORE THE ASSESSMENT PROCEEDINGS TO THE FILE OF AO TO CONSIDER IT AFRESH. NEEDLESS TO SAY THAT THE ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY. IN CASE OF NON-COMPLIANCE FROM ASSESSEE, THE A.O IS FREE TO TAKE DECISIONS BASED ON FACTS AS AVAILABLE ON RECORD AND LAW. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2018. SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 25 TH JANUARY, 2018. KRK 5 ITA NO. 140/HYD/2017 SMT. RAJESHWARI REDDY, BADDAM, HYDERABAD. 1) SMT., RAJESWARI REDDY BADDA, C/O B. SHANTHI KUMAR, ADVOCATE, 111, TARAMANDAL COMPLEX, 5-9-13, SAIFABAD, HYDERABAD. 500004. 2) ITO, WARD-8(2) HYDERABAD. 3) CIT(A) -2, HYDERABAD. 4) THE PR.CIT-2, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE