Smt Kaja Devi Madhavi, Vijayawada V. The ITO Ward-2(4) Vijayawada, Vijayawada

ITA 212/VIZ/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7393 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Assessee Lawyers: S RAMA RAO

Judgement Text

ITA NO 212 OF 2011 SMT KAJA DEVI MADHAVI VIJAYAWADA PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.212/VIZAG/2011 ASSESSMENT YEAR: 2006-07 SMT. KAJA DEVI MADHAVI, VIJAYAWADA VS. ITO WARD-2 (4) VIJAYAWADA (APPELLANT) PAN NO: AMPPK 1298 P (RESPONDENT) APPELLANT BY: SHRI S. RAMA RAO, ADVOCATE RESPONDENT BY: SMT. D. KOMALI KRISHNA, SR.DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30.03.2011 PASSED BY LEARNED CIT(A), VIJAYAWADA AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. 2. THE PENALTY OF ` 1,07,368/- LEVIED UNDER SECTION 271(1)(C) OF THE AC T, HAVING BEEN PARTIALLY CONFIRMED BY THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US SEEKING FURTHER RELIEF. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON DECLARING A TOTAL INCOME OF ` 70,712/-. THE ASSESSING OFFICER COMPLETED THE ASSES SMENT BY DETERMINING THE TOTAL INCOME AT ` 3,57,280/- BY MAKING TWO TYPES OF ADDITIONS VIZ., INTEREST DISALLOWANCE OF ` 57,540/- AND ASSESSMENT OF SHORT TERM CAPITAL GAIN OF ` 2,29,030/- WHICH WAS NOT DISCLOSED IN THE RETURN OF ITA NO 212 OF 2011 SMT KAJA DEVI MADHAVI VIJAYAWADA PAGE 2 OF 4 INCOME. THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271 (1)(C) IN RESPECT OF BOTH THESE ADDITIONS. IN THE APPEAL FILED , THE LEARNED CIT (A) SUSTAINED PENALTY RELATING TO THE SHORT TERM CAPITA L GAIN. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. SO FAR AS PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF T HE ACT, ONE HAS TO CONSIDER THE EXPLANATION 1 TO SECTION 271 WHICH REA DS AS UNDER: EXPLANATION-1 WHERE IN RESPECT OF ANY FACTS MAT ERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON U NDER THIS ACT (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FA LSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT A BLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SA ME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM. THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FO R THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEM ED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. IN THE INSTANT CASE, THE ASSESSEE DID NOT DISCLOSE T HE SHORT TERM CAPITAL GAIN THAT ACCRUE TO HER ON SALE OF TWO PROPERTIES JOINTL Y HELD BY THE ASSESSEE AND HER TWO SISTERS. HOWEVER, HER SHARE OF SALE PROCEE DS AGGREGATING TO RS.6,95,668/- ON THE SAID SALE OF TWO PROPERTIES WA S DEPOSITED IN HER BANK ITA NO 212 OF 2011 SMT KAJA DEVI MADHAVI VIJAYAWADA PAGE 3 OF 4 ACCOUNT. THE ASSESSING OFFICER, DURING THE COURSE O F ASSESSMENT PROCEEDINGS, ENQUIRED ABOUT THESE CREDITS FOUND IN THE BANK ACCOUNT AS WELL AS THE CAPITAL ACCOUNT OF THE ASSESSEE. ON MAKING SUCH ENQUIRIES, THE ASSESSEE CAME FORWARD TO OFFER THE SHORT TERM CAPIT AL GAIN CITED ABOVE. DURING THE COURSE OF PENALTY PROCEEDING, IT WAS EXP LAINED THAT THE ASSESSEE HAS VOLUNTARILY OFFERED THE SAID CAPITAL GAIN, BUT THE ASSESSING OFFICER TOOK THE VIEW THAT IT WAS NOT VOLUNTARILY AND HENCE LEVI ED PENALTY AND THE LEARNED CIT(A) ALSO ENDORSED THE VIEW OF THE ASSESS ING OFFICER. 5. HOWEVER, WE FIND THAT THE ASSESSEE HAS SUBM ITTED THAT SHE WAS AN NRI AND SHE WAS REPRESENTED BY HER GPA HOLDER IN THE ASSESSMENT PROCEEDINGS. THE ASSESSEES SHARE OF SALE PROCEEDS AMOUNTING TO RS.6,95,668/- WAS DULY DEPOSITED IN HER BANK ACCOUN T. HOWEVER, WHILE FILING THE RETURN OF INCOME, THE SHORT TERM CAPITAL ARISING FROM OUT OF THE SAID SALES WAS OMITTED TO BE INCLUDED. HOWEVER, SU BSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD OFFERED THE SAID SHORT TERM CAPITAL GAIN WHICH WAS DULY ACCEPTED BY THE AS SESSING OFFICER. IT WAS FURTHER SUBMITTED THAT THE TWO OTHER CO-OWNERS OF T HE IMPUGNED PROPERTIES HAD DULY OFFERED THEIR SHARE OF CAPITAL GAIN IN THE IR RESPECTIVE RETURN OF INCOME. ACCORDINGLY IT WAS SUBMITTED THAT THERE IS NO INTENTION TO CONCEAL THE INCOME. IN OUR VIEW, IT IS QUIET REASONABLE T O ACCEPT THE EXPLANATIONS OF THE ASSESSEE, PARTICULARLY IN VIEW OF THE FACT T HAT THE ASSESSEE IS A NRI AND SHE IS REPRESENTED BY HER GPA. IT IS ALSO PERT INENT TO NOTE THAT THE SAID EXPLANATIONS OF THE ASSESSEE WERE NOT FOUND TO BE F ALSE BY THE ASSESSING OFFICER. THE ASSESSEE ALSO FURNISHED ALL THE MATER IALS THAT WERE MATERIAL TO THE COMPUTATION OF HER TOTAL INCOME BEFORE THE ASSE SSING OFFICER. THUS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR VIE W, THE EXPLANATION-1 TO ITA NO 212 OF 2011 SMT KAJA DEVI MADHAVI VIJAYAWADA PAGE 4 OF 4 SECTION 271 OF THE ACT COMES TO THE HELP OF THE ASS ESSEE AND THE PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE IN THE HAND S OF THE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LEARNED C IT (A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY RELATING TO THE SHORT TERM CAPITAL GAIN. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:08-08-2011 COPY TO 1 SMT. KAJA DEVI MADHAVI, D/O VENKATESWARA RAO, D.N O.30-6-18, V. RANGA RAO STREET, SEETHAMMAPURAM, VIJAYAWADA 520 00 4 2 THE ITO WARD-2(4) VIJAYAWADA 3 4. THE CIT VIJAYAWADA THE CIT(A), VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM