M. Praveen Kumar, Hyd, Hyderabad V. ACIT, Central Circle-11(1), Hyd, Hyderabad

ITA 366/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2510 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Cost of acquisition
• Section: 54F; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 366/HYD/2016 (A.Y.: 2009 - 10) M. PRAVEEN KUMAR, HYDERABAD. PAN: ANYPM 7455 L VS. ACIT, CENTRAL CIRCLE - 11(1), HY DERABAD . (APPELLANT) (RESPONDENT) FOR ASSESSEE: NONE FOR REVENUE : SHRI SUNKU SRINIVAS, DR DATE OF HEARING : 26.10.2017 DATE OF PRONOUNCEMENT : 26.10.2017 ORDER PER S. RIFAUR RAHMAN, AM: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A) - 5, HYDERABAD AND IT PERTAINS TO A.Y. 2009 - 10. 2. PENALTY LEVIED U/S 271(1)(C) OF THE ACT HAVING BEEN CONFIRMED BY LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE CASE WAS POSTED FROM TIME TO TIME BUT, NONE APPEARED FOR ASSESSEE. EVEN THOUGH A NOTICE WAS SERVED UPON THE ASSESSEE, NONE APPEARED TODAY. THEREFORE, WE HAVE NO OTHER ALTERNATIVE EXCEPT TO DISPOSE OF THE APPEAL, EX - PARTE , QUA ASSESSEE. 3. FACTS NECESSARY FOR DISPOSAL OF APPEAL ARE STATED IN B RIEF. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF ASSESSEE ON 07.08.2008. ASSESSMENT PROCEEDINGS WERE TAKEN UP WHEREIN A.O. NOTICED THAT THERE WAS UNDISCLOSED CAPITAL GAINS ON RELINQUISHMENT OF RIGHTS. THE OBSERVATIONS OF A.O. ARE REPRODUCED FOR IMMEDIATE REFERENCE: UNDISCLOSED CAPITAL GAINS ON RELINQUISHMENT OF RIGHTS: DURING THE COURSE OF SEARCH TWO CASH RECEIPTS NUMBERED AS 70 AND 71 IN LOOSE SHEET FOLDER A/CHMR/RES/ 02 WERE SEIZED FROM THE RESIDENCE OF SHRI MALLA REDDY. THESE ARE THE RECEIPTS FOR CASH GIVEN BY THE ASSESSEE, FOR A SUM OF RS. 40 LACS AND RS. 1.15 CRS. AT PAGE NO. 70 IS THE ACKNOWLEDGEMENT OF RECEIPT OF RS. 1,15,00,000/ - DATED 01. - 07.2008 2 TOWARDS LAND AT SHAPURNAGAR GOWTHAM BUILDING. AT PAGE NO.71 IS THE ACKNOWLEDGEMENT OF RECEIPT OF RS. 40,00,000/ - DATED 11.07.2008 TOWARDS LAND ADVANCE AT SHAPURNAGAR GOWTHAM BUILDING. IN HIS STATEMENT RECORDED ON OATH U/S 131 ON 20.11.2008, SHRI MALLA REDDY HAD STATE D THAT HE HAD PURCHASED 50% OF THE SHARE OF LAND FROM SHRI M. RAJALINGAL GOUD FOR A CONSIDERATION OF RS. 1,55,00,000/ - . CONFRONTED WITH THE EVIDENCE, SHRI RAJALINGAM GOUD FATHER OF THE ASSESSEE IN HIS SWORN DEPOSITION U/S 132(4) RECORDED ON 5.9.2008 HAS C ONFIRMED THE RECEIPT IN LIEU OF RELINQUISHMENT OF PROPERTY RIGHTS IN THE GOWTHAM JUNIOR COLLEGE BUILDING, SHAPOORNAGAR, HYDERABAD. HE HAD FURTHER OFFERED TO ADMIT THE AMOUNT RECEIVED ON RELINQUISHMENT RIGHTS OF RS. 1.55 CRORE TO TAX AFTER CONSIDERING THE NEW PROPERTY ACQUIRED BY HIM. IT WAS NOTICED FROM THE RETURN THAT COST OF ACQUISITION OF LAND WAS RS. 7,50,000/ - . THE ASSESSEE CLAIMED AS AMOUNT OF RS. 7,50,000/ - AS BEING SPENT FOR CONSTRUCTION OF THE BUILDING, AND AS HIS FAMILY HAS 50% SHARE I N THE ABOVE PROPERTY FOR PURCHASE AND CONSTRUCTION COMES TO APPROXIMATELY RS. 11,25,350/ - . THE CAPITAL GAIN AS ADMITTED BY THE ASSESSEE FOR THE TOTAL PROPERTY BELONGING TO HIM AND HIS SON AFTER INDEXATION IS SHOWN AS UNDER: RS. 1,55,00,000 RS. 11,00,000 = RS. 1,44,00,000/ - THE RATIO OF INVESTMENT MADE IN THIS PROPERTY BY SHRI RAJALINGAM GOUD AND THE ASSESSEE IS 45:55. IN VIEW OF THIS, APPORTIONMENT OF CAPITAL GAINS IN THE HANDS OF THE RAJALINGAM GOUD C O MES TO RS. 64,80,000/ - WHEREAS IN THE HANDS OF SHR I M. PRAVEEN KUMAR WORKS OUT TO RS. 79,20,000/ - . ACCORDINGLY THE UNDISCLOSED CAPITAL GAINS OF RS. 79,20,000/ - IS HEREBY BROUGHT TO TAX FOR A.Y. 2009 - 10. PENALTY PROCEEDINGS U/S 271AAA & 271(1)(C) IS HEREBY INITIATED. 4. FOR THE SAME REASONS, A.O. LEVI ED PENALTY OF RS. 17,94,675/ - U/S 271(1)(C) OF THE ACT WHICH WAS AFFIRMED BY LD. CIT(A) ON THE GROUNDS THAT (A) THE RECEIPT OF SALE CONSIDERATION WAS ENTIRELY IN CASH; (B) THE FACTS OF SUCH RECE IPTS CAME TO LIGHT IN CONSEQUENCE OF A SEARCH; (C) SHRI RAJALI NGAM GOUD, FATHER OF THE ASSESSEE, ADMITTED THE RECEIPT OF CONSIDERATION AND ALSO STATED THAT TAXES WILL BE PAID ON CAPITAL GAINS AND (D) THE CLAIM OF EXEMPTION U/S 54F WAS HELD TO BE FICTITIOUS BY BOTH A.O. AS WELL AS LD. CIT(A). FURTHER AGGRIEVED, ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE WOULD LIKE TO CLARIFY THAT THOUGH THE ASSESSEE, VIDE GROUND NO.2, SUBMITTED THAT THEY ARE AWAITING FOR THE FATE OF QUANTUM APPEALS PENDING BEFORE ITAT, HYDERABAD, NO INFORMATION WITH REGARD TO DATE OF FILING OF THE APPEALS ETC., WERE PLACED BEFORE US. LD DR, IN GENERAL AS WELL AS IN THIS SPECIFIC CASE, WAS OF THE OPINION THAT IN AN APPEAL FILED BY THE ASSESSEE THEY NEED NOT H A V E TO MAKE ANY EFFORT TO OBTAIN THE INCOME TAX APPEAL NOS OR THE FACTS MENTIONED IN QUANTUM PROCEEDINGS. THUS VIRTUALLY WE COULD NOT G ET ANY ASSISTANCE FROM LD DR EXCEPT FOR THE FACT THAT HE STRONGLY RELIED UPON ORDERS PASSED BY A.O. AS WELL AS LD. CIT(A). 3 6. THOUGH THE ASSESSEE CHALLENGED ORDER OF LD. CIT(A), NO MATERIAL WHATSOEVER COULD BE PLACED TO CONTRADICT THE FINDINGS OF THE TAX A UTHORITIES. HAVING REGARD TO THE CONCURRENT FINDINGS OF A.O. AS WELL AS LD. CIT(A), WE HAVE NO OTHER ALTERNATIVE EXCEPT TO UPHOLD THE LEVY OF PENALTY AND ACCORDINGLY WE DISMISS THE APPEAL FILED BY ASSESSEE. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 26 T H OCTOBER, 2017. SD/ - SD/ - (D. MANMOHAN) (S. RIFAUR RAHMAN) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED: 26 TH OCTOBER, 2017 OKK, SR.PS COPY TO 1. M. PRAVEEN KUMAR , PLOT NO.145, IDPL CROSS PUN E, IDPL CROSS ROAD , CHINTAL, HYDERABAD. 2. ACIT, CIRCLE - 11(1), HYDERABAD. 3. CIT(A) - 5, HYDERABAD. 4. PR. CIT - 5, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE